—-   As the world transitioned from the Industrial Revolution to the Information Age in the last 20 years – the so-called “Wired” Age – paradigm shifts have begun, which have tremendously redefined how people live and interact today. The successful business models have changed from the old Top-Down approach to a more spontaneous and dynamic grassroots-level sort of economy. In terms of leveling the playing field of globalization, author Thomas L. Friedman refers to this general trend as a “flattening.” A similar pattern is emerging in local transactions as well. A major consequence of this flattening is a new redistribution of wealth. In the past, a surplus of material assets meant wealth for its stewards, and thus was concentrated in the hands of a few. These days, it is rapidly spreading throughout all corners of the global community.

internet-globe

Economies, as we know, depend on the main commodities of the day. In Adam Smith’s World, the Darwinian determinant of wealth was decided by whoever was able to corner any particular physical market. Livestock, crops, and other natural resources were regulated and held by a fortunate few who were able to capitalize on a series of lucky breaks and string them together to become masters of the World. As with everything else, the Internet changed all that in the late Twentieth Century. When the electronic floodgates opened, Information became King. The worth of any other underlying physical constants – livestock, crops and all – hinged upon their usefulness to any prospective buyer. So while an investor in big energy companies might stand to lose money if oil prices drop, a short-selling speculator may reap big dividends.

In everyday transactions, consumers have found that they no longer have to settle for expensive products, and this has forced producers to sell at more competitive prices. As a proactive development, this flattening phenomenon has significantly lowered many of the barriers that once made entrepreneurial dreams all but impossible. Today’s tools, coupled with the light-speed accessibility of communications and knowledge retrieval, act as force multipliers. They are rewriting how startups are done. Anyone with a unique idea, a computer, and access to the internet can now reach out and virally touch a whole lot of someones, to make that idea a million-dollar reality. There are other factors at play, of course, but most of the initial obstacles may have been effectively reduced. Thus, the rate of failures of small businesses could decrease (barring any new government regulation that could be cooked up – or varying degrees of intestinal fortitude for the entrepreneur). That’s because in the previous era, a lot of capital, labor and time had to be invested in order to make a business get past break even. In the Wired Age, a shoestring will need just a fraction of all of that. With the right training, simpler administrative and bookkeeping tasks can be done with minimal outside help. As for sales and advertising – well, do I need to say more about how one can find so many resources to get there?

flat-earthstars

Unfortunately for most of us, this flattening isn’t manifesting fast enough. The majority of the world is still stuck in the old institutionalized mentality. Even now, our leaders and parents still preach the tired old doctrine of finishing college, finding a good, stable company to surrender a lifetime of work, with the goal of earning a comfortable retirement. That model worked for nearly a century, when large corporations could be counted on to provide jobs and facilitate the flow of goods. As they reached their terminal stages of growth, upstart executives in the big banks thought they could further growth by dabbling in the heathen idols of derivatives, specifically Credit Default Swaps. The moral of this particular story is that one must never deviate from what is known, tried and true. The cliche to insert here is, “Keep it Simple, Stupid.” On the other hand, crimes of omission led other companies to begin declining as well. US automakers hardly did anything to modify and streamline their operations in order to survive this new economic wilderness. We’ve heard and seen enough about their failures in other editorials, so we won’t dwell on that here.

There’s another industry which we should do well to observe. Currently, these players in the Digital Age are in their prime, companies like Apple, Microsoft, Intel, Google and Yahoo! But to this writer, at least, signs of stress are showing. Microsoft, for instance, has suffered setback after setback in its repeated quest to try to take a slice of the Next Big Thing. Intel has all but cornered the market, but is finally being put in its place by an antitrust court in Europe. Once upon a time, all of these companies were but a mere flicker of an idea in an individual’s head. Now as they grow older, they are falling into that corporate trap of equating success with size. They have lost their entrepreneurial backbone and have resorted to typical bullying.

While America still appreciates capitalism and competition, such tactics only breed contempt and don’t assure long-term success. When innovative new products, such as the next step in social evolution after Facebook or a device with ridiculously simple power requirements, occur and spread, these companies will have to switch gears and figure out how to get in. Or they can simply return to their entrepreneurial roots and invest more in Research and Development, the way it used to be. That, and not the Me-Too type of competition, should be what such companies should focus on. Why build a better mousetrap when you can build the next Wonder of the World?

We as individuals are also guilty of this lack of entrepreneurial backbone, although this was involuntary. After decades of sucking on the milk of a corporate-centric economy, we are literally crying for an answer to our financial predicament. The Twilight of Corporatalia is fast approaching, if it hasn’t already arrived. So isn’t it about time to rediscover and relearn that sense of adventure and start working for ourselves again? We’ll be back in the wilderness again, as our ancestors. But this time, we won’t have to step out of our homes to hunt. We just simply have to plug in to find our own unique answer to finding our share of this New Wealth in the New Economy. It’s there waiting for us to claim it.

Here’s are some excellent related articles for further reference. I found my inspiration from the first one… and Thomas Friedman’s book, of course:

The New New Economy: More Startups, Fewer Giants, Infinite Opportunity

Secrets of Googlenomics: Data-Fueled Recipe Brews Profitability

Copyright Anabasius 2009

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s