This is NOT your Father’s Information Economy

Updated: July 06, 2010

These days, information is everywhere. There are millions of blogs and billions of posts on Facebook. Wikipedia is growing faster than you can read it and every traditional magazine and newspaper has a hundred competitors online. No - this is surely not your father's information economy. Things were very different back then.

In 1937, economist Ronald Coase wrote his seminal article titled "The Nature of The Firm" in which he argued that the size of the corporation is correlated with the cost of information. Large firms had evolved to dominate the 20th century economy because the cost of getting the information necessary to conduct business successfully was so expensive. Massively hierarchal organizations - the rise of middle management - were a direct result of this effect.

In the mid-Twentieth Century, information analysis was performed much like auto manufacturing. A large assembly line of white-collar workers pushed information up the pyramid - analyzing, augmenting and combining as it went. Once decisions were made at the top, a reverse process occurred as the "insight" was pushed down and out to the far reaches of the enterprise. It was nearly impossible to change course in a large firm because of the rigid and massive information gathering, management, and decision-making infrastructure.

Fast forward to the web-enabled world. With so many new "sources" of information, you'd think the costs to generate insight would become astronomical, right? Well not for the agile enterprise. With the right tools, the cost of capturing and analyzing the right information can be exceedingly cheap. So cheap, in fact, that Coase's Law can been flipped on it's head.

The first generation of mainstream information aggregation tools for the web were the Internet directories - remember Yahoo when it was just a directory? (Am I dating myself??) We found information online by hunting through directory structures - just like a card catalog.

Then came search and exotic names like Alta Vista and Inktomi and then Google. Information access exploded, as did our ability to sift through it. Now we are in the third wave of information aggregation with the convergence of social, real-time and mobile information overwhelming our previously reliable search and research strategies.

This "RealSocialMobile" web calls for a new strategy for information aggregation. Rather than expecting traditional search technologies to yield optimal results, we now must turn to tools that provide a federated approach to information retrieval and insight analysis.

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