Shopping on line can be easy, simple and save you lots of money. It can also take a lot of your time, frustrate you, and result in unwanted purchases. Now the same can be said for regular high street shopping, but with the vast opportunity presented by the Internet it will pay you to spend a few minutes reading this and understanding how to better optimize your Information Age shopping experience:
1. Compare - without doubt the biggest advantage that the Information Age offers shoppers today is the ability to compare thousands of Information Age at a time. This is a great thing, but not necessarily all the time! Too much can be daunting at times so take advantage of the great comparison sites and where possible let them do the hard work for you.
2. Research - if it has been said it will be on the internet. Ignorance is no longer a justifiable reason for buying the wrong thing. Take the time to research in detail everything that you could possible want to know about
3. Testimonials - don't know anybody that has bought a Information Age? Wrong! If the Information Age is good the internet will let you know. Use the Internet as a friend and get testimonials before you buy.
4. Questions - Got a question about Information Age then search the Forums, FAQ's, Blogs etc. Don't be afraid to ask .....
5. Reputation - Never heard of the company selling Information Age? Don't worry, no reason why you should know every company in the world, but you know someone that does! Use the internet to find out what people are saying about Information Age and build up a picture of their reputation for sales, returns, customer service, delivery etc.
6. Returns - still worried that even after all of the above your Information Age wont be what you want? Check out the returns policy. There is so much competition now that someone, somewhere is bound to offer the terms that you are comfortable with.
7. Feedback - happy with your Information Age then let people know, after all you are depending on others people input in your buying decision, so why not give a little back.
8. Security - check for the yellow padlock on the Information Age site before you buy, and the s after http:/ /i.e. https:// = a secure site
9. Contact - got a question about Information Age, or want to leave a comment then check out the sites contact page. Reputable companies have them and respond.
10. Payment - ready to pay for your Information Age, then use your credit card or PayPal! Be aware of companies that don't accept them, there may be genuine reasons but given the huge amount of choice you have when buying online there is no reason at all not to buy via credit card or PayPal.
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Oral Culture,
Manuscript Culture, Print Culture, and Information Age
Information Age is a term that has been used to refer to the present economic era. The name alludes to the global economy's shift in focus away from the production of physical goods (as exemplified by the industrial age) and toward the manipulation of information.
Information technology
The relatively recent field of
information technology concerns the use of computer-based information systems to convert, store, protect, process, transmit and retrieve information. Technological advances in this field have changed lifestyles around the world and spawned new industries around controlling and providing information.
Prototype technologies
In
1837 Samuel Morse created a device which converted physical movement into Electricity that could travel over large distances. In 1844, telegraphy was used to transmit data along an experimental telegraph line from
Washington, DC to Baltimore, Maryland. In 1858, the first telegraph cables were stretched across the Atlantic Ocean. The telegraph was soon followed by other revolutionary inventions: the typewriter, the mechanical
calculator, and finally, the telephone in
1876.
The information technologies of the 19th century allowed faster and wider dissemination of information than previously possible. However, ultimately such information had to be reduced to the same form which had been the final form for centuries: paper, whose analogs go back to stone and clay tablets. With the development of what was called wireless transmission, when combined with the ability to transmit voice and sound from the telephone, and recording technology, the new medium of radio began to emerge.
Television followed, allowing video to be displayed with sound. While radio brought the world's events to our homes, it was television that brought the first pictures of the world to many people. TVs were first used as a way to get information and news from other places, but quickly became a very important entertainment device, as well as a useful tool for learning. Unlike radio, television brought with it a whole new industry of content delivery. Not only were stations producing and broadcasting their own shows, but the broadcasting industry allowed homes to receive more and more channels. With the later advances in technology, direct services such as
cable television and satellite television provided increasingly diverse amounts of content.
The Personal computer
Early electronic computers were big, costly, and available only to universities and big corporations. Before the 1990s, most discoveries in information technology were driven by full time researchers having access to the high priced equipment.
In the 1980s, however, small computers started to become available. A
personal computer, or PC, is generally a microcomputer intended to be used by one person at a time, and suitable for general purpose tasks such as word processing, Computer Programming, editing or playing a personal computer game, and is usually used to run purchased or other software not written by the user. Unlike minicomputers, a personal computer is often owned by the person using it, indicating a low cost of purchase and simplicity of operation. The user of a modern personal computer may have significant knowledge of the operating environment and application programs, but is not necessarily interested in programming nor even able to write programs for the computer.
The term PC was popularized by Apple Computer and soon after many other companies began offering personal computers. International Business Machines Corporation (
IBM) developed the first open standard personal computer (IBM PC launched in US markets in 1981; the first deliveries to European markets were in 1982 and
1983), which standardized the software development. For the first time in the world, the general public had personal computers. These computers used similar operating systems that allowed their users to communicate by using the same platform.
Soon after, the general public saw the start of what is now known as the current information technology era: personal computers in the public's homes, using communication devices known as modem, to access information on remote Server (computing). The first incarnation of those were Bulletin board system servers, setup by education facilities or even individual people, to store both information and allow discussion with chat and messages.
The Internet
The
Internet was originally conceived as a distributed, fail-proof network that could connect computers together and be resistant to any point of failure. It was created mainly by DARPA; its initial software applications were
email and computer file transfer.
With the invention of the
World Wide Web in
1989, the Internet really took off as a global network. Now, the Internet is the ultimate place to accelerate the flow of relevant information. Lallana, Emmanuel C., and Margaret N. Uy, "The Information Age", http://en.wikibooks.org/wik/The_Information_Age
Digital Revolution
The Digital Revolution is a recent term describing the effects of the rapid drop in cost and rapid expansion of power of digital devices such as computers and telecommunications (e.g
mobile phone). It includes changes in technology and society, and is often specifically used to refer to the controversies that occur as these technologies are widely adopted.
Technological breakthroughs have revolutionized communications and the spread of information. In 1875, for example, the invention of the telephone breached distance through sound. Between 1910 and 1920, the first AM radio stations began to broadcast sound. By the 1940s television was broadcasting both sound and visuals to a vast public. In 1943, the world's first electronic computer was created. However, it was only with the invention of the
microprocessor in the 1970s that computers became accessible to the public. In the 1990s, the Internet migrated from universities and research institutions to corporate headquarters and homes.
All of these technologies deal with information storage and transmission. However, the one characteristic of computer technology that sets it apart from earlier analog technologies is that it is
digital. Analog signals work by having a signal (usually electric) where the voltage is proportional to some variable. Digital technology, however, converts everything into binary values that are either 0 or 1. This is the "universal language" of nearly every modern device.
To use an analogy, a digital world is a world united by one language, a world where people from across continents share ideas with one another and work together to build projects and ideas. More voluminous and accurate information is accumulated and generated, and distributed in a twinkling to an audience that understands exactly what is said. This in turn allows the recipients of the information to use it for their own purposes, to create ideas and to redistribute more ideas. The result is progress. Take this scenario to a technological level—all kinds of computers, equipment and appliances interconnected and functioning as one unit. Even today, we see telephones exchanging information with computers, and computers playing compressed audio data files or live audio data streams that play music over the Internet like radios. Computers can play movies and tune in to television. Some modern homes allow a person to control central lighting and air-conditioning through computers. These are just some of the features of a digital world.
Box 1. Wearable Computer Systems{{TextBox|Wearable computers are entire systems that are carried by the user, from the CPU and hard drive, to the power supply and all input/output devices. Such systems are under development here at the (MIT) Media Lab, where we are also working to create prototypes of uniquely affective wearable systems. The size and weight of these wearable hardware systems are dropping, even as durability…is increasing. We are also designing clothing and accessories (such as watches, jewelry, etc.) into which these devices may be embedded to make them not only unobtrusive and comfortable to the user, but also invisible to others.
Wearable computers allow us to create systems that go where the user goes, whether at the office, at home, or in line at the bank. More importantly, they provide a platform that can maintain constant contact with the user in the variety of ways that the system may require; they provide computing power for the all affective computing needs, from affect sensing to the applications that can interpret, understand and use the data; and they can store the applications and user input data in on-board memory. Finally, such systems can link to personal computers and to the Internet, providing the same versatility of communications and applications as most desktop computers.-->
Source: MIT Media Lab Affective Computing Research Group, “Wearable Computer Systems for Affective Computing” page on-line; available from http://affect.media.mit.edu/AC_research/wearables.html;accessed 28 August 2002.
Information and Communications Technology
ICT (education) in the United Kingdom education system refers to a broad field encompassing computers, communications equipment and the services associated with them. It includes the telephone, cellular networks, satellite communication, broadcasting media and other forms of communication. ICT is therefore fairly synonymous with Information Technology, however ICT is a subject interested in studying the information age, where as Information Technology is more the cause of the Information Age.
Digital and ICT revolution
The digital and ICT revolutions are twin revolutions. To understand their relationship, let us look at the history of voice telephony. According to Robert W. Lucky, "The crux of Graham Bell’s invention of the telephone in 1875 was the use of analog transmission - the voltage impressed on the line was proportional to the sound pressure at the microphone".Robert W. Lucky "In a Very Short Time: What Is Coming Next in Telecommunications", in Technology 2001: The Future of Computing and Communications, ed. Derek Leebaert (Cambridge, MA: MIT Press, 1995), 339. The growth of the telephone was relatively slow; it was not until the 1920s that a national telephone network was established in the US. In the late 1940s, an alternative to analog transmission of voice was considered with pulse-code modulation (an encoded signal of pulses). This marked the start of digitization in telecommunications.
However, it was only in 1961 that the first digital carrier system was installed. Digitization meant the widespread replacement of telephone operators with digital switches. In 1971 the first fiber optic cables suitable for communications were made, leading to efforts to send communications signals via light waves. (Light wave transmission systems are inherently digital.) By about 1989, "ones and zeros" had become the language of telephone networks in the U.S. Digitization was a critical development because with digital transmission "noise and distortion were not allowed to accumulate, since the ones and zeros could be regularly restored (i.e., regenerated) by a succession of repeater sites along the transmission line". Ibid., 342. The outcome was clearer communications over longer distances at lower costs.
Today, voice is translated into data packets, sent over networks to remote locations, sometimes thousands of kilometers away, and, upon receipt, translated back to voice. Even television is not immune to digitization. In the near future, television signals and television sets will be digital. It will also be possible to use the television to surf the Internet. The digital TV will allow people from different locations to chat with each other while watching a program. With everything becoming digital, television, voice telephony, and the Internet can use similar networks. The transmission of hitherto different services (telephony, television, internet) via the same digital network is also known as convergence.
Cairncross observes that once the infrastructure and the hardware, be it a computer or a telephone or another device, have been set in place, the cost of communications and information exchange will be virtually zero. Distance will no longer decide the cost of communicating electronically.Frances Cairncross, The Death of Distance: How the Communications Revolution Will Change Our Lives (London: Orion, 1997), xiii. This explains why, for example, a three-minute transatlantic call that costs $0.84 today would probably have cost nearly $800 in today’s money 50 years ago.
Box 2: Enter the Communication Satellite{{TextBox|In the late 1970s and early 1980s, just as Jordan appeared on the scene, commercial television began to jump over national boundaries. A decade later, NBA games, especially those of the Chicago Bulls, could be seen in ninety-three countries. This exposure was made possible by the direct broadcast satellite (DBS). .. DBS was to have a much greater impact on the day-to-day lives of people around the world than did the moon landing. Launched into orbit so it would float in space over the west coast of South America, the first broadcast satellite relayed information from specialists on health and education into previously isolated areas…. The experiment was so successful that private companies stepped in to launch their own satellites. The companies, as usual, made their profits by selling advertising.
