ICTlogy

Notes from the course Network Society: Social Changes, Organizations and Citizens, Barcelona, 15-17 October, 2008.

Organizations in the Network Society
Enrique Dans, Instituto de Empresa

The evolution from the oral tradition, to writing, to the press is that of making it possible, between people and along time, communication: first, is lasts; then, is can be replicated. And it was put at the service of the society at a “reasonable” cost. Same happened with the media (TV, radio, etc.) revolution. But still it had a cost, and thus, timespan was expensive and not accessible by everyone. The Internet opens the box.

What’s the impact on organizations?

Ronald Coase: firms exist because of transaction costs.

But now, we can see that these transaction costs have dropped and many people can engage in shared projects at lowest costs [see below, Benkler].

Intellectual property rights are, systematically seen as a barrier, as a new transaction cost that seems (a) useless and (b) induces to circumvention.

A Netocracy is arising that demands a reflection about the needs to rethink some long-established conventions, as Tim Berners-Lee de facto did in designing the World Wide Web.

Some examples of new organizations

• The real innovation of Amazon.com was not selling books online, but rearranging the shelves of the bookshop for each and every customer that “entered” the shop… at (almost) zero cost.
• Ebay made profitable selling some goods by (a) attracting massive amounts of customers while (b) keeping very low the transaction costs.
• Google build an index by having people built it for free: when doing links, when doing searches, etc.
• Napster made music distribution available at low transaction costs.
• Blogger, making it easy to publish content online
• BitTotrrent, to distribute huge amounts of data without having to own a powerful server and access to the Net
• Friendster, to maintain one’s own network
• Keyhole, to put yourself on the map and get geographically contextualized information
• YouTube, to share videos
• FaceBook, making it possible to develop applications and turning the social networking site into a platform

And more and more people are used to work based on the afore mentioned services, plus voice over IP, etc. But still there are different layers of adoption, where early adopters are way beyond the rest of the organizations, that still think about computers. But computer-centric technology/philosophy just does not allow this decentralized way of working, of cutting down transaction costs. Cloud computing is about the opposite of PC-centric computing.

Access to information and the economy of scarcity

We stick to old mental models, based on the scarcity of information, and we tend to collect and store information instead of learning (and teaching) how to find it. The added value is no more in finding, getting, storing the information, but on transforming it.

But it is true that to have changes being done, an added value proposal for that change is to be attached. And evidence shows that it is easier to begin from scratch (i.e. a brand new firm) that bring change on an existing infrastructure.

One added value: peeping through the keyhole. Knowing what’s been told about you / your enterprise.

Access to information and the economy of attention

The amount of information is so huge that it is very difficult to catch anyone’s (e.g. the custormer’s) attention. People shift between media with most ease and at no cost. And not only between media, but between platforms, e.g. from the TV to the Internet.

Some new strategies to catch the audiences’ attention necessarily have to be created: the presentation of the iPhone, the release of Google’s Chrome…

Using social networking software (SNS) might not be a goal in itself where there’s not a natural social network. But using SNS’s capabilities to improve other environments can add value to old or traditional processes.

On the other hand, it well might be a goal in itself, as digital natives will sooner or later enter the organizations and bring with them all the technologies and ways of working of the Generation Y. And, as a matter of fact, this is something that will surely happen.

More info

Notes from the course Network Society: Social Changes, Organizations and Citizens, Barcelona, 15-17 October, 2008.

State of development of the Networked Society
Irene Mia, World Economic Forum

The Global Competitiveness Report and The Global Information Technology Report

The Global Competitiveness Report

A network of experts that reports the state of the economy in most countries of the World (covering circa 98% of the World’s GDP). The network works also on tourism, technology, private investment, etc.

The main goal is seeing why, given different countries with very different frameworks and socioeconomic backgrounds, why some of them behave similarly. It seems that there is a high correlation between competitiveness and e-readiness: ICTs are a general purpose technology that impacts all levels, thus why its relationship with competitiveness.

The Global Information Technology Report and the Networked Readiness Index

To see how countries can benefit from ICTs, how ready are they to enter the Information Society. To do so:

• A proper environment: business environment, government environment, individual environment
• A joint action between all the social actors to work together and share a common vision towards the Information Society
• Readiness, to make usage possible.

A composed index of three subindices:

• Environment: Market, Political/Regulatory, Infrastructure
• Readiness: Individual, Business, Government
• Usage: Individual, Business, Government

Data come from two different kind of sources: hard data, coming from national statistics; soft data, coming from experts that note down their perceptions. There is criticism on this last kind of data, dubbed as subjective; but perceptions, in the Economy, do play an important role, so despite the bias that might arise, it is also a way to gather all subjectiveness from a country’s reality.

Denmark — and other Scandinavian countries — are normally on top of the rankings. They are countries that are very innovative, competitive and wide open to international trade and a way of understanding the World as a global arena. On the other hand, some small Asia-Pacific countries have transformed their economies from having poor natural resources to be able to export hi-tech products and services. Last, some Arabic countries are also quickly scaling up the rankings, the reason being the diversification of their economies beyond oil.

