Blueprint to the Digital Economy
Summary
Tapscott, with Alex Lowy and David Ticoll, edited this collection of essays by consultants and executives on how businesses should restructure for the internet, published in 1998.
The contributions cover business process redesign for networked operations, disintermediation and the removal of layers between producer and customer, the effect of near-zero communication cost on organisational boundaries, knowledge management and the treatment of intellectual capital as a balance sheet item, the shift from mass production to customisation, and the emerging forms of interfirm collaboration that later work would call ecosystems or platforms.
Several of the structural predictions were correct in direction. The removal of intermediaries, the collapse of coordination cost, the shift of value toward information rather than physical goods, and the emergence of networked firms rather than integrated ones all occurred. The predictions about timing, about which companies would benefit, and about the specific technologies were largely wrong, and several essays describe technologies and companies that no longer exist.
The reference has not verified the specific contents and contributors of this volume. It is a period document of consulting thought at the height of the first internet boom, written by people selling transformation services, and it should be read as such. Readers wanting the durable arguments about digital business economics should use Shapiro and Varian's Information Rules, published the same year, which is analytically serious and has aged far better.
Key takeaways 7
- Near-zero communication cost changes the economic boundary of the firm, since coordination that previously required ownership can be done by contract.
- Disintermediation removes layers between producer and customer wherever those layers exist only to move information.
- Value shifts from physical goods toward the information about them, including design, matching and coordination.
- Networked collaboration between firms can substitute for vertical integration when the interfaces are standardised.
- Knowledge and intellectual capital constitute the principal assets of information-era firms and are recorded nowhere in their accounts.
- Mass customisation becomes possible when production is coordinated by information rather than by physical scheduling.
- The reference has not verified this volume's specific contents, and Shapiro and Varian's Information Rules is the analytically serious book from the same year.
Who should read it
Readers interested in a period document of 1998 consulting thought, with Information Rules as the better source on the same subject.
About Don Tapscott
Canadian business author and consultant, co-founder of the Blockchain Research Institute, who wrote The Digital Economy and Wikinomics.
The Digital Economy set out early how networks would redraw firm boundaries, and Wikinomics documented mass collaboration - open source, peer production, crowdsourced research - as a working production model rather than a curiosity. Blockchain Revolution extends the argument to distributed ledgers and their business applications.
Who recommended it 1 · 1 direct
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Where it sits in the reference 2
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