Thus new technology led the world’s people into a new era of globalization, paid for by new advertising.…
The potential profit of markets skyrocketed in the 1980s when fiber optic cable carried information in light waves along a silicon wire that had the thinness of human hair. Compared with the copper wire it replaced, the silicon wire could transmit dozens of television programs at once instead of one or two … Digital compression technologies meanwhile increased the possible number of channels on a television set from dozens to 150 and even 500. A British firm developed the first round-the-world fiber optic system in 1991.
Now the possibilities were breathtaking. A single direct-to-broadcast satellite could transmit to earth all of the Encyclopedia Britannica in less than a minute. The contents could even be picked up and placed before the viewer by a cable relay station whose cost in 1975 had been $125,000, but in 1980 was less than $4,000 because of the quick technological advances. Profits promised to have no limit. As cable and satellites created international television in the 1980s, so did advertising, whose profits for cable companies shot up more than ten times.
These new systems seemed to resemble magic cash registers as they churned out the money. They also resembled dynamite as they blew apart governmental regulation and geographical boundaries. They did nothing less than change some of the fundamental ways nations’ officials behaved toward their citizens.-->
Source: Walter LaFeber, Michael Jordan and the New Global Capitalism (New York: Norton & Company, 1999), 69-71.
Characteristics of digital technology
Media Integrity. Data stored in analog formats cannot be reproduced without degradation. The more copies made, the worse the copies get. Digital data, on the other hand, do not suffer such deterioration with reproduction.Covell, Digital Convergence, 66. For instance, movies, videos, music and audio files in digital format can be copied and distributed with a quality that is as good as the original.
Media Integration. One of the major limitations of many conventional technologies is their inability to combine media types. Telephones, for example, can send and receive only sound. Similarly, you can’t watch television and expect a character to answer a question you pose. However, with digital data, it is easy to combine media.Ibid., 676 Thus, phones with video, or interactive sound with pictures, become possible. Hence the term multimedia.
Flexible Interaction. The digital domain supports a great variety of interactions, including one-on-one conferences, one-to-many broadcasts, and everything in between. In addition, these interactions can be synchronous and in real time.Ibid., 68.
Transactions. The ability to combine the transactional capability of computers and computer networks with digital media is another interactive advantage of the digital domain. Placing an order and finalizing a transaction becomes as easy as filling in an electronic form and clicking a button. Movies-on-demand (where you pay for movies that you choose to watch on your TV screen) is just around the corner.
Tailoring. Software developed for digital communications and interaction is designed so that users may tailor their use of the tool and the media in a manner not possible with conventional analog technologies.Ibid., 69.
Editing. The conventional alternatives for manipulating text, sound, images, and video are almost always more cumbersome or limited than the new digital tools. Years ago, Francis Ford Coppola said that the day would come when his young daughter will take a home video camera and make films that would win film awards. Coppola’s prediction is fast becoming a reality. Computers with the right software and minimal hardware can do today what thousands of dollars worth of film and video editing equipment did in the past decades.
Internet
The
Internet is a network of networks. It is a global set of connections of computers that enables the exchange of data, news and opinion. Aside from being a communications medium, the Internet has become a platform for new ways of doing business, a better way for governments to deliver public services and an enabler of lifelong learning.
Unlike the telephone, radio or television, the Internet is a many-to-many communication medium. John Gage argues that—
The Internet is not a thing, a place, a single technology, or a mode of governance: it is an agreement. In the language of those who build it, it is a protocol, a way of behaving. What is startling the world is the dramatic spread of this agreement, sweeping across all arenas—commerce, communications, governance—that rely on the exchange of symbols.John Gage, “Decentering Society;” available from http://www.civmag.com/articles/ C9910E03.html 10/31/2000; accessed 8 August 2002.
The Internet has become the fastest growing mass medium. In only four years the number of Internet users has reached 50 million. In contrast, it took radio 38 years, television 13 years and the PC 16 years to reach the same milestone. Despite its explosive growth, however, less than 10% of the global population is online.
The Internet, according to Lawrence Lessig, is an “innovation commons”, a shared resource that enables the creation of new and/or innovative goods and services.Lawrence Lessig, The Future of Ideas:The Fate of the Commons in a Connected World (New York: Random House, 2001), 23.
The Internet can be likened to designer clay; its use is limited only by the imagination and skill of the designer. This unique characteristic is due to the fact that the Internet is designed using the end-to-end (e2e) principle. That is, the intelligence in the network is at the ends, and the main task of the network is to transmit data efficiently and flexibly between these ends.
Lessig identifies at least three important consequences of an e2e network on innovation. First, because applications run on computers at the edge of the network, innovators with new applications need only to connect their computers to the network to let their applications run. Second, because the design is not optimized for any particular existing application, the network is open to innovation not originally imagined. Third, because the design has a neutral platform—in the sense that the network owner can’t discriminate against some packets and favor others—the network can’t discriminate against a new innovator’s design.
The Internet as an “innovation commons” has made the transformation to the information age possible. As Christopher Coward notes,
Because of end-to-end, the Internet acts as a force for individual empowerment. It fosters entrepreneurship. And, as long as end-to-end is not violated, it is democratizing in the sense that it redistributes power from central authorities (governments and companies) to individuals. In the Internet Age, everyone can be a producer of content, create a new software application, or engage in global activities without the permission of a higher authority.Christopher Coward, correspondence with author.
Box 3:
The Earth Will Don an Electronic Skin{{TextBox|In the century, planet earth will don an electronic skin. It will use the Internet as a scaffold to support and transmit its sensations. This skin is already being stitched together. It consists of millions of embedded electronic measuring devices: thermostats, pressure gauges, pollution detectors, cameras, microphones, glucose sensors, EKGs, electroencephalographs. These will probe and monitor cities and endangered species, the atmosphere, our ships, highways and fleets of trucks, our conversations, our bodies—even our dreams.
Ten years from now, there will be trillions of such telemetric systems, each with a microprocessor brain and a radio. Consultant Ernst & Young predicts that by 2010, there will be 10,000 telemetric devices for every human being on the planet. They’ll be in constant contact with one another. But the communication won’t be at our plodding verbal pace. ‘’Fifty kilobits per second is slow,’’ huffs Horst L. Stormer, a Nobel prize-winning physicist employed by Lucent Technologies Inc.’s Bell Laboratories and Columbia University. Machines will prefer to talk at gigabit speeds and higher—so fast that humans will catch only scattered snippets of the discussion.
What will the earth’s new skin permit us to feel? How will we use its surges of sensation? For several years—maybe for a decade—there will be no central nervous system to manage this vast signaling network. Certainly there will be no central intelligence. But many scientists believe that some qualities of self-awareness will emerge once the Net is sensually enhanced and emulates the complexity of the human brain.-->
Source: Neil Gross, “The Earth Will Don an Electronic Skin,” in Businessweek Online (August 30, 1999); available from http://www.businessweek.com/1999/99_35/b3644024.htm; accessed 28 August 2002.
Scalability
If, over the past 30 years, transportation technology had improved at the same rate as information technology with respect to size, cost, performance, and energy efficiency, then an automobile would be the size of a toaster, cost $200, go 100,000 miles per hour and travel 150,000 miles on a gallon of fuel.Ed Lazowska, Bill & Melinda Gates Chair in Computer Science, Department of Computer Science & Engineering, University of Washington; cited in email of Chris Coward to the author. Moore’s Law and Metcalfe’s Law are insightful observations into the power of the personal computer and the Internet.
Moore's Law
Gordon Moore, co-founder of Intel, the chip making company, postulated that the computing power of a microchip doubles every 24 months. This means that the power of the computer chip keeps growing as its size shrinks. As the chip becomes smaller and more powerful without significant price increases, so does the personal computer. Many associate Moore’s Law with the widespread availability of powerful PCs at constant (if not lower) prices. It was used as an explanation for the rapid changes in the PC industry, which in turn affected the whole economy.
Metcalfe's Law
Robert Metcalfe, co-inventor of the Ethernet, the local area networking (LAN) technology, observed that a network’s value grows proportionately to the square of the number of users.
Internet time refers to the fact that with the Internet, more intensive activities are possible. Indeed, in business Internet time can be the source of competitiveness.
Moore’s Law, Metcalfe’s Law and Internet time are pithy ways of expressing the dynamism that characterizes developments in the ICT sector and in the areas being transformed by ICT. Ed Lozowska best puts the rapid changes in the ICT sector in perspective:
Importance of technological revolutions
New technologies transform our lives “by inventing new, undreamed of things and making them in new, undreamed of ways”, says the economist Richard Lipsey.Richard Lipsey, Technological Shocks: Past, Present and Future; available from http:// www.sfu.ca/~rlipsey/T&G.PDF; accessed 28 August 2002.
Imagine what will happen when the cost of a long distance telephone call becomes as low as the cost of a local call? Or, when you can get a driving license at a time and place of your own choosing? Or, when you can bank from the comfort of your own living room? In some countries, ICT is already making these happen. Many believe that the current technological revolution may in time exceed the Industrial Revolution in terms of social significance.Tom Forrester and Perry Morrison, Computer Ethics: Cautionary Tales and Ethical Dilemmas in Computing (Oxford: Blackwell, 1990), 1.
Lipsey, who studies the relationship between technological change and economic development, suggests that the introduction of new technologies can have the following effects on societyLipsey, Technological Shocks, 11.
- Initial productivity slowdown and delayed productivity payoff from the new technologies
- Destruction of human capital (as many old skills are no longer wanted)
- Technological unemployment (temporary but serious)
- Widening disparities in the distribution of income, which tends to be temporary until the supply of labor catches up to the new mix of skill requirements
- Big changes in regional patterns of industrial location (globalization)
- Big changes in required education
- Big changes in infrastructure (e.g., the information highway)
- Big changes in rules and regulations (intellectual property, antimonopoly, etc.)
- Big changes in the way we live and interact with each other
Consequences of the digital and ICT revolutions
First, let us look at the effects of the digital revolution. James Beniger explains:
The progressive digitization of mass media and telecommunications content begins to blur earlier distinctions between the communication of information and its processing…, as well as between people and machines. Digitization makes communications from persons to machines, between machines, and even from machines to persons as easy as it is between persons. Also blurred are the distinctions among information types: numbers, words, pictures, and sounds, and eventually tastes, odors, and possibly even sensations, all might one day be stored, processed, and communicated in the same digital format.John V. Pavlik, citing James Beniger, New Media Technology: Cultural and Commercial Perspectives, 2nd ed. (Boston: Allyn and Bacon, 1998), 134.
On a societal level, the digital and ICT revolutions make possible better and cheaper access to knowledge and information. This speeds up transactions and processes and reduces their cost, which in turn benefit citizens and consumers.
The ability of ICTs to traverse time and distance allows human beings to interact with each other in new ways. Distance is no longer a consideration. As Giddens observes,
With the advent of the communications revolution, distance has a different relationship to self-immediacy and experience than it used to have. Distance isn’t simply wiped out, but when you have a world where the value of the money in your pocket is affected immediately by ongoing electronic transactions happening many miles away it’s simply a different situation from how the world was in the past.Anthony Giddens, “Runaway World: The Reith Lectures Revisited Lecture 1: 10 November 1999;” available from http://www.lse.ac.uk/Giddens/pdf/10-Nov-99.PDF; accessed 28 August 2002.
