The Internet and Change: Economic Space Type


Before 1900, most economic activity happened outside. Agriculture, Hunting, Trapping, Fishing, Lumbering and other outdoor activities used natural workspace.

Outdoors is naturally provided and low maintenance. Renewable resources renew within very broad boundaries. A "broken" environment usually self-corrects (over-fishing leads to no fish, then no fishermen, then fish stock regeneration).


The Work Space is Permanent: Human modification is limited, and production processes subordinate to natural forces. It's stable: Weather, land and water are static or follow cyclical patterns over thousands of years. Production methods are largely static: plant in the spring; harvest in the fall. Use bait to attract fish, etc.

Knowledge is semipermanent. Education and science pass nearly identical information, often orally, to new generations. Social systems are traditional and enduring, change is largely cyclical.

Office Building

During the 20th Century, most economic activity moved indoors: Into stores, factories, office buildings, schools, stores, malls, warehouses, etc.

Indoor space is purpose built, but resource constraints and time are limitations: A huge office building can't be built overnight, and 2,000 or 3,000 feet may be a practical height limit. Change (ex:tear down a factory building and put up a new one)is possible, expensive and slow. Physical laws such as gravity, material strength, etc. constrain.

Factory Building

The production process and work environment change at a moderate rate. Social systems are legislative, deliberate, and bureaucratic (Ex: The US Constitution's "checks and balances"). Science is careful and formally reviewed; Education is structured in institutions and books.

The style is mass production; with hundreds to hundreds of thousands of workers performing very similar tasks. Formal training and practical experience are highly valued, enabling the experienced, trained worker to excel in a specific production process for years or decades. Slowly changing standards and regulations, such as building and zoning codes, professional training requirements, and bureaucratic company polices govern much of economic life.

Change Button

In the 21th Century, much human economic activity moved to Digital Space: Brick and Mortar stores were replaced by websites, pure Internet banks arose, Sales and Marketing activity left the sales floor.

Digital space is purpose-built quickly, with very few resource constraints, and near infinite possibilities. Possiblity creates instability. Change can be instantaneous, inexpensive, frequent, dramatic and unpredictable (changing the logo and large exterior sign on 1,000 brick and mortar stores would take months or years and cost millions; changing the logo on 10,000 web pages might take five seconds and a handful of keystrokes).


The style is Creative Destruction: A torrent of new ideas rapidly displace the old: Briefly dominant or powerful organizations such as AOL, Netscape, Alta Vista, or My Space can disappear or fade to obscurity in a few months or years.

Large bureaucracies struggle, because environmental change renders the static policies forming their skeleton obsolete. Adaptability is more important than efficiency. Some large organizations serve a short term purpose, then fade away quickly, displaced or absorbed by a new company (MySpace leads to Facebook, etc).

Creative Destruction Icon

Learning is informal, outside of educational institutions, commonly provided in blogs, forums, or advertising-supported YouTube videos. Formal degrees and certifications become less important. Many founders of Cyberspace are college dropouts - a personality ill-suited to a slow, careful, and structured learning process is perfectly adapted to the Digital Age. The careful certification of experts to train other experts is too slow; "correct" methods of production evolve in loosely structured continuous, fluid, interactive, and very democratic processes. It's more akin to a large group of friends discussing what restaurant to eat at than a traditional classroom "lecture and test" or "election every four years" process.

That's why most companies decay slowly over time. They tend to do approximately what they did before, with a few minor changes. It's natural for people to want to work on things that they know aren't going to fail. But incremental improvement is guaranteed to be obsolete over time. Especially in technology, where you know there's going to be non-incremental change.

-Larry Page, Google

...the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization...

-Joseph Schumpeter