10 The Law of Displacement

The net wins

Many observers have noted the gradual displacement in our economy of materials by information. Automobiles weigh less than they once did and perform better. The missing materials have been substituted with nearly weightless high tech know-how in the form of plastics and composite fiber materials. This displacement of mass with bits will continue in the Network Economy.

Whereas once the unique dynamics of the software and computer industry (increasing returns, following the free, etc.) were seen as special cases within the larger “real” economy of steel, oil, automobiles, and farms, the dynamics of networks will continue to displace the old economic dynamics until network behavior becomes the entire economy.

For example, take the new logic of cars as outlined by energy visionary Amory Lovins. What could be more industrial-age than automobiles? However, chips and networks can displace the industrial age in cars, too. Most of the energy a car consumes is used to move the car itself, not the passenger. So, if the car’s body and engine can be diminished in size, less power is needed to move the car, meaning the engine can be made yet smaller, which means that the car can be smaller yet, and so on down the similar slide of compounded value that microprocessors followed. That’s because smart materials – stuff that requires increasing knowledge to invent and make – are shrinking the steel.

Detroit and Japan have designed concept cars built out of ultralightweight composite fiber material weighing about 1,000 pounds, powered by hybrid-electric motors. They take away the mass of radiator, axle, and drive shaft by substituting networked chips. Just as embedding chips in brakes made them safer, these lightweight cars will be wired with network intelligence to make them safer: a crash will inflate the intelligence of multiple air bags – think smart bubblepak.

The accumulated effect of this substitution of knowledge for material in automobiles is a hypercar that will be safer than today’s car, yet can cross the continental US on one tank of fuel.

Already, the typical car boasts more computing power than your typical desktop PC, but what the hypercar promises, says Lovins, is not wheels with lots of chips, but a chip with wheels. A car can rightly be view as headed toward becoming a solid state module. And it will drive on a road system increasingly wired as a decentralized electronic network obeying the Network Economy’s laws.

Once we see cars as chips with wheels, it’s easier to imagine airplanes as chips with wings, farms as chips with soil, houses as chips with inhabitants. Yes, they will have mass, but that mass will be subjugated by the overwhelming amount of knowledge and information flowing through it, and, in economic terms, these objects will behave as if they had no mass at all. In that way, they migrate to the Network Economy.

Nicholas “Atoms-to-Bits” Negroponte guesstimates that the Network Economy will reach $1 trillion by 2000. What this figure doesn’t represent is the scale of the economic world that is moving onto the Internet – that grand net of interconnected objects – as the Network Economy infiltrates cars and traffic and steel and corn. Even if all cars aren’t sold online right away, the way cars are designed, manufactured, built, and operated will depend on network logic and chip power.

The question “How big will online commerce be?” will have diminishing relevance, because all commerce is jumping onto the Internet. The distinctions between the Network Economy and the industrial economy will fade to the difference of animated versus inert. If money and information flow through something, then it’s part of the Network Economy.

In the Network Economy, the net wins. All transactions and objects will tend to obey network logic.

Рубрики: | Дата публикации: 12.07.2010

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