• The new economy is a networked economy, integrating molecules into clusters that network with others for the creation of wealth.
When Ron Ponder took over as the do of AT&T in 1994, his central challenge was to create the network infrastructure for AT&T to segment its markets, to create a molecular delivery system. “We’re creating a new operating model for the business,” says Ponder. “We’re creating the ability for unique segmentation for a customer market of one. But, you can’t do this transformation without the new technology—it enables you to go from one paradigm to the other.”
The new paradigm in wealth creation is possible because of compute networks that are digital rather than analog, and because of a shift in th style of networking from the host computer, hierarchical networks of th past to peer-to-peer webs based on the Internet model. As the bandwidth of such networks grows to achieve full multimedia (integrating data, te audio, image, and video media), the opportunities for such new institutional structures grow dramatically.
The new networked organizational structures are not simply the
ation of process-oriented organizations in which “stovepipe” hi,cin processes are reengineered horizontally to save costs and impr responsiveness. Nor is the change simply a shift to team-based structi. (although the business team is central to the new enterprise). Rather is a radical rethinking of the nature and functioning of the organizati and the relationships between organizations. The new organizatin dubbed by the Alliance for Converging Technologies as the “Tntt’rn worked Enterprise,” is a vast web of relationships including all levels and business functions in which the boundaries inside and outside are permeable and fluid.
The new technology networks enable small companies to overcome the main advantages of large compariies…conomies of scale and access to resources. At the same time, these smaller companies are not burdened with the main disadvantages of large firms—_deadening bureaucracy; stifling hierarchy, and the inability to change. As larger companies disaggregate—beco me clusters of smaller molecules that can work well together….. they gain the advantages of agility, autonomy, and flexibility.
The Intemetworked Enterprise will be a far-reaching extension of the virtual corporation because there will be access to external business part- tiers, constant reconfiguration of business relationships, and a dramatic increase in outsourcing. The Internetworked Enterprise will behave like the Internet, where everyone can participate and the total effort is greater titan the sum of the parts.
The overall economy will act in the same way Networks of networks along the Internet model are beginning to break down walls among companies_suppliers, customers, affinity groups, and competitors. We will see Ihe rise of internetworked business, internetworked government, inter- networked learning, and internetworked health care, to name a few
Every economy needs a national information infrastructum. This is lie utility of the twenty-first century-._a broadband highway for a broadltaimd, high-capacity economy. And every organization needs to plug into Un,s utility with an enterprise information infrastructure The new infrasirlicture will change economic activity as significantly as did electrification. Just as business and wealth creation would be unthinkable today Without electrification, so the new economy would be impossible without the power of information.