Evidence shows that when there is an acknowledged strategy and philosophy to foster the Information Society (especially between businesses and governments), results are much better at achieving higher e-development goals.

The role of Governments in e-Readiness

The level of government readiness and usage is crucial, as it is a vector that dynamizes the introduction of new technology, the supply of services, the activation of the demand for those digital services, etc.

The case of Estonia

The shift from a planned (soviet) economy towards an open market one.

A huge effort was made to make government more efficient and to provide an appropriate environment so that the digital economy could develop: high usage, computers and Internet at home and at school, high level of e-government, etc.

• Leadership from the top
• Holistic national ICT Policy
• An inclusive information society
• Public-private partnerships

The case of Israel

Strong bet on software and exporting software — coming from a traditional economy based on exports of citrus.

How to create the appropriate environment? The government acted as an “ICT powerhouse”: investment in infrastructures, in R&D, in capacity and skills, in enterprise-university partnerships, firm incubators and venture capital, etc. Even this government “intervention”, it was always seen as “market friendly” and contributing to its dynamization without crowding it out.

The case of Taiwan

Incredible economic development based on hi-tech exports, with a highest share of ICT products worldwide.

Again, the strong role of the government and its vision and leadership. An emphasis on education, high quality training; innovation and investment, fostered through incubation programmes and parks.

Other countries that had high positive changes in their Networked Readiness Raking were China, Guatemala, India, Jamaica, Lithuania, Romania, the Russian Federation, Ukraine or Vietnam. Reasons for success being similar to the ones afore mentioned, including many important changes in education too. On the other hand, Africa or the Western Hemisphere showed poor change, normally due not (only) to lack of infrastructures, but to more fundamental reasons like being able to make change happen, the educational and socioeconomic framework, etc.

Q&A

Q: What does it take to shift one point upwards in the index/rankings? A: We don’t know, because the problem is that each country’s reality is too complex to draw a single model.

Q: In the case of Spain, how will it impact the law of access to the e-Administration or the electronic ID? How ambitious is the year 2010 deadline? A: It surely would, but it will not be in the short run. On the other hand, rankings are comparative, so it not only depends on your own performance but on your neighbours’. Of course, accomplishing deadlines also depend on the complexity of specific countries, so it is difficult to tell.

Q: Why e-readiness and usage measured apart? How it is that usage can be higher than readiness? A: Usage is more about e-government (public services, content, etc.), e-readiness more about strategy and policies.

Q: Are there rankings amongst countries with similar populations? Where’s France? Are there any countries going backwards? A: There are no rankings amongst similar populations, but it does make sense as implementation quite often depends on the total population (both positively and negatively).

Q: Is there any repository of best practices? A: The World Economic Forum publishes their case studies — based on successful practices —, as do some other organizations, but normally not as repositories but within reports, etc.

Q: Andalousia (southern Spain) has implemented telecenters and put computers+Internet in the classroom… but it looks like teachers are not ready to (efficiently) use them in teaching. Have other countries (e.g. Denmark) found the way to (efficiently) promote the use of ICTs in education? A: More than ICT policies, it is about education policies. Finland, for instance, invested highly in teachers and their skills (but also in wages). [see also “more info” below]

Q: Why is the civil society scared of the government having an important intervention? A: Public intervention is a need, and it should be better explained why, but there also is a need to protect the individuals in front of some violations of rights like privacy, security, freedom of expression, etc.

Q: What’s the role of web 2.0 apps in e-Readiness? A: It is especially about the role of the citizenry, the relationship of individuals with organizations, etc. And it will have a positive impact on usage, availability of information, etc.

Q: Intellectual property rights… are a barrier or a protection? A: It surely is a double-edged instrument, and there are reasons to and against having IP rights, and there is no clear positioning about them. What it is clear, is that governments should have a criterion about it and act according to it, coherently and consistently.

Demand or supply policies, push or pull strategies? A: In the case of developed countries (e.g. Spain) that already have some amount of infrastructures and skills, most probably the bet should be on demand-based policies and pull strategies to put the user actively in the equation.

More info

Notes from the course Network Society: Social Changes, Organizations and Citizens, Barcelona, 15-17 October, 2008.

About the importance of the Network Society
Juan Freire, Universidad de A Coruña

Some reflections:

• Elites are disconnected, as is citizenry at large. Debate is needed as the future is at stake.
• The process of change is led by institutions and citizens, intensively using technology, hence technology is a driver of change and deserves close attention.

Concerning the actual state of the situation worldwide, framed by a deep financial — and systemic — crisis, what causes can be attributed to the changes that the Network Society brought, and what solutions could these change that Network Society brings help to contribute. Is it times for a deep change?

Some questions/concepts

Alessandro Baricco, in The Barbarians, states that we are all, in some way, invaders entering new worlds.

Gartner (2008) Hype Cycle for Social Software: any technology first enters a peak of expectations, of excitedness, then falls down through dissillusionment, entering, at last, a slope of enlightenment where real benefits are extracted from a reflected use of the new technology.

Organizations and people might also be in different parts of the cycle, seeing each other as latecomers or as invaders.

