Centralization vs. decentralization tensions in the Digital Economy

By Ismael Peña-López
ICTlogy (ISSN 1886-5208). Issue #163, April 2017

 

When we speak about Information and Communication Technologies, it is an almost unavoidable mantra to say that this is an era of democratization of technology, of democratization of (access to) information. Meanwhile, we witness how the major technological firms grow, acquire or bury their competitors, keep on growing and concentrate the market in a decreasing number of hands. Which is quite the opposite of the democratization of technology.

Let us simplify things a little bit for the sake of the explanation.

Two of the main reasons for the centralization of production in the Industrial Age were the cost of capital and the economies of scale. That is, the need to gather huge amounts of money to build up factories and infrastructures in general meant that only organizations with lots of money (e.g. governments) or large coalitions of people (e.g. big firms and their stakeholders) could afford huge enterprises and, thus, property of the productive tissue was concentrated in few hands. This concentration had, in its turn, a side-effect: the bigger the investment, the bigger the returns, as economies of scale are significant in mass production.

In a digital economy it does not exactly work this way. Investment costs usually are much lower than in the Industrial Age. Let us take creating a newspaper. Lots of in-house journalists have to be allocated inside a building (it is cheaper this way), and an expensive printing press and tons of paper are strictly necessary before a single issue sees the light. On the contrary, a free software installation on a cheap web server is enough for a decentralized team of freelancers to create content and automatically and very cheaply put that content online (remember this is a simplification of reality).

On the other hand, though, big returns come not with doing more with less (returns of scale), basically because we are already operating with lesser costs, both fix and per unit. Returns will come with people: the more people join your (publishing in this case) platform, the bigger the returns. These are the network economies or network effect: something is more valuable the more people use it.

Pre-industrial
Industrial
Digital
Capital cost Low High Low
Economies None Scale Network
Appropriation Distributed Concentrated Distributed
Exploitation Distributed Concentrated Concentrated


Table 1. Centralization vs. decentralization tensions in the Digital Economy

And here is where the tension appears: as investment costs decrease, appropriation of capital — or technology — can be decentralized. That, is individual people or smaller groups have it easier to have state-of-the-art technology in their hands. When there is no copyright (an non-technical added barrier to the cost of technology), such as in openly licensed information, free software or open hardware, then costs are even lower and technology distribution can spread further and broader. This is where “democratization of technology” does apply.

But it is different with the exploitation of digital capital and digital infrastructures. Unlike appropriation, it still needs a critical mass to make the best of it, to benefit from its returns. Its nature is different — from production costs and economies of scale to network effects and network economies — but the result is similar: concentration of production of goods or delivery of services to have a deep impact.

This tension can be solved in two different ways.

  1. The first one is that people can still use technology for their own particular purposes, but main corporations will still dominate production — including media and agenda setting. You can have a blog, but media rule the communication market. You can have a 3D printer, but big factories produce everything. You can sell online your used stuff, but the big digital retailers distribute everything that there is to be sold. And so on.
  2. The second one is that there is a way where individual appropriation can be combined with collective exploitation. Or, better said, communal exploitation. Just like in cooperatives.

The latter is an idea with a highly transforming potential, because it may — it may — change the economy (and society) as we know it. It represents taking the best of XIXth century cooperatives with the best of the digital revolution. On of the most interesting ideas behind this model is described in Platform Cooperativism. Challenging the Corporate Sharing Economy by Trebor Scholz.

Here come other references for reflection:

Acevedo, M., Moreno Romero, A. & Mataix, C. (2015). “ICT4D as the driver of Network Cooperation actors, connections and collaboration in the post-2015 international development landscape”. In Steyn, J. & Van Belle, J. (Eds.), Beyond development. Time for a new ICT4D paradigm?, 18-39. Proceedings of the 9th IDIA conference, IDIA2015, Nungwi, Zanzibar. Nungwi: IDIA.
Espelt, R., Peña-López, I. & Rodríguez, E. (2016). “Activismo desde el consumo cooperativo de productos agroalimentarios: ¿Economía alternativa o tecnopolítica?”. In Balcells et al. (Coords.), Building a European digital space, 560-581. Proceedings of the 12th International Conference on Internet, Law & Politics. Universitat Oberta de Catalunya, Barcelona, 7-8 July, 2016. Barcelona: UOC-Huygens Editorial.
Saveri, A., Rheingold, H. & Vian, K. (2005). Technologies of Cooperation. Palo Alto: Institute for the Future.
Scholz, T. (2016). Platform Cooperativism. Challenging the Corporate Sharing Economy. New York: Rosa Luxemburg Stiftung.

