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Out of Control

Characteristics of the Emerging Network Economy:

Executive Summary

As I see it, a few general systemic patterns will prevail in the economy of the near future. And what economic plan would be without its executive summary? Certainly not this one. Cataloged below are some traits I believe a networked-based economy would exhibit:

  • Distributed Cores -- The boundaries of a company blur to obscurity. Tasks, even seemingly core tasks like accounting or manufacturing, are jobbed out via networks to contractors, who subcontract the tasks further. Companies, from one-person to Fortune 500, become societies of work centers distributed in ownership and geography.

  • Adaptive Technologies -- If you are not in real time, you are dead. Bar codes, laser scanners, cellular phones, 700-numbers, and satellite uplinks which are directly connected to cash registers, polling devices, and delivery trucks steer the production of goods. Heads of lettuce, as well as airline tickets, have shifting prices displayed on an LED on the grocery shelf.

  • Flex Manufacturing -- Smaller numbers of items can be produced in smaller time periods with smaller equipment. Film processing used to happen in a couple of national centers and take weeks. It's now done in a little machine on every street corner in a hour. Modular equipment, no standing inventory, and computer-aided design shrink product development cycles from years to weeks.

  • Mass Customization -- Individually customized products produced on a mass scale. Cars with weather equipment for your local neighborhood; VCRs preprogrammed to your habits. All products are manufactured to personal specifications, but at mass production prices.

  • Industrial Ecology -- Closed-loop, no-waste, zero-pollution manufacturing; products designed for disassembly; and a gradual shift to biologically compatible techniques. Increasing intolerance for transgressions against the rule of biology.

  • Global Accounting -- Even small businesses become global in perspective. Unexploited, undeveloped economic "frontiers" disappear geographically. The game shifts from zero-sum, where every win means someone else's loss, to positive-sum, where the economic rewards go to those able play the system as a unified whole. Alliances, partnerships, collaboration, even if temporary or paradoxical, become essential and the norm.

  • Coevolved Customers -- Customers are trained and educated by the company, and then the company is trained and educated by the customer. Products in a network culture become updatable franchises that coevolve in continuous improvement with customer use. Think software updates and subscriptions. Companies become clubs or user groups of coevolving customers. A company cannot be a learning company without also being a teaching company.

  • Knowledge Based -- Networked data makes any job faster, better, easier. But data is cheap, and in the large volumes on networks, a nuisance. The advantage no longer lies in "how you do a job" but in "which job do you do?" Data can't tell you that; knowledge does. Coordination of data into knowledge becomes priceless.

  • Free Bandwidth -- Connecting is free; switching is expensive. You can send anyone anything anytime; but choosing who, what, and when to send, or what and when to get is the trick. Selecting what not to connect to is key.

  • Increasing Returns -- Them that has, gets. Them that gives away and shares, gets. Being early counts. A network's value grows faster than the number of members added to it. A 10 percent increase in customers for a company in a nonnetworked economy may increase its revenue 10 percent. But adding 10 percent more customers to a networked company, such as a telephone company, could increase revenues by 20 percent because of the exponentially greater numbers of conversations between each member, both new and old.

  • Digital Money -- Everyday digital cash replaces batch-mode paper money. All accounts become real-time.

  • Underwire Economies -- The dark side: the informal economy booms. Creative edges and fringe areas expand, but now they are invisibly connected on encrypted networks. Distributed cores and electronic money drives economic activity underwire.

In network economics the customer can expect increased speed and choice, and more responsibility as a customer. The provider can expect increased decentralization of all functions and increased symbiotic relationships with customers. Finding the right customer in the chaotic web of infinite communications will be a new game.

The central act of the coming era is to connect everything to everything. All matter, big and small, will be linked into vast webs of networks at many levels. Without grand meshes there is no life, intelligence, and evolution; with networks there are all of these and more.

My friend Barlow -- at least Barlow's disembodied voice -- has already connected his everything to his everything. He lives and works in a true network economy. He gives away information -- for free -- and he is given money. The more he gives away, the more money he gets. He had something to say about the emerging network in an e-mail message to me:

Computers -- the gizmos themselves -- have far less to do with techie enthusiasm than some half-understood resonance to The Great Work: hardwiring collective consciousness, creating the Planetary Mind. Teilhard de Chardin wrote about this enterprise many years ago and would be appalled by the prosaic nature of the tools we will use to bring it about. But I think there is something sweetly ironic that the ladder to his Omega Point might be built by engineers and not mystics.

The boldest scientists, technologists, economists, and philosophers of this day have taken the first steps to interconnect all things and all events into a vast complex web. As very large webs penetrate the made world, we see the first glimpses of what emerges from that net-machines that become alive, smart, and evolve -- a neo-biological civilization.

There is a sense in which a global mind also emerges in a network culture. The global mind is the union of computer and nature -- of telephones and human brains and more. It is a very large complexity of indeterminate shape governed by an invisible hand of its own. We humans will be unconscious of what the global mind ponders. This is not because we are not smart enough, but because the design of a mind does not allow the parts to understand the whole. The particular thoughts of the global mind -- and its subsequent actions -- will be out of our control and beyond our understanding. Thus network economics will breed a new spiritualism.

Our primary difficulty in comprehending the global mind of a network culture will be that it does not have a central "I" to appeal to. No headquarters, no head. That will be most exasperating and discouraging. In the past, adventurous men have sought the holy grail, or the source of the Nile, or Prester John, or the secrets of the pyramids. In the future the quest will be to find the "I am" of the global mind, the source of its coherence. Many souls will lose all they have searching for it -- and many will be the theories of where the global mind's "I am" hides. But it will be a never-ending quest like the others before it.