Put another way, so what if two people are located in different time zones? They can still talk, negotiate, and make deals as though they were face to face. As the sociologist
Manuel Castells has noted, “Technological revolutions are all characterized by their pervasiveness, that is by their penetration of all domains of human activity, not as an exogenous source of impact, but as the fabric in which such activity is woven.”Manuel Castells, The Rise of the Network Society. The Information Age: Economy, Society & Culture, vol. 1 (Oxford:Blackwell, 1996), 31.
Technological determinism
The revolution will affect some countries earlier than it will others. For ICT to weave its magic, it must find a hospitable social and political environment. New technologies threaten existing power and economic relationships, and those that benefit from these old relationships put up barriers to the spread of the new technologies. Note, for example, how the music industry has resisted digital audio tapes and Napster. Moreover, laws can deter (or encourage) the spread of new technologies. For example, the lack of legal recognition for digital contracts and digital signatures is holding back electronic commerce.
Debora Spar states that “life along the technological frontier moves through four distinct phases: innovation, commercialization, creative anarchy, and rules.”Debora L. Spar, Ruling the Waves: From the Compass to the Internet, a History of Business and Politics along the Technological Frontier (New York: Harcourt: 2001), 11. While individualism and the absence of government are characteristics of the first three stages, government—with its rule making and enforcing capability—is a key player in the fourth stage. This is because
The establishment of property rights is one of the most crucial events along the technological frontier. It allows the market to unfold in a predictable way, and gives pioneers a hefty dose of ownership and security. Most important, perhaps, the creation of property rights also marks the difference between pioneers and pirates, between those whose claim on the new technology is legitimate and those whose claim is not.Ibid, 374.
It is important to remember that technology is shaped by society as much as it shapes society. Thus, those interested in harnessing the power of new technologies should help create the right environment for it to flourish.
Information, Knowledge and the New Economy
Information Economy
An information economy is where the productivity and competitiveness of units or agents in the economy (be they firms, regions or nations) depend mainly on their capacity to generate, process, and apply efficiently knowledge-based information.Castells, The Rise of the Network Society, 66. It is also described as an economy where information is both the currency and the product.
While we have always relied on information exchange to do our jobs and run our lives, the information economy is different in that it can collect more relevant information at the appropriate time. Consequently, production in the information economy can be fine tuned in ways heretofore undreamed of. What makes information plentiful in this economy is the pervasive use of information and communications technology.
Box 4:
Banking without Boundaries{{TextBox|For the first time in 300 years, the very nature of banking has changed. We still handle money, but information, not money, is now the lifeblood of our industry. From what was essentially a transaction-based business, where customers came to you (or didn’t), banking has to make the leap into what is essentially a sale-and-marketing culture. In the new culture, a bank is defined almost solely by its ability to add value to the customer relationship, which breaks down into acquiring, analyzing, integrating, and leveraging of information about, from, and for the benefit of each individual customer.
The last (but obviously not the least) of our fundamental changes goes to the very heart of how banking is done. What used to happen only in branches (and only during ‘bankers hours’) can now happen not just anywhere in the world at any time of the day or night, but also through just about any delivery channel a customer cares to select—the automated banking machine, the telephone, the personal computer, even the television set.-->
Source: Lloyd Darlington “Banking Without Boundaries: How the banking industry is transforming itself for the digital age” in Don Tapscott, Alex Lowy and David Ticoll (eds.), Blueprint for the Digital Economy: Creating Wealth in the Era of e- Business (New York: McGraw Hill), 115.
The information economy is global. A historically new reality, the global economy has the capacity to work as a unit in real time on a planetary scale.Ibid., 92.Corporations and firms now have a worldwide base for skilled labor to tap. Capital flows freely between countries, and countries can utilize this capital in real time.
However, some critics claim that a true global economy has yet to be achieved. Stephen Cohen observes that the mobility of labor is undermined by people’s xenophobia and stricter immigration laws. Multinational corporations still maintain their assets and strategic command centers in their home nations, and capital is still limited by banking and finance laws.
Castells, however, argues that even if globalization has not yet been fully realized, it will only be a matter of time before this happens. Globalization will be affected by government regulations and policies, which will affect international boundaries and the structure of the global economy.Ibid., 97-98.
A second characteristic of the information economy is that it is highly productive. William Nordhaus of the US National Bureau of Economic Research states that:
Productivity growth in the new economy sectors has made a significant contribution to economy-wide productivity growth. In the business sector (between 1999 and 2001), labor-productivity growth excluding the new economy sectors was 2.24 percent per year as compared to 3.19 percent per year including the new economy. Of the 1.82 percentage point increase in labor-productivity growth in the last three years relative to the earlier period, 0.65 percentage point was due to the new economy sectors. The contribution of the new economy was slightly larger for well-measured output because that sector is smaller than the business economy.William D. Nordhaus, “Productivity Growth and the New Economy,” Working Paper 8096 National Bureau of Economic Research; available from http://www.nber.org/papers/8096; accessed 28 August 2002, 6-7.
Some critics argue that there is no relationship between profitability and investment in ICT. Castells looks into the history of productivity growth in advanced market economies and observes a downward trend of productivity growth starting roughly around the time that the information technology revolution was taking shape in the early 1970s. According to him, this decline was particularly marked in all countries for serviced activities, where new information-processing devices could be thought to have increased productivity. However, manufacturing productivity presents a different picture. Manufacturing productivity in the US and Japan increased dramatically in 1988-1989 by an annual average of 3% and 4.1% respectively, and productivity increased at a faster pace than during the 1990s.Castells, The Rise of the Network Society, 79. Castells concludes that economic statistics do not adequately capture the movements of the new information economy, precisely because of the broad scope of transformation under the impact of information technology and related organizational change. There may be a diffusion from information technology, manufacturing, telecommunications, and financial services into manufacturing services at large, and then into business services.
A third characteristic of the information economy is the change in the manner of obtaining profits. Robert Reich observes that profits in the old economy came from economies of scale—long runs of more or less identical products. Thus, we had factories, assembly lines, and industries. Now profits come from speed of innovation and the ability to attract and keep customers. Where before the winners were big corporations, now the winners are small, highly flexible groups that devise great ideas, develop trustworthy branding for themselves and their products, and market these effectively.Robert Reich, The Future of Success (New York: Alfred A. Knopf, 2001), 106. The winning competitors are those who are first at providing lower prices and higher value through intermediaries of trustworthy brands. But the winning is temporary, and the race is never over. Those in the lead cannot stop innovating lest they fall behind the competition.Ibid., 48.
Knowledge and network economies
All these terms are used interchangeably, although the various concepts tend to emphasize different aspects of the phenomenon—like “knowledge” instead of “information” or “network” as opposed to “new”. Peter Drucker describes the information revolution as a knowledge revolution. The key, he says, is not electronics but cognitive science.Peter Drucker, “Beyond the Information Revolution” in The Atlantic Online page online; available from http://www.theatlantic.com/issues/99oct/9910drucker.htm; accessed 28 August 2002. The software used for computers merely reorganizes traditional work, which had been based on experience. This is done through the application of knowledge, in particular systematic, logical analysis. Setting up an IT structure is not enough. To maintain leadership in the new economy, the social position of knowledge professionals and the social acceptance of their values should be guaranteed.
The knowledge economy is also a networked economy. The concept stresses the important role of links among individuals, groups and corporations in the new economy. It has been argued that networks have always been an ideal organizing tool due to their inherent flexibility and adaptability. However, traditional networks were not designed to coordinate functions beyond a certain size and complexity. This early limitation has been overcome with the introduction of ICTs, particularly the Internet, where the flexibility and adaptability of networks are brought to the fore, and their evolutionary nature is asserted.Manuel Castells, The Internet Galaxy (Oxford & New York: Oxford University Press, 2001), 1-2.
Coasian transactions
Nobel Laureate for Economics Ronald Coase noted that a firm tends to expand until “the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market.”Cited in Tapscott, Ticoll and Lowy, Digital Capital: Harnessing the Power of Business Webs (London: Nicolas Brealey Publishing, 2000), 8. Coase also believed that the law of diminishing returns applies to firm size: Big firms are complicated and they find it hard to manage resources efficiently. Small companies often do things more cheaply than big ones. Therefore, if it’s cheaper to perform a transaction within a firm, it usually stays there. However, if it’s cheaper to go to the marketplace, then firms go to external suppliers. Thus, a car maker (like Toyota) will buy car batteries from a supplier rather than manufacture batteries in-house if it is easier to do so.
ICT reduces transaction costs significantly. Large and diverse groups of people can now more easily and more cheaply gain near real-time access to the information they need to make sound decisions and to coordinate complex activities.Ibid., 7-9. Firms can now downsize to the point of producing their main competence and purchasing everything else they need from outside. Thus, instead of massive corporations, what are emerging are small highly focused corporations that farm out production to their allies. This is also known as network production.
Box 5:
Furiously Fast Fashions (excerpts){{TextBox|… Hong Kong is the center of the garment outsourcing industry. Most of the companies located there own and run factories across Asia that weave, cut and sew garments. But Li & Fung is a different kind of outsourcer… the 95-year-old trading house that once sold ceramics and fireworks overseas doesn’t own a stitch when it comes to making garments. No factories, no machines, no fabrics. Instead, [Li & Fung[ deal only in information, relying on a far-flung network of more than 7,500 suppliers in 37 countries, from Madagascar to China to Guatemala. “There are no secrets in the actual manufacturing. I mean, a shirt is a shirt,” says William Fung, the managing director. “We would rather build on something proprietary, like what information it takes to make that shirt faster or more efficiently.”
As an order comes in … Li & Fung uses personalized Web sites and e-mail to fine-tune specifications with the customer. It then takes those instructions and feeds them into its intranet to find the right supplier of raw materials and the right factory for assembling the clothes.
… (Li & Fung’s) division manager Ada Liu explains how she juggled a pants order for a major American clothing brand. She had the fabric woven in China because the factories there could dye it the dark green indigo she needed, and she chose fastenings from factories in Hong Kong and Korea because they are the most durable. Then she sent the raw materials to Guatemala for sewing. “For simple things like pants with four seams, Guatemala is great.” says Liu. “They can do things quickly, and it’s close to the U.S. Delivery takes only a few days.” And if production problems arise in Guatemala, Li & Fung can tap into its worldwide network and send the order to another country to avoid delays.
As a garment moves through production, retailers can make last-minute changes to orders on the Web site, which tracks the entire production process. About five years ago, when the company was run by phone and fax, Li & Fung would get an order for 50,000 khaki cargo pants - and deliver the goods five months later. Now, until the material is woven, the customer can cancel the order online. Until the fabric is dyed, the retailer can change the color. Until it is cut, the client can change the design or size. “There are generally fewer mistakes and disputes now when we have to make changes because the communication is clearer. That makes easier to do,” explains Liu.-->
Source: Joanne Lee-Young and Megan Barnett, “ Furiously Fast Fashions,” in The Software and Information Industry Association Trends Report 2001 page on-line; available from http://www.trendsreport.net/software/young.html; accessed 28 August 2002.
E-commerce
The ICT revolution has transformed not only how (and where) goods are produced but also how commodities are exchanged. E-commerce is buying and selling over the Internet or any transaction concluded through an information network involving the transfer of ownership or rights to use goods or services. More precisely, it includes all business transactions that use electronic communications and digital information processing technology to create, transform and redefine relationships for value creation between organizations, and between organizations and individuals.
