We live in what Zygmunt Baumann calls “liquid modernity” characterized by a level of complexity and fragmentation that, when observed according to traditional categories, can easily be perceived as chaotic and disordered. The reality is that an individual with an average level of digital literacy and access to the Internet has access to an almost unlimited amount of information, expressing and sharing their interests and passions with others, and is radically changing our society.
For the first time in history this is a change that is not created from above but from below, from a system that is not based on hierarchical organization but on network logic, in which the dynamic interconnections between users shape fluid and voluntary combinations. We have arrived at what Malcom Gladwell calls the “Tipping Point”, the moment when a trend stops being a small number of people and exceeds a given peak, spreading in a rapid and decisive way across the rest of society.
What are the main consequences of this change, in which the single digitized individual can afford to access an almost infinite amount of information, to produce and share multimedia content without barriers to access?
In the first place what is called into question is the concept of hierarchy, within a system in which abundance and not scarcity are the predominant characteristics, it is necessary to know how to manage an extraordinary amount of data and information. Management of this situation requires the use of technology: it is unthinkable, today, to manage information such as that present in search engine databases, social networking sites or content sharing platforms, hierarchically.
It is not just a matter of selecting the information to be supplied together with an interpretation of reality: it is a question of allowing the total information produced to be deposited and made available through the technology itself. A key text to understand this phenomenon is “The Wisdom ofCrowds“ in which James Surowiecki articulates the fascinating thesis that numerous groups of people are still more “intelligent” than any “elite” specialist in solving problems, creating innovation and even predicting the future.
The collective intelligence of Web users is more appropriate than any single expert in determining the meanings and connections among the billions of documents present online. An example? PageRank, the algorithm that Google uses to determine the hierarchy of pages shown in the search results according to the key words entered. It owes its success precisely to the fact that, by analyzing links on the Web, it capitalizes on the widespread intelligence generated by Internet users who, with their discussions and opinions, links to the page mentioned. It collectively determines the connections between sites. Wikipedia is also perhaps, the most representative example of the attempt to exploit a multitude of users who interact with flat technological form in an attempt to organize and share universal knowledge.
Surely there are controversial aspects, mainly related to the unreliability of the information present and also of real attempts at manipulation: however, to date, Wikipedia remains the encyclopedic tool that boasts the largest number of items contained and a rate of inaccuracies not far from that of traditional encyclopedias.
The logic of the network of the community of people allows the generation of shared projects that prove to have a potential superior to any organized and hierarchical structure. In fact, the community is able to exercise social control based on common values and attitudes, capable of minimizing fraudulent or uses for those with an interest.
This, in my opinion, remains one of the most interesting and also in some respects, controversial features of digital society: how is it possible to reconcile universal access of applications without a center that filters and controls, at the same time minimizing fraudulent use? Where these applications reach a certain critical threshold, the community itself is responsible for exercising control, favoring the verification of digital identity of users based on reputation and correct behavior.
This focus on user-consumer is the reason for the transformation of technologies towards pre-digital social organization. The concept of relationship presupposes and imposes an interaction based on feedback on the relationship, and this strongly modifies the logic of relations between organizations and individuals. There is the affirmation of forms of direct and participatory democracy that modify the traditional forms of civil, social, political and economic participation. Many of these concepts are not really new to Web 2.0 but they were an integrated part of the vision of the creators of the Web; what represents an absolute novelty is the level of scalability assumed by these phenomena, scalability made possible by technology.
The combined effect of broadband deployment and the reduction of storage and computing costs has made it possible for peer to peer applications that generate peer to peer collaboration to spread. The principles of relationship, organization and information that are determining the success of Web 2.0 applications shift the expectations of millions of users towards new forms of relationship and social engagement that will not remain exclusive to this ecosystem. The paradigms that establish themselves in this field can represent a potential source of innovation both in the political, social and economic fields.
Innovators will be able to use these paradigms in every field to modify and open their own systems to interact with their users and benefit from the intelligence produced. Surely it is neither a simple nor painless transition: the conversion from an economy dominated by the scarcity present in the physical world to the abundance that characterizes the digital dimension involves an unprecedented reversal of “culture“.
Kevin Kelly uses the fax machine as an example to explain this concept. At the cost of the purchase of a fax machine you get the network and connections made up of all 18 million devices in the world. Every single fax sold increases the value of the single fax. This theory immediately contradicts two of the fundamental axioms inherited from the industrial age.
Value comes from scarcity.
When goods abound, they devalue.
The logic of the network completely overturns this typical approach of the industrialized world. In a networked economy, value derives from abundance, just as the value of the individual device grows as fax machines are introduced everywhere. The opportunity for innovation is closely connected to the opening of the systems and connections that these are able to generate outside of themselves.
