All fruit gets ripe except the “pear-haps”

The message of present US economic success has never got through to Europe so loud and clear as at Davos. Clinton himself, at the head of practically his entire economic policy team, summed up their recipe for success in an apparently simple sentence: Alan Greenspan had realised the importance of information technology in business very early on and, in a relatively short time, decided to create tax and other incentives for “rewarding” all those who incorporated new technologies into their business. When did all this happen? 8 years ago. This is one of the advantages –there are others, of course– that the US economy has over Europe: the time and the accumulated experience in, firstly, the use of information and communication technologies and, secondly, informational technologies (Internet).

The results are there for all to see, particularly in increased productivity. For the first time, the visible heads of the big European corporations are beginning to say publicly what we have been saying for the last four years, “If we carry on like this, the Americans will absorb us.” This time the words are those of Ron Sommer, president of Deutsche Telekom speaking in Madrid last week. But every day more and more people subscribe to this idea. And more and more people are becoming converted to the Internet cause. What is not clear, however, is that their new fundamentalism, augmented by the bright lights of the Stock Market, will necessarily lead them to salvation.

The reason for this is that they are clinging on to the Internet in its most ingenuous form. After all, this was also expressed at Davos with great clarity: the Net is the totem of the new economy, the key element for gaining lost ground. Yes, but only up to a point. Or, rather, it is not the only solution. Newