The business of industry is changing; we can feel it. Commercial transactions are faster, engineering cycle-times shorter, staffing levels no longer follow sales volume, and the geographic reach for markets is extending for most producers. If virtual enterprise lacks definition, its purposes are vivid: speed, efficiency, and presence among customers, everywhere. Technology is effecting fundamental changes that strengthen their role in global commerce.
Regarding virtual enterprise, it is not coincidental that the upcoming 1996 International Conference on Engineering and Technology Management in Vancouver is centered on managing it. When the conference topic was selected it was suggested that the Review consider an issue on the matter. I was hesitant. The name is itself a buzzword now, so a question of substance is not out of order. Fledgling editors of the Review ought to embrace only important topics.
Oddly, the term invites misunderstanding. For example: enterprising, but not really? Virtual, a wide- ly used word, seems to be applied in contradictory ways. Virtual memory, on one hand, is real to the function of computation because it supports the use of more and longer programs and data files. Its physical existence, internal control structure, and response times may differ from that of traditional memory configurations, but it is otherwise transparent to program and programmer.
Virtual reality, on another hand, is perceptual trickery-you think you have something when you don't. It serves entertainment and training well because although one is not really flying, neither can one crash real planes. You end up where you started, save some sense of new experience, perhaps. It does parallel virtual memory to the extent that both repackage information.
Upon further consideration, I concluded that the topic is indeed worthy-virtual enterprise is a defining mechanism by which companies are now improving their competitive edge while enjoying new growth. The topic has importance in both concept and practice. Since this represents a dynamic in environments where engineering is practiced, it demands more of engineers as well.
Reasons to Believe
Regarding current business climate, competitiveness demands operational efficiency and market effectiveness. It all goes hand in hand with the transportability of goods, services, information, and money. The more easily such things are moved about, the more apt a firm is to have market presence. Such agility raises performance standards for competitors as well. In particular, when distant markets become more lucrative than local ones-the likely case-business can grow by reaching out, but com- petition increases. One must perform better. Regardless, new markets, wherever they are, often present the only real opportunities for growth. Thus the acceleration of business processes self-propagates. I see four reasons:
A Precedent
As North America accumulated populations from abroad, a range of people with a variety of desires and talents made their way west. Over a long period of time they blazed a trail of profound economic change. If explorers, trappers, gold diggers, ranchers, and farmers came first, they soon had use for merchants, shippers, bankers, doctors, lawyers, and such. Before long, need arose for construction, manufacturing, engineering, and even entertainment. Yes, yet more lawyers and bankers too. Throughout, the infrastructure of this growth has been markets, postage, law, and money. The pony express yielded to telegraph and rail. Information and money move directly by wire, plastic, and now wireless.
Why did people come? First was an access to inexpensive land and vast resources. Second, the resulting initiation of new markets. These factors broadcasted repeated messages of opportunity as each new wave generated its own particular demands for supplies and services. As one wave followed another, the need to move money and information grew. Both then and now, faster seems better.
Virtually Today?
There seems to exist a paradox. As communications accelerate to meet needs of greater sophistication, doesn't the limit of this trajectory converge on an impersonal frenzy? Are we not threatened by diminished qualities of life and work?
Yes, but perhaps not necessarily. In fact, virtual enterprise may offer hope. The ideal business transaction occurs when one person acts with the power and support of an entire organization in serving individual customers. It may take an organization to attend to technical complexity and market volume, but it requires an individual to attend to customer relations. The difference with virtual enterprise is that big buildings are not a prerequisite, only product, quality, service, and attention.
This is as true in markets of high technology. Because technology helps move things more quickly, it has itself become a market commodity to be gotten about.
Who Wins?
A lot has happened in the U.S. over the past ten years. Many markets have gone from looking down to looking up, a fact reflected in market share, profit, and, to some extent, employment. "Back on Top" centers this issue by offering a context for reinvigorated global competitiveness. This, coupled with innovation in moving information and dollars, places virtual enterprise at the forefront. U.S. companies want to compete well everywhere in every market. Many corporations have implemented changes that now allow them to project a local presence more easily, regardless of where business is conducted. Of course, the same is true for foreign firms where greater market access and lower labor costs are complemented with improved communications technologies and trade agreements. When established firms show us "how to do it right," inevitably some among their competition will one day demonstrate how it is done better. Lost share is lost strength. On the upside, increased competition raises standards for all.
Virtual Enterprise, Literally Enterprising
That this conference is in Vancouver is itself significant. Asia is coming on strong, and the dominant corridor of trade is shifting from the Atlantic to the Pacific. As a staging area for virtual enterprise, I think Vancouver is.
I claimed that competitiveness goes hand in hand with the movement of money and information. This is more than a good fit with technology. Romer asserts that technology itself contributes to economic growth. Even if technology fuels market growth, it promises no lasting advantage for its own- helping others to move their thoughts and money around more quickly offers, at best, temporary security. For business the challenge is twofold: apply technological innovation toward improved competitiveness, and see to the long-term utility of technologists. In other words, keep markets and engineers relevant to one another. Between the person and the organization, if the results are not win-win, then the results are unsatisfactory.
The difference now is that redundant engineering, management, and marketing organizations within one company need not be set up in every region and country to provide support equivalent to what was previously the old icon of market presence-big offices, lots of people, every city. Customers want to communicate their needs with one person who can make and meet commitments. This fact is confirmed by the successes of virtual enterprise.
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