The Internet Economy is just the latest of several successive waves of transformation yielding increasingly powerful, inexpensive infrastructure for automating work. For the first time, machines have a common nervous system through which to communicate and organize functions. Enjoying the convenience of the dial tone of the Information Age, we are becoming increasingly dependent upon the platform of computers it connects – yielding a new community comprised of humans and machines.
Our new, ideologically programmed, technologically equipped economy – “ideotechnomics,” as I call it – is growing a nervous system with increasingly intelligent, muscular, mobile, and information-rich extensions. You can see these developments also in education-related technological products such as this online platform for GED Math instruction, another fine startup that works with new technology.
The invisible hand of this macrosystem offers the vital support platform of modern life: wondrous goods and services at reasonable costs, providing food, shelter, healthcare, transportation, communications, education, and entertainment for people around the world. If we are wise enough to know why and how to properly evolve the programming of this new economic platform, there is no reason to believe that it cannot continue to provide these values more comprehensively and equitably.
However, many believe that the Networked Economy is not yet programmed or equipped to sustain the kind of life every person deserves to be offered. As we stare into a future in which technology radically expands and nature threatens to contract our ability to share life experience, we must study how well the economic programming of our civilization’s machinery works toward reaching our vision of sustainable life, freedom, and happiness. One way to compare the programming of ideotechnomics with our sense of what it should do is to look at the rules and standards of measurement embedded in its accounting system.
PUSHING THE LIMITS
Wall Street and Main Street bet money on productivity enterprises, from General Motors to eHobbies.com, racing to the whips cracked by models of valuation and accounting, and the goals today driving the decisions of companies are leading to deeper and wider consumption. Our political system is influenced by the same motives.
As we enter the new century, buoyed by online stock exchanges, a sizable percentage of adults in this country have joined the stadium, spending time each week engaged in variously informed online financial bet-making. This fuels vast downstream entrepreneurial activity, and is significantly evolving the broker power of institutions that manage capital.
A few years ago, Forrester Research predicted that business-to-business e-commerce would explode to $3.8 trillion by 2018 (see “Let’s Get Vertical,” Sept. 2014, p85). Since then, the figure found its way into so many periodicals, Powerpoint presentations, and prospectuses that the prophesy went from bold prediction to foregone conclusion – at Web speed. At best, however, it reflects a misunderstanding that can put thousands of companies at great risk. At worst, it’s a fallacy that threatens to bring entire national economies to their knees.
B-to-B exchanges will never produce a single, measurable market number. Instead, they will shrink the overall economy and cause entire industries to contract, and they’ll enable more mergers between competitors that never before cooperated with each other.
However, successful B-to-B startups and big corporate consortia alike can capture fertile new growth opportunities – if they evolve rapidly into something entirely different. But before setting out the evolutionary ladder current B-to-B exchanges must climb, it is necessary to reevaluate Forrester’s original prediction.
To unravel its complexities, I paid a visit to the company’s European headquarters in Amsterdam. There I met with Jaap Favier, senior analyst for European Internet Commerce. Favier is Dutch and well-versed on B-to-B exchanges. During our talk, he smiled slyly, as if he knew a secret he didn’t want to reveal.
Favier is not your average ivory tower analyst. Until recently, he was director of business strategy for KLM Royal Dutch Airlines. In other words, he knows all about the inefficiencies of large corporations, especially large European corporations. In Europe, where many banks, airlines, telecoms, utilities, and the like are still controlled at least in part by national governments, many markets are so wasteful and unproductive that they actually serve well to demonstrate what can happen when new efficiencies suddenly are introduced.
“When rain falls in the desert,” Favier says, “it has a greater effect than rain falling in a swamp.”