Up until 2005, the average German was working a 35-hour week. Most Europeans are paid for a 13-month year while taking 6 weeks vacation in the summer. The German government along with the labor union party changed the official workweek to 40 hours and within less than 2 years, Germany, with a population of 83 million, became the number one exporter in the world.
Do the math. Since the United States, with a population of 350 million, citizens and non-citizens included, the GDP has slipped into second place. U.S. output per person is not very efficient. China is just starting their industrial age and with a population in the billions it won’t be long before they outpace everybody. Since we don’t manufacture anything but war and construction equipment for the rest of the world, California is no longer the 6th largest economy in the world – sorry Governor Schwarzenegger. The U.S. will now be a service driven economy.
Germany did something else over the past two years – they became the leading e-commerce market in Europe. Of the 438.7 billion Euros generated from online commerce, Germany generated 30% of that. Germany also has the largest percentage of Internet users in Europe, with 56 million Netizen’s of their total population of 83 million.
Now that is a sign of prosperity. Try comparing that to the sinking US dollar and you get the picture. We’re talking big money – digital money. Europe is predicting 779.8 billion for 2010.
While a huge part of our population is complaining about Globalization (something they cannot stop), a shift is happening that is not apparent to the naked eye. A huge part of the global economy is not part of the bottom line, …yet. It is the online economy. I’m not talking about buying and selling – I’m talking about socializing.
Facebook is getting all the attention lately, but lets take a look at Massively Multiplayer Online Role Playing Games (a.k.a. MMORPGs) where people just hang out and chat, play or do battle with subscribers from anywhere in the world. Many of you have heard of them: World of War Craft, EverQuest, Half Life. The more sedate, yet just as exciting online pleasure, is Second Life. This Metaverse (a name for any online world) is an über version of the real world where players can build a house, get married, and have careers that, in the real world, would be out of reach. In Second Life, one can become the next great party planner, real estate mogul or clothing designer. This isn’t speculative, this has already happened, (Past tense is intentional).
This online world can be had for just under $11 a month. But it’s not the subscription-based revenue I wish to talk about here. What I am focusing on is the virtual economy of Second Life. The Linden dollar is their currency and somehow through PayPal you can exchange them for real currency. I believe three hundred fifty Linden’s equal one US Dollar. (If the dollar keeps falling the currency exchange could be 1:1). People pay for such services as clothing, new house construction or even upgrade your avatar. The citizens of Second Life pay handsomely to create a fantasy life where they can live out some of the careers and lifestyles they can’t readily have in this world. This virtual economy is generating $15 million per month!
And, I apologize for this, what is more amazing is that I am quoting year-old data! $15 million per month! Who knows how much it has grown since last calculation. *[Side Note: Since this article was written Second Life's virtual economy has doubled.]
Well, the economy has moved and to most Baby Boomers, this makes no sense. It can’t be seen! But to those born after 1985, it makes total sense. These are the generations that were immersed in video games AND the Internet. Reaching out in a virtual world and talking to a global community is natural to their process. These young people are not America-centric. Boomers picked up computer skills long after they were out of college.
The other problem is most Boomers (and I am one) see the Gamer as a geeky teenager hiding away in his bedroom. Au contraire – the average gamer, both online and off, is 33 years old with over a third of them female. That means most of today’s vice presidents, managers, and workforce are playing games in their spare time. And here it goes: “Brad, what does this have to do with leadership?”
A huge portion of your workforce is playing, buying and creating in a virtual world that we can’t see unless we are logged on. This comfort with technology is helping immensely to drive globalization and is creating borderless management. Digital natives like to call this Virtualization – the ability to access servers, data and personnel despite location.
How will you manage morale, productivity or necessary face time when your key people are spread out over five continents? Technology is the answer, but more importantly, those who can handle the technology and people at the same time. Operating locally but thinking globally becomes paramount to every competitive organization. So, it doesn’t take a genius to realize that the trends of the future will be to manage a virtual workforce. Actually, it is already happening as IBM builds pavilions in Second Life for the exclusive use of their employees and customers and another major presence in Torque. And this my friends, is old news.
There are two questions for the future of business:
How will you manage virtual employees in a Metaverse such as Second Life or Torque? And, if manufacturing is an Industrial Age construct to measure output against the total working population, then how will future GDP or ROI be measured and converted into real world currencies?
Traditional branding doesn’t work on the Internet nor do traditional leadership skills. A new primer must be developed that works for all cultures, all borders and all currencies as we cross the great divide from the Industrial Age into the Information Age.
What will Best Practices be in this new world? Time will tell.
Thanks for reading,
Avatar – a graphical representative of oneself used for virtual reality worlds a.k.a. the Metaverse. Not necessarily an exact replication, one’s Avatar can look like anyone or anything one wishes. Gender swapping can take place online as well as any other parameters the game allows as an Avatar can be anything the user wishes. When EverQuest was launched, a female hacker changed the games programming in order to create pink armor, an idea EverQuest designers had yet to think of.
Metaverse – a slang term for the virtual reality based Internet of the future first coined by science fiction writer Stephen Johnson in his book Snow Crash. People interact in this universe by use of a digital representative called an avatar.
Fun Facts: China is the number one importer of goods into the United States. Walmart is second. If The United States only manufactures war machines, and construction equipment here on our shores, what does that make our economy?
Email me at brad@liquidleadership.com with your answer.
Germany: meeting the challenges of globalization
http://www.rbs.com/content/economic/downloads/world/Germany_global.pdf
Germany: E-Commerce Report
http://www.buyusa.gov/arkansas/ecommgerm1007.pdf
Introduction to Second Life
http://www.youtube.com/watch?v=b72CvvMuD6Q
IBM eyes move into Second Life ‘v-business’
http://secondlife.reuters.com/stories/2006/10/24/ibm-eyes-move-into-second-life-v-business/
IBM Leaves Second Life for Torque
http://richardcarey.net/2007/05/15/ibm-chooses-torque/
