Snail-mail on the superhighway
Dear John,
It was good to meet you at the Prospect launch party. I thought it might be worth trying to disentangle some of our differences on how the superhighway and the wider upheaval in communications could change our lives. Sorry not to be able to do so by e-mail-you will no doubt find me rather old-fashioned in other ways too.
It seems clear to me that Nicholas Negroponte and other ideologues of the superhighway have grossly idealised the new technologies. They argue that the information revolution will allow knowledge, work and learning to be dispersed and decentralised, undermining the centralised structures of industrial society. My own view is that the information society is in danger of leading us towards an atomised, privatised world, which also reinforces the trends towards the casualisation of work.
Of course we have all benefited from automated banking and fax machines. The superhighway will deliver a range of other services in education, health care, home shopping and so on. But it is well known that entertainment will be the main source of revenue for the multi-media empires. These companies will take an increasing share of the UK market in leisure and entertainment, and growth may well be at the expense of existing franchises in broadcast television, retail music, video and book distribution. Price competition and economies of scale will rule supreme.
Much has been made of the impact of new technology on manufacturing. I should know: I'm an industrial sociologist. But here again the impact of technology has been overstated. The preoccupation with information technology has obscured the fact that "lean production" is a refinement of mass production. The Japanese have not escaped from the classically "Fordist" problems of high costs, over-capacity and market saturation. Productivity and wage costs will remain vital issues in a world where even the most advanced goods and services can be outsourced to developing countries.
The changes now under-way can best be understood if the question of new technology is put to one side. Economics historians have shown how the application of steam and electricity generated a "control revolution" which has happened over the last hundred years. It has even been argued that scientists, technologists and marketing specialists had established the main elements of the information society by 1939.
The information revolution is a revolution in technique. Development has been cumulative, and there is little in, say, the operation of a modern bank which would have surprised my compatriot Adam Smith.
Yours sincerely and best regards
Martin Harris
October 1st 1995
See you in cyberspace
Dear Martin,
Thanks for your note. We have much to discuss-for not only is the future you see very different from mine, but so is the present.
Reading your comments, I was reminded of a famous article published by the Harvard Business Review in 1958, entitled "Management in the 1980s." Like you, it predicted that technology would bring a continuation of existing managerial and economic trends. So the American economy would be dominated by about 100 huge corporations. Each corporation, in turn, would be run by a single computer, tended by a small group of techno-managers.
This hasn't happened-thank God-on either side of the Atlantic. On average, firms have become smaller, not bigger (measured by the number of people employed). Even big companies have become more dependent on small suppliers. And if you believe anything they teach at business school, managerial power is becoming diffused though a wholesome emphasis on teamwork.
A crucial thing missing from the Harvard Review analysis-and from yours-was innovation. Leave aside the inability to foresee the future of computers; the article also failed to predict that minute improvements in productivity are just plain useless when some upstart from a garage starts lobbing explosive new products into your markets.
I find it difficult to recognise the media and academia, which are worlds I know well, as places where, as you put it, "price competition and economies of scale rule supreme." Surely getting new ideas is at least as vital to these businesses as churning them out cheaply.
I also miss in your letter a sense of the distinction between different forms of new technology. The reason Toyota's technologies may seem to be an extension of old-fashioned mass production techniques is because they are. Even Toyota robots are for the most part, analogue and non-programmable. The organisation which Japanese firms have put around this technology is new and intriguing, but the keyboard un-friendliness of its language has excluded Japan from the technologies I find most revolutionary-those that create some sort of networked intelligence.
Which brings us back to why I think the Internet and other technologies are truly revolutionary, economically as well as socially. They create an economy of ideas, an economy in which an ever-increasing share of the population earns a living from solving problems and generating innovation.
The economy I see is one exploding with new diversity and innovation-because new technology has dramatically lowered the barriers to entry of new players. Media-your example-is a good one. Established magazines and newspapers now compete with a cornucopia of desktop-published journals such as Prospect itself. In New York, 16-year-old Jake Fogelnest has been producing a cable-television show from his bedroom which was recently syndicated by MTV. And the number of sites on the World Wide Web-where anybody with a Net-connected computer can publish thoughts, pictures, polemic, research results or whatever to an audience of tens of millions over the Internet-has grown well into the millions. Is this a "well-established pattern of market rationalisation"? It certainly doesn't look like it to me.
Traditionally, economies of scale have prevailed in those industries which require lots of capital, or have complex manufacturing processes, or require extensive distribution chains. But thanks to the telephone-and, soon, computer networks-banks such as First Direct can achieve (regulators permitting) a global marketing reach without networks of high street branches.
