In the 1970s, Alvin Toffler's "future shock" brought to everyone's notice the rapid pace of change in the modern world and the challenges of adaptation. It talked about the generation gap that change creates on account of conflicting beliefs, values and lifestyles between generations. In the years that ensued, we have all come to realise that prediction can end up as a gross understatement.

People who grew up a decade or two ago believing that drinking anything other than milk is bad, are now being advised to take a glass of wine every day. Not frequenting a pub once in a while is considered uncivilised behaviour these days. The institution of marriage and the responsibilities that it carries is undergoing a change right in front of our eyes. Western values are seeping into the psyche of Indians every passing day. When such changes and conflicts are being faced by ordinary people in their lifetime, let alone gaps between generations, what changes and issues are we to expect in the corporate world? Are we to expect businesses to be managed and driven differently? What kind of entrepreneur will be riding the emerging wave of newer wealth creation?

Before we try and predict the behaviour of the new entrepreneur, we must develop a view of what the future has in store for us. Let me take a shot at what this century will unfold. If we don't self destruct (which is not a completely unlikely scenario, given the possibility of a nuclear holocaust or any negative application of the enormously high technological power that we possess), we are likely to witness dominance of newer goods and services in the new economy on account of yet-unexploited and yet-to-emerge inventions and innovations. The 20th century has seen more than two thirds of global wealth arise out of inventions and innovations that happened during that century. Today's highly mature airline, pharmaceutical, information technology, and several other industries are testimonials to that.

By the same token, more than 75 per cent of the world GDP towards the end of this century is likely to relate to newer goods and services. For example, in information technology services in India, in less than eight years newer services have come to contribute more than 80 per cent of the revenues .

The world GDP is at $36 trillion (Rs 15,84,00,000 crore) today, with about two thirds of the same being in services (say $24 trillion or Rs 10,56,00,000 crore). With about 15 years of offshore delivery experience in India, and with this disruptive way of delivering services in a virtual environment being a mature practice, one can conclude that remote delivery of services will dominate global economic activity in the future. While China has emerged as the 'manufacturing hub of the world', India consolidated its position as the 'services hub of the world'. This does not in any way diminish the importance and prospects for manufacturing for India. In fact, one can expect a fair amount of manufacturing to shift to India as the global customers want to minimise the country risks.

By 2020, the world GDP may exceed $50 trillion (Rs 22,00,00,000 crore) with more than $35 trillion (Rs 15,40,00,000 crore) coming from services. If India grabs 3 per cent of this global services pie, touching a trillion dollars in this segment is a potential reality. Interestingly, if India continues to grow at about 31 per cent in exports of IT and business process outsourcing, that in itself would yield a trillion dollars for the country by 2020. The knowledge industry creates opportunities for the new entrepreneur in ways that are far removed from traditional operations.

Tomorrow's entrepreneur will increasingly be a global player. In the last 10-15 years, global trade has significantly outpaced general economic growth and has come to alter traditional economic models. The breadth of economic models worldwide is much narrower now. Instead of capitalism at one end and communism in the other, with different hues of socialism in between, consumerism and market-led economics have come to prevail for all practical purposes. The role of nations is diminishing as their policies are converging. As we are moving towards the diminishing role of nationhood, corporations are increasing their role of seamless operations across nations and are acting as true ambassadors. Likewise, globalisation coupled with the information technology revolution is greatly enhancing the need to appreciate cross-cultural differences and is developing an attitude of building effective cross-cultural bridges.

The new entrepreneur is also in most instances a virtual entrepreneur who has come to terms with the new reality of the death of distance that information and communication technologies have brought about. What the technology is able to provide, however, is yet to be matched by mindset changes. While the technology is changing by the day, the natural inclination for the minds is to change by the generation. Those select few who are able to make the leap sooner are therefore in a better position to reap the benefits. Working with people and teams in a virtual environment is a different ball game altogether. Recognising the differences in the first place and taking a process-centric view could bring in benefits of much bigger orders of magnitude. The offshore delivery model in the information technology industry was predicated on this belief, and has proven to be a successful model. Customers, for example, are preferring to opt for a process-driven security environment that a vendor is able to provide, than rely on companies that are not as mature in their processes even if they operate from the same country. Virtual operations, thus, is both a challenge and a great opportunity.

As intellectual capital came to dominate physical capital, professional entrepreneurs started dominating the economic world. Whether it is a Bill Gates or a Michael Dell or a Sam Walton, people with direct stakes in the company, active participants who bring professional expertise and passion to the table, are redefining the rules of the game.

As entrepreneurs are turning professional, professionals are acquiring entrepreneurial attitudes and skills. Employees are no longer regarded as providers of services, but as partners, associates and stakeholders. Hierarchical structures and command-and-control systems are no longer effective. Organisations are operating in a networked fashion, with many value-creating entities that are functioning as though they are businesses within businesses. Rewards are directly connected to the end results and outcomes rather than effort. Stock options and more of variable pay are encouraging entrepreneurial behaviour among employees.

