A distinctive feature of the digital
economy emergent in the last couple of decades or so has been the rise of networked
computer mediated communication environment. This is in contrast to scale
enabled industrial information economy that permeated the business backdrop for
more than three and half centuries. A byproduct of new digital topography has
been the movement of non-market and non-proprietary means of production and exchange to the core
from the periphery.
The industrial information ecosystem
compelled production on a commercial scale. Given the factors of production and
costs associated with them, it was relatively difficult if not impossible to
build up alternative models of production based on non-proprietary and
non-market models. However, a robust nonprofit sector did exist for centuries.
What has however changed is the scale and scope of the operations of the same. The
propositions of Alfred Chandler are being restructured and revisualised in the
digital era.
An exploration
of the factors than made possible the alternative models of production and distribution
would be worth pursuing. The input patterns are observing a significant change.
In contrast to the machines and factories that dominated the landscape in the
industrial era, it is the humble personal computer or its derivatives like
laptops, palmtops or even mobile handsets that symbolize the physical capital
of the networked information era. To add to the personal computer is its
connectivity to the rest of the universe through the internet. The rapid
diffusion of internet has exceeded the expectations of even its most ardent
advocates. Internet has brought about a radical change in consumption patterns
at all layers of the society. Therefore, a mobile handset or a personal
computer is not merely a tool of production but also a device for consumption.
It adds to the production function as much as it enhances the utility function.
A mobile handset
or a PC is essentially a mid granular input. Granualrity refers to the size of
the modules in terms of time and effort that an individual must invest in
producing and using them. Further it is linked to affordability and usability
by an individual. A car is highly granular in underdeveloped country but mid granular
in developed country. Moderating a website of restaurant reviews in finely
granular while debugging an open source project is highly granular. A personal
computer or a mobile handset can be termed as mid granular inputs. To add to
their granularity they are lumpy. Lumpiness refers to indivisibility of the
same. They come with certain discrete storage capacity and processing speed,
empirical studies of which have shown less than 50% usage in the normal course.
Large slack of capacity utilization exists. Further the production tasks are increasingly
modularized. Modularization enables the work to be divided and circulated among
multiple nodes before recombining the same at the central hub.
At a commercial
level, the rise of cloud and fog computing are manifestations of the above
phenomenon. Yet there is a vast space for non-commercial applications like pure
sciences. Building supercomputers operating at high teraflops speed. Yet the
same can be achieved through distributed computing and parallel processing. The
examples of Search for Extra-terrestrial Intelligence (SETI), protein mapping,
gene mapping etc. demonstrate the applications of what Benkler would term as
commons based peer production. Computational biology, astronomy are perhaps
greatest beneficiaries at the moment though the applications are still at the
tip of the iceberg. To India, the rapid
growth of mobile device
adoption has resulted in around 15 billion GB per month of mobile data consumption.
Given that India’s mobile data consumption exceeds combined aggregate of US and
China, opportunities abound in noncommercial distributed computing.
The granularization of inputs have
created an output in human meaning and communication. Computation, storage and
communications capacity are in the hands of practically every connected person.
It gives potential for abundant creativity and noncommercial creative output on
YouTube, TIk Tok, Instagram, Facebook, Twitter etc. are symbolizing the shift
to an economy centered on information and cultural production and manipulation
of symbols. The industries engulfed by the switch range from financial services
to software to films to branding to advertising to many more. The critical
message is the increasing centrality of information, knowledge & culture to
human freedom and progress.
The use of a
connected PC or a mobile device as an input has resulted in the societal
distribution of capital costs. To pure sciences, research and development
involves high capital costs and the key capital input would be the computing
devices. By enabling the shift of computing for SETI, protein@fold among others
to host of parallel processing systems making use of idle capacity of its
users, the capital costs have been spread across the society. To an individual
users who is essentially is lending his or her personal computing device for
the scientific research, it is the sense of achievement or affiliation that
emerges from the entire process. Moreover, it could be an constructive application
of the cognitive surplus.
Wikipedia built
upon by the contributions of thousands of users is classic example of
constructive cognitive surplus as opposed to passive receptivity like television
couch potatos or whiling away time in pubs etc. Analogues to Wikipedia would be
open source platforms and communities that harness the cognitive surplus
through an application of what economists would call backward bending labour
supply curve. The emergence of numerous user interest communities and platforms
too are an outcome of this societal distribution of costs of knowledge creation,
dissemination and distribution something Britannica could perhaps have never
come about with.
The Google
Supply Chain through its search algorithm monetizes the production from such
thousands of spokes who search for their self-interest. In fact the design and enhancement
of Google Search algorithm making use of user preferences and clicks to improvise
future searches is a interesting illustration of monetizing self-interest
principle of Adam Smith. The information
exchanges confined to the elite has now been released to the masses. The confinement
of exclusivity seems archaic.
the shift is
manifested in changing terms of access to information and knowledge assets from corporation to individual. It is
not corporation doesn’t control the access but it is no longer an undisputed
monopoly or a one way street of information flow. The augmented connectivity is
unfettered by geography, class or scale, alluring small producers with
irresistible opportunities. The only constraint seems the software being the
rate limiter, to borrow a phrase from chemistry. The emergent dynamic value
chains and consequent ubiquity of IT products and services have generated internet
interfaces which no longer seem a scarce exquisite specialty. The vertical communication
is giving way to horizontal communication altering the entire dynamics of ‘raja-praja’
information hierarchy predicted on the industrial information superstructures.
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