Über die Autorin bzw. den Autor

JOHN M. JORDAN is a clinical professor in the Department of Supply Chain and Information Systems at the Smeal College of Business, Penn State University, where he teaches IT strategy to undergraduates, MBAs, and executives. His research focuses on emerging technologies and their impact on business strategy, design, and practice.

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Information, Technology, and Innovation
Resources for Growth in a Connected World

Incredibly rapid innovation is a hallmark of our time. The social media discount site Groupon went from revenues of $33 million in 2009 to $760 million in 2010. Facebook has crossed 800 million users since its launch in a dorm room seven years ago. Kiva the online lending platform funded $200 million in microloans to people around the world in less than six years. While these types of organizations and achievements were inconceivable only a decade ago, many other corporate giants have either lost their competitive foothold or completely closed shop. Information, Technology, and Innovation provides you with the tools and knowledge to survive the shifting sands of today's rapidly changing business models.

Author and IT strategist John Jordan examines basic principles underlying technology, management, and economics to show how rapid innovation is reinventing competition in today's fast-paced global marketplace. Addressing the many ways in which IT has drastically altered the business landscape over the past forty years the personal computer, the Internet, GPS, cell phones, and smartphones Information, Technology, and Innovation reviews the consequences of our technological revolution and shows how to move forward by incorporating these traits into new innovations.

By examining several recently displaced industries, Information, Technology, and Innovation reveals a variety of ways that technology innovation can translate into a mix of threats to established patterns of business behavior, as well as opportunities, including:

• The Music Industry: How at least a dozen changes to the music industry business model including MTV and the surge of mega-retailers helped set the stage for the disruptive threat from Napster
• Newspapers: Was Google the sole culprit in the demise of news readership and will the increase of tablet users help re-energize the business?
• Health Care: How Wal-Mart, CVS, and Walgreens are placing clinics in selected pharmacies to address routine matters that would often otherwise require an emergency room visit

Information, Technology, and Innovation also discusses the various technologies you can use as building blocks to move your business forward and concludes with five broad areas of rapid change in the foreseeable future.

The ways people behave, relate to each other, and organize themselves to work are changing at warp speed. Information, Technology, and Innovation shows you how to make sense of today's rapid changes by moving beyond a mindset of optimization. Instead, the wealth of technological and organizational changes is the starting point for tomorrow's business transformations.

Aus dem Klappentext

Incredibly rapid innovation is a hallmark of our time. The social media discount site Groupon went from revenues of $33 million in 2009 to $760 million in 2010. Facebook has crossed 800 million users since its launch in a dorm room seven years ago. Kiva--the online lending platform--funded $200 million in microloans to people around the world in less than six years. While these types of organizations and achievements were inconceivable only a decade ago, many other corporate giants have either lost their competitive foothold or completely closed shop. Information, Technology, and Innovation provides you with the tools and knowledge to survive the shifting sands of today's rapidly changing business models.

Author and IT strategist John Jordan examines basic principles underlying technology, management, and economics to show how rapid innovation is reinventing competition in today's fast-paced global marketplace. Addressing the many ways in which IT has drastically altered the business landscape over the past forty years--the personal computer, the Internet, GPS, cell phones, and smartphones--Information, Technology, and Innovation reviews the consequences of our technological revolution and shows how to move forward by incorporating these traits into new innovations.

By examining several recently displaced industries, Information, Technology, and Innovation reveals a variety of ways that technology innovation can translate into a mix of threats to established patterns of business behavior, as well as opportunities, including:

• The Music Industry: How at least a dozen changes to the music industry business model--including MTV and the surge of mega-retailers--helped set the stage for the disruptive threat from Napster

• Newspapers: Was Google the sole culprit in the demise of news readership and will the increase of tablet users help re-energize the business?

• Health Care: How Wal-Mart, CVS, and Walgreens are placing clinics in selected pharmacies to address routine matters that would often otherwise require an emergency room visit

Information, Technology, and Innovation also discusses the various technologies you can use as building blocks to move your business forward and concludes with five broad areas of rapid change in the foreseeable future.

The ways people behave, relate to each other, and organize themselves to work are changing at warp speed. Information, Technology, and Innovation shows you how to make sense of today's rapid changes by moving beyond a mindset of optimization. Instead, the wealth of technological and organizational changes is the starting point for tomorrow's business transformations.

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Information, Technology, and Innovation

John Wiley & Sons

Chapter One

If you watch exponential change for long enough, the effects grow beyond comprehension. In the late 1990s the technology analyst George Gilder was fond of telling the story of "the second half of the chessboard." Here is one version:

The emperor of China was so excited about the invention of chess that he offered the inventor anything he wanted in the kingdom. The inventor thought for a moment and said, "One grain of rice, Your Majesty." "One grain of rice?" the puzzled emperor asked. "Yes, one grain of rice on the first square, two grains of rice on the second square, four grains of rice on the third square, and so on through the 64 squares on the chessboard." The emperor readily granted that seemingly modest request. Of course, there are two possible outcomes to this story. One is that the emperor goes bankrupt because 2 to the 64th power grains of rice equals 18 million trillion grains of rice, which would cover the entire surface of the earth with rice fields two times over.

