THIS NEW ECONOMY

As tremendous as the influence of financial inventions have been,…

…the influence of network inventions will be as great, or greater.

It took several billion years on Earth for unicellular life to evolve. And it took another billion years or so for that single-celled life to evolve multi-cellular arrangements–each cell touching a few cells near it to make a living spherical organism. At first, the sphere was the only form multicellular life could take because its cells had to be near one another to coordinate their functions. After another billion years, life eventually evolved the first cellular neuron–a thin strand of tissue–which enabled two cells to communicate over a distance. With that single enabling innovation, the variety of life boomed. With neurons, life no longer had to remain bounded in a blob. It was possible to arrange cells into almost any shape, size, and function. Butterflies, orchids, and kangaroos all became possible. Life quickly exploded in a million different unexpected ways, into fantastic awesome varieties, until wonderful life was everywhere.

Silicon chips linked into high-bandwidth channels are the neurons of our culture. Until this moment, our economy has been in the multicellular stage. Our industrial age has required each customer or company to almost physically touch one another. Our firms and organizations resemble blobs. Now, by the enabling invention of silicon and glass neurons, a million new forms are possible. Boom! An infinite variety of new shapes and sizes of social organizations are suddenly possible. Unimaginable forms of commerce can now coalesce in this new economy. We are about to witness an explosion of entities built on relationships and technology that will rival the early days of life on Earth in their variety.

In the future very few companies will look like Microsoft, or even Wired. Even ancient forms will be bent. Farming, and trucking, plumbing, and other traditional occupations will continue, just as unicellular life continues. But the economics of farmers and friends, in their own way, will obey the logic of networks, just as Microsoft does now.

We see evidence for that already. A farmer in America–the hero of the agricultural economy–rides in a portable office on his tractor. It’s air conditioned, has a phone, a satellite-driven GPS location device, and sophisticated sensors near the ground. At home his computer is connected to the never-ending stream of weather data, the worldwide grain markets, his bank, moisture detectors in the soil, digitized maps, and his own spreadsheets of cash flow. Yes, he gets dirt under his fingernails, but his manual labor takes place in the context of a network economy.

Much the same can be said about truck drivers. While the experience of sitting behind a wheel remains unchanged, the new tools of trucking–bar codes, radios, dispatch algorithms, route hubs, and even roads themselves–all follow the logic of networks. Thus, the very sweat of truckers as they manually load and unload heavy boxes becomes incorporated into the network economy.

 

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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