The different types of e-commerce are: business-to-business (B2B); business-toconsumer (B2C); business-to-government (B2G); consumer-to-consumer (C2C); and mobile commerce (m-commerce).
Impact on agriculture
Like the production and exchange of commodities, agriculture will also be transformed by ICT. ICTs will allow farmers to have more accurate information on the factors that are needed to increase crop yield. “Precision farming” or farm management using ICTs will become the norm rather than the exception.
We can also expect better crops and livestock as a result of agricultural biotechnology. The term “biotechnology” broadly includes “any technique that uses living organisms, or parts of such organisms, to make or modify products, to improve plants or animals, or to develop microorganisms for specific use.”Doyle, J.J. and G.J. Persley, eds., Enabling the Safe Use of Biotechnology: Principles and Practices (Washington, D.C.: The World Bank, 1996).
The potential applications of modern biotechnology in agriculture are varied and promising. These include: (a) improved yield from crops; (b) reduced vulnerability of crops to environmental stresses; (c) increased nutritional qualities of food crops; (d) improved taste, texture or appearance of food; (e) reduced dependence on fertilizers, pesticides and other agrochemicals; and (f) production of novel substances in crop plants.
Box 6:
Farming Goes into Space{{TextBox|For most of the twentieth century, farming has been somewhat of an inexact science, more a matter of a farmer developing an innate understanding of the nuances of his land and thereby planting and harvesting his fields accordingly. Now, at the beginning of the twentyfirst century, sophisticated technological advancements offer today’s farmers a variety of methods to increase crop yields, selectively apply pesticides, and lower associated costs. The technology that is enabling this revolution in farming processes is on the ground, in the tractors, but it is also up in the sky, circling the globe in a geo-synchronous orbit 12,000 miles above the planet’s surface.
Twenty-four satellites orbit the Earth, making up the Global Positioning System (GPS) System. These satellites have the ability to pinpoint the location of an object on the ground within a few centimeters. Developed by the Department of Defense for military purposes, GPS has now been opened up for civilian use. In fact, civilian applications have come to outnumber military one almost 10 to 1. Among the former, precision farming seems poised to become the next great application area for GPS.
How, specifically, are these new technologies helping farmers to improve farming efficiencies? At this point, precision farming can be broken down into three major areas: crop, soil, and positioning sensors — including remote and vehicle-mounted, on-the-go tools that detect moisture levels, protein, water stress, and disease or weed infestations; machine controls that guide field equipment and can vary the rate, mix, and location of water, seeds, nutrients, or chemical sprays; and computerized GIS maps and databases that process the data produced by the first category of tools and generates the “prescriptions” that drive the second category.
Although improvements can and are being made in the first and second categories, their capabilities are well developed, well defined, increasingly integrated, user-friendly, and ever more affordable. The critical component, and the one that can realize the greatest benefits for farmers, is found in the final category: GIS-based, decision-support software that can guide management practices. It is in this third area where more work remains to be done: building the databases, refining the analytical tools, and increasing the site-specific agronomic knowledge and expertise of the community.-->
Source: Craig Sutton and John Deere, “Farming Goes Into Space,” in The Software and Information Industry Association Trends Report 2001 page on-line; available from http://www.trendsreport.net/software/deere.html; accessed 28 August 2002.
The information revolution will not eliminate farmers, just as the industrial revolution did not eliminate them. But farming methods will change yet again. More information will help farmers to irrigate only those areas that need water and provide for more effective use of fertilizers, among others. In addition, agricultural biotechnology genetically modifies plants and food sources to maximize their reproduction and nutritional value.
Aside from increased yield, faster communications and transactions and lower transportation costs also ensure more efficient delivery of farm inputs that lead to lower prices and better inventory.
Dot-com crash
Not at all. If we look at the history of technology and development, we will see that the dot-com bust is part of the normal pattern of events in any technological revolution.
The economist Joseph Schumpeter suggests that a technology revolution starts with the introduction of one or more technologies that enables the new cluster.
The new technology cluster, at first little noticed, achieves successes in early demonstrations. Technical people start small companies based on the new ideas. These new companies compete intensely in this early turbulent phase, when government regulation is largely absent, and as successes mount in a technical free-for-all environment. The promise of extraordinary profit looms. The public begins to speculate.
The middle phase sees a sustained build out or golden age of the technology, during which the technology becomes the engine of growth for the economy. Large companies and oligopolies reign, and the period is one of confidence and prosperity.
In the last phase, the technology matures. Technological possibilities are saturated, production moves to places on the periphery, and complacency sets in. Profits at home are low, and entrepreneurs start scouting for new opportunities. The economy becomes ripe for the next revolution.W. Brian Arthur, “Is The Information Revolution Dead?” Business 2.0 (March 2002); available from www.business2.com/articles/mag/print/0,1643,37570,FF.html; accessed 8 August 2002.
It was not the information economy that died with the dot-com crash. Only the hype died. The downturn in ICTs and the dot-com crash simply ended the first phase. We are now just entering the middle phase, the “sustained build out or golden age of the technology”.
New Work
Labor effects
Jeremy Rifkin suggests that the rise of productivity as a consequence of ICT deployment affects the amount of time worked in two ways.Jeremy Rifkin, The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era, (New York: JP Putnam, 1995), 223. First, labor and time saving technologies have allowed companies to eliminate and dismiss workers en masse. Second, those who manage to hold their jobs are made to work longer hours. For firms a smaller workforce means saving on the cost of providing benefits such as health care.
But the history of the industrial revolution suggests that workers will not disappear; only particular kinds of workers will. Peter Drucker gives us a clue on what kinds of work will disappear. According to Drucker, “the Information Revolution has routinized traditional processes in an untold number of areas.”Drucker, “Beyond the Information Revolution” in The Atlantic Online. Just as the industrial revolution mechanized weaving, the information revolution will replace what has been automated by robots. The scenario is not much different from what transpired in previous eras and technology revolutions.
There will always be room for workers, but the areas or fields of demand will change.
The breadth of new work in the information age is immense. New workers can be seen in traditional industries (old workers renewed), in new ICT-related services and content provision (the information workers), in infrastructure development and maintenance of the information economy (information managers and entrepreneurs) and in a host of related areas.
Among the most in demand and sought after workers are information technology (IT) professionals. According to a 1999 US Commerce Department study: “For more than 15 years, employment in the core IT occupations—computer scientists, computer engineers, system analysts and computer programmers—has grown at an astounding pace. The growth rate for computer scientists and system analysts has even accelerated in recent years.”Carol Ann Meares et al., The Digital Workforce: Building Infotech Skills at the Speed of Innovation (US Department of Commerce, June 1999), 21. The recent downturn has not changed this trend; it has only slowed down the demand.
But it is not only IT professionals who will thrive. What Robert Reich calls “symbolic analysts”—engineers, attorneys, scientists, professors, executives, journalists, consultants and other “mind workers” who engage in processing information and symbols for a living—will occupy a privileged position in that they can sell their services in the global economy. In an economy where information is critical, symbolic analysts or “knowledge workers” will constitute an elite group.
Box 7:
The New Workforce (excerpts){{TextBox|...he knowledge workers, collectively, are the new capitalists. Knowledge has become the key resource, and the only scarce one. This means that knowledge workers collectively own the means of production….
Effective knowledge is specialized. That means knowledge workers need access to an organization—a collective that brings together an array of knowledge workers and applies their specialism to a common end-product. …
Knowledge workers… see themselves as equal to those who retain their services, as ‘professionals’ rather than ‘employees’. The knowledge society is a society of seniors and juniors rather than bosses and subordinates.
… although women have always worked, since time immemorial the jobs they have done have been different from men’s. There was men’s work and there was women’s work. … Knowledge work, on the other hand, is ‘unisex’, not because of feminist pressure but because it can be done equally well by both sexes.
Such workers have two main needs: formal education that enables them to enter knowledge work in the first place, and continuing education throughout their working lives to keep their knowledge up to date.
Although the emergence of knowledge as an important resource increasingly means specialization, knowledge workers are highly mobile within their specialism. They think nothing of moving from one university, one company or one country to another, as long as they stay within the same field of knowledge.
The knowledge society is the first human society where upward mobility is potentially unlimited. Knowledge differs from all other means of production in that it cannot be inherited or bequeathed. It has to be acquired anew by every individual, and everyone starts out with the same total ignorance.
The upward mobility of the knowledge society, however, comes at a high price: the psychological pressures and emotional traumas of the rat race. There can be winners only if there are losers. This was not true of earlier societies. The son of the landless labourer who becomes a landless labourer himself was not a failure. In the knowledge society, however, he is not only a personal failure but a failure of society as well.-->
Source: “The Next Society: A Survey of the Near Future,” The Economist (November 3, 2001), 8-11.
Attention givers
Another category of workers that will emerge are attention-givers—people who care for, tend to, or oversee children, the elderly, the disabled, the depressed and anxious, as well as more or less healthy adults who want more attention for themselves and are able and willing to pay for it.Reich, The Future of Success, 176.
Two reasons account for the growth of the attention industry. First is the increasing number of people who work harder and subcontract family responsibilities, many of which involve giving attention. Second, with the growing productivity of machines (computerized machine tools and robots inside factories, and, in the service economy, automated bank tellers, automated gas pumps, voice activated telephone answering systems, and digital devices), they will soon be capable of doing just about everything. Everything, that is, except personal attention. So those with jobs that have been replaced by highly productive machines sell personal attention instead, and this trend will continue as the years pass.Ibid., 176-7.
Entrepreneurialism
It has been suggested that the Internet is a natural environment for entrepreneurs. Entrepreneurs are innovators who implement change within markets through the introduction of new goods, new methods of production or new markets. Gregory K. Ericksen believes that enterpreneurs will flourish in the new Internet society:
…the Internet world calls for a personality portfolio that comes naturally to entrepreneurs. It demands a willingness to take risks, a whole-hearted commitment to the enterprise, a sense of timing, and a readiness to act fast. The challenge of the Internet is not technology, whish is the enabler. The challenges and the opportunities are based on problem solving and innovations that deliver true value. Ideas that make a difference can and must be put into action quickly.Gregory K. Ericksen, Net Entrepreneurs Only: 10 Entrepreneurs Tell The Stories of Their Success (New York, NY: John Wiley & Sons, 2000), ix.
Entrepreneurs flourish in an environment that allows the free flow of ideas, encourages risk taking and accepts failure as a necessary part of doing business. Creating entrepreneurs is also linked to an environment of lifelong learning. The European Commission defines lifelong learning as “all learning activity undertaken throughout life, with the aim of improving knowledge, skills and competence, within a personal, civic, social and/or employment-related perspective.”The European Commission, “LifeLong Learning,” European Communities, 1995-2002; available from http://europa.eu.int/comm/education/life/what_islll_en.html; accessed 31 August 2002 Lifelong learning involves acquiring and updating all kinds of abilities, interests, knowledge and qualifications to enable citizens to adapt to the information age. If designed and implemented properly, ICT use in education can promote the acquisition of the knowledge and skills that will empower students for lifelong learning in the 21st century.
Box 9:
Educating Entrepreneurs{{TextBox|The Consortium for Entrepreneurship Education supports the concept that entrepreneurship is a lifelong learning process that has at least five distinct stages of development. This lifelong learning model assumes that everyone in our educational system should have opportunities to learn at the beginning stages, but the later stages are targeted to those who choose to become entrepreneurs.
Each of the following five stages may be taught with activities that are infused in other classes or as a separate course.
