The network economy is a meta-country.

Its web of relationships differ from those of a country in three ways:

  • No geographical or temporal boundaries exist--relations flow ceaselessly 24 by 7 by 365.
  • Relations in the network economy are more tightly coupled, more intense, more persistent, more diverse, and more intimate in many ways than most of those in a country.
  • Multiple overlapping networks exist, with multiple overlapping allegiances.

These hyperconnections can either strengthen or weaken traditional relationships. The extremely personal, highly trust-bound relations in a family stand to be strengthened, while the diffuse and nearly contractual relations in a nation-state are liable to weaken. Yet, as Peter Drucker points out, "The nation-state is not going to wither away. It may remain the most powerful political organ around for a long time to come, but it will no longer be the indispensable one." In its stead we'll rely on nongovernmental agencies such as the Red Cross, ACLU, HMOs, insurance giants, the net and the web, and UN-like entities. These parapolitical organizations will supplement the embedded nation-state. They will be the indispensable networks we care about.

In both country and network, the surest route to raising one's own prosperity is raising the system's prosperity. The one clear effect of the industrial age is that the prosperity individuals achieve is more closely related to their nation's prosperity than to their own efforts. Lester Thurow, an MIT economist, has pointed out that enabling the lowest paid to earn more is the best way to raise wages for the highest paid--the theory being that a rising tide lifts all boats. The network economy will only amplify this.

To raise your product, lift the networks it ties into. To raise your company, lift the standards it supports. To raise your country, increase the connections (in quality and quantity) that allow others to prosper.



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This is a blog version of a book of mine first published in 1998. I am re-issuing it (two posts per week) unaltered on its 10th anniversary. Comments welcomed. More details here.
-- KK