March 19--MUMBAI -- Vijay Sethi , who won the Economist Intelligence Unit (EIU) Business Professor of the Year award on 15 March, is happy that it recognizes not only research but also rewards excellence in teaching. More than 30,000 students and alumni nominated and voted for 222 professors from 31 countries for this award, which is supported by the Boston-based Hult International Business School.
In a telephone interview on Monday, Sethi -- a B.Tech from the Indian Institute of Technology, Delhi, an MBA from Ohio University, and PhD from the University of Pittsburgh -- said companies should not perceive information technology (IT) as a mere utility but pay attention to how they can take advantage of it to build businesses, failing which they will not survive. He currently teaches IT and operations management at the Nanyang Business School of the Nanyang Technological University in Singapore and is a consultant to several companies based there. Edited excerpts:
What does this award mean to you?
The feeling is yet to sink in. But I'm happy that the award recognizes teaching and not just research. I hope it brings more respectability to the teaching profession.
How have you married the strengths between your engineering and business degrees? Is this what helped you in your research on the economics of technology? What was the outcome?
My engineering background helped me in understanding how companies can leverage technology and build digital ecosystems rather than concentrate on individual technologies in isolation. The physical world deals with atoms while the digital world deals with bits and bytes (units of digital information in computing). This implies that in the physical world, value is created because of abundance. In contrast, it's abundance that creates value in the digital world. Hence, the cost of creating bits after the initial research and development (R&D) expenses, is almost negligible. Both individuals and companies have to undergo a mindset change to realize this.
Also, much of the technology we see today is driven by individuals. Social media networking sites are a good example. This will continue to be the case. Companies have to realize that value will lie in co-creation with individuals from within, or outside, the company.
This implies a shift both in thinking and business models...
Companies will learn to become more like a network. They will be able to own or control the innovation but the process leading to the innovation will be one of co-creation. Video rental company Netflix Inc. is a case in point. It offered a $1 million prize to anyone who could develop an algorithm to improve its movie recommendation engine (in September 2009) and benefited from the exercise (with a 10% improvement).
Another example of co-creation is Skype (the proprietary voice over Internet Protocol, or VoIP, software application founded in 2003 by Janus Friis from Denmark and Niklas ZennstrÃ¶m from Sweden and developed by Estonians Ahti Heinla, Priit Kasesalu, and Jaan Tallinn, who together with Friis and ZennstrÃ¶m were also behind the peer-to-peer file sharing software Kazaa). On 12 September 2005, eBay Inc. acquired Skype Technologies SA for around $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration. On 10 May 2011, Microsoft Corp. acquired Skype Communications SARLfor $8.5 billion. The contribution of Kazaa to this whole transaction must not be ignored.
This is co-creation and it also leads to more openness. There is still too much proprietary stuff in the technology field. One only has to look at where apps are coming from, to understand open innovation. It's best to have open standards. The success of Google Inc.'s Android mobile operating system (OS) is a fine example even though the Apple Inc. iOS may have a much better look and feel.
But if standards are open, and everyone gets around to making similar products like handsets based on the Android OS, what's the differentiating factor?
That is indeed a problem. Consider this. Using the Android OS, Chinese ve