It’s not just an era; it’s a new world order

Fred Wilson says what I’ve been thinking: That we’re in more than a financial crisis, we’re in a fundamental restructuring.

Clearly the economic downturn is the direct cause of most of these failures but I believe it is the straw that broke the camel’s back in most cases.

The internet, now closing in on 15 years old in its mainstream incarnation as the world wide web, is in many cases the underlying cause of these business failures.

Bits of information flowing over a wire (or through the air) are just more efficient than physical infrastructure….

This downturn will be marked in history as the time where many of the business models built in the industrial era finally collapsed as a result of being undermined by the information age.

Fred outlines fundamental changes in retail, banking, and auto sales, to name three industries, and then is kind enough to plug my book for more.

I also argued in a recent Guardian column that not only will specific industries be overtaken by this change but so will the structure of the economy as – post-crisis, post-Google – companies and sectors will no longer grow to critical mass through vast ownership funded by vast debt but instead, Google-like, by building networks atop platforms. Industries will change and so will the structure in which they operate.

The point in any case is that it would be a mistake to think that we will come out of this financial crisis soon wounded but still seeing the world the way we saw it before. In the graveyard of camels with broken backs, we will see a new world newly structured and we’re only beginning to figure it out.

In this sense, media – music, newspapers, TV, magazines, books – may be lucky to be among the first to undergo this radical restructuring. Communications was also early on because it – like media – appeared close to the internet and Google (though, as I say in the post below, it’s a mistake to see the internet strictly as media or as pipes; it’s something other). Other industries and institutions – advertising, manufacturing, health, education, government… – are next and they, like their predecessors, don’t see what’s coming, especially if they think all they’re undergoing is a crisis. The change is bigger, more fundamental, and more permanent than that.

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  • “New World Order” has kind of a sinister meaning to many, relating more to world governance – something that many people are religiously opposed to.

    Moreover, “global” has a more specific meaning than “world” which carries a multitude of meanings and synonyms in the English language.

    “New Global Order” might be a more appropriate terminology for what you speak of.


  • invitedmedia

    it’s worth clicking on “p. money’s link above and reading his 12/12 post about ‘the elephant in the room’

    still laughing.

  • Bernard Madoff was one of the first to use the internet to trade stocks

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  • Fred’s post is fantastic – it reinforces that while there are many self inflicted wounds by newspaper organizations – “The Innovator’s Dilemma” and Disruptive Technology – as originally defined by that book – are far more the root driver of what has been going on in that industry and in many, many others.

    The Internet, the Web, and mobile are ultimate disruptive technologies.

    I’m looking forward to reading your book.

  • It will be interesting to see how many millionaires and billionaires come out of this global economic, social, political shift that is taken place because of current and emerging technologies with the Internet at the focal point. The Internet has decreased the need for big business as we know it and gives power to individuals with a spirit of ingenuity.

    Thank you for sharing your thoughts.

  • Rather than pointing at the the Internet in particular, I would have cited the global telecommunications network in conjunction with the existence of energy resources affordable enough to support globalized trade in production output. But then, when you’re living through the larger historical upheavals you never have a clue as to what is really going on till it’s too late to respond in any useful fashion.

  • jtf

    Some stray thoughts I put together about a whimsical newspaper industry bailout:

    The Newspaper Czar Speaks:

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  • For years, I’ve been using the music business and the MP3 as an example of major changes to come for all industries as the knowledge economy develops. During that time, most people have wanted to believe that such tectonic shifts would be contained to the media industry. That’s not so surprising given human psychology – inertia and comfort are powerful forces in keeping people from seeing the changes that are obviously on the horizon.

    The good news is, this fundamental change could actually result in BETTER institutions than the ones we have now. It won’t be comfortable to change, but for better or worse, we don’t have any choice.

    Let’s hope that in 2009 people can start the painfully honest discussions that will lead to positive developments in industry and society.

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  • I agree, it is a mistake to see the internet strictly as media or as pipes. It’s not just technology either. The Internet is new human behavior. This new behavior is what makes the business models of the industrial era obsolete.