If you need to cite this article in a formal way (i.e. for bibliographical purposes) I dare suggest:

Peña-López, I. (2017) “Centralization vs. decentralization tensions in the Digital Economy” In ICTlogy, #163, April 2017. Barcelona: ICTlogy.
Retrieved month dd, yyyy from http://ictlogy.net/review/?p=4518

Book chapter. Environmental education in a world of networks

By Ismael Peña-López
ICTlogy (ISSN 1886-5208). Issue #163, April 2017

 

Cover of the book Educació Ambiental

In 2009-2010, some colleagues and I did a small research for the Diputació de Barcelona (Barcelona County Council) on new ways of political participation enabled by ICTs. The following year, my colleague Albert Padró-Solanet and I adapted some of that research and turned into a set of training sessions for city council officers in the field of communication, participation and environment, the latter being a field in which collaboration between institutions and organizations at the city level is crucial.

The Technical office of education and environmental promotion of the Barcelona County Council has just issued a book, Environmental education. Where have we come from? Where are we going?, in which we were invited to write a book chapter on how environmental education and awareness raising on environmental issues has changed due to the adoption of ICTs.

Our chapter —Environmental education in a world of networks— begins with an introduction to the digital revolution and the kinds of tools and applications that are more deeply changing information and communication between citizens and between citizens and public administrations. Of course, the list of specific applications will quickly be outdated, but the reflections around them and their categorization we believe will still be useful in the following years. After the digital revolution and some tools, we talk about the communication plan, how to identify our targets, how to campaign or how to think of communication as a way of building up a project-centered personal learning environment (PLE — in this case, the P would stand for project instead of personal). The chapter ends with some practical cases and some conclusions or things to keep in mind.

The book — and the book chapters — is published in Catalan, Spanish and English, and our chapter can be downloaded below.

Downloads

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Book chapter:
Peña-López, I. & Padró-Solanet, A. (2017). “Environmental education in a world of networks”. In Diputació de Barcelona, Environmental education. Where have we come from? Where are we going?, Chapter 11, 544-559. Col·lecció Estudis. Sèrie Medi Ambient, 4. Barcelona: Diputació de Barcelona.
logo of PDF file
Capítulo del libro:
Peña-López, I. & Padró-Solanet, A. (2017). “Educación ambiental en un mundo de redes”. En Diputació de Barcelona, Educación ambiental. ¿De dónde venimos? ¿Hacia dónde vamos?, Capítol 11, 397-414. Col·lecció Estudis. Sèrie Medi Ambient, 4. Barcelona: Diputació de Barcelona.
logo of PDF file
Capítol del llibre:
Peña-López, I. & Padró-Solanet, A. (2017). “Educación ambiental en un mundo de redes”. A Diputació de Barcelona, Educació ambiental. D’on venim? Cap a on anem?, Capítol 11, 231-257. Col·lecció Estudis. Sèrie Medi Ambient, 4. Barcelona: Diputació de Barcelona.

If you need to cite this article in a formal way (i.e. for bibliographical purposes) I dare suggest:

Peña-López, I. (2017) “Book chapter. Environmental education in a world of networks” In ICTlogy, #163, April 2017. Barcelona: ICTlogy.
Retrieved month dd, yyyy from http://ictlogy.net/review/?p=4513

ICTlogy Review

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About Me

    I am Ismael Peña-López.

    I am professor at the School of Law and Political Science of the Open University of Catalonia, and researcher at the Internet Interdisciplinary Institute and the eLearn Center of that university. I am also the director of the Open Innovation project at Fundació Jaume Bofill.