Stage 1 - BASICS: In primary grades, junior high and high school, students should experience various facets of business ownership. At this first stage the focus is on understanding the basics of our economy, career opportunities that result, and the need to master basic skills to be successful in a free market economy. Motivation to learn and a sense of individual opportunity are the special outcomes at this stage of the lifelong learning model.
Stage 2 - COMPETENCY AWARENESS: The students will learn to speak the language of business, and see the problems from the small business owner’s point of view. This is particularly needed in vocational education. The emphasis is on beginning competencies that may be taught as an entire entrepreneurship class or included as part of other courses related to entrepreneurship. For example, cash flow problems could be used in a math class and sales demonstrations could be part of a communications class.
Stage 3 - CREATIVE APPLICATIONS: There is so much to learn about starting a business it is not surprising that so many businesses have trouble. We teach future doctors for many years, but we have expected a small business owner to learn everything by attending several Saturday seminars.
This stage may take place in advanced high school vocational programs, two-year colleges where there are special courses and/or associate degree programs, and some colleges and univers
:
Oral Culture, Manuscript Culture,
Print Culture, and Information Age
Information Age is a term that has been used to refer to the present economic era. The name alludes to the global economy's shift in focus away from the production of physical goods (as exemplified by the
industrial age) and toward the manipulation of information.
Information technology
The relatively recent field of information technology concerns the use of computer-based information systems to convert, store, protect, process, transmit and retrieve information. Technological advances in this field have changed lifestyles around the world and spawned new industries around controlling and providing information.
Prototype technologies
In
1837 Samuel Morse created a device which converted physical movement into Electricity that could travel over large distances. In
1844, telegraphy was used to transmit data along an experimental telegraph line from
Washington, DC to Baltimore, Maryland. In
1858, the first telegraph cables were stretched across the Atlantic Ocean. The telegraph was soon followed by other revolutionary inventions: the
typewriter, the mechanical calculator, and finally, the telephone in 1876.
The information technologies of the 19th century allowed faster and wider dissemination of information than previously possible. However, ultimately such information had to be reduced to the same form which had been the final form for centuries: paper, whose analogs go back to stone and clay tablets. With the development of what was called wireless transmission, when combined with the ability to transmit voice and sound from the telephone, and recording technology, the new medium of radio began to emerge.
Television followed, allowing video to be displayed with sound. While radio brought the world's events to our homes, it was television that brought the first pictures of the world to many people. TVs were first used as a way to get information and news from other places, but quickly became a very important entertainment device, as well as a useful tool for learning. Unlike radio, television brought with it a whole new industry of content delivery. Not only were stations producing and broadcasting their own shows, but the broadcasting industry allowed homes to receive more and more channels. With the later advances in technology, direct services such as cable television and
satellite television provided increasingly diverse amounts of content.
The Personal computer
Early electronic computers were big, costly, and available only to universities and big corporations. Before the 1990s, most discoveries in information technology were driven by full time researchers having access to the high priced equipment.
In the 1980s, however, small computers started to become available. A
personal computer, or PC, is generally a
microcomputer intended to be used by one person at a time, and suitable for general purpose tasks such as word processing, Computer Programming, editing or playing a personal
computer game, and is usually used to run purchased or other software not written by the user. Unlike minicomputers, a personal computer is often owned by the person using it, indicating a low cost of purchase and simplicity of operation. The user of a modern personal computer may have significant knowledge of the operating environment and application programs, but is not necessarily interested in programming nor even able to write programs for the computer.
The term PC was popularized by Apple Computer and soon after many other companies began offering personal computers. International Business Machines Corporation (
IBM) developed the first open standard personal computer (IBM PC launched in US markets in 1981; the first deliveries to European markets were in
1982 and
1983), which standardized the software development. For the first time in the world, the general public had personal computers. These computers used similar operating systems that allowed their users to communicate by using the same platform.
Soon after, the general public saw the start of what is now known as the current information technology era: personal computers in the public's homes, using communication devices known as
modem, to access information on remote
Server (computing). The first incarnation of those were Bulletin board system servers, setup by education facilities or even individual people, to store both information and allow discussion with chat and messages.
The Internet
The Internet was originally conceived as a distributed, fail-proof network that could connect computers together and be resistant to any point of failure. It was created mainly by
DARPA; its initial software applications were email and computer file transfer.
With the invention of the World Wide Web in 1989, the Internet really took off as a global network. Now, the Internet is the ultimate place to accelerate the flow of relevant information. Lallana, Emmanuel C., and Margaret N. Uy, "The Information Age", http://en.wikibooks.org/wik/The_Information_Age
Digital Revolution
The Digital Revolution is a recent term describing the effects of the rapid drop in cost and rapid expansion of power of digital devices such as computers and telecommunications (e.g
mobile phone). It includes changes in technology and society, and is often specifically used to refer to the controversies that occur as these technologies are widely adopted.
Technological breakthroughs have revolutionized communications and the spread of information. In 1875, for example, the invention of the telephone breached distance through sound. Between 1910 and 1920, the first AM radio stations began to broadcast sound. By the 1940s television was broadcasting both sound and visuals to a vast public. In
1943, the world's first electronic computer was created. However, it was only with the invention of the
microprocessor in the 1970s that computers became accessible to the public. In the 1990s, the Internet migrated from universities and research institutions to corporate headquarters and homes.
All of these technologies deal with information storage and transmission. However, the one characteristic of computer technology that sets it apart from earlier analog technologies is that it is
digital. Analog signals work by having a signal (usually electric) where the voltage is proportional to some variable. Digital technology, however, converts everything into binary values that are either 0 or 1. This is the "universal language" of nearly every modern device.
To use an analogy, a digital world is a world united by one language, a world where people from across continents share ideas with one another and work together to build projects and ideas. More voluminous and accurate information is accumulated and generated, and distributed in a twinkling to an audience that understands exactly what is said. This in turn allows the recipients of the information to use it for their own purposes, to create ideas and to redistribute more ideas. The result is progress. Take this scenario to a technological level—all kinds of computers, equipment and appliances interconnected and functioning as one unit. Even today, we see telephones exchanging information with computers, and computers playing compressed audio data files or live audio data streams that play music over the Internet like radios. Computers can play movies and tune in to television. Some modern homes allow a person to control central lighting and air-conditioning through computers. These are just some of the features of a digital world.
Box 1. Wearable Computer Systems{{TextBox|Wearable computers are entire systems that are carried by the user, from the CPU and hard drive, to the power supply and all input/output devices. Such systems are under development here at the (MIT) Media Lab, where we are also working to create prototypes of uniquely affective wearable systems. The size and weight of these wearable hardware systems are dropping, even as durability…is increasing. We are also designing clothing and accessories (such as watches, jewelry, etc.) into which these devices may be embedded to make them not only unobtrusive and comfortable to the user, but also invisible to others.
Wearable computers allow us to create systems that go where the user goes, whether at the office, at home, or in line at the bank. More importantly, they provide a platform that can maintain constant contact with the user in the variety of ways that the system may require; they provide computing power for the all affective computing needs, from affect sensing to the applications that can interpret, understand and use the data; and they can store the applications and user input data in on-board memory. Finally, such systems can link to personal computers and to the Internet, providing the same versatility of communications and applications as most desktop computers.-->
Source: MIT Media Lab Affective Computing Research Group, “Wearable Computer Systems for Affective Computing” page on-line; available from http://affect.media.mit.edu/AC_research/wearables.html;accessed 28 August 2002.
Information and Communications Technology
ICT (education) in the United Kingdom education system refers to a broad field encompassing computers, communications equipment and the services associated with them. It includes the telephone, cellular networks, satellite communication, broadcasting media and other forms of communication. ICT is therefore fairly synonymous with Information Technology, however ICT is a subject interested in studying the information age, where as Information Technology is more the cause of the Information Age.
Digital and ICT revolution
The digital and ICT revolutions are twin revolutions. To understand their relationship, let us look at the history of voice telephony. According to Robert W. Lucky, "The crux of Graham Bell’s invention of the telephone in 1875 was the use of analog transmission - the voltage impressed on the line was proportional to the sound pressure at the microphone".Robert W. Lucky "In a Very Short Time: What Is Coming Next in Telecommunications", in Technology 2001: The Future of Computing and Communications, ed. Derek Leebaert (Cambridge, MA: MIT Press, 1995), 339. The growth of the telephone was relatively slow; it was not until the 1920s that a national telephone network was established in the US. In the late 1940s, an alternative to analog transmission of voice was considered with pulse-code modulation (an encoded signal of pulses). This marked the start of digitization in telecommunications.
However, it was only in 1961 that the first digital carrier system was installed. Digitization meant the widespread replacement of telephone operators with digital switches. In 1971 the first fiber optic cables suitable for communications were made, leading to efforts to send communications signals via light waves. (Light wave transmission systems are inherently digital.) By about 1989, "ones and zeros" had become the language of telephone networks in the U.S. Digitization was a critical development because with digital transmission "noise and distortion were not allowed to accumulate, since the ones and zeros could be regularly restored (i.e., regenerated) by a succession of repeater sites along the transmission line". Ibid., 342. The outcome was clearer communications over longer distances at lower costs.
Today, voice is translated into data packets, sent over networks to remote locations, sometimes thousands of kilometers away, and, upon receipt, translated back to voice. Even television is not immune to digitization. In the near future, television signals and television sets will be digital. It will also be possible to use the television to surf the Internet. The digital TV will allow people from different locations to chat with each other while watching a program. With everything becoming digital, television, voice telephony, and the Internet can use similar networks. The transmission of hitherto different services (telephony, television, internet) via the same digital network is also known as convergence.
Cairncross observes that once the infrastructure and the hardware, be it a computer or a telephone or another device, have been set in place, the cost of communications and information exchange will be virtually zero. Distance will no longer decide the cost of communicating electronically.Frances Cairncross, The Death of Distance: How the Communications Revolution Will Change Our Lives (London: Orion, 1997), xiii. This explains why, for example, a three-minute transatlantic call that costs $0.84 today would probably have cost nearly $800 in today’s money 50 years ago.
Box 2: Enter the Communication Satellite{{TextBox|In the late 1970s and early 1980s, just as Jordan appeared on the scene, commercial television began to jump over national boundaries. A decade later, NBA games, especially those of the Chicago Bulls, could be seen in ninety-three countries. This exposure was made possible by the direct broadcast satellite (DBS). .. DBS was to have a much greater impact on the day-to-day lives of people around the world than did the moon landing. Launched into orbit so it would float in space over the west coast of South America, the first broadcast satellite relayed information from specialists on health and education into previously isolated areas…. The experiment was so successful that private companies stepped in to launch their own satellites. The companies, as usual, made their profits by selling advertising.
Thus new technology led the world’s people into a new era of globalization, paid for by new advertising.…
The potential profit of markets skyrocketed in the 1980s when fiber optic cable carried information in light waves along a silicon wire that had the thinness of human hair. Compared with the copper wire it replaced, the silicon wire could transmit dozens of television programs at once instead of one or two … Digital compression technologies meanwhile increased the possible number of channels on a television set from dozens to 150 and even 500. A British firm developed the first round-the-world fiber optic system in 1991.
Now the possibilities were breathtaking. A single direct-to-broadcast satellite could transmit to earth all of the Encyclopedia Britannica in less than a minute. The contents could even be picked up and placed before the viewer by a cable relay station whose cost in 1975 had been $125,000, but in 1980 was less than $4,000 because of the quick technological advances. Profits promised to have no limit. As cable and satellites created international television in the 1980s, so did advertising, whose profits for cable companies shot up more than ten times.
