Saturday, September 21, 2013

Staying away in droves

Some commentaries on the digital age suggest that there is a unique economics associated with connectivity, i.e., that the old rules do not apply.

For example, a BBC commentary by Peter Day and colleagues on ubiquitous networks' impact on small, rural businesses emphasized how critical it was to connect far flung operators with customers, suppliers and markets.  Fair enough, but the suggestion was made that 'normal economics do not seem to apply' to the Internet, because no how much supply there is, demand seems to grow and grow to match or exceed supply.

Sounds right, in that we seem to be able to get more Internet speed for less in many cases, i.e., Moore's Law may apply to connectivity.  But, what about micro-economics?  Does demand never curve downward when it comes to connectivity?  Having been 'burnt' by mobile network providers who (still) charge outrageous roaming fees, many of us use only wifi when abroad as data charges dampen our demand for connectivity.

Two other examples suggest that demand for connectivity has marginal limits.

First, consider the Deloitte report ('Upwardly Mobile') that found uptake of mobile services in the UK is far less than the capacity (supply) available there.  The biggest deterrent in the case of organisations is not cost, but rather management's resistance to letting employees out of their sight, a problem certainly not unique to the UK.

Meanwhile, another report from the US suggests that while a large proportion of the population are connected to fast and relatively inexpensive broadband, 20% are opting out, i.e., not connecting.  See 'Most Americans are wired, but millions are not plugged in.'  Again, this phenomenon is not unique to the US as many developed economies are struggling to get the 'last mile' of broadband penetration.

On the one hand, this is another indicator of individual choice, which is important.  But, on the other hand, as more and more modern information and services are available primarily on the Internet, having a large portion of any population disconnected could have a substantial impact on the nation's economic and political development. Ignorance may be bliss, but leaving too many people behind in the Internet age is also problematic.

As for managers' attitudes toward flexible and/or mobile work, are business schools doing enough to educate managers and leaders for a connected age?  What about organisational leadership in an inter-connected, mobile era?  As the Internet has become the nexus of political economy, are we preparing future leaders for this world?

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