The Information Economy is Not the Second Industrial Age


One thing to get out of the way:  Andrew McAfee and Erik Brynjolfsson’s The Second Industrial Ageis a compelling book.  I devoured it over a weekend.

We are not, though, in a second industrial age.  Increasingly, we participate in an information economy.  In economist’s terms, information is the product.  Units of production are effectively data.  The factors of production are code (programmers) and computing (servers, storage, networks, electricity, etc.).

A new era also requires a new vocabulary, lest it limits our understanding of the future.  The information technology industry long has adopted the language of the industrial age, of the factory assembly line.  We talk about boxes (servers, storage), plumbing (networking), and power (CPU, memory) with a proto-mechanical mindset.  One of the biggest buzzwords in IT is automation, which comes from the industrial age.  Automating processes that do not meet the requirements of the information economy, that overwhelm the ability of human beings to keep up with the increasingly dynamic nature of computing, is the equivalent of Lucy and Ethel wrapping candy on the assembly line.

That we are saddled with an industrial age vocabulary is not a surprise as many of the parents of today’s computing industry were born in second half of the twentieth century, during heavy industry’s heyday.  Technology today is undergoing both a platform shift from client server to distributed systems as well as generational change, with a new leadership cadre that is coming of age in the Internet era.  The old boss ain’t the same as the new boss

The Shot Heard Around the Information Economy

GE’s recent announcement that it was standardizing on Box as its information economy collaboration platform stands out as one of the crossover events of this new era.  GE was (and still is) a huge winner in the industrial age (aircraft engines, MRI machines, power turbines, etc.) and it is ramping up to be a big winner in the information economy.  If you listen to GE, in the past few years they have made it perfectly clear that their information assets are among the company’s most valuable resources and a huge focus going forward.

From an IT perspective, what was most remarkable about the GE/Box deal was that the industrial giant abandoned the traditional enterprise software model for software-as-a-service (SaaS).   For those us who came from big iron side of this industry, the data center is the crown jewel of information assets.  But GE’s choice of Box meant it has started to prioritize the data and not the center of its computing environment.

SaaS makes information technology’s traditional physical assembly line invisible. Companies purchasing SaaS applications spend very little time investigating the underlying plumbing of the systems running the software and more on what the software can do and how intuitive, how usable it is.

To be successful, though, SaaS must enable speed, accuracy, and security for data while hiding the complexity of traditional applications and infrastructure.  It is not about replicating the old approach in software, but rather, reinventing for a dynamic and data rich era.

The ease and security of using and moving information is critical. Once business leaders can get past this issue – and given the recent focus on hacking and privacy, this is not trivial – they will look at information like inventory, a balance sheet item.  How many turns will your data have?

In the information economy, the tools to store, process and move data increasingly look like the trucks, cars, railroads, and planes: important but fungible capabilities.  Over time, applications will land on computing resources like commuters using
Uber and Lyft to get around.

The huge acceleration and complexity of the data environment requires the computing industry to evolve to meet this transformation.  As enterprises race to accelerate their information asset utilization, the combatants in the IT industry are going to compete not only for the capabilities required to make it secure, reliable and fast, but invisible and easy to users and IT staff alike – i.e., move data and measure information value rapidly.


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3 thoughts on “The Information Economy is Not the Second Industrial Age

  1. […] Continue Reading : The Information Economy is Not the Second Industrial Age […]

  2. […] who recently published an interesting piece about the information economy on his blog, Ineluctable Modality. You can follow Alan at @ascohen and @BoxWorks on Twitter for the latest #BoxWorks […]

  3. […] commentator, who recently published an interesting piece about the information economy on his blog, Ineluctable Modality. You can follow Alan at @ascohen and @BoxWorks on Twitter for the latest #BoxWorks […]

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