Benjamin H. Bratton: what if people adapted to the net, and not the other way? What if the network was the platform, and the “real” economy adopted it as its natural framework?

Michel Bauwens: this is no more capitalism, nor communism, but communalism.

Notes from Tim Berners Lee’s investiture ceremony as doctor honoris causa, Open University of Catalonia, Barcelona, October 10th, 2008.

Manuel Castells: Laudatio for Sir Timothy Berners-Lee

Quoting Tim Berners-Lee (TBL): the World can be seen as just connections, nothing else.

Net neutrality has to be maintained as one of its genuine foundations, not to create a new digital divide amongst the ones that can freely surf the Internet and those who cannot.

Timothy Berners-Lee

The Web is just a platform for people to do new things.

Lots of things that happen on the web are there just because someone else let them happen, and let people go on with their ideas… just like the Web, that in a first draft was dubbed as vage… but exciting.

Keeping one web is important, securing that computers still speak the same language, the same protocol, one to each other.

Why does the web work? Because one person puts a link, and somebody else follows it. So, understanding people is (or should be) the first step in computer science and, indeed, in designing and developing the Web of the next years. This is the aim of Web Science, to gather under the same roof computer scientists, who know about computers, and other disciplines, the ones who know about people. Web Science is about bridging the people that understand technology and people that understand people. Technology is created for the sake of Humanity, not the other way.

Francesc Balagué (interesting reading if you’re into Education 2.0, in Spanish) asks me for some references around new science publishing and diffusion systems (e.g. blogs).

Best I can do is provide the references of my own readings, gathered into a collection I named Research Blogs and Blogging for Science Diffusion ( ). Here comes a snapshot of this evolving collection:

Ricard Ruiz de Querol — always worth reading him — has an interesting reflection around the alternatives for an ICT sector (in Spanish). Based on the Financial Times article , the issue is whether and how it is possible to foster a national ICT sector so that it becomes a driver, and a locomotive, of development, in substitution of other traditional (obsolete) industries like oil, mining or raw materials.

Ricard highlights to trends to keep in mind:

• Developing an ICT industry to foster competitiveness of other established industries
• Protecting the local market from foreign competitors, trying to nationally replicate foreign technology and services

Recent history has provided good examples — Ireland, Finland… even Bangalore or Bangladesh — of strategies focused on the creation of a strong ICT sector, but I personally growingly doubt it can be generalized on a one-solution-fits-all basis. Four reasons:

1. In many cases, developing and ICT sector was not a solution but the only remaining choice, so the relative success of the initiative changes dramatically if the rest of the economy is doing (more or less) well. I am not saying those examples were not successful (they where, and quite a lot), but one should be careful to take ultimate chances, well backed up and supported by most agents of the economy, as perfectly planned from scratch strategies that became magic solutions. I don’t think there is nothing like a blueprint for ICT sector based development.
2. The successful examples benefited from well set socio-economic frameworks: the language (i.e. English), the quality of the educational system, a strong welfare state/economy that perfectly leveraged all other efforts. As the iceberg, we just saw the visible part of the whole system.
3. (As the article also states) Even if it is said that the road of ICT development can be leaped so that leapfrogging is possible, it is nonetheless true that the firms that have been able to establish themselves strongly in the market, have achieved quasi-monopolies or, to say the least, have made things very difficult for late comers.
4. In addition to the first point — and somehow a consequence of the other two — we (I) still have to find strong evidence of ICT sector based strategies and policies that have proven effective and brought a deep impact at the macroeconomic level. Most impact on the GDP of the ICT sector is due to expenditure, investment and revenue of the sector, but not (which is what we’d call a locomotive effect) because of a positive impact on other industries from the supply point of view. If the railroad had an impact on the iron and steel industry, the energy industry, etc., I find it difficult to find what have been — from a supply point of view — the satellite industries that are being developed around the ICT sector at the national level.

That said, I agree with (a) fostering competitiveness of other established industries but not in (b) protecting the local market from foreign competitors and trying to nationally replicate foreign technology and services: the goal should not be developing a national ICT sector, which, in my opinion, can be a desired side effect, but not a primary outcome.

I am more and more convinced that the focus has not to be on the supply, but on the demand.

• Stimulate demand so that ICTs are incorporated in everyday’s life, most especially in industrial and business processes so that they enhance their productivity
• Stimulate demand so that the level of technology absorption comes naturally, thus upgrading the digital capacity of human resources and firms, and benefit even more from everyday’s life ICT use
• Stimulate demand so that it requires the corresponding supply growth, that will come from abroad but will equally generate business opportunities in the national ICT sector, based on the real economy
• Stimulate demand so that ICT use is based on real needs, the only formula for long-term sustainability

Summing up, it is my opinion that, despite the evidence on the benefits of a powerful ICT sector, these benefits (while important) are limited to the direct impact and have a small multiplier effect on the rest of the economy. Thus, we should focus on the adoption of technology, which has proven to have huge and much broader effects at all levels, and let the development of the ICT sector be a second derivative of economic development — and not the other way round.