These new systems seemed to resemble magic cash registers as they churned out the money. They also resembled dynamite as they blew apart governmental regulation and geographical boundaries. They did nothing less than change some of the fundamental ways nations’ officials behaved toward their citizens.-->
Source: Walter LaFeber, Michael Jordan and the New Global Capitalism (New York: Norton & Company, 1999), 69-71.
Characteristics of digital technology
Media Integrity. Data stored in analog formats cannot be reproduced without degradation. The more copies made, the worse the copies get. Digital data, on the other hand, do not suffer such deterioration with reproduction.Covell, Digital Convergence, 66. For instance, movies, videos, music and audio files in digital format can be copied and distributed with a quality that is as good as the original.
Media Integration. One of the major limitations of many conventional technologies is their inability to combine media types. Telephones, for example, can send and receive only sound. Similarly, you can’t watch television and expect a character to answer a question you pose. However, with digital data, it is easy to combine media.Ibid., 676 Thus, phones with video, or interactive sound with pictures, become possible. Hence the term multimedia.
Flexible Interaction. The digital domain supports a great variety of interactions, including one-on-one conferences, one-to-many broadcasts, and everything in between. In addition, these interactions can be synchronous and in real time.Ibid., 68.
Transactions. The ability to combine the transactional capability of computers and computer networks with digital media is another interactive advantage of the digital domain. Placing an order and finalizing a transaction becomes as easy as filling in an electronic form and clicking a button. Movies-on-demand (where you pay for movies that you choose to watch on your TV screen) is just around the corner.
Tailoring. Software developed for digital communications and interaction is designed so that users may tailor their use of the tool and the media in a manner not possible with conventional analog technologies.Ibid., 69.
Editing. The conventional alternatives for manipulating text, sound, images, and video are almost always more cumbersome or limited than the new digital tools. Years ago, Francis Ford Coppola said that the day would come when his young daughter will take a home video camera and make films that would win film awards. Coppola’s prediction is fast becoming a reality. Computers with the right software and minimal hardware can do today what thousands of dollars worth of film and video editing equipment did in the past decades.
Internet
The
Internet is a network of networks. It is a global set of connections of computers that enables the exchange of data, news and opinion. Aside from being a communications medium, the Internet has become a platform for new ways of doing business, a better way for governments to deliver public services and an enabler of lifelong learning.
Unlike the telephone, radio or television, the Internet is a many-to-many communication medium. John Gage argues that—
The Internet is not a thing, a place, a single technology, or a mode of governance: it is an agreement. In the language of those who build it, it is a protocol, a way of behaving. What is startling the world is the dramatic spread of this agreement, sweeping across all arenas—commerce, communications, governance—that rely on the exchange of symbols.John Gage, “Decentering Society;” available from http://www.civmag.com/articles/ C9910E03.html 10/31/2000; accessed 8 August 2002.
The Internet has become the fastest growing mass medium. In only four years the number of Internet users has reached 50 million. In contrast, it took radio 38 years, television 13 years and the PC 16 years to reach the same milestone. Despite its explosive growth, however, less than 10% of the global population is online.
The Internet, according to Lawrence Lessig, is an “innovation commons”, a shared resource that enables the creation of new and/or innovative goods and services.Lawrence Lessig, The Future of Ideas:The Fate of the Commons in a Connected World (New York: Random House, 2001), 23.
The Internet can be likened to designer clay; its use is limited only by the imagination and skill of the designer. This unique characteristic is due to the fact that the Internet is designed using the end-to-end (e2e) principle. That is, the intelligence in the network is at the ends, and the main task of the network is to transmit data efficiently and flexibly between these ends.
Lessig identifies at least three important consequences of an e2e network on innovation. First, because applications run on computers at the edge of the network, innovators with new applications need only to connect their computers to the network to let their applications run. Second, because the design is not optimized for any particular existing application, the network is open to innovation not originally imagined. Third, because the design has a neutral platform—in the sense that the network owner can’t discriminate against some packets and favor others—the network can’t discriminate against a new innovator’s design.
The Internet as an “innovation commons” has made the transformation to the information age possible. As Christopher Coward notes,
Because of end-to-end, the Internet acts as a force for individual empowerment. It fosters entrepreneurship. And, as long as end-to-end is not violated, it is democratizing in the sense that it redistributes power from central authorities (governments and companies) to individuals. In the Internet Age, everyone can be a producer of content, create a new software application, or engage in global activities without the permission of a higher authority.Christopher Coward, correspondence with author.
Box 3:
The Earth Will Don an Electronic Skin{{TextBox|In the century, planet earth will don an electronic skin. It will use the Internet as a scaffold to support and transmit its sensations. This skin is already being stitched together. It consists of millions of embedded electronic measuring devices: thermostats, pressure gauges, pollution detectors, cameras, microphones, glucose sensors, EKGs, electroencephalographs. These will probe and monitor cities and endangered species, the atmosphere, our ships, highways and fleets of trucks, our conversations, our bodies—even our dreams.
Ten years from now, there will be trillions of such telemetric systems, each with a microprocessor brain and a radio. Consultant Ernst & Young predicts that by 2010, there will be 10,000 telemetric devices for every human being on the planet. They’ll be in constant contact with one another. But the communication won’t be at our plodding verbal pace. ‘’Fifty kilobits per second is slow,’’ huffs Horst L. Stormer, a Nobel prize-winning physicist employed by Lucent Technologies Inc.’s Bell Laboratories and Columbia University. Machines will prefer to talk at gigabit speeds and higher—so fast that humans will catch only scattered snippets of the discussion.
What will the earth’s new skin permit us to feel? How will we use its surges of sensation? For several years—maybe for a decade—there will be no central nervous system to manage this vast signaling network. Certainly there will be no central intelligence. But many scientists believe that some qualities of self-awareness will emerge once the Net is sensually enhanced and emulates the complexity of the human brain.-->
Source: Neil Gross, “The Earth Will Don an Electronic Skin,” in Businessweek Online (August 30, 1999); available from http://www.businessweek.com/1999/99_35/b3644024.htm; accessed 28 August 2002.
Scalability
If, over the past 30 years, transportation technology had improved at the same rate as information technology with respect to size, cost, performance, and energy efficiency, then an automobile would be the size of a toaster, cost $200, go 100,000 miles per hour and travel 150,000 miles on a gallon of fuel.Ed Lazowska, Bill & Melinda Gates Chair in Computer Science, Department of Computer Science & Engineering, University of Washington; cited in email of Chris Coward to the author. Moore’s Law and Metcalfe’s Law are insightful observations into the power of the personal computer and the Internet.
Moore's Law
Gordon Moore, co-founder of Intel, the chip making company, postulated that the computing power of a microchip doubles every 24 months. This means that the power of the computer chip keeps growing as its size shrinks. As the chip becomes smaller and more powerful without significant price increases, so does the personal computer. Many associate Moore’s Law with the widespread availability of powerful PCs at constant (if not lower) prices. It was used as an explanation for the rapid changes in the PC industry, which in turn affected the whole economy.
Metcalfe's Law
Robert Metcalfe, co-inventor of the Ethernet, the local area networking (LAN) technology, observed that a network’s value grows proportionately to the square of the number of users.
Internet time refers to the fact that with the Internet, more intensive activities are possible. Indeed, in business Internet time can be the source of competitiveness.
Moore’s Law, Metcalfe’s Law and Internet time are pithy ways of expressing the dynamism that characterizes developments in the ICT sector and in the areas being transformed by ICT. Ed Lozowska best puts the rapid changes in the ICT sector in perspective:
Importance of technological revolutions
New technologies transform our lives “by inventing new, undreamed of things and making them in new, undreamed of ways”, says the economist Richard Lipsey.Richard Lipsey, Technological Shocks: Past, Present and Future; available from http:// www.sfu.ca/~rlipsey/T&G.PDF; accessed 28 August 2002.
Imagine what will happen when the cost of a long distance telephone call becomes as low as the cost of a local call? Or, when you can get a driving license at a time and place of your own choosing? Or, when you can bank from the comfort of your own living room? In some countries, ICT is already making these happen. Many believe that the current technological revolution may in time exceed the Industrial Revolution in terms of social significance.Tom Forrester and Perry Morrison, Computer Ethics: Cautionary Tales and Ethical Dilemmas in Computing (Oxford: Blackwell, 1990), 1.
Lipsey, who studies the relationship between technological change and economic development, suggests that the introduction of new technologies can have the following effects on societyLipsey, Technological Shocks, 11.
- Initial productivity slowdown and delayed productivity payoff from the new technologies
- Destruction of human capital (as many old skills are no longer wanted)
- Technological unemployment (temporary but serious)
- Widening disparities in the distribution of income, which tends to be temporary until the supply of labor catches up to the new mix of skill requirements
- Big changes in regional patterns of industrial location (globalization)
- Big changes in required education
- Big changes in infrastructure (e.g., the information highway)
- Big changes in rules and regulations (intellectual property, antimonopoly, etc.)
- Big changes in the way we live and interact with each other
Consequences of the digital and ICT revolutions
First, let us look at the effects of the digital revolution. James Beniger explains:
The progressive digitization of mass media and telecommunications content begins to blur earlier distinctions between the communication of information and its processing…, as well as between people and machines. Digitization makes communications from persons to machines, between machines, and even from machines to persons as easy as it is between persons. Also blurred are the distinctions among information types: numbers, words, pictures, and sounds, and eventually tastes, odors, and possibly even sensations, all might one day be stored, processed, and communicated in the same digital format.John V. Pavlik, citing James Beniger, New Media Technology: Cultural and Commercial Perspectives, 2nd ed. (Boston: Allyn and Bacon, 1998), 134.
On a societal level, the digital and ICT revolutions make possible better and cheaper access to knowledge and information. This speeds up transactions and processes and reduces their cost, which in turn benefit citizens and consumers.
The ability of ICTs to traverse time and distance allows human beings to interact with each other in new ways. Distance is no longer a consideration. As Giddens observes,
With the advent of the communications revolution, distance has a different relationship to self-immediacy and experience than it used to have. Distance isn’t simply wiped out, but when you have a world where the value of the money in your pocket is affected immediately by ongoing electronic transactions happening many miles away it’s simply a different situation from how the world was in the past.Anthony Giddens, “Runaway World: The Reith Lectures Revisited Lecture 1: 10 November 1999;” available from http://www.lse.ac.uk/Giddens/pdf/10-Nov-99.PDF; accessed 28 August 2002.
Put another way, so what if two people are located in different time zones? They can still talk, negotiate, and make deals as though they were face to face. As the sociologist
Manuel Castells has noted, “Technological revolutions are all characterized by their pervasiveness, that is by their penetration of all domains of human activity, not as an exogenous source of impact, but as the fabric in which such activity is woven.”Manuel Castells, The Rise of the Network Society. The Information Age: Economy, Society & Culture, vol. 1 (Oxford:Blackwell, 1996), 31.
Technological determinism
The revolution will affect some countries earlier than it will others. For ICT to weave its magic, it must find a hospitable social and political environment. New technologies threaten existing power and economic relationships, and those that benefit from these old relationships put up barriers to the spread of the new technologies. Note, for example, how the music industry has resisted digital audio tapes and Napster. Moreover, laws can deter (or encourage) the spread of new technologies. For example, the lack of legal recognition for digital contracts and digital signatures is holding back electronic commerce.
