Girisimcia Kademisi

Archive for the ‘Economy’ Category

• The new economy is a digital economy.
Throughout history, revolutions in a natural resource have enabled a new paradigm in tools (iron, bronze, steel), which led to new modes of wealth creation and social development. The new age could be aptly dubbed the age of sand. The affairs of commerce, business transactions, human communications, and the insights of science are all reduced to charges on particles of silicon or racing through glass fibers—both derived from sand.
The new media, the I-Way, and the new economy are all built on a strikingly simple thing. Ml information can be represented as either 1 or 0 which form the basis of the binary number system. Number 1 is represented as a 1; number 2 as a 10; number 3 as an ii, and so on. If all number can be described as is and Os, early thinkers concluded that a combination of is and Os could be used to represent the letter “a” and the letter “b”
the capital letter “A” and, for that matter, other kinds of information,
These is and Os can in turn be represented in a computer as the presence or absence of an electrical signal. The first computers could encode and translate numbers and, later, letters into is and Os by using vacuum tubes.  When the tube was on, this indicated a 1. When the tube was off, this indicated aa 1. Later, tubes were replaced by transistors that could be turned or off. These were, in turn, replaced by silicon chips in which the on or was represented by the absence or presence of a charge on a particle.
Over time, digitization was applied beyond numbers and letters. could he used to represent more and more types of information, such graphs and photographs. Furthermore, time-based media (which are static but which take time to present themselves) such as audio and video.

could be sampled and translated into bits. If, for example, the analog wave form of a human voice could be converted into a digital signal by sampling it a sufficient number of times, these bits could be stored in a computer or a digital storage device like a disk (as in the case of voice mail) and reconstructed back into an analog wave that your ear can hear.
In the old economy, information was analog or physical (or as Nicholas Negroponte likes to say “atoms”). People communicated by moving their physical presences into a meeting room, talking over an analog telephone line, sending letters made of atoms to one another, broadcasting analog television signals to homes, showing pictures developed at the local photo shop, exchanging cash or checks, playing records by the guidance of a stylus through some grooves on a record, publishing physical magazines purchased at a store or delivered by the post office, or projecting light through a physical film strip at a movie theater.
In the new economy, information is in digital form: bits. When information becomes digitized and communicated through digital networks, a new world of possibilities unfolds. Vast amounts of information can be squeezed or compressed and transmitted at the speed of light. The quality of the information can be far better than in analog transmissions. Many (different forms of information can be combined, creating, for example, multimedia documents. (If a picture is worth a thousand words, the right multimedia document retrieved at the right time is worth a thousand pictures.) Information can be stored and retrieved instantly from around the world, eventually providing instant access to much of the information recorded by human civilization. New digital appliances can be created that lit in your pocket (or smaller) and can have an impact on most aspects of business and personal life.
By comparing something as simple as the post office and its delivery of physical mail to the digital electronic mail systems of today (even though I may are relatively primitive), you can begin to understand the effect of digitization on the metabolism of the economy. The benefits of e-mail are not mist that messages move faster (approaching the speed of light compared
mail trucks). Nor that there is additional convenience in being able to scud messages with the flick of a keyboard to a distribution list. Nor that here is a permanent searchable record of communications. Nor that shadow functions,” like walking to the mail box or playing telephone tag,
reduced. Although all those benefits are real enough, the point is that e-mail is just the beginning of a whole new way of human collaboration. Product planners are working as a team from various locations. People can work just as effectively from home or their hotel room as they can in the office. Similar change is coming to every aspect of commerce, management, and learning throughout the economy. As text-based e-mail systems are replaced by multimedia mail—in which your message contains information in many forms, including video—the capacity of humans to communicate across time and space will be affected significantly

