IT and business technology will take centre stage in the post-recession economy, according to George Colony, CEO of Forrester.
In his keynote address at Forrester IT Forum in Berlin, Colony described the current economic turbulence as a "gateway recession" that will connect two different eras.
The crisis, he said, will sweep away organisations that do not grasp the importance of and utilise social network technologies.
Colony listed five challenges that chief executive officers can expect to tackle during this recession.
In the past, "Technology was essentially a choice before for most companies, but digital is now mandatory. The CEO is no longer able to say 'I don't understand technology'. Today's boards can no longer forgive CEOs that don't understand digital," said Colony.
Secondly, said Colony, customers are no longer loyal to brands because there is more choice.
Customers are changing, he added. The new generation of graduates, the Y Generation or Millennials, are more comfortable with using social networking technologies than older media. They are twice as likely to use blogs, gaming sites and Twitter as to read newspapers.
"Colleges in US have stack of New York Times that are given away for free, but nobody reads them in the colleges. People no longer watch TV," he said. This means, "Companies must sell to them in a different way, connect to Twitter, MySpace and Facebook to reach customers."
The Forrester CEO also highlighted a demographic time bomb facing businesses. There will be challenges in attracting and recruiting the best graduates in future. The proportion of young people in the population is declining, while many workers are approaching retirement. In the next ten years, 40% of nurses will retire and 45% of federal workers will retire, he said.
"If you have a lot of COBOL, may want to build your next datacentre next to a retirement home," Colony quipped.
The fifth, and perhaps biggest challenge, is that traditional "black-box", internal innovation is "dead".
"Innovation will be defined by networks, you work with partners or competitors or customers using social technologies," said Colony.
In an interview with ComputerworldUK.com, Colony used the term "Social Sigma" to describe the way businesses need to embrace social networking tools and methodologies.
In the new post-recession era, customers will use social technologies to become an active participant in broad aspects of product development.
Colony concluded on a positive note, saying that in the post-recession era, it will be the turn of IT and business technology to shine.