Emergic: Rajesh Jain's Blog

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Making A Real Revolution

April 1st, 2004 · No Comments

[via Anish] Shoshana Zuboff, writing in Fast Company, discusses the Internet revolution:

For decades, historians were mesmerized by the “industry” in industrial revolutions. Power looms and steam engines got much of the credit for the first industrial revolution in 18th-century Britain; the assembly line was the symbol of mass production in the early-20th-century United States. We know now that in those economic revolutions, technology wasn’t the star, but one member of an ensemble cast. New consumers played a key role, too. In the 18th century, rising incomes created new demand. In early-20th-century America, new urban masses needed to buy goods once produced in their homes and villages.

If there was a star in those earlier dramas, it was something far more audacious than a new machine. It was an idea of Copernican stature, powerful enough to reorder the known universe of producing and consuming. I call it a “new enterprise logic.” Eighteenth-century entrepreneurs like Josiah Wedgwood pioneered consumer marketing and invented much of what came to be understood as “factory work.” They reconceived the commercial process, consolidating many fragmented activities under the control of a single owner. This laid the foundation for more than a century of “proprietary capitalism” and explosive growth.

More than 100 years later, Henry Ford played a similar role when he discovered the then-unknown economics of mass production. Instead of custom-making each expensive car to the specifications of a wealthy buyer, he made one kind of car at an ever lower price, relying on volume, not margins, for profit. Ford’s unprecedented idea became the cornerstone of the second industrial revolution and the century of managerial capitalism that followed.

So here’s the news flash: Revolution can’t be automated. It is brewed in a perfect storm of new markets, new technologies, and a new enterprise logic. That third force–the Copernican idea–was missing from the Internet revolution. We had people hungry for a new consumption experience, and a technology capable of delivering it. But instead of a new enterprise logic, the old adversarial business model prevailed. Internet companies scrambled for survival at their customers’ expense, selling private information, chasing us with ads, conning us with low prices and high fees, and secretly monitoring our behavior. They settled for a new distribution channel when they could have made a real revolution.

Wishful thinking is being thought again. Carnegie-Mellon recently hosted the kickoff of the “100 by 100” consortium, whose goal is 100 million homes with Internet speeds of 100 megabytes a second. Another group at MIT is developing “next-generation Internet architecture.” These efforts are vital, but there’s something missing: the new enterprise logic that can finally harness the Internet to a fundamentally new conception of commerce. Without that, the only revolution we’ll see is the one produced by a revolving door.

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