Thinkers, doers and communicators are no longer segregated in successful organisations. The job descriptions are bundling thinking, doing and communicating capabilities into every function, as every employee is being regarded as a leader, taking end-to-end responsibility for whatever he or she is entrusted with. Whether the activity is an external customer facing function or an internal support function, the same is regarded as a value creating business operation. And the benchmarks for each of these functions are becoming global. This kind of independence and interdependence calls for collaborative behaviour that is quite distinct from the operations of the industrial era.

The knowledge economy operates by principles that are dramatically different from those of industrial economies of the past. The emergence of the new economy has been so rapid that the world has not come to grips with the new reality fully. The lifecycle of any new value creation attempt proceeds from an idea to commercialisation and from commercialisation to commoditisation. This cycle time has proven to be significantly shorter in case of the knowledge industry. Even in case of manufactured goods, the influence of the knowledge economy has been significant. In most instances, modern day manufacturing has knowledge and technology deeply embedded in its processes and products.

However, the knowledge industry in particular goes through the following shifts between commercialisation of an idea to commoditisation. In the initial stages, value is driven around people with specialised knowledge and skill, then those capabilities get captured by a process or methodology that standardises, demystifies and provides access to more professionals, and thereafter, these processes get automated through use of technology. Once that stage of automation is reached, the path to commoditisation is a short one. Enterprise resource planning (ERP) products, for example, represent this trend rather well. At one time, understanding and acting on organisational processes was the prerogative of a privileged few. Thereafter, process-driven consulting firms enhanced the participation of professionals on a massive scale to extend the benefits of this knowledge to more businesses. ERP products automated this process knowledge and have brought down the total cost of ownership for the customer over a period of time, and may continue to move in that direction.

The speed at which new products and services are introduced, and are becoming obsolete, is altering investment considerations and behaviour. Companies rarely make five-to-seven year plans these days. When next year's projections are most often off the mark, planning beyond three years is a futile exercise in most instances. Venture capital and private equity seem to fill some gaps in the current capital environment, driven by intellectual capital considerations and altered risk-reward scenarios.

Traditional factors of production (land, labour and capital) are no longer the principal drivers of value creation. As compared to the 'hard infrastructure' in the traditional industry, the role of what I would refer to as the 'soft infrastructure' has become quite dominant. Soft infrastructure is represented by factors like quality of the brand, strength of the customer base, possession of specialised competencies and knowledge components of unique value, systems, processes and technologies that can deliver sustainable value, quality of leadership, etc. A quick look at the balance sheet of any reputed organisation reveals that the difference between the market capitalisation of the company and the weight of the balance sheet is in fact the unaccounted value of the soft assets. In most instances, the hard assets as accounted in the balance sheet may be no more than 20 per cent of the market capitalisation, particularly in a knowledge industry.

Another way of looking at the new value creation model is to observe resource consumption differences as perceived by the old and the new economy. Assessing requirements from traditional classification of men, materials and machines is quite limiting. Unless we take into consideration what I would call the "methods" (which are the same as soft assets), full lifecycle requirements of value creation may remain unaddressed.

Globalisation and liberalisation in India have shifted economic initiatives away from wealth distribution considerations to wealth creation. Long before we are able to sort out wealth distribution issues, additional wealth could in fact be created. My driver not only possesses a cell phone, but is using it more extensively than I could dare use a few years ago on account of high cost.

The knowledge base has expanded manifold in the last 50 years or so. Information technology, for example, has brought about a transformational change. Newer and potentially more impact-creating technologies such as biotechnology and nanotechnology are still in the works. The potential for information technology (which is man's way of dealing with information) and life sciences (that deals with understanding, in a way, nature's way of dealing with information) converging and coming together is very exciting.

It does not take 50 years for a country to become wealthier, as was the case with Japan, any longer. Right in front of our eyes, we are seeing a large country like China performing economic wonders. In certain sectors, India has also shown such resilience. Current knowledge and technology are way ahead of our ability to put all of it to good use. We need no more than 15 to 20 years to have all the basic needs of the entire population met. In today's environment, basic needs are no longer limited to bread (roti), clothing (kapda) and housing (makaan). Basic needs include good education and servicing of the health requirements of the population as well.

There is a paradigm shift taking place in our economic worldview. What we consider creation is no more than transformation. For, what is a microchip more than a fistful of sand and a bucketful of knowledge? A combination of earth, water, heat and stated knowledge of a process can create a pot through a transformational process that rearranges the atoms to suit our needs and requirements.

Practically every wealth creation attempt is a transformational process. The new entrepreneur is far too aware of this. He recognises the importance of gaining knowledge. At the same time, he has an attitude of losing sleep over translating that knowledge into tangible action. He rests only when the transformation is complete. For him, profit is the difference between the value he creates and the society's value in the form of resources that he consumes. For the new entrepreneur, profit is the recognition of his creativity and hard work by the market and society.