The Old Economy Isn’t Working

Luís Ángel Fernández Hermana - @luisangelfh
22 January, 2019
Editorial: 275
Fecha de publicación original: 10 julio, 2001

If you think only about where you’re going you’ll forget where it is you have been.

If, as neo-liberal thinkers maintain, the market knows how to respond correctly to the signals it gets, assigning resources where needed, satisfying demands and regulating prices so that intervention is made unnecessary, then things are looking great for the Internet, and the economy in general. As far as the Net is concerned, its population has doubled in record time, investment in its infrastructure continues to grow and its volume of activity has shot up. Nevertheless, the information and knowledge industries which one would expect to accompany these tendencies, have failed to show. It is like a town where everyone gathers in the market square only to find that the stalls have been set up in the fields beyond (is this what is meant by “the old economy”?). In the meantime the US, Germany and Japan seem to be heading for a whopper of a recession, the first time these three big powers have found themselves in this situation since the 70s oil crisis (is this, too, what they mean by “business run on old economy lines”?).

The dotcom crisis, fuelled mainly by the unbridled investment policies of big telecommunications operators, powerful financial organisations and many venture capital companies, accompanied by all the usual stock market speculation trappings, have left the digital landscape looking like a barren desert. And all this at a time when one would expect the market to be encouraging and supporting the creation and activity of companies based on the demographic dynamism of the Internet. The number of people connected to the Net has gone up 47% in Catalonia and 100% in Spain over the last year. According to statistics released by the Secretaría de la Sociedad de la Información de la Generalitat de Catalunya, almost 30% of all Catalans over the age of 15 connect to the Net every week. Isn’t this enough to generate an economy that goes beyond digital poster pasting? Quite the opposite apparently. For the moment anyway, not only have these companies not made their appearance, but amidst all the revenge talk raging against the era of waste we have had to endure due to the malpractice of big capitalist companies, users are feeling disorientated by the markets lack of response to their needs.

Every single country in the world —large, small, rich or poor— knows that education is the corner stone of the Knowledge Society. Education, based on the Net, could very well upset the old adage that says that the difference between a rich country and a poor one is that the former sits back and waits to be given fish while the other goes out to fish itself. But, if one takes a look at the education panorama one finds a huge disparity between needs and the wherewithal to satisfy them. Public administrations have embarked on grand projects, perhaps grandiloquent would be a better word, based precisely on “old economy” ideas of supply. But, when they get underway, even when all programme promises are fulfilled (Internet connection and computers in all schools), on the whole the results have been poor. This is certainly the case in Catalonia where the Asociación de Docentes de Informática de Cataluña (AEIC) (Catalan Computer Science Teachers’ Association) lodged a bitter complaint recently.

Catalonia is not the only place where there is discontent however. Wherever one looks, teachers complain about training programmes. The “digital gap” between them and their students is becoming an abyss and nobody is really sure what it is that separates them, whether it is being able to use computer programmes with ease or the latter’s ability to work online (two very different skills). Students, on the other hand, with few exceptions, don’t really know how to make their “computer rooms” compatible with a different way of accessing sharing and transversally integrating knowledge from different disciplines. When innovative projects that try to bridge these gaps are presented, using players from both the traditional educational system as well as new ones, products of the opportunities the networks have afforded them, obstacles of all kinds tend to crop up.

So how is the old economy dealing with these challenges? Well, for the moment anyway with a very poor cultural perception of the kind of changes taking place. On all levels. In the case of education, resistance to metabolising these changes on the part of the educational organisations themselves is leading to a kind of sclerosis. It isn’t paralysis, because things are evidently still moving, but without the support of the private sector, on the one hand, and a prevailing supply, from both the private and the public sector, on the other. The networks, in contrast, make it possible to generate and disseminate knowledge transversally, to restructure organisations so that targets can be fulfilled via the talent and creativity of members. But that seems to be taking things too far. These ideas play no part in any business plan, nor is it the language of the “old economy”.

Any analysis of the networked economy (at conferences, courses, symposia) immediately calls business structure into question, decision-making mechanisms at all levels and the amount companies waste by not taking advantage of the opportunities the networks afford for modifying their methodology and procedures “informationally”. Bottlenecks holding up the internal flow of communication impede the creation of strategic action. When this point is reached, the discussion usually takes an interesting turn towards the culture of supply (i.e. marketing, traditional communication, the media, promotion and advertising). In the meantime, the potential power of those who use the Net to demand things is growing, in order to satisfy their personal and collective interests they gather together into nuclei to find what they want and develop it. The inaccurately-named anti-globalisation movement is a prime example of this way of using and taking advantage of the Net. But on different scales the same could apply to all areas of life before the old economy learns how to respond in a suitable way. The important question is not what we will gain from doing something in the future but what we are losing out on by not doing it today.

Translation: Bridget King