. The new economy is a knowledge economy.
Information technology enables an economy based on knowledge. But notwithstanding the rise of artificial intelligence and other “knowledge technologies,” knowledge is created by human beings—by knowledge workers (professional and technical workers now outnumber industrial workers by almost three to one) and by knowledge consumers. “Leveraged intellect and its prime facilitator, service technology, are reshaping not only the service industries but also U.S. manufacturing, the country’s overall growth patterns, national and regional lob structures, and the position of the United States in world politics and international competition,” argues James Brian Quinn, professor at Dartmouth’s Tuck School, in intelligent Enterprise.3
To begin, the knowledge content of products and services is growing significantly as consumer ideas and information and technology become part of products. Take, for example, the new era of smart products which are beginning to revolutionize every aspect of society.
Smart clothes. Clothing manufacturers are placing chips in clothes that can contain information on where and when the item was made, who manufactured it, when it was imported, when it arrived in the store, and when it was placed on the rack. When the item is purchased information can be added about who purchased it, the date, and the amount paid. The item has a memory that can provide useful information to everyone in the value network. This can help to solve return problems, or if the item goes out the store door before it has been paid for, it can communicate back: “Help,” cries the jacket. “I’m being stolen!”
Smart cards. Credit card, debit card, an access card to the office— who needs so many separate pieces of plastic with various expiry dates and annual fees? Coming: one card for all these functions plus driver’s permit, personal health information including drug interreactions and organ donor info, spouse’s sizes for gift giving—all managed by a single microprocessor embedded in the plastic. As for the issues of security and privacy? They are significant. (More on that later.)
Smatt houses. Burglar and fire alarms, appliances, and lighting can be controlled from a handy keypad or by dialing up the system from an outside phone. You can check on the room temperature, get supper started in the oven, feed the dog, and monitor goings-on to ensure that your teenagers aren’t breaking too many pieces of furniture at the party they’re not supposed to be having while you’re on vacation. Soon, the pantry will keep track of items you’re running out of and automatically issue food and beverage replenishment orders for food that is delivered to your door.
• Smart roads. Pavement can do more than carry vehicles to destinations. Roadbeds will monitor traffic and weather conditions, then issue warnings about dangerous conditions ahead. There will be fewer accidents because sensing devices will alert drivers who are following other cars too closely or who have fallen asleep and are swerving out of the proper lane. Transport trailers will give you sufficiently wide berth. Potholes? Unheard of.
• Smart cars. Too drunk to drive? The car won’t start. Passing an historic site? An audio and video broadcast explains what happened and when. An integrated system monitors both your driving performance and the car’s operations, automatically scheduling service visits where the technician plugs in and knows immediately what’s wrong under the hood. Maps and directions will be broadcast via global positioning satellites. No man will ever again have to admit to his wife that he’s lost.
• Smart tires. Logging trucks in Alaska and Northern British Columbia have onboard computers linked through satellite to geographical information and weather systems, which link back to the truck dynamically adjusting (among other things) the pressure in the truck’s tires. Because trucks can go faster and last longer with tire pressure right for the road conditions, the entire cost of the system pays back in months.
• Stuart pucks. Hockey is growing in popularity, but aging viewers find it hard to see the puck on the TV screen. Coming soon are pucks containing a chip that will transmit data to the network computers. The puck on the screen can be bright, or pink, or change color depending on which way the play is going, or it can even contain sound effects for the viewing audience.
• Smart radios and TVs. Who wants one-way communication? What about personal, interactive radio and television where you can ask for and receive more information about the music, movie, or commercial, including the capability to order merchandise? Or if you don’t like what you’re getting, more bowling scores and bingo locations can be yours. A built-in agent will look after your individual programming preferences and personal interests and then play information about them on command. Commercial messages will be tailored to your buying habits; no more ads for personal products you never intend to use.
• Smart telephones. Already phones have built-in answering machines and come with faxes and caller ID, but there’s more yet. The smart telephone will combine all known communications functions, offer mobility, plus handle voice, video, and data at the same time. Now, if only there were a function known as call backward, so that you could turn back the clock and speak the wonderful sentence that you thought of five minutes after you hung up from that important conversation.
In an economy based on brain rather than brawn, there is a shift toward knowledge work. In the new economy the key assets of the organization are intellectual assets, and they focus on the knowledge worker. This is causing companies around the world to develop new ways of measuring and managing their intellectual capital.4 For Peter Drucker, knowledge is not simply another resource along with the traditional factors of production such as labor, capital, and land; for him, it is the only meaningful resource today. Consequently, the knowledge worker is any organization greatest single asset.5
Consider Microsoft as a new economy company. When evaluating assets of Microsoft, it is ludicrous to contemplate old-economy questi such as the following:
How much land does the company own?
What is the value of Microsoft’s manufacturing facilities—its plants?
How much inventoiy does it have?
How many office buildings does it own?
How great is its stock of raw materials?

Rather, the only meaningful assets are contained in the crania of the managers and employees of the company These assets walk out the door every night (or in the case of Microsoft, many leave in the morning and at other sundry times of the day).
But surely capital is still a critical asset? Isn’t Microsoft’s ownership of and access to money what enables it to invest in new products, to acquire companies, to throw tens of millions of do]lars into marketing a new product such as Windows 95? True, capital is a key asset, but it is a fleeting one. Fifteen years ago Microsoft had virtually no capita]. Now its market capitalization is greater than that of General Motors or IBM. In the new economy, capital will more and more become a function of knowledge.
The means of production is shifting from something physical to something human. As Robert Harris says: “The most visible differences between the corporation of the future and its present-day counterpart will be not the products they make or the equipment they use—but who will be working, how they will be working, why they will be working and what work will mean to them.”
Furthermore, labor is no longer a commodity. In the old economy, the workers at one car company were pretty well equivalent to the workers at another. Labor was only a commodity and was interchangeable Now, labor is highly variable. The craft workers at the old-economy Mercedes plant in Germany, hand-sewing the seat covers, have a completely different knowledge base and skill set from those of the highly educated workers running robots at today’s Lexus plant. And in the battles shaping up between Lotus, Microsoft Oracle, Novell, and other software companies there is almost no labor in the traditional sense. The knowledge and creative genius of the product strategists, developers, and marketers are the key. What counts is a company’s ability to attract, retain, and continually grow the capabilities of knowledge workers and provide the environment for innovation and creativity
So Allied Signal spends millions of dollars annually training plant workers to use sophisticated statistical methods to drive toward six sigma (very high) quality levels. It is this shift to knowledge work that is behind all the discussion in academic circles, management seminars, and boardrooms of organizational learning. In such a world, an organization will be competitive only if it can learn faster than either its current or emerging competitors. Any firm can have the same technology, as another company; any product can be copied. In the new race to the finish line, lifelong organizational learning becomes the only sustainable competitive advantage. Because production is based on knowledge, there are vast new opportunities for improvements in quality of life for societies that can achieve a successful transition and effectively distribute the social benefits. In the old economy, workers tried to achieve fulfillment through leisure. The worker was alienated from the means of production that were owned and controlled by someone else. In the new economy, fulfillment can be achieved through work and the means of production shifts to the brain of the producer.