Debora Spar states that “life along the technological frontier moves through four distinct phases: innovation, commercialization, creative anarchy, and rules.”Debora L. Spar, Ruling the Waves: From the Compass to the Internet, a History of Business and Politics along the Technological Frontier (New York: Harcourt: 2001), 11. While individualism and the absence of government are characteristics of the first three stages, government—with its rule making and enforcing capability—is a key player in the fourth stage. This is because
The establishment of property rights is one of the most crucial events along the technological frontier. It allows the market to unfold in a predictable way, and gives pioneers a hefty dose of ownership and security. Most important, perhaps, the creation of property rights also marks the difference between pioneers and pirates, between those whose claim on the new technology is legitimate and those whose claim is not.Ibid, 374.
It is important to remember that technology is shaped by society as much as it shapes society. Thus, those interested in harnessing the power of new technologies should help create the right environment for it to flourish.
Information, Knowledge and the New Economy
Information Economy
An information economy is where the productivity and competitiveness of units or agents in the economy (be they firms, regions or nations) depend mainly on their capacity to generate, process, and apply efficiently knowledge-based information.Castells, The Rise of the Network Society, 66. It is also described as an economy where information is both the currency and the product.
While we have always relied on information exchange to do our jobs and run our lives, the information economy is different in that it can collect more relevant information at the appropriate time. Consequently, production in the information economy can be fine tuned in ways heretofore undreamed of. What makes information plentiful in this economy is the pervasive use of information and communications technology.
Box 4:
Banking without Boundaries{{TextBox|For the first time in 300 years, the very nature of banking has changed. We still handle money, but information, not money, is now the lifeblood of our industry. From what was essentially a transaction-based business, where customers came to you (or didn’t), banking has to make the leap into what is essentially a sale-and-marketing culture. In the new culture, a bank is defined almost solely by its ability to add value to the customer relationship, which breaks down into acquiring, analyzing, integrating, and leveraging of information about, from, and for the benefit of each individual customer.
The last (but obviously not the least) of our fundamental changes goes to the very heart of how banking is done. What used to happen only in branches (and only during ‘bankers hours’) can now happen not just anywhere in the world at any time of the day or night, but also through just about any delivery channel a customer cares to select—the automated banking machine, the telephone, the personal computer, even the television set.-->
Source: Lloyd Darlington “Banking Without Boundaries: How the banking industry is transforming itself for the digital age” in Don Tapscott, Alex Lowy and David Ticoll (eds.), Blueprint for the Digital Economy: Creating Wealth in the Era of e- Business (New York: McGraw Hill), 115.
The information economy is global. A historically new reality, the global economy has the capacity to work as a unit in real time on a planetary scale.Ibid., 92.Corporations and firms now have a worldwide base for skilled labor to tap. Capital flows freely between countries, and countries can utilize this capital in real time.
However, some critics claim that a true global economy has yet to be achieved. Stephen Cohen observes that the mobility of labor is undermined by people’s xenophobia and stricter immigration laws. Multinational corporations still maintain their assets and strategic command centers in their home nations, and capital is still limited by banking and finance laws.
Castells, however, argues that even if globalization has not yet been fully realized, it will only be a matter of time before this happens. Globalization will be affected by government regulations and policies, which will affect international boundaries and the structure of the global economy.Ibid., 97-98.
A second characteristic of the information economy is that it is highly productive. William Nordhaus of the US National Bureau of Economic Research states that:
Productivity growth in the new economy sectors has made a significant contribution to economy-wide productivity growth. In the business sector (between 1999 and 2001), labor-productivity growth excluding the new economy sectors was 2.24 percent per year as compared to 3.19 percent per year including the new economy. Of the 1.82 percentage point increase in labor-productivity growth in the last three years relative to the earlier period, 0.65 percentage point was due to the new economy sectors. The contribution of the new economy was slightly larger for well-measured output because that sector is smaller than the business economy.William D. Nordhaus, “Productivity Growth and the New Economy,” Working Paper 8096 National Bureau of Economic Research; available from http://www.nber.org/papers/8096; accessed 28 August 2002, 6-7.
Some critics argue that there is no relationship between profitability and investment in ICT. Castells looks into the history of productivity growth in advanced market economies and observes a downward trend of productivity growth starting roughly around the time that the information technology revolution was taking shape in the early 1970s. According to him, this decline was particularly marked in all countries for serviced activities, where new information-processing devices could be thought to have increased productivity. However, manufacturing productivity presents a different picture. Manufacturing productivity in the US and Japan increased dramatically in 1988-1989 by an annual average of 3% and 4.1% respectively, and productivity increased at a faster pace than during the 1990s.Castells, The Rise of the Network Society, 79. Castells concludes that economic statistics do not adequately capture the movements of the new information economy, precisely because of the broad scope of transformation under the impact of information technology and related organizational change. There may be a diffusion from information technology, manufacturing, telecommunications, and financial services into manufacturing services at large, and then into business services.
A third characteristic of the information economy is the change in the manner of obtaining profits. Robert Reich observes that profits in the old economy came from economies of scale—long runs of more or less identical products. Thus, we had factories, assembly lines, and industries. Now profits come from speed of innovation and the ability to attract and keep customers. Where before the winners were big corporations, now the winners are small, highly flexible groups that devise great ideas, develop trustworthy branding for themselves and their products, and market these effectively.Robert Reich, The Future of Success (New York: Alfred A. Knopf, 2001), 106. The winning competitors are those who are first at providing lower prices and higher value through intermediaries of trustworthy brands. But the winning is temporary, and the race is never over. Those in the lead cannot stop innovating lest they fall behind the competition.Ibid., 48.
Knowledge and network economies
All these terms are used interchangeably, although the various concepts tend to emphasize different aspects of the phenomenon—like “knowledge” instead of “information” or “network” as opposed to “new”. Peter Drucker describes the information revolution as a knowledge revolution. The key, he says, is not electronics but cognitive science.Peter Drucker, “Beyond the Information Revolution” in The Atlantic Online page online; available from http://www.theatlantic.com/issues/99oct/9910drucker.htm; accessed 28 August 2002. The software used for computers merely reorganizes traditional work, which had been based on experience. This is done through the application of knowledge, in particular systematic, logical analysis. Setting up an IT structure is not enough. To maintain leadership in the new economy, the social position of knowledge professionals and the social acceptance of their values should be guaranteed.
The knowledge economy is also a networked economy. The concept stresses the important role of links among individuals, groups and corporations in the new economy. It has been argued that networks have always been an ideal organizing tool due to their inherent flexibility and adaptability. However, traditional networks were not designed to coordinate functions beyond a certain size and complexity. This early limitation has been overcome with the introduction of ICTs, particularly the Internet, where the flexibility and adaptability of networks are brought to the fore, and their evolutionary nature is asserted.Manuel Castells, The Internet Galaxy (Oxford & New York: Oxford University Press, 2001), 1-2.
Coasian transactions
Nobel Laureate for Economics Ronald Coase noted that a firm tends to expand until “the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market.”Cited in Tapscott, Ticoll and Lowy, Digital Capital: Harnessing the Power of Business Webs (London: Nicolas Brealey Publishing, 2000), 8. Coase also believed that the law of diminishing returns applies to firm size: Big firms are complicated and they find it hard to manage resources efficiently. Small companies often do things more cheaply than big ones. Therefore, if it’s cheaper to perform a transaction within a firm, it usually stays there. However, if it’s cheaper to go to the marketplace, then firms go to external suppliers. Thus, a car maker (like Toyota) will buy car batteries from a supplier rather than manufacture batteries in-house if it is easier to do so.
ICT reduces transaction costs significantly. Large and diverse groups of people can now more easily and more cheaply gain near real-time access to the information they need to make sound decisions and to coordinate complex activities.Ibid., 7-9. Firms can now downsize to the point of producing their main competence and purchasing everything else they need from outside. Thus, instead of massive corporations, what are emerging are small highly focused corporations that farm out production to their allies. This is also known as network production.
Box 5:
Furiously Fast Fashions (excerpts){{TextBox|… Hong Kong is the center of the garment outsourcing industry. Most of the companies located there own and run factories across Asia that weave, cut and sew garments. But Li & Fung is a different kind of outsourcer… the 95-year-old trading house that once sold ceramics and fireworks overseas doesn’t own a stitch when it comes to making garments. No factories, no machines, no fabrics. Instead, [Li & Fung[ deal only in information, relying on a far-flung network of more than 7,500 suppliers in 37 countries, from Madagascar to China to Guatemala. “There are no secrets in the actual manufacturing. I mean, a shirt is a shirt,” says William Fung, the managing director. “We would rather build on something proprietary, like what information it takes to make that shirt faster or more efficiently.”
As an order comes in … Li & Fung uses personalized Web sites and e-mail to fine-tune specifications with the customer. It then takes those instructions and feeds them into its intranet to find the right supplier of raw materials and the right factory for assembling the clothes.
… (Li & Fung’s) division manager Ada Liu explains how she juggled a pants order for a major American clothing brand. She had the fabric woven in China because the factories there could dye it the dark green indigo she needed, and she chose fastenings from factories in Hong Kong and Korea because they are the most durable. Then she sent the raw materials to Guatemala for sewing. “For simple things like pants with four seams, Guatemala is great.” says Liu. “They can do things quickly, and it’s close to the U.S. Delivery takes only a few days.” And if production problems arise in Guatemala, Li & Fung can tap into its worldwide network and send the order to another country to avoid delays.
As a garment moves through production, retailers can make last-minute changes to orders on the Web site, which tracks the entire production process. About five years ago, when the company was run by phone and fax, Li & Fung would get an order for 50,000 khaki cargo pants - and deliver the goods five months later. Now, until the material is woven, the customer can cancel the order online. Until the fabric is dyed, the retailer can change the color. Until it is cut, the client can change the design or size. “There are generally fewer mistakes and disputes now when we have to make changes because the communication is clearer. That makes easier to do,” explains Liu.-->
Source: Joanne Lee-Young and Megan Barnett, “ Furiously Fast Fashions,” in The Software and Information Industry Association Trends Report 2001 page on-line; available from http://www.trendsreport.net/software/young.html; accessed 28 August 2002.
E-commerce
The ICT revolution has transformed not only how (and where) goods are produced but also how commodities are exchanged. E-commerce is buying and selling over the Internet or any transaction concluded through an information network involving the transfer of ownership or rights to use goods or services. More precisely, it includes all business transactions that use electronic communications and digital information processing technology to create, transform and redefine relationships for value creation between organizations, and between organizations and individuals.
The different types of e-commerce are: business-to-business (B2B); business-toconsumer (B2C); business-to-government (B2G); consumer-to-consumer (C2C); and mobile commerce (m-commerce).
Impact on agriculture
Like the production and exchange of commodities, agriculture will also be transformed by ICT. ICTs will allow farmers to have more accurate information on the factors that are needed to increase crop yield. “Precision farming” or farm management using ICTs will become the norm rather than the exception.
We can also expect better crops and livestock as a result of agricultural biotechnology. The term “biotechnology” broadly includes “any technique that uses living organisms, or parts of such organisms, to make or modify products, to improve plants or animals, or to develop microorganisms for specific use.”Doyle, J.J. and G.J. Persley, eds., Enabling the Safe Use of Biotechnology: Principles and Practices (Washington, D.C.: The World Bank, 1996).
The potential applications of modern biotechnology in agriculture are varied and promising. These include: (a) improved yield from crops; (b) reduced vulnerability of crops to environmental stresses; (c) increased nutritional qualities of food crops; (d) improved taste, texture or appearance of food; (e) reduced dependence on fertilizers, pesticides and other agrochemicals; and (f) production of novel substances in crop plants.
