Umair Haque / Bubblegeneration

Friday, November 18, 2005

Edge Competences and the Post-Network Economy

The fundamental economic shift taking place in the 21st century is the shift from cheap information to cheap coordination.

In the second half of the 20th century, thing got digitized, and then networked - the cost of information itself dropped discontinuously. This made the dominant strategy hyperspecialization - to leverage this cheap info by building core competences, which are essentially, scale economies in specialization.

Now, new technologies are making coordination discontinuously cheap - it's now increasingly possible to do things with that information, without the need to build the huge coordination mechanisms firms employ; like bosses, managers, meetings, roles, and performance assessments.

At it's heart, this is why Web 2.0 is important - it's about going beyond cheap information; about dropping the costs of coordination. This is the shift to a post-network economy; where what we do with the stuff on the network is more valuable than just being part of the network.

This is why, increasingly, competences at the edge are more valuable than at the core - they let you learn how to leverage cheap coordination, to generate new sources of value; rather than leveraging cheap information, to which returns are dropping.

MIT's $100 laptop is a nice example of another driver of this stuff - it will help drop the cost of information, and the cost of coordination (assuming it can plug into the 2.0sphere). Which is why incumbents across industries should be actively thinking about edge competences, as their core competences continue to get devalued.

-- umair // 3:36 AM // 0 comments

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