By 2005, the US will have completed its first digital decade — the 10 years during which consumers will have adopted digital appliances, Internet access, and the services they enable. In a recent Report that explores what life will be like when the Internet becomes a mainstream resource, like electricity or water, Forrester Research (Nasdaq: FORR) envisions that by 2005 the Net will complete its first phase of commercial adoption and give rise to an information utility. This utility, defined by Forrester as “the mechanism that people use to access information and each other from anywhere, and through any device,” will enable individuals to take greater control of their lives as consumers, employees, and citizens.

“The Internet is a fundamental force that will truly transform the way people interact and behave at an individual, organizational, and social level,” said David M. Cooperstein, research director at Forrester. “The original promises of a networked society, like anytime, anywhere communication, will be fulfilled and surpassed, as people tailor the utility to suit their needs. Over the next four years, technology standards, user adoption, and a massive build-out will transform the Internet from the ‘new new thing’ to a truly ubiquitous information resource, creating new roles for businesses and government to address new end user demands for emerging technologies and Internet-enabled lifestyles.”

Forrester believes that the information utility is inevitable as individuals — acting in their roles as consumers, employees, and citizens — increasingly rely on information to accomplish everyday tasks. Information access will evolve into a utility as consumers pay to research or shop online, while traditional corporations weave Internet strategies throughout their supply chains to offer customers a reliable experience across all channels.

By 2005, 67% of US households will have Internet access — dramatically affecting the way Americans communicate, shop, and research. As people become more comfortable with Internet applications, the next era in technological displacement will enable electronic communications like email, instant messaging, digital photos, and voice-over IP to become the norm. During this same period, 55% of US consumers will shop online, increasing their online retail spending from more than $40 billion today to nearly $270 billion in 2005. Armed with price-comparison data, consumers will demand more value for their money and expect personal attention and special offers when they shop online.

As employees, invididuals will begin to rely on their personal PDAs, cell phones, and digital cameras to become more productive at work and improve business operations. The information utility will also help executives hone their research skills to access data critical to their business success, or to accelerate career ambitions using online training programs.

The same information-derived power that individuals wield as consumers will also define their expectations as citizens and force governments to promote full access to the information utility. The utility can help citizens locate rules, regulations, and information more readily while allowing them to receive services like license renewal and voter registration more conveniently. Grassroots efforts will also rise as the utility creates a new breed of electronic activism around causes. Forrester believes that by 2005, governments will attempt to end the digital divide and reset the level of access that most citizens will have to their information.

The information utility will also spawn waves of innovation — like personal entertainment and on-demand communication. To reach mainstream users, vendors will agree on standards and bury the complexity of Internet technology under simpler interfaces, devices, and systems. For example, by 2005, consumers will ask carriers to fulfill broadband access needs and sign up for the solution that matches their cost and location constraints. Games, broadcasts, and social events will blend as game consoles become Internet access devices. As the information utility becomes more dominant, it will become embedded, pervasive, and transparent as it is incorporated into the products and services we use every day.

“We will grow accustomed to information as a permanent flow of value rather than as a dedicated activity,” added Cooperstein. “However, this utility will pose challenges for vendors who must perfect the Internet to reach mainstream users while simultaneously delivering niche value to perfect the customer experience.”

For the February 2001 Report “Ubiquitous Internet,” Forrester interviewed consumers, user organizations, vendors, technology visionaries, academics, and investment professionals.