Box 6:
Farming Goes into Space{{TextBox|For most of the twentieth century, farming has been somewhat of an inexact science, more a matter of a farmer developing an innate understanding of the nuances of his land and thereby planting and harvesting his fields accordingly. Now, at the beginning of the twentyfirst century, sophisticated technological advancements offer today’s farmers a variety of methods to increase crop yields, selectively apply pesticides, and lower associated costs. The technology that is enabling this revolution in farming processes is on the ground, in the tractors, but it is also up in the sky, circling the globe in a geo-synchronous orbit 12,000 miles above the planet’s surface.
Twenty-four satellites orbit the Earth, making up the Global Positioning System (GPS) System. These satellites have the ability to pinpoint the location of an object on the ground within a few centimeters. Developed by the Department of Defense for military purposes, GPS has now been opened up for civilian use. In fact, civilian applications have come to outnumber military one almost 10 to 1. Among the former, precision farming seems poised to become the next great application area for GPS.
How, specifically, are these new technologies helping farmers to improve farming efficiencies? At this point, precision farming can be broken down into three major areas: crop, soil, and positioning sensors — including remote and vehicle-mounted, on-the-go tools that detect moisture levels, protein, water stress, and disease or weed infestations; machine controls that guide field equipment and can vary the rate, mix, and location of water, seeds, nutrients, or chemical sprays; and computerized GIS maps and databases that process the data produced by the first category of tools and generates the “prescriptions” that drive the second category.
Although improvements can and are being made in the first and second categories, their capabilities are well developed, well defined, increasingly integrated, user-friendly, and ever more affordable. The critical component, and the one that can realize the greatest benefits for farmers, is found in the final category: GIS-based, decision-support software that can guide management practices. It is in this third area where more work remains to be done: building the databases, refining the analytical tools, and increasing the site-specific agronomic knowledge and expertise of the community.-->
Source: Craig Sutton and John Deere, “Farming Goes Into Space,” in The Software and Information Industry Association Trends Report 2001 page on-line; available from http://www.trendsreport.net/software/deere.html; accessed 28 August 2002.
The information revolution will not eliminate farmers, just as the industrial revolution did not eliminate them. But farming methods will change yet again. More information will help farmers to irrigate only those areas that need water and provide for more effective use of fertilizers, among others. In addition, agricultural biotechnology genetically modifies plants and food sources to maximize their reproduction and nutritional value.
Aside from increased yield, faster communications and transactions and lower transportation costs also ensure more efficient delivery of farm inputs that lead to lower prices and better inventory.
Dot-com crash
Not at all. If we look at the history of technology and development, we will see that the dot-com bust is part of the normal pattern of events in any technological revolution.
The economist Joseph Schumpeter suggests that a technology revolution starts with the introduction of one or more technologies that enables the new cluster.
The new technology cluster, at first little noticed, achieves successes in early demonstrations. Technical people start small companies based on the new ideas. These new companies compete intensely in this early turbulent phase, when government regulation is largely absent, and as successes mount in a technical free-for-all environment. The promise of extraordinary profit looms. The public begins to speculate.
The middle phase sees a sustained build out or golden age of the technology, during which the technology becomes the engine of growth for the economy. Large companies and oligopolies reign, and the period is one of confidence and prosperity.
In the last phase, the technology matures. Technological possibilities are saturated, production moves to places on the periphery, and complacency sets in. Profits at home are low, and entrepreneurs start scouting for new opportunities. The economy becomes ripe for the next revolution.W. Brian Arthur, “Is The Information Revolution Dead?” Business 2.0 (March 2002); available from www.business2.com/articles/mag/print/0,1643,37570,FF.html; accessed 8 August 2002.
It was not the information economy that died with the dot-com crash. Only the hype died. The downturn in ICTs and the dot-com crash simply ended the first phase. We are now just entering the middle phase, the “sustained build out or golden age of the technology”.
New Work
Labor effects
Jeremy Rifkin suggests that the rise of productivity as a consequence of ICT deployment affects the amount of time worked in two ways.Jeremy Rifkin, The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era, (New York: JP Putnam, 1995), 223. First, labor and time saving technologies have allowed companies to eliminate and dismiss workers en masse. Second, those who manage to hold their jobs are made to work longer hours. For firms a smaller workforce means saving on the cost of providing benefits such as health care.
But the history of the industrial revolution suggests that workers will not disappear; only particular kinds of workers will. Peter Drucker gives us a clue on what kinds of work will disappear. According to Drucker, “the Information Revolution has routinized traditional processes in an untold number of areas.”Drucker, “Beyond the Information Revolution” in The Atlantic Online. Just as the industrial revolution mechanized weaving, the information revolution will replace what has been automated by robots. The scenario is not much different from what transpired in previous eras and technology revolutions.
There will always be room for workers, but the areas or fields of demand will change.
The breadth of new work in the information age is immense. New workers can be seen in traditional industries (old workers renewed), in new ICT-related services and content provision (the information workers), in infrastructure development and maintenance of the information economy (information managers and entrepreneurs) and in a host of related areas.
Among the most in demand and sought after workers are information technology (IT) professionals. According to a 1999 US Commerce Department study: “For more than 15 years, employment in the core IT occupations—computer scientists, computer engineers, system analysts and computer programmers—has grown at an astounding pace. The growth rate for computer scientists and system analysts has even accelerated in recent years.”Carol Ann Meares et al., The Digital Workforce: Building Infotech Skills at the Speed of Innovation (US Department of Commerce, June 1999), 21. The recent downturn has not changed this trend; it has only slowed down the demand.
But it is not only IT professionals who will thrive. What Robert Reich calls “symbolic analysts”—engineers, attorneys, scientists, professors, executives, journalists, consultants and other “mind workers” who engage in processing information and symbols for a living—will occupy a privileged position in that they can sell their services in the global economy. In an economy where information is critical, symbolic analysts or “knowledge workers” will constitute an elite group.
Box 7:
The New Workforce (excerpts){{TextBox|...he knowledge workers, collectively, are the new capitalists. Knowledge has become the key resource, and the only scarce one. This means that knowledge workers collectively own the means of production….
Effective knowledge is specialized. That means knowledge workers need access to an organization—a collective that brings together an array of knowledge workers and applies their specialism to a common end-product. …
Knowledge workers… see themselves as equal to those who retain their services, as ‘professionals’ rather than ‘employees’. The knowledge society is a society of seniors and juniors rather than bosses and subordinates.
… although women have always worked, since time immemorial the jobs they have done have been different from men’s. There was men’s work and there was women’s work. … Knowledge work, on the other hand, is ‘unisex’, not because of feminist pressure but because it can be done equally well by both sexes.
Such workers have two main needs: formal education that enables them to enter knowledge work in the first place, and continuing education throughout their working lives to keep their knowledge up to date.
Although the emergence of knowledge as an important resource increasingly means specialization, knowledge workers are highly mobile within their specialism. They think nothing of moving from one university, one company or one country to another, as long as they stay within the same field of knowledge.
The knowledge society is the first human society where upward mobility is potentially unlimited. Knowledge differs from all other means of production in that it cannot be inherited or bequeathed. It has to be acquired anew by every individual, and everyone starts out with the same total ignorance.
The upward mobility of the knowledge society, however, comes at a high price: the psychological pressures and emotional traumas of the rat race. There can be winners only if there are losers. This was not true of earlier societies. The son of the landless labourer who becomes a landless labourer himself was not a failure. In the knowledge society, however, he is not only a personal failure but a failure of society as well.-->
Source: “The Next Society: A Survey of the Near Future,” The Economist (November 3, 2001), 8-11.
Attention givers
Another category of workers that will emerge are attention-givers—people who care for, tend to, or oversee children, the elderly, the disabled, the depressed and anxious, as well as more or less healthy adults who want more attention for themselves and are able and willing to pay for it.Reich, The Future of Success, 176.
Two reasons account for the growth of the attention industry. First is the increasing number of people who work harder and subcontract family responsibilities, many of which involve giving attention. Second, with the growing productivity of machines (computerized machine tools and robots inside factories, and, in the service economy, automated bank tellers, automated gas pumps, voice activated telephone answering systems, and digital devices), they will soon be capable of doing just about everything. Everything, that is, except personal attention. So those with jobs that have been replaced by highly productive machines sell personal attention instead, and this trend will continue as the years pass.Ibid., 176-7.
Entrepreneurialism
It has been suggested that the Internet is a natural environment for entrepreneurs. Entrepreneurs are innovators who implement change within markets through the introduction of new goods, new methods of production or new markets. Gregory K. Ericksen believes that enterpreneurs will flourish in the new Internet society:
…the Internet world calls for a personality portfolio that comes naturally to entrepreneurs. It demands a willingness to take risks, a whole-hearted commitment to the enterprise, a sense of timing, and a readiness to act fast. The challenge of the Internet is not technology, whish is the enabler. The challenges and the opportunities are based on problem solving and innovations that deliver true value. Ideas that make a difference can and must be put into action quickly.Gregory K. Ericksen, Net Entrepreneurs Only: 10 Entrepreneurs Tell The Stories of Their Success (New York, NY: John Wiley & Sons, 2000), ix.
Entrepreneurs flourish in an environment that allows the free flow of ideas, encourages risk taking and accepts failure as a necessary part of doing business. Creating entrepreneurs is also linked to an environment of lifelong learning. The European Commission defines lifelong learning as “all learning activity undertaken throughout life, with the aim of improving knowledge, skills and competence, within a personal, civic, social and/or employment-related perspective.”The European Commission, “LifeLong Learning,” European Communities, 1995-2002; available from http://europa.eu.int/comm/education/life/what_islll_en.html; accessed 31 August 2002 Lifelong learning involves acquiring and updating all kinds of abilities, interests, knowledge and qualifications to enable citizens to adapt to the information age. If designed and implemented properly, ICT use in education can promote the acquisition of the knowledge and skills that will empower students for lifelong learning in the 21st century.
Box 9:
Educating Entrepreneurs{{TextBox|The Consortium for Entrepreneurship Education supports the concept that entrepreneurship is a lifelong learning process that has at least five distinct stages of development. This lifelong learning model assumes that everyone in our educational system should have opportunities to learn at the beginning stages, but the later stages are targeted to those who choose to become entrepreneurs.
Each of the following five stages may be taught with activities that are infused in other classes or as a separate course.
Stage 1 - BASICS: In primary grades, junior high and high school, students should experience various facets of business ownership. At this first stage the focus is on understanding the basics of our economy, career opportunities that result, and the need to master basic skills to be successful in a free market economy. Motivation to learn and a sense of individual opportunity are the special outcomes at this stage of the lifelong learning model.
Stage 2 - COMPETENCY AWARENESS: The students will learn to speak the language of business, and see the problems from the small business owner’s point of view. This is particularly needed in vocational education. The emphasis is on beginning competencies that may be taught as an entire entrepreneurship class or included as part of other courses related to entrepreneurship. For example, cash flow problems could be used in a math class and sales demonstrations could be part of a communications class.
Stage 3 - CREATIVE APPLICATIONS: There is so much to learn about starting a business it is not surprising that so many businesses have trouble. We teach future doctors for many years, but we have expected a small business owner to learn everything by attending several Saturday seminars.
This stage may take place in advanced high school vocational programs, two-year colleges where there are special courses and/or associate degree programs, and some colleges and univers
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