Tech stock mania highlights commercial and social importance of Internet

One thing the stock markets have gotten right is the unlimited commercial potential of the Internet. The brash upstart has demonstrated its ability to leap frog conventional ways of delivering goods and services. More fundamentally, it has created an opportunity to leap frog conventional notions of how we socialize. When we talk about the "unlimited" potential of the Internet and the new economy, the very words seem to contradict a basic tenet of market economics: that is, scarce resources are allocated by markets in a manner which gives the greatest "well-being" to society. The key assumption in our economic theory has been that resources are in fact scarce, or limited. That is, while some allocation systems may be more efficient than others, we can only squeeze so-much juice from the orange. The Internet, and its counterpart elements in the new economy are eliminating scarcity. By allowing a valuable resource, like information, to be re-used, re-worked, mutated or combined in limitless ways, value-creating opportunities also become limitless. Not only have the stock markets caught a glimpse of a world without information limits, but they have also seen concrete examples of the ability to leapfrog conventional delivery systems. After several years of scratching around for a valid business-model (setting aside the gambling and erotica markets) it is now clear that money can be made online. For example, we now know that advertising dollars will migrate to web-based businesses. More definitively, the rise of auction services over the Internet has allowed sellers to get the highest possible price while satisfying buyers' needs like never before. We started with books and CD's. We added clothing, cars, houses, and now, businesses - multi-million dollar businesses. In the process, a layer or two of processing (read: cost) has been discarded. That the markets caught on to these changes so quickly surprised most of us. That the markets wagered in to heap astounding valuations on specific companies was an even bigger surprise. What the markets did not (and can not) get right at this stage are the real winners and losers. The markets have been betting on front-runners, on concepts, on niche technologies, sometimes on hype - mostly good indicators, but not proven winners. We won't know the real winners for several years. What has gone largely unnoticed in the recent frantic actions of the market is the steady change in the way we relate to each other. While going online has been a routine practice for some time, it has expanded into an important (sometimes the most important) means of maintaining relations with family and friends. Not just distant acquaintances, but immediate family and close friends. We accept that the medium must affect the message. The online medium must therefore bring a new dimension into our personal relations. This doesn?t strike me as a particularly threatening development. Consider it a new social opportunity. And of course, for some, it will be seen as yet another commercial opportunity. Either way, it represents what the markets have already concluded: the opportunities are unlimited. Dr. Gerry Wall is president of Wall Communications Inc, an Ottawa-based consulting company, and publisher of Decima Publishing Inc.

Tech stock mania highlights commercial and social importance of Internet

Broadcast | April 6, 2000

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