BUSINESS Schumpeter
The wiki way Sep 23rd 2010 >From The Economist print edition Two cyber-gurus take a second look at how the internet is changing the world [cid:image001.jpg@01CB5C06.D6E14DC0] AFTER Kenya's disputed election in 2007 Ory Okolloh, a local lawyer and blogger, kept hearing accounts of atrocities. State media were not interested. Private newspapers lacked the money and manpower to investigate properly. So Ms Okolloh set up a website that allowed anyone with a mobile phone or an internet connection to report outbreaks of violence. She posted eyewitness accounts online and even created maps that showed where the killings and beatings were taking place. Ms Okolloh has since founded an organisation called Ushahidi, which puts her original idea into practice in various parts of the world. It has helped Palestinians to map the violence in Gaza and Haitians to track the impact of the earthquake that devastated their nation in January. It even helped Washingtonians cope with the "snowmaggedon" that brought their city to a halt this year. Ushahidi's success embodies the principles of wikinomics. Don Tapscott and Anthony Williams coined the term "wikinomics" in their 2006 tome of that name. Their central insight was that collaboration is getting rapidly cheaper and easier. The web gives amateurs access to world-class communications tools and worldwide markets. It makes it easy for large groups of people who have never met to work together. And it super-charges innovation: crowds of people can develop new ideas faster than isolated geniuses and disseminate them even faster. Mr Tapscott and Mr Williams have now written a follow-up to their bestseller. They solicited 150 suggestions online for a snappy title. The result, alas, was a bit dull: "Macrowikinomics: Rebooting Business and the World". But the book is well worth reading, for two reasons. The first is that four years is an eternity in internet time. The internet has become much more powerful since "Wikinomics" was published. YouTube serves up 2 billion videos a day. Twitterers tweet 750 times a second. Internet traffic is growing by 40% a year. The internet has morphed into a social medium. People post 2.5 billion photos on Facebook every month. More than half of American teens say they are "content creators". And it is not only people who log on to the internet these days. Appliances do, too. Nokia, for example, has produced a prototype of an "ecosensor" phone that can detect and report radiation and pollution. The second reason is that the internet's effects are more widely felt every day. In "Wikinomics" the authors looked at its impact on particular businesses. In their new book they look at how it is shaking up some of the core institutions of modern society: the media, universities, government and so on. It is a Schumpeterian story of creative destruction. Two of the most abject victims of wikinomics are the newspaper and music industries. Since 2000, 72 American newspapers have folded. Circulation has fallen by a quarter since 2007. By some measures the music industry is doing even worse: 95% of all music downloads are illegal and the industry that brought the world Elvis and the Beatles is reviled by the young. Why buy newspapers when you can get up-to-the-minute news on the web? Why buy the latest Eminem CD when you can watch him on YouTube for free? Or, as a teenager might put it: what's a CD? Other industries are just beginning to be transformed by wikinomics. The car industry is a model of vertical integration; yet some entrepreneurs plot its disintegration. Local Motors produces bespoke cars for enthusiasts using a network of 4,500 designers (who compete to produce designs) and dozens of microfactories (which purchase parts on the open market and then assemble them). Universities are some of the most conservative institutions on the planet, but the Massachusetts Institute of Technology has now put all of its courses online. Such a threat to the old way of teaching has doubtless made professors everywhere spit sherry onto the common-room carpet. Yet more than 200 institutions have followed suit. Wikinomics is even rejuvenating the fusty old state. The Estonian government approved a remarkable attempt to rid the country of unsightly junk: volunteers used GPS devices to locate over 10,000 illegal dumps and then unleashed an army of 50,000 people to clean them up. Other governments are beginning to listen to more entrepreneurial employees. Vivek Kundra, now Barack Obama's IT guru, designed various web-based public services for Washington, DC, when he worked for the mayor. Steve Ressler, another American, created a group of web-enthusiasts called Young Government Leaders and a website called GovLoop. FixTheState.com How can organisations profit from the power of the web rather than being gobbled up by it? Messrs Tapscott and Williams endorse the familiar wiki-mantras about openness and "co-creation". But they are less starry-eyed than some. They not only recognise the importance of profits and incentives. They also argue that monetary rewards can be used to improve the public and voluntary sectors. NetSquared, a non-profit group, introduced prizes for the best ideas about social entrepreneurship. Public-sector entrepreneurs such as Mr Kundra are excited by the idea of creating "app stores" for the public sector. Messrs Tapscott and Williams sometimes get carried away with their enthusiasm for the web. Great innovators often need the courage to ignore the crowd. (Henry Ford was fond of saying that if he had listened to his customers he would have produced a better horse and buggy.) Great organisations need time to cook up world-changing ideas. Hierarchies can be just as valuable to the process of creative destruction as networks. But the authors are nevertheless right to argue that the web is the most radical force of our time. And they are surely also right to predict that it has only just begun to work its magic. Economist.com/blogs/schumpeter<http://www.economist.com/blogs/schumpeter> Copyright © 2010 The Economist Newspaper and The Economist Group. All rights reserved. http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=17091709&subjectID=348963&fsrc=nwl ________________________________ José A. López Globomedia, Dpto. de Documentación-Comunicación jalo...@globomedia.es<mailto:jalo...@globomedia.es> ---------------------------------------------------- Para darse de baja IWETEL pincha y envia el siguiente url mailto:iwetel-signoff-requ...@listserv.rediris.es ----------------------------------------------------
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