Studying the Knowledge Economy

 

On April 30, 1993, the WWW became open to public. So the era in the human society could very well be defined before the www era and the www era. The vision of Tim Berners Lee came to fruition on this day. He had visualized the interconnectivity among systems in the early 1980s which came to become the internet in 1989 at CERN. While the first website might have come around in 1991 or so, it was in 1993, the access was open to the public. It heralded into a revolution few could have imagined. As the world entered 1990s, it was believed computers would be here to stay but more of a standalone systems or at the most local area connected networks. The concept of wide area networks would again be a private or rather a club good. In the years following 1993, the expansion of the internet was beyond the expectations of its most ardent advocates. As information or even before it, the data began to pile up, it had become virtually difficult to search for something one needed in the internet. This obviously meant that an algorithm was necessitated to search for information on the internet. This might have led to the development of search engines but it was not until Google that search engines took a very different face altogether.

 

As the uses of the internet expanded, it led to the creation of several new business models. There were business models on the internet and there was business infrastructure that was to be provided to the businesses on the net. By the late 1990s, it was believed that life would happen over the net and thus the rise of dotcoms. The dotcoms might have burst yet, the phenomenon what it created survived. Amazon was just one business model that demonstrated business on the internet was very different from the business on the brick and mortar shelves. Internet was not a mere distribution platform something envisaged by scholars but a whole set of business landscape that would bring to the table its own idiosyncrasies. This was manifested by the rise of the blogosphere where people could express their views on matters mundane and sundry and get noticed by the others. This perhaps was the forerunner, albeit unconsciously to platforms like Facebook etc. The internet dismantled the vertical hierarchy opening up the gates for horizontalisation of communication.

 

As the internet gave way from hierarchy to hyperarchy, it did pose numerous existentialist questions on the current business landscape. The industrial information economy had taken root in the era of Industrial Revolution. It had outlived its era and something new was taking over. The networked communication environment would be heralded by democratization of production with the tools being a mere connected device accessible to one and all. Modularization ensured the remote work was possible, something that is now sought to be expanded into work from home. Granularity ensured the access being available to all something akin to personal computer or a smart phone. These devices came with discrete capacity which meant supply was greater at any point than demand. An interconnection of all these smart devices could result in the generation of perhaps the world’s most power supercomputers at very low costs thus helping development of basic science.

 

The infinite reservoir of space on the net ensured that new business models bordering on infinite availability came into existence. They were accompanied by models that could link people’s utility with the firm’s costs and revenues, hitherto not possible in the brick and mortar economy. There were deconstruction of value chains that resulted in new value propositions. The fragmentation meant that new business emerged and the traditional Porter value chain seemingly broke down. The outsourcing or offshoring were all manifestations of this. The shelf life of the products and services began to shrink with availability of substitutes. At the same time, the costs of production began to increase. This meant new business models and new innovation models had to emerge. The knowledge would be the new production factor. The traditional production functions in economics would give way. The technical progress in production would give way to technical progress in utility. The role of intellectual property rights assumes very different importance in this scenario.

 

Yet accompanying the changes are the externalities many of which would be negative. There is increasing digital fraud, impersonation, spam, porn to name a just a few that are circulating in the web white grey and dark. These are some challenges that both society and the policymakers have to confront. A possibility is the emergence of walled garden approach something visible in many instances notably of Apple or in China. These would bring threats to the very notion of the free internet as one knows it. In the meanwhile the role of the Big Tech is assuming gigantic proportions. There are apprehensions with reasonable degree of certainty over the psychographic colonization that these giants of the Big Tech would unleash on the society. There are fears that a new version of East India Company might be on the anvil. Therefore, it would be imperative for the policy makers across the nation states to confront these challenges to sovereignty. Yet the trade-off that might emerge would be the sacrifice in terms of progress in innovation. There is a school of thought which believes in permissionless innovation, as opposed to precautionary models adopted by the principles of state policy in general.

 

These issues that are being noted above might impact differently to different sectors. Similarly, the societies too would have to analyses these impacts with specific reference to them rather than an universal rule of one size fits all approach. There is this journey that traverses through many unknown terrains. The journey from an analog economy to something digital is not over. The transformation is a work in progress. In this work in progress, the changes that are emergent on the horizon, are transient. New challenges and opportunities crop up with each passing day. There is no certainty on how the things might evolve. There is the battle for what one might term as master switch, yet scholars are unable to conclude how the battles will shape up. The battles that were being fought a decade or so ago have turned obsolete. Therefore, there becomes a rationale for an academic approach with emphasis on sectoral changes for decoding the knowledge economy and the accompaniment of changed management practices.