Moving things vs. moving ideas

10 10 2011

AVENTURA, FL - AUGUST 18:  Ed Cole (R), with t...

Image by Getty Images via @daylife

As previously seen in Biznology:

All of our existing controls around content, intellectual property, and information exchange were developed when moving information around was an ancillary function to what mattered at the time: moving goods efficiently to generate wealth. The most powerful nations and organizations throughout the centuries were the ones that mastered the levers that controlled the flow of things. That pattern may soon be facing its own Napster moment. Information is becoming a good in itself, and our controls have not yet adapted to this new reality. In fact, much of what we call governance consists of ensuring that information moves very slowly–if at all. The entities–countries, companies, individuals–that first realize that a shift has already taken place, and re-think their raison d’être accordingly, might be the ones who will dominate the market in this brave new world.

In my last Biznology post, I used a comparison between information and physical goods to support an argument that social technologies still have a long way to go to be considered mature. When information itself becomes the good, and social interactions become the transportation medium, some new and interesting economic patterns may emerge.

Scarcity is a natural attribute of the physical world: a house, a car, or a TV set cannot be owned by multiple people at the same time, nor can one person provide hairdressing or medical services to several customers simultaneously. Our whole economic model is built on top of it: theories around economies of scale, price elasticity, bargaining, patents and copyright all have a strong dependency on “things” or “services” being limited. We even created artificial scarcity to digital items such as software and audio files in the form of license keys and DRM, so that they could fit our “real world” economy.

That model worked OK when being digital was the exception. However, more and more “things” are becoming digital: photos, movies, newspapers, books, magazines, maps, money, annotations, card decks, board games, drawings, paintings, kaleidoscopes–you name it. Furthermore, services are increasingly less dependent on geographical or temporal proximity: online programming, consulting, doctor appointments, tutoring, and teaching are sometimes better than their face-to-face counterparts. While most online services are still provided on a one-off basis, the digitization of those human interactions is just the first step to make them reusable. TED talks and iTunes University lectures are early examples of that.

Of course, I’m not advocating a world without patents or copyrights. But I do think that it’s important to understand what that world would look like, and assess if the existing controls are playing in our favor or against us. Even if we do not dare to change something that served us so well in the past, others may not have the same incentives to keep the status quo.

Another factor to consider is the leapfrog pattern experienced by the mobile telephony industry: countries that were behind in the deployment of phone landlines ended up surpassing those in the developed world in the adoption of cellular phones. Similarly, countries that never developed a sophisticated intellectual property framework may be able to start fresh and put a system in place where broad dissemination and re-use trumps authorship and individual success.

Finally, the emergence of social technologies over the last 10 years showed the power of a resource that has been underutilized for centuries: people and their interactions with each other. The essence of what we used to call Web 2.0 was the transformational aspect of leveraging social interactions throughout the information value chain: creation, capture, distribution, filtering and consumption. The crowd now is often the source, the medium, and the destination of information in its multiple forms.

The conclusion is that the sheer number of people that can be mobilized by an entity–a nation, an organization or an individual–may become a source of a wealth in the near future. Of course, peoplenomics is mostly a diamond in the rough for now. A quick comparison between the top 20 countries by GDP per capita (based on Purchasing Power Parity) and the top 20 countries in the world by population shows that the size of a country’s population is still a poor indicator of its wealth–only the United States, Japan and Germany are part of both lists. Whether or not unleashing the economic value of large populations and efficient information flows will ever materialize is anybody’s guess, but keeping an eye for it and being able to adapt quickly may be key survival skills in a rapidly changing landscape.

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2 responses

10 10 2011
What’s next? Social Media and the Information Life Cycle « The bamboo raft

[...] is the third post in this current series discussing the differences between making and moving information and knowledge versus physical [...]

31 10 2011
Denilson Nastacio

Lots of useful information and facts. I got stuck on “Whether or not unleashing the economic value of large populations and efficient information flows will ever materialize is anybody’s guess”.

To stay on the analogy, information is a component to a good, either higher-level information or a durable good. Information has to be produced with time/money investment. Now think whether large populations have had any effect on efficient creation and flows of durable goods and you are onto something: economies of scale.

Large populations give you critical mass, but have cultural, rather than geographical boundaries. With the widespread adoption of English, that supra-nation of English-speaking people certainly have more reach than other nations, such as Japan and Germany. Whether the US/UK/Australia are better poised to take advantage of the current situation is anyone’s guess in my mind.

Thanks for the wonderful posting and for getting me thinking. What else can one ask?

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