As more of the economy migrates to intangibles…

…more of the economy will require standards.

But consumers will groan under the load of decisions. There is a yin-yang tradeoff in the new economy. The yin, or positive side, is that consumers keep most of the gains in productivity that are earned by technology. Competition is so severe, and transactions so “friction-free,” that most of each cycle’s betterment goes not to corporate profits but to consumers in the form of cheaper prices and higher quality.

The yang, or downside, is that consumers have a never-ending onslaught of decisions to make about what to buy, what standard to join, when to upgrade or switch, and whether backward compatibility is more important than superior performance. The fatigue of sorting out options and allegiances, or recovering from them, is underappreciated at the moment, but will mount. The joy of the new economy is that the next version is almost free; the bane is that no one wants the hassle of upgrading to it, even if you pay them to do it.

The fatigue will only worsen. The net is a possibility factory, churning out novel opportunities by the screenful. Unharnessed, this explosion can drown the unprepared. Standardizing choices helps tame the debilitating abundance of competing possibilities. This is why the most popular sites on the web today are meta-sites that sort the abundance and point you to the best.

Since the network economy is so new, we as a society have paid little attention to how standards are created and how they grow. But we should notice, because once implemented, a successful standard tends to remain forever. And standards themselves shape behavior.



Comments are closed.


Archives - This site operates under a Creative Commons License.

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

© 2023