duminică, 23 ianuarie 2011

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Unlike automobiles, toothpaste, appliances, or textiles, information products are not consumed one unit at a time. Rather, each product unit is designed to be utilized repeatedly by many, thus becoming more valuable with use. While the value of a single industrial product such as an automobile, refrigerator, or computer decreases with usage, the precisely opposite effect applies to an information or cultural product. A film, book, television program, or software product increases its value disproportionately the more it is used, viewed, or applied by increasing numbers of people.

Repeated usage is even further accelerated in a network environment such as the Global Internet. In fact, the rift between industrial economics and information economics has grown even wider with the introduction of infrastructure networks for facilitating distribution of ideas. The inherent tendencies of information economics to leverage the value of creative ideas with use have been steadily heightened in the deployment of networks such as theater networks, giant book store chains, and cable television. But with the Internet it is now possible to cultivate worldwide audiences in the millions with well-designed forms of intellectual and creative ideas—audio, video, text, or data—distributed digitally in cyberspace. The economic value of individual creative expression can now be augmented exponentially to a degree unknown in the economic history of nations. This is largely because, as a networked information system levitates the value of ideas and forms of expression, it causes even further heightening of demand for the same expression, thus creating an upward spiral in the spread of a specific form.

Self programmable

Many people are hostile to law and regulation: libertarian computer pioneers because they want a free market, upholding the Internet’s original gift economy and banks and business interests because they resent government’s attempts to regulate content and tax e-commerce. They both want to keep government out of the Internet, even though for quite different reasons.

The Internet’s ad hoc, flexible, consensual structure offers powerful lessons in business. It is a prototype of the way companies will have to operate in the future. The consensus stems from a shared purpose: the creation of a network that allows easy communication. This is in part a technical vision, and it requires deep knowledge of computer science. But it is also an ideological one, requiring a humanistic commitment to freedom of expression and to a medium of communication that rises above the interests of government and commerce. An ethic of collaboration and open discussion around a common purpose is an extraordinarily powerful and creative force.

New business models imply new revenues patterns. These new cross-industry production hybrids are being matched by cross-industry hybrids in terms of revenues. In many cases, the production hybrid is created mainly in order to exploit new sources of revenue. [1] Profits do not come from scale or volume, but from continuous discovery of links between needs and solutions, for which customers pay a premium. Workers become problem-solvers, problem-identifiers, and brokers of information. Services and goods are no longer distinct categories, and a quickly-shrinking share of production costs actually are paid to production workers.[2]

The new economy is based on information, which workers must navigate, focus, and organize. Dynamic information means that labor must be self-programmable, making talent the key resource. Innovation is the product of intelligent, collective labor, best produced by open-source networks of production, collaboration, and interaction – with products, services, and customers. The new division of labor is of cooperation in innovation, and competition in service and application of knowledge. The view of creative production is broadened, suggesting that the development of the internet and its technologies are themselves a function of open-source art and the creative work of hackers.[3]

[1] HOWKINS, John, “The Creative Economy. How people make money from ides”, London Allen Lane, The Penguin Press, London, 2001, p.196
[2] REICH, Robert, “The Work of Nations: Preparing Ourselves for 21st Century  Capitalism”, A. A. Knopf, New York, 1991
[3] CASTELLS, Manuel, “The Internet Galaxy: Reactions on the Internet, Business, and Society”, Oxford University Press, New York, 2001

Internet communication protocols

The new architecture is Internet-based. The Internet communication protocols will shape all communications technologies for the near future. Creativity is assisted by networks into a faster, more transparent and more intense collaboration. They can facilitate collaborative creativity. This way of working is more efficient and produces better results than single working in the conventional manner. In collaborative creativity, everybody is given equal, meritocratic access to the same body of knowledge and is able to contribute to its development in a free, open and collaborative manner. It is easy, in such a fluid environment, to lose control of one’s ideas and products, and to have them replaced by others.

Linus Torvalds, the creator of Linux, put no proprietary restrictions on the source code which constitutes his program’s essential design elements. Nor did the devisers of GNU (the operating system which uses the Linux kernel). They gave away the source code for free on two grounds: first as a moral absolute that nobody should own something as basic as computer code; and second on the intellectual and economic grounds that private ownership inhibits growth. Torvalds says that the person who wants to own source code is like a man who, having invented a printing press, also wants to own the letters so that everyone who wants to rearrange letters into words and words into sentences has to seeks his permission. Free software references are more detailed in the next chapter.

The proponents of open source have different views about how far this openness should go. They agree that a program’s source code should remain for ever in the public domain. They also agree that the program’s code may be sold commercially, and many companies sell Linux packages. Richard Stallman, the originator of GNU and leader of the Free Software Foundation (FSF) argues that code, in any form, must never be privatized. He has devised a General Public Licence (GPL) which functions as a copyright licence under the Berne convention and puts a program permanently in the public domain. It is called copyleft because it does the opposite of copyright. Instead of restraining how people use materials, it liberates them. For the copyleft provisions, refer to the appendix section. [1]

[1] See Appendix no. 3

Symbolic language

The power of the digital, as a symbolic language, has no material but only intellectual limit. The reason is that designers and engineers continually become more skillful and creative at their tasks. Moore found that this higher productivity could not be explained by conventional reasons, such as economies of scale; he also found that Ricardo’s law of diminishing returns, which might have increased labor costs, had little impact. Instead, he realized that the designers were becoming better with practice, and that their cleverness could be quantified and measured. As a result, either chip speeds double or, if the manufacturer wishes to keep speeds the same, the price is halved, every eighteen to twenty-four months. So a chip does twice as much for the same cost, or the same for half the cost. To predict these changes with accuracy, in such a volatile business as computer R&D, was an astonishing achievement. Such rapid changes would be incredible in the material world but are feasible in the virtual world of the digital economy.

This radical reduction in the cost of digital space and networks is causing a new economy which represents a clear-cut break with previous manufacturing and service economies. The new economy deals in intangible goods and services, it is global and it is intensely interlinked[1]. Markets and supply chains may be radically altered by the widespread adoption of electronic commerce…Virtual companies of the future may have little in common with today’s organization.[2]

Any new technology cuts costs for existing companies; then it allows new companies to come and produce a new kind of product which has a more general impact. The remarkable attributes of digital are its speed and its predictability.

[1] KELLY, Kevin, WIRED Magazine, San Francisco, 1997
[2] Department of  Trade and Industry, UK , “Our Competitive Future: Building the Knowledge-Driven Economy” Report, 1998