Information work and innovation remain resolutely resistant to economies of scale. It is also impossible to manage the work of an information decision-maker in the same way as a production-line worker. At the heart of Fordism is the ability of a manager to write contracts which specify in detail how a worker should react to any situation he is likely to encounter. But why hire a decision-maker if you can specify in advance all of the decisions he is going to make?
So anyway, Martin, I see de-centralisation and co-operation where you see atomisation. I don't understand why you seem to think that privatisation is a bad thing; to me it just means individual choice (which is good, right?). Nor, for that matter, do I see why part-time working and short-term contracts should be worrisome. But then I'm a more or less unashamed optimist, who still believes that people are smart enough and capable enough to get what they want in the end-or at least what they need.
Please don't take this question wrong, but I do have to ask: don't you get kind of depressed by the way you see the world going? Isn't there something you'd like to do about it?
Best Regards
John Browning
October 7th 1995
Dear John,
We seem to be talking at cross purposes. You argue that the new technology lowers entry barriers, citing the example of a schoolboy. Of course one can list examples of innovative ventures which started small. However, entry barriers and levels of capital intensity remain high in the oligarchical heartlands of the IT supply and electronic capital goods industries.
But let's cut to the chase. Your letter does little to convince me that network technologies will undermine existing structures. I mentioned causalisation to highlight the ways in which technology is embedded in existing social and market relationships. It is all very well to argue that networks allow people to work from dispersed locations. But the technical fact of a network tells us very little about the social implications, or the organisational consequences of these technologies. The impact of network technologies on the casualised homeworker with few rights will be very different from that experienced by the secure professional who may use technology to support an "arms length" relationship with client organisations.
I question the role of technology in transforming structures-not because I take the cynical view that "nothing has changed," but because related changes in institutions and social organisation are required if technology is to make a difference.
I take as my starting point not just the use of technology in individual households and small businesses, but also its use in large organisations. I can think of many information based activities which may be a source of future growth and jobs. But does the fact that anyone can disseminate their thoughts on any network produce what you call "an economy of ideas?".
A key question in the debate is skills and the future of work. A variety of commentators are making confident predictions about the ability of the new communications technologies to provide instantaneous access to knowledge and education. Politicians of the left (Gore, Smith), of the right (Gingrich, Baker), and the centre (Ashdown), promulgate the benefits of the "virtual" campus, "virtual" organisations and "the wired society." Information technology and the management of change is represented as a purely technical neutral activity. Use of the superhighway metaphor promotes the impression that knowledge and skills will somehow be diffused in much the same way that water and other utilities were once provided by local government.
In the UK a large part of the debate has coalesced into an exaggerated concern about information "haves" and "have nots." But this is surely a red herring. How much information do people actually need and use? And is the future of work and skills really synonymous with access to information technology and the superhighway? Once again, the form of the debate may say more about the need for soundbites than it does about tackling unpleasantly gritty subjects such as training levies or classroom sizes. Why has information come to be regarded as such a potent symbol of change? And why should policy makers in Brussels, Westminster and Washington want to promote the idea of an information society?
Yours sincerely-and best regards
Martin
October 13th 1995
Dear Martin,
Let's take your last question first. "Why has information come to be regarded as such a potent symbol of change?" Because information technology is a potent force for change. "Why should policy makers ... want to promote the idea of an 'information society'?" Because even they can see that something powerful and important is happening and they either want to climb on the bandwagon or hijack it. Seems pretty obvious to me, and it kind of makes me wonder what we're arguing about.
You say that technology cannot be important because it is overshadowed by social and economic change. I say that the power to set in motion social and economic change is exactly what makes a technology important. The ultimate accolade for any technology is to become invisible in the world it has helped to create-just as the car is taken for granted by the fissioning nuclear families of suburbia.
As you point out, it is the choices that people make with technology that matter, and making choices is a process filled with politics, personality and human foible. But surely that just makes it all the more important to understand the sorts of new choices that technology offers. And in your determination to put technology in the background, you seem to miss even the basics.
What enables Ford to take hourly delivery of automobile seats, each correctly coloured for the following hour's production, is computers and networks. You may have seen no convincing evidence that multimedia can improve education, but airlines certainly have. They train their pilots on multimedia flight simulators and similar simulation tools are being enthusiastically adopted in professional schools ranging from business to medicine.
Mass production-the ability to produce high quality goods and services at low cost-is not enough for competitive success. Companies need to be able to innovate and to customise their wares on a mass scale as well as simply to produce them. Technology is crucial to this.
First Direct Bank, which I mentioned earlier, is an example. Thanks to telephones and computers a salesperson sitting somewhere in Scotland has both information about the financial history of a person in London and the ability to move money at his behest. The computer also helps that salesperson navigate through the technical shoals of financial products to recommend what might be the best investment for a person he has never met.
Sure, there are a lot of shortcomings with this approach-but the technology makes "customised" service available for a range of customers who could not otherwise be served economically. As it does so, it also extends the decision-making scope of the salesperson far beyond what it would have been in an efficiency-oriented bureaucracy. Similar stories can be told elsewhere.
This is not a continuation of the industrial logic of the early 20th century-which gave bosses control by defining subordinates into increasingly narrow roles. It is a fundamental reversal. Whatever else the Internet may be, or may become, it is a demonstration of a new form of organisations. The Internet connects over 5 million computers world-wide and tens of millions of people. Nobody is in charge. It was built co-operatively, from the ground up, by the people who use it. Technically, that would have been impossible without the abilities of general-purpose computers. The fundamental infrastructure of the new economy is being built by the users for the users. This is, as you point out, a profoundly political process and neither big business nor big government will give up control easily. In America, legislation on telecommunications de-regulation is turning into one of the most controversial reform efforts of the Republican Congress. On this side of the Atlantic, British Telecom's deal with Labour is the most spectacularly misguided of many efforts to turn back the clock to the old days of centralised control. BT has stood on the sidelines while new companies such as Unipalm, Demon and Videotron have built Britain's information motorway. Now that the UK has more computers on the Internet than any country apart from the US, BT is asking for a potentially controlling position in the market "for the public good." It's just ridiculous.
But even as the dinosaurs fight back, I still reckon that the climate created by technology favours the emergence of a new breed of economic mammals.The decentralisation of control and responsibility will promote individual choice and responsibility in all its manifestations-from free markets to democracy. No analyst of the industrial revolution predicted that. It's not just new; it's a future worth working for.
Best regards
John
October 16th 1995
Dear John,
We seem to be moving closer on the importance of social choice, but not, needless to say, on economics. Here, in Europe, ideologues of the information society lack the exuberance of their US counterparts, and their language tends to be managerialist rather than individualist. But the belief in the transforming power of technology is no less apparent. The European Commission report by Martin Bangemann (widely regarded as a blueprint for the information society), opens with the assumption that: "Today technology is in search of applications."
So, the new communications technologies have confronted corporations with a "solution in search of a problem." The real problem is not technical advance, but stimulating demand for new information. Hence the pressing need to shape consumer expectations.
What kind of information services do people actually want, and what will the market provide? Comparative research carried out at the Annenberg School of Communications in the US suggests that people are less interested in new data and information services than in traditional entertainment. Successful applications of technology depend on the content of what is purchased, and not on the medium of delivery.
These findings are corroborated by the experience of cable television, where the pattern of demand for cable services is well established and understood. Cable and satellite operators have only won about 10 per cent of UK market share. Suppliers are competing with conventional broadcasters in mainstream areas of broadcasting-notably live sport and other forms of popular entertainment. Companies such as BSB (part of whose remit was to supply minority and educational services) failed. Cable and satellite broadcasting, far from enabling a new diversity and richness, is dominated by large conglomerates such as News International and Time Warner which dominate production world-wide.
The belief that information can itself provide solutions to social and economic problems rests on a highly mechanistic view of information and its economic use. The new information and communications technologies may allow more effective management of information, but how far does this help decision-makers to make choices about resource allocation? These choices are essentially political and derive ultimately from the values and interests of the people involved.
Of course economic activity is in large part concerned with information processing. But will these activities produce an information society? The demand pattern noted by the Annenberg research shows that leisure and entertainment is being disseminated to consumers in radically new ways. But there is nothing to suggest a revolution in education and learning.
The main issue at the bottom of all this is the very old tension between the market place and the attempt to promote "socially responsible" uses of information. We must understand that the real choices do not turn on choosing one technical medium over another. They depend on decisions about what kinds of provision people actually need. If the goal is also a revolution in learning and skills, our policy-makers would do well to consider the social and cultural ends before seizing on particular technical means.
Technical change, as you have acknowledged, is a profoundly political process. Technological means must be interwoven with the appropriate social and political ends if they are going to make a difference for the better.
Yours sincerely
Martin Harris
October 18th 1995
Dear Martin,
We're kind of back to square one here. I think technology is already having a huge impact, and that Bangemann-style pleas for the "responsible" use of technology can do no more than bolt the stable door behind the fleeing horse.
But maybe we should put technology to use instead of just talking about it. David Goodhart is on the phone talking rather emotionally about deadlines, and we're out of space in Prospect anyway. I suggest we take our conversation from the postman to the net, and invite any readers who might be interested in our debate to join us. If you, and any readers interested in joining our discussion, would e-mail me at jb@wired.co.uk, I will set us all up on a mailing list so that we can share in a common electronic conversation-and we'll see for ourselves if this new media can help us reach consensus or not, or at least make us think again about learning, education and communication along the way.
john
