Howard Rheingold
To MSNBC Business Week Online: “We should have thought about it when we sold all those computers and chips overseas. These aren't just widgets. These are the building blocks of innovation.”
The tech guru sees a "new economic system" in the unconscious cooperation embodied by Google links and Amazon lists
Updated: 8:00 p.m. ET Aug. 11, 2004
Howard Rheingold is on the hunt again. With his last book, Smart Mobs: The Next Social Revolution, in 2001 (see book's summary here), the longtime observer of technology trends made a persuasive case that pervasive mobile communications, combined with always-on Internet connections, will produce new kinds of ad-hoc social groups. Now, he's starting to take the leap beyond smart mobs, trying to weave some threads out of such seemingly disparate developments as Web logs, open-source software development, and Google.
At the same time, Rheingold is worried that established companies could quash such nascent innovations as file-sharing -- and potentially put the U.S. at risk of falling behind the rest of the world. He recently spoke with Robert D. Hof, BusinessWeek's Silicon Valley bureau chief. Here are excerpts from their conversation:
(...)
Q: If so, it's a good bet not all companies will be happy with the changes.
A: New digital technologies are creating a crisis in the business models of the companies that depend on having a monopoly on distribution. Look at MP3 blogs: We're now seeing bands that are saying, "Please pirate my material. Here it is." They make money from that. They get bookings from that. They build an audience on that.
Q: Are there more such conflicts and opportunities to come?
A: Assigning frequencies to license holders...is an old-fashioned scheme...based on technologies of the 1920s. We now have technologies that make it possible to use the spectrum the way packets use the Internet. Instead of having a circuit-switched analog system in which you have to have an end-to-end connection, you just send your packets out with their addresses through this network and they find their way. It's much more efficient. It makes for millions more broadcasters in the Internet space. This is all pointing to a kind of voluntary sharing of your property.
Q: Does the pushback by companies threatened by these trends, such as the record and movie companies, threaten innovation?
A: Yes. Never before in history have we been able to see incumbent businesses protect business models based on old technology against creative destruction by new technologies. And they're doing it by manipulating the political process. The telegraph didn't prevent the telephone, the railroad didn't prevent the automobile. But now, because of the immense amounts of money that they're spending on lobbying and the need for immense amounts of money for media, the political process is being manipulated by incumbents.
Q: What might keep these powerful incumbents from holding back this tide?
A: You've got to have some huge force outside of the United States, where it's getting locked down. What if China says, "The FCC doesn't rule us. We're going to stop assigning frequencies within our borders. We're going to regulate devices so that they play fair with each other, and we're going to open up spectrum." That's going to make the U.S. an economic and technological backwater.
Then there's always the idea that maybe we're just beginning to see disruptive technologies. Maybe something is just going to blow it away. Certainly we've seen that over and over again in recent decades.
Q: Where will we see that happen?
A: We now have a world out there where billions of people have in their pockets technologies for innovation that far surpass what entire industries had just a couple decades ago. If you're talking about the communications industry, your innovation is happening with 15-year-old girls. That was where [Japanese cellular network provider NTT] DoCoMo (DCM) won big. I think the total number of text messages sent is approaching 100 billion a month. Of course, the revenues on that are only a fraction of a cent each, but multiply a fraction of a cent by 100 billion, and it begins to add up to real money.
You're seeing that now with the picturephones. People are not using them the way it was predicted. They're using them to share their days: Here's a picture of somebody's haircut. Here's a picture of somebody's melon. Look at this shoe in a store. It wasn't determined by an expensive R&D lab. It was determined in practice by young people who appropriate these devices in unexpected ways. There's nothing more inventive than a 15-year-old.
I don't think that's going away. If I was a Nokia (NOK) or a Hewlett-Packard (HPQ), I would take a fraction of what I'm spending on those buildings full of expensive people and give out a whole bunch of prototypes to a whole bunch of 15-year-olds and have contracts with them where you can observe their behavior in an ethical way and enable them to suggest innovations, and give them some reasonable small reward for that. And once in a while, you're going to make a billion dollars off it.
Q: A focus group on steroids.
A: This would be more like ethnography, where you let them loose and watch what they do. If you want to think out of the box about innovation, let's not put all of our bets on 50-year-old PhDs in laboratories. We now have dispersed the means of individual and collective innovation throughout the world.
Here's where Wikipedia fits in. It used to be if you were a kid in a village in India or a village in northern Canada in the winter, maybe you could get to a place where they have a few books once in a while. Now, if you have a telephone, you can get a free encyclopedia. You have access to the world's knowledge. Knowing how to use that is a barrier. The divide increasingly is not so much between those who have and those who don't, but those who know how to use what they have and those who don't.
Q: Some folks in the U.S. are worried about the competition from overseas that comes from that dispersal of knowledge.
A: We should have thought about it when we sold all those computers and chips overseas. These aren't just widgets. These are the building blocks of innovation.
Copyright © 2004 The McGraw-Hill Companies Inc. All rights reserved.
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