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Rules for E-commerce

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Twelve dependable principles
-for thriving in a turbulent world
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The Law of Connections
-Embrace dumb power
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The Law of Plentitude
-More gives more.
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The Law of Exponential Values
-Success is nonlinear
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The Law of Tipping Points
-Significance preceedes momentum
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The Law of Increasing Returns -Make virtuous circles
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The Law of Inverse Pricing
-Anticipate the cheap
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The Law of Generosity
-Follow the free
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The Law of the Allegiance
-Feed the web frist
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The Law of Devolution
-Let go at the top
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The Law of Displacement
-The net wins
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The Law of Churn
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The Law of Inefficiencies
-Don't solve problems

Related Links

1.
The Roaring Zeros - You will be a Millionaire
2.
Bruce Gingey's Critique -
3.
Raj Mehta's Comments -
New Rules for the New Economy: 12 rules for E-Commerce

12. The Law of Inefficiencies

Don't solve problems

In the end, what does this Network Economy bring us?

Economists once thought that the coming age would bring supreme productivity. But, in a paradox, increasing technology has not led to measurable increases in productivity.

This is because productivity is exactly the wrong thing to care about. The only ones who should worry about productivity are robots. And, in fact, the one area of the economy that does show a rise in productivity has been the US and Japanese manufacturing sectors, which have seen about a 3 to 5 percent annual increase throughout the 1980s and into the 1990s. This is exactly where you want to find productivity. But we don't see productivity gains in the misnamed catch-all category, the service industry - and why would we? Is a Hollywood movie company that produces longer movies per dollar more productive than one that produces shorter movies?

The problem with trying to measure productivity is that it measures only how well people can do the wrong jobs. Any job that can be measured for productivity probably should be eliminated.

Peter Drucker has noted that in the industrial age, the task for each worker was to discover how to do his job better; that's productivity. But in the Network Economy, where machines do most of the inhumane work of manufacturing, the task for each worker is not "how to do this job right" but "what is the right job to do?" In the coming era, doing the exactly right next thing is far more "productive" than doing the same thing better. But how can one easily measure this vital sense of exploration and discovery? It will be invisible to productivity benchmarks.

Wasting time and being inefficient are the way to discovery. The Web is being run by 20-year-olds because they can afford to waste the 50 hours it takes to become proficient in exploring the Web. While 40-year-old boomers can't take a vacation without thinking how they'll justify the trip as being productive in some sense, the young can follow hunches and create seemingly mindless novelties on the Web without worrying about whether they are being efficient. Out of these inefficient tinkerings will come the future.

In the Network Economy, productivity is not our bottleneck. Our ability to solve our social and economic problems will be limited primarily by our lack of imagination in seizing opportunities, rather than trying to optimize solutions. In the words of Peter Drucker, as echoed recently by George Gilder, "Don't solve problems, seek opportunities." When you are solving problems, you are investing in your weaknesses; when you are seeking opportunities, you are banking on the network. The wonderful news about the Network Economy is that it plays right into human strengths. Repetition, sequels, copies, and automation all tend toward the free, while the innovative, original, and imaginative all soar in value.

Our minds will at first be bound by old rules of economic growth and productivity. Listening to the network can unloose them. In the Network Economy, don't solve problems, seek opportunities.


Kevin Kelly is Wired's executive editor.
This article is published here by the permission of the author. Originally the article appeared in Wired Magazine: http://www.wired.com/wired/archive/5.09/newrules.html

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Copyright © 1999 Dr. Raj Mehta. All rights reserved.