The story highlights one of the critical facts of contemporary life: Improvements in digital technologies are possible at scales never experienced in previous domains. As a 2005 advertisement from Intel pointed out, if air travel since 1978 had improved at the pace of Moore's law of microprocessor price/performance (one of Gilder's doubling technologies), a flight from New York to Paris would cost about a penny and take less than one second. Cognitively, physically, and collectively, humanity has no background in mastering change at this scale. Yet it has become the expectation; the list later in this chapter should be persuasive.

Given the changes of the past 40 years—the personal computer, the Internet, Global Positioning Systems (GPS), cell phones, and smartphones—it's not hyperbole to refer to a technological revolution. This book explores the consequences of this revolution, particularly but not exclusively for business. The overriding argument is straightforward:

* Computing and communications technologies change how people view and understand the world, and how they relate to each other.

* Not only the Internet but also such technologies as search, GPS, MP3 file compression, and general-purpose computing create substantial value for their users, often at low or zero cost. Online price comparison engines are an obvious example.

* Even though they create enormous value for their users, however, those technologies do not create large numbers of jobs in western economies. At a time when manufacturing is receding in importance, information industries are not yet filling the gap in employment as economic theory would predict.

* Reconciling these three traits will require major innovations going forward. New kinds of warfare and crime will require changes to law and behavior, the entire notion of privacy is in need of reinvention, and getting computers to generate millions of jobs may be the most pressing task of all. The tool kit of current technologies is an extremely rich resource.

Cognition

Let's take a step back. Every past technological innovation over the past 300-plus years has augmented humanity's domination over the physical world. Steam, electricity, internal combustion engines, and jet propulsion provided power. Industrial chemistry provided new fertilizers, dyes, and medicines. Steel, plastics, and other materials could be formed into skyscrapers, household and industrial items, and clothing. Mass production, line and staff organization, the limited liability corporation, and self-service were among many managerial innovations that enhanced companies' ability to organize resources and bring offerings to market.

The current revolution is different. Computing and communications augment not muscles but our brain and our sociability: Rather than expanding control over the physical world, the Internet and the smartphone can combine to make people more informed and cognitively enhanced, if not wiser. Text messaging, Twitter, LinkedIn, and Facebook allow us to maintain both "strong" and "weak" social ties—each of which matters, albeit in different ways—in new ways and at new scales. Like every technology, the tools are value neutral and also have a dark side; they can be used to exercise forms of control such as bullying, stalking, surveillance, and behavioral tracking. After about 30 years—the IBM Personal Computer (PC) launched in 1981—this revolution is still too new to reflect on very well, and is of a different sort from its predecessors, making comparisons only minimally useful.

For a brief moment let us consider the "information" piece of "information technology" (IT), the trigger to that cognitive enhancement. Claude Shannon, the little-known patron saint of the information age (see Figure 1.1), conceived of information mathematically; his fundamental insights gave rise to developments ranging from digital circuit design to the blackjack method popularized in the movie 21. Shannon made key discoveries, of obvious importance to cryptography but also to telephone engineering, concerning the mathematical relationships between signals and noise. He also disconnected information as it would be understood in the computer age from human uses of it: Meaning was "irrelevant to the engineering problem." This tension between information as engineers see it and information that people generate and absorb is one of the defining dynamics of the era. It is expressed in the Facebook privacy debate, Google's treatment of copyrighted texts, and even hedge funds that mine Twitter data and invest accordingly. Equally important, however, these technologies allow groups to form that can collectively create meaning; the editorial backstory behind every Wikipedia entry, collected with as much rigor as the entry itself, stands as an unprecedented history of meaning-making.

The information revolution has several important side effects. First, it stresses a nation's education system: Unlike twentieth-century factories, many information-driven jobs require higher skills than many members of the workforce can demonstrate. Finland's leadership positions in education and high technology are related. Second, the benefits of information flow disproportionately to people who are in a position to understand information. As the economist Tyler Cowen points out, "a lot of the Internet's biggest benefits are distributed in proportion to our cognitive abilities to exploit them." This observation is true at the individual and collective level. Hence India, with a strong technical university system, has been able to capitalize on the past 20 years in ways that its neighbor Pakistan has not.

Innovation

Much more tangibly, this revolution is different in another regard: It has yet to generate very many jobs, particularly in first-world markets. In a way, it may be becoming clear that there is no free lunch. The Internet has created substantial value for consumers: free music, both illegal and now legal. Free news and other information such as weather. Free search engines. Price transparency. Self-service travel reservations and check-in, stock trades, and driver's license renewals. But the massive consumer surplus created by the Internet comes at some cost: of jobs, shareholder dividends, and tax revenues formerly paid by winners in less...