The wholesale migration from mass to bits…

…began with the arrival of computer chips. This subtle disembodiment was first viewed as a unique dynamic of the high-tech corridors of Silicon Valley. Software was so strange–part body, part spirit–that nobody was surprised when the computer industry itself behaved strangely. The principles of the net, such as increasing returns, were seen as special cases, anomalies within the larger “real” economy of steel, oil, automobiles, and farms. What did such weirdness have to do with, say, making cars, or selling lettuce? At first, nothing. But by now every industry (shoe retail, glass manufacturing, hamburgers) has an information component, and that component is increasing. There is not a single company of consequence that does not use computers and communication technology. All U.S. companies (low as well as high-tech) together spent $212 billion on information technology in 1996. Often, the digital component of the firm, say the IT or MIS department, or the wizards running the technology, will be the first to feel the influence of the new rules and network dynamics. Consultants Larry Downes and Chunka Mui say, “Even though the primary technology of many industries may not be in transition … every industry is going through a revolution in its information technology.” As more of a company “goes online” nerd ideas begin to seep into the whole organization, reshaping the firm’s understanding of what it is doing. Over time, more and more employees will chase the opportunities that intensive information and communication networks bring.

New network technology and globalization accelerate the disembodiment of goods and services. The new dynamics of information will gradually supersede the old dynamics of industrialization until network behavior becomes the entire economy.



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