Digital Economy is about REAL equal opportunities

As an Economy student I was taught all about the wonders of the market: how, let free, it accomplishes an allocation of resources and gives in the end better products, services and wealth to Society. I also learned about the core hypothesis underlying the theory of free market. And I believe in them. What I don´t believe in is in the market… as it is at present. The main reason being, that one of the main hypotheses doesn’t work en reality. And the good news is that digital economy corrects that flaw.

For the market to work correctly, the hypothesis is that all contenders, producers and consumers must have equal access to equal information. When there are asymmetries of information, abuses happen, by either side. With asymmetries of information, power games can dwell, with small countervailing powers available. It happens in local economies. It happens in non democratic countries. It doesn´t happen in the Web.  It doesn´t happen in the digital economy.

Call me naïve if you wish, but this is something I see everyday happening once and again, increasingly. What was created with the Web is a virtual space where all are equal. It doesn´t matter how much money you've got: the late business success stories have not been about putting more money, but about acting fast and smart. It doesn´t matter how you access the Web: it can be from a smartphone or an old computer; it can be with extra-speed or lower-end broad band. Once you are inside, you have access to the same amount of information, business tools, apps, products and services, learning experiences and living experiences. All are equal. Information is symmetrical. Knowledge – in the form of information and tools – is the new, unlimited resource, available for all, on equal basis. Mostly, for free. 

The Web has transformed business and societies, and it will continue to do so, at increasing speed. In the Web, free markets are really free, since information is hugely available to all. The Digital economy has been growing at two digits, and is by far and long the most dynamic economy in the world. It is destroying traditional jobs, but for each one destroyed, it creates 2.6 new ones, with better quality and better income. The most that benefit from it are the Small and Medium Companies and the independent professionals[1].  

The main shift in the knowledge economy is towards individual autonomy, by enabling consumers to become producers of knowledge, innovation, energy ... and food. The concept of a large corporation where people are workers for owners is obsolete in the knowledge economy. Already professional services centered on consulting are increasing (I’ve been there for the past 16 years!). Manufacturing tools will empower individuals to make things at home with technologies such as 3D printing. These manufacturing tools will enable customized, personalized clothing to be made from raw materials. Small scale, residential hydroponic agriculture is already being commercialized. In the knowledge (or digital) economy, 50% or more of the value in the GDP will be created by autonomous individuals who are sole proprietors and producers. With IT tools connected to the cloud, people can do banking so big, Banks are not needed. The 21st Century is the Age of Autonomy. Cities will become distributed. The technical definition of this type of organization is a holonic architecture and the people are holons - independent, yet networked cooperative agents. Holonic systems are distributed systems and are faster, more reliable and economically more efficient and cheaper to operate that centralized systems. The Internet is a holonic system. The PC and cell phones are parts of holonic systems. A pure democracy has holonic voting. Systems naturally evolve to become holonic[2].

As this “holonic system” unravels, more and more people will incorporate to self independence, working networked. As this holinic system unravels, power will shift from big entities (Corporations, the State) to distributed entities (the Web, networked people, crowdsourcers).  As I have written repeatedly, this Web has “a will of its own”, as the ring of the Lord. It has its own Agenda. It runs by its own plans. It has created a huge value in very few years, and a huge innovation process of which we are seeing but the first steps (the “Belle Epoque”, that other great era of innovation, lasted 70 years) It may even borrow Asimov´s concept of psycho-history (though that is too dramatic, but you get the point).

So what the tide of digital innovation is bringing is a new paradigm of Society. It might not be clear to many or most of people working and living today, as they worked and lived in the past 30-50 years. It was not clear for the people living in the early 19^th Century, while in front of them political systems fell and were replaced by democracies, and Mercantilism was overcome by Capitalism. We still are not aware that what is going on now has not happened since writing was invented. We are a social race, and communicating paradigms are the milestones to leapfrog advances in humanity. It took 7,000 years for writing to be masificable, with the invention of printing. It took another 500 years before you could say the new technology was available for 30% of the World’s population, and could be deemed a universal value. It has taken only 20 years to the Web be accessed by 30% of the World’s Population, and it has already been named a “basic human right” by the United Nations.

Why all that? Because digital economy is about equal opportunities, especially for those who are less favored. Putting the focus in the development of human talent puts the focus on real equal opportunities.

Alfredo Barriga

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[1] Internet Matters: the Net’s sweeping impact on growth, jobs and prosperity, Mc Kinsey Global Institute, May 2011

[2] This parragraph is borrowed from my friend William Miller - except for the "16 years in consultancy" part. Thanks, Bill!