To put it with Luhmann‘s terminology, the “Reduction of Complexity” offered by systems must still allow the system to open up to the environment to partially reproduce the complexity, if you do not want to run the risk of self-referentiality and entropy. This theme is unquestionably transversal, as I have cited several times: ‘the success that the use of communication platforms such as blogs, YouTube and others are experiencing in political communication, in particular in the United States but also in the recent elections in France, use of these applications by candidates has mobilized and attracted the attention of a very large number of people who decided to publicly discuss the various topics under consideration.’
The increase in participation is therefore related to the level of relationship that the candidate succeeds in establishing and the level of feedback he is able to get: elements that are the equivalent of full transparency and of one’s own digital reputation. The same concept is valid for the archetypal relationships that occur between companies and consumers.
In an economy dominated by scarcity and high barriers to entry characterized by the production and physical distribution of goods, management efforts are focused on interpreting consumer desire and offering products that are able to generate significant sales volume, to guarantee a profit for the company.
With this approach, consumers are differentiated on the basis of belonging to a demographic segment that tends to reduce individual differences in favor of gender categorization.
Chris Anderson in “The Long Tail” explains how in a digital economy where it’s cheaper and the potentially infinite assortment sustainable economically distribute niche products, the sum of which can match the volumes generated from flagship products. In this scenario the consumer instead of being inserted into socio-demographic categories is guided within the purchasing process from the tools information and aggregate user recommendations .Instead of seeking interpretation of consumer taste is put at their disposal the totality of the products to which consumers come or manifestation of individual need or through recommendations made by other consumers.
This is made possible by a technology of data analysis that works on associations between categories of purchased products and allows the development of recommendation software (those programs advise users based on their previous purchases) to be more and more sophisticated. This phenomenon is also noticeable in the analysis of the number of ‘playbacks’ conducted on YouTube, where the sheer volume is produced by an extremely large number of videos whose majority still consists of the original content produced by users. If it were a digital application that allowed the aggregation of massive amounts of data without barriers of cost to the user, this phenomenon would have been impossible to observe and predict.
If we pause to analyze this phenomena in the Italian context, what can be observed is a degree of diffusion of the main web applications equivalent to other countries, even if with strong geographical representation. Surely digital development and literacy takes place in relation to the spread of broadband, which is a necessary condition, but what remains a peculiar aspect is a low rate of adoption of digital communication platforms by companies.
These are platforms that allow the distribution of products and services on innovative channels with very low implementation costs and able to penetrate new markets that would be well suited to the fabric of small medium-sized Italian companies. In this case the low rate of digital literacy combined a conservative cultural attitude towards technology and innovation means that the rate of adoption of digital communication and distribution platforms is lower in Italy than in continental Europe and the United States.
We have observed that there is, however, a close correlation between competitive tension within the markets, the development of efficiency research activities in the communication and distribution activities and the rate of adoption by the companies of these platforms. The more markets that are more liberalized, open and competitive are the competitive tension and therefore the search for efficiency by companies.
The development of technology favors the emergence of new ecosystems and highly connected markets, in which the rate of development generates organizational, social, political and economic innovation. The lack of basic demand arises precisely from the competitive level of the market system specific to each country.
This point should be on the agenda of every leader that wants to contribute to the development of an innovation-oriented ecosystem and of which technology is a determining element. Surely this is a crucial issue of debate between elements that develop web applications, governments and guarantor authorities, the fact remains that the Internet cannot be conceived with a center that governs it and we must be able to think of structures able to measure themselves with the complexity of a completely decentralized system. The subject of government and the management of complexity is in fact intimately linked to technological development, since it is impossible to operate in this reality without reproducing within the organization a dynamic of comprehension and reproduction of complexity that does not take into account the use of technologies.
Schools undoubtedly have a crucial role in this sense, but it is the social system as a whole that should engender this predisposition of cultural openness towards technology. As I have argued previously, one of the key points is the quality of the access that allows the use of advanced web services both in the ambit of services themselves and of entertainment and quality of access that can be guaranteed either via a fixed line or through forms of mobile connection.
It is evident the relationship between the diffusion of broadband and use of advanced services such as home banking, public sector engagement, innovative e-commerce systems and communication between users and how innovation requires a high quality connection at acceptable cost. The connection quality favors the roll-out of applications whose increase in penetration generates the establishment of a digital ecosystem that increases the overall innovation rate.
The theme of inclusion within this system of entire areas of population that are currently excluded is a crucial, current and essential issue. Today, power passes from the hands of organizations that manage the economy of scarcity from above, to a society in which individuals manage their activities in a more autonomous way and that organizations, companies, institutions, require relationships, no more than just directions.
Massimiliano Magrini
Published on “Not just Blog” The technology we will need, edited by Maurizio Guandalini ETAS Libri 10/2007