A Man of Many Sound Bites

P> Don Tapscott, author of the best seller, "The Digital Economy: Promise and Peril in the Age of Networked Intelligence," may be the most influential Canadian media guru since Marshall McLuhan. The Toronto-based author's phrases have yet to enter the argot of the technocracy, as have McLuhan's. But someday soon, the words "molecular economy" may slip off the tongue just as easily as McLuhan's global village. As a best-selling author, Tapscott's an up-and-coming cyberoracle. He's one of the minor punditry aiming for the hallowed ranks of his profession, which includes oft-quoted figures such as the libertarian George Gilder, Luddite Clifford Stoll and MIT media guru Nicholas Negroponte. His wisdom comes in byte-sized packets -- too big for bumper stickers but just right for brochures: "All the cynicism around the information highway is a reflection of the thinking of the new Luddites," says Tapscott. "You find it very strong in many industries, including the media. They say this is all about watching more Beavis and Butthead."

WT: What is the molecular economy, as you put it in your book?

TAPSCOTT: The molecule is a basic element of matter -- the smallest substance a particle can be divided into and still maintain the original chemical properties of the substance. Molecules are held together by electrical forces. When forces are balanced, you have a solid. When unbalanced, you have gases. The basic element of the industrial economy, the economic element, was the corporation. But the basic element of the digital economy is the business unit of one. It is you. The molecule. You will move around, forming dynamic relationships and clusters. Others have talked about demassification. But I've tried to take it a step further and apply this molecular idea.

Ron Ponder, the CIO at AT&ampT, has a goal to create an infrastructure such that the company can segment the market to a market of one. Every customer is a different situation. What was mass production becomes molecular production. Similarly, mass marketing becomes molecular marketing. And mass media becomes molecular media. There won't be 100 channels or 500 channels. There will be one million channels, via the Internet and related networks.

WT: Why are the industrial models of business no longer valid?

TAPSCOTT: The world will change -- not because people in organizations are becoming more entrepreneurial, but because the dynamics of the economy are changing and require new kinds of structures for success. Those organizations and individuals who don't change will fall behind.

The old command and control hierarchy came out of the church and the military. Communications were between the governed and the governors. Your goal in life was to move up the hierarchy, to get more people reporting to you, because the system said that means you would make more money. Your objective was to satisfy your superiors. It was inwardly focused. Turf battles ate up all kinds of time. That doesn't work when it takes four months to move through the hierarchy, but the product has a three-month life cycle.

WT: Can you expand on that?

TAPSCOTT: Capital is fleeting. Twenty years ago, Microsoft had no capital. And it won't have any in five years if it makes another big mistake like it did around the Internet. So this is a formula for big, big changes. You have no guarantee of a job anymore. But you are asked to be highly motivated and to innovate. Very different from the old industrial production line where the boss could say 'We want another 10 percent out of this.' You can't say 'We want 10 percent more innovative ideas.' Or 10 percent better insights.

WT: Will there be a sort of Luddite reaction to this new dialectic?

TAPSCOTT: There is in a sense. All the cynicism around the information highway is a reflection of that. You find it very strong in many industries, including the media. They say this is all about watching more Beavis and Butthead. I had a conversation with Neal Postman [author of "Technopoly"], who describes himself as a latter-day Luddite. He is confusing the old dialectic with the new. The old being broadcasting or mainframe computing. But the new media is the antithesis of that. It will be what we want it to be. There is nothing inherent in the technology that means we will be watching more Beavis and Butthead or more alienating jobs.

WT: That technological impact will also reach the government. What changes do you foresee there?

TAPSCOTT: The big national bureaucracies that we've had are quite inappropriate. There is a disintermediation from our government. Many of the state and federal governments will be middle management who need to do some serious career planning.

But we need a strategy. Until that is done, all this talk about blowing away the industrial-age bureaucracy becomes a euphemism for bashing government.

Some WT predictions about the future of the digital economy:

- The nation's legal system will have to be overhauled to protect intellectual property in a digital world. Lawyers win.

- Authoritarian, developing nations such as China are caught in a bind: They recognize the necessity of a free exchange of information via computer networks to economic growth. But those computer networks also represent a political threat. So only those governments willing to sow the seeds of their own demise will raise their people's standards of living.

- As the economy moves into cyberspace, the tax man followeth. Local, state and federal governments -- strapped for cash because of a declining industrial tax base -- will focus on new on-line industries for tax revenues.

- As economics moves into cyberspace, politics, crime and war will follow. Corporations and governments will deploy cybermercenaries to disrupt network organizations and pilfer information.

- More specialization. The accessibility of on-line databases will allow individuals to become experts in increasingly obscure areas.

- Interdisciplinary approaches. The explosion of specialists will place a premium on the few people able to tie together disparate fields and disciplines. Interdisciplinarians, as they will be known, will be among the highest paid consultants.

- The information have-nots will have strategic advantage in the marketplace over the haves. That is because those not hooked into cyberspace will alone retain the social skills necessary to interact effectively in the physical presence of others.

- Marketing will become more important than ever as conduits for information explode. The most successful companies will be those able to compete for what will become the world's most precious commodities -- our attention and time.

You, too, can be a pundit. To join the punditocracy, send your predictions to technews@technews.com with "digital economy predictions" in the subject line. We'll publish the better ones in a future issue.