Monday, 4 August 2008

Wealth of Networks 2008: digital economies & next generation internet - audio recordings

Here are audio recordings and notes on a few of the sessions at the Wealth of Networks conference hosted by Imperial College on 24 July 2008, organised by the Imperial College Internet Centre, Margaret Gold and others, which to me was one of the most interesting and useful conferences ever - it was much better than many expensive conferences, yet it was free to attendees as it was sponsored by the ESPRC (Engineering and Physical Sciences Research Council), who wanted to encourage public attendance and feedback.

Click the arrows to play the recordings from this page.

You can read Margaret's write up of the day (intro, keynote, panel discussion, internet angel) - and another summary of the internet angel (personalised agents) session. See also the pages on transport, e-healthcare, and cascade of information (identifying influential bloggers etc) which link to the slides for those sessions.

Digital Economy Programme

Digital Economy Programme speech - audio MP3 recording. By John Hand, above, of the EPRSC (Engineering and Physical Sciences Research Council), about the joint Councils' visionary, multi-disciplinary Digital Economy Programme, which initially is concentrating on:

  • healthcare
  • transport, and
  • the creative industries.

Keynote speech: John Varney, MaximumClarity

The keynote speech was an absolutely brilliant exposition by John Varney, founder and CEO of MaximumClarity (and formerly CTO of the BBC), on the Net and networks - where they've come from, where they're going.

I'm gutted that something went wrong with the MP3 recording of the keynote presentation, but the video should be up shortly and no doubt will be linked to from the main Wealth of Networks site - it's very well worth watching, even for non-geeks (also see this blog post summary).

Here are some key points based on his slides and some jottings.

John Varney's 5 C's

Starting with radio / TV pioneer David Sarnoff in 1935, there have been increasing advances in terms of:
  • Capability - power of the device (Gordon Moore) 1965
  • Connectivity - power of the network (Bob Metcalfe) 1973
  • Collaboration - power of the group formed network (David Reed) 1984
  • Communities - power of the participants (Ross Mayfield) 2003
  • Content - all driven by a content (and service) rich Web.

The democratisation of culture

He mentioned The Wealth of Networks: how social production transforms markets and freedoms, a book (available online) by Yochai Benkler published in 2006. The title of the conference is no coincidence... Social wealth, monetary wealth and creative wealth have all increased - plus, there's increasing information symmetry, as illustrated by changes in news reporting:
  • 9/11 - in 2001, the mainstream media provided the primary coverage and dictated what information people received.
  • Indian Ocean tsunami - in 2004, it was all over by the time journalists from the mainstream media reached the affected regions. But people who were on the spot, ordinary people, took photos and videos of the events, and sent them in to newspapers and TV stations.
  • 7 July Tube bombings - in 2005, people who were directly affected by the bombings recorded their own experiences. Some sent their cameraphone videos and photos to the press and broadcasters, but many just sent them straight to family and friends, or uploaded them online.

The demand for network

It took:
  • 50 years for books to reach 50 million people
  • 75 years for the telephone
  • 11 years for the television
  • only 5 years for the internet (...and in another 10 years the Net will reach 1 billion people).

John Varney's top 5

His personal predictions for the future:
  • Death of the organisation, rise of the collaboration (firms will still exist, but the way they work will be different)
  • Micro-entrepreneurialism (as exemplified by online micro-lending platform Kiva, which he personally contributes to)
  • Open source innovation
  • Telemedicine
  • Computing-free enterprise (thin clients, cloud computing, Google Docs etc) - there will be no IT departments in a dozen years...!

"The future has arrived, it's just not evenly distributed yet." William Gibson, science fiction writer.

Plenary Panel on Digital Economies and the Next-generation Internet

Plenary Panel discussion - audio MP3 recording. An excellent discussion, focusing on:
  • music - P2P filesharing and ISPs' recent deal with music industry (letters to ISP customers); business model for the music business
  • internet - business models for internet service providers, bandwidth, internet blackout, Net neutrality.
Panelists (above from left to right): John Varney (MaximumClarity), Professor John Darlington (Director, Internet Centre), Nick Leon (Design London), Dan Appelquist (Vodafone), Dr. Gary Graham (University of Manchester), John Hand (EPSRC), John Barr (451 Group), and David deRoure (University of Southampton), moderated by Gareth Mitchell, below (Imperial College and Digital Planet, BBC World Service).

Diginomics - the importance of being (re)born digital

Diginomics panel discussion - audio MP3 recording, on the economic impact of digital technologies: how the news and newspaper industry is changing, why people pirate music etc, why DRM doesn't work, the economic inefficiencies of Web 2.0 and why it's hard to monetise Web 2.0, the impact on privacy, and possible new business models. See also the slides for the session, and Broadstuff's writeup.

It was chaired by Thierry Rayna (Imperial College Internet Centre) (below), with (above from left to right) Samuel Landau (Comwax CTO), Gary Graham (University of Manchester), Ludmila Striukova (University College London), and Paul Bourgine (Ecole Polytechnique, France).

This session was in my view (along with the keynote speech) the best session of the day, and certainly the best in terms of the "eureka scenario"- what was said was very insightful and made a lot of sense, and I've finally begun to understand what's behind some of the issues and problems unique to the digital economy.

Or, as I'd paraphrase it, "It's the economics, stupid!". There's no need for anything fancy or new - the principles of good ol' fashioned economics apply equally to the digital world; they just need to be applied appropriately, and then suddenly a lot of things make sense. This really shows how important it is to take a multidisciplinary approach to the internet and technology, and how much technologists can learn from fields of study which may look at things from a different perspective (in this session most of the panel were economists or management/business experts, rather than IT geeks).

Newspapers - Gary Graham thinks that for newspapers to survive in the Internet age, they'll have to move to:
  • more customisation / personalisation
  • consumer participation - so readers become more involved
- and become more entrepreneurial.

Digital goods (Thierry Rayna) are the only products which have all 3 of the following characteristics:
  • they have the economic characteristics of "public goods" (e.g. a lighthouse, which ships from nations that haven't funded its cost of building can still benefit from) - and therefore there will be "free riders" (who consume more than their fair share of a resource or bear less than their fair share of production costs) which is economically rational behaviour for consumers (why pay for something you can get without paying?), and there are (piracy)
  • they are infinitely durable - so the market will shrink unless new products are created
  • they are mainly "experience goods" - you can't find out the value to you before trying it out, e.g. watch movies or listen to music. Consumers aren't willing to pay a lot for something whose value is uncertain (how to know how much to pay when you don't know how much something is worth?). But if asked to pay after the event, they can say they didn't like it!
The result: people can get digital goods without having to pay for them, when they decide to buy or get them they can keep them forever, and they're not willing to pay before consuming them (and possibly after). Each of these characteristics undermines suppliers' profitability.

But of course digital goods aren't rare, they are an increasingly big part of the economy, so it's important to address these issues.

Suppliers could try to pretend digital goods don't have these economic characteristics, or try to alter their nature (e.g. by using existing business models and DRM) - which won't work - or they could acknowledge their economic characteristics and work with them to devise different business models:
  • Advertising business models (Google, etc.)
  • Subscription business models (newspapers, MobileMe)
  • Tangible complement business models (Microsoft, Apple)
  • Tax funded business models (BBC).
However, Thierry thinks that none of those business models can be generally applied. [Note: there wasn't time to discuss why he thinks so - I'd certainly like to know, e.g. is there empirical evidence suggesting it, or economics principles etc? Many would say that Google's advertising-based model does work - for Google, anyway. Does he mean that none of those models will be sustainable in the longer term?]

Again there wasn't time to discuss fully the interesting points about Web 2.0 that economics can help explain, like why people pirate and why it can't be stopped, why existing DRM methods are bound to fail, why Web 2.0 is inefficient and how it could be improved. For other points and questions please see the slides. Thierry was kind enough to give out copies of some papers co-written by Ludmila and him, which expand on many of the points raised (and more) and which attempt to address some of the questions raised in the session.

Having read them I think they're fascinating, and very worthy of summary and comment in a separate dedicated post on digital economics - please see that post for details.

Identity and trusted resources

Identity and trusted resources discussion - audio MP3 recording - this session ended up combining what were originally intended to be two separate concurrent sessions on identity and trusted resources in the network society.

Rather than detailed panel discussion, it comprised mainly views from the floor, reflecting the aims of the convenors who wanted opinions from the public on trust and identity in order to help them frame and direct their future work (which is fair enough):

  • do people reveal their real identities, or use multiple identities, and why?
  • is there more "faking" online than offline?
  • which sites do people trust? What would you trust them with?

Personally I would have found it more useful to hear the results of studies by the panel members providing insights into these issues, and I wish that the sessions had been billed more clearly as a factfinding one as I probably wouldn't have attended it if I'd known... Addressing the detailed questions on the original description pages for these sessions (identity, and trusted resources) is I think crucial for the future of the internet, and I very much look forward to seeing the outcome of the research that follows on from this session.

A few, very selective, points:

  • under 16s use multiple identities online far more than people over 16. Why? (I didn't know this fact, I must track down the research behind it.)
  • knowing someone's identity is not of course the same as trusting them (I strongly agree with this, of course - people should be able to trust me and this blog (or not) from what they can see I've done here, my real name should be irrelevant for that purpose)
  • don't forget that information given out online is stored!

Chaired by Dr. Sandra Gonzales Bailon (University of Oxford), below, with (above from left to right) Rashid Mehmood, Gary Graham (Manchester Business School), Ludmila Striukova (University of London), and Thierry Rayna (Imperial College Internet Centre).

Concluding round-up

Concluding remarks and summary - audio MP3 recording - summing up of the day's proceedings, chaired by John Darlington, with the moderators of the individual sessions on travel & mobility, health & healthcare, diginomics, internet angel (personalised agents), cascade of information in networks & influence, service infrastructure and identity & trust (see the agenda for details).

One interesting point (among many) - will Web 3.0 be:

Or will it be all of them together, to give us Web 6.0?

1 comment:

Wallace R. Wood said...

In 1998, in response to over 30 years of research and writing on the subject of a future ‘digital economic’ system, I coined the word “Diginomics.” Much to my surprise, I found no evidence of its existence in any dictionary, so I submitted it to every English-speaking dictionary I could find. In 2007, Merriam-Webster’s Online Dictionary agreed to showcase the word on their website. Today, it’s amazing to see how the word has truly taken hold around the globe, fairly true to the definition that I assigned to it. Here is my original ‘official’ definition:

DIGINOMICS (dij’i-nom’iks), n. – acronym of two words: digital and economics. (1) the status of development toward an all-digital economy conducted electronically in all financial dealings between buyer and seller; a cashless system where all moneys (incl. cash, coins, checks and credit) and transactions involving the same are conducted electronically. (2) Societal trends in which the presence of and use of advanced electronic technology is both prevalent and predominant, creating lifestyles and social cultures that are technology driven. Syn. Cashless society, digital economy, friction-free economy, e-business, mobile economy, m-economy, entertainment economy, intangible economy. [1998, Wallace R. Wood, Houston TX]

For an “official” recognition of this new term, visit the Merriam-Webster On-Line Open Dictionary site.
Indeed, we truly are living in a “Diginomic World.” It’s only a matter of time before the full application is realized.