The network is a structure…

…to generate relationships. Networks haul relations the way rivers once hauled freight. When everything is connected to everything else, relationships are rampant. Each variety of connection in a network begets a relationship. Between firms and other firms. Between firms and customers. Between customers and the government. Between customers and other customers. Between employees and other firm’s employees. Between customers and machines. Between machines and machines, objects and objects, objects and customers. There is no end to the complexity and subtlety of relationships spawned in a network economy.

Each of these types of relationship has its own specific dynamics and quirks. And each is nurtured by a particular type of technology. The technologies of jelly bean chip and boundless bandwidth are, in the end, relationship technologies. “We need to shift away from the notion of technology managing information and toward the idea of technology as a medium of relationships,” writes Michael Schrage in Shared Minds, a book about the new technologies of collaboration. Despite the billions of bits that information hardware can process in a second, the only matter of consequence silicon produces are relationships.

Of course reputation and trust have been essential in all economies of the past, so what’s new? Only two things:

  • With the decreased importance of productivity, relationships and their allies become the main economic event.
  • Telecommunications and globalism are intensifying, increasing, and transforming the ordinary state of relationships into an excited state of hyperrelations–over long distances, all the time, all places, all ways. It’s not Kansas anymore; it’s Oz.

Relationships among more than two people can be structured as hierarchies or as networks. In hierarchies, members are ranked in privilege relative to one another; in networks, members relate as peers–counterparts of similar power and opportunity. In previous ages the most intelligent way to construct a complex organization in the absence of plentiful information was to build a hierarchy. Rank is a clever and workable substitute for ubiquitous real-time information. When information is scarce, follow orders.



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