Abstract
The author presents an overview of information as an input and output in the economy and discusses the emergence of an information society and the drivers of change. Thirteen key characteristics of the new information economy are then identified. These include: extreme economies of scale; network effects; divergent cost trends in the value chain; excess supply; price deflation; non-normal distribution of success; importance of intangible assets; the presence of non-maximizers of profit; public good characteristics; high government involvement; and more. The author then draws out the managerial implications.
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Notes
- 1.
Computer-oriented information scientists take another tack and speak of a “DIKW” hierarchy at whose bottom is “Data”—raw unprocessed facts. Organize and digest this data, and one gets “Information.” Distill that information and one reaches “Knowledge.” Add judgment and meaning and one finds “Wisdom.”
- 2.
Kleinfield, Sonny. The Biggest Company on Earth (New York: Holt, Rinehart and Winston, 1981), 3.
- 3.
The acquiring company, SBC, itself one of the breakup parts, renamed itself AT&T, but the old “Ma Bell” was gone.
- 4.
Fortune. “100 Fastest-Growing Companies.” Accessed April 10, 2017. http://archive.fortune.com/magazines/fortune/fortunefastestgrowing/2009/snapshots/1.html.
- 5.
Today we are starting to intervene into the DNA content in a process that will ignite the next scientific revolution: the bio-information revolution.
- 6.
Classical Chinese was standardized between ad 25 and 220. It remained until the 1920s, when it was altered to resemble spoken Mandarin. Omniglot. “Chinese Script and Language.” Last accessed on July 12, 2010. http://www.omniglot.com/writing/chinese.htm#intro.
- 7.
He developed typefonts, the casting of letters, the composition of lines and pages, the right kind of ink and its application, the required paper, the pressing of the pages (hence the term “the press”) and their binding. Harry Ransom Center: The University of Texas at Austin. “The Printing of the Bible.” Accessed on July 12, 2010. http://www.hrc.utexas.edu/exhibitions/permanent/gutenberg/html/4.html.
- 8.
Innis, Harold A. Empire and Communications (Toronto: University of Toronto Press, 1972), 164–198.
- 9.
Even if this rate slows down, as every exponential process eventually does, we still have a long way to go.
- 10.
Price, Derek John de Solla. See Cloud, Wallace. “Science Newsfront.” Popular Science, 182, no. 3 (Mar. 1963): 17.
- 11.
Information production in the Western world has increased since about 1000 ce, with a nadir during the Dark Ages when a significant part of the information accumulated in the period of Antiquity was lost.
- 12.
Unless marginal costs rise significantly, which they rarely do in media industries.
- 13.
Metcalfe, Robert and Michael Vizard. “Ontology and Revenge of the System Analyst.” InfoWorld, no. 51 (December 17, 2001): 8.
- 14.
Salganik, Michael J., Peter Sheridan Dodds, and Duncan J. Watts. “Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market.” Science 31, no. 5762 (February 10, 2006): 854–856. “The gazillion-dollar question.” The Economist. April 20, 2006. Accessed on August 2, 2012. http://www.economist.com/node/6794282
- 15.
Anderson, Chris. “The Long Tail.” Wired. October 2004. Last accessed on July 13, 2010. http://www.wired.com/wired/archive/12.10/tail.html.
- 16.
As exemplified in the loss of the Great Library of Alexandria.
- 17.
Kurzweil, Ray. “The Law of Accelerating Returns.” KurzweilAI.net. March 7, 2001. Last accessed July 13, 2010. http://www.kurzweilai.net/the-law-of-accelerating-returns.
- 18.
Some of this consumption is while multitasking, e.g. while driving or working.
- 19.
School of Information Management & Systems, University of California, Berkeley. “How Much Information.” 2000. Last accessed May 14, 2008. http://www2.sims.berkeley.edu/research/projects/how-much-info/summary.html#consumption.
- 20.
Simon, Herbert. “Designing Organizations for an Information-Rich World.” In Martin Greenberger. Computers, Communication, and the Public Interest (Baltimore: The Johns Ho21pkins Press, 1971), 37–72.
- 21.
Strictly speaking, toward its long-run marginal cost, where all inputs are variable.
- 22.
Collis, D. J., P. W. Bane, and S. P. Bradley. “Winners and Losers--Industry Structure in the Converging World of Telecommunications, Computing, and Entertainment.” In Competing in the Age of Digital Convergence, edited by D. B. Yoffie. Boston: Harvard Business School Press, 1997.
- 23.
Evans, Philip, and Thomas S. Wurster. Blown to Bits (Boston: Harvard Business School Press, 2000), 15–21.
- 24.
Shapiro, Carl. and Hal R. Varian. Information Rules (Boston: Harvard Business School Press, 1999), 1–18.
- 25.
The more accurate distribution is instead, an “exponential” distribution as the best statistical representation of media content revenue success. (And among several distributions, the exponential one linked to Alfredo Pareto and his 80:20 rule is the most useful, or the “Zipf distribution” For film. Specifically observed is the Stable Paretian distribution.) De Vany, Arthur S. and W. David Walls. “Does Hollywood Make Too Many R-Rated Movies? Risk, Stochastic Dominance, and the Illusion of Expectation.” Journal of Business 73, no. 3 (July 2002): 425–451. There are various explanations for such a non-normal distribution. One reason is a “cumulative advantage” (“Cumulative advantage” occurs when preferences are determined by the amplified choices of the first few consumers, i.e. where there are strong network effects.)
- 26.
Collis, D. J., P. W. Bane, and S. P. Bradley. “Winners and Losers--Industry Structure in the Converging World of Telecommunications, Computing, and Entertainment.” In Competing in the Age of Digital Convergence, edited by D. B. Yoffie. Boston: Harvard Business School Press, 1997.
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Noam, E.M. (2019). The Information Environment. In: Managing Media and Digital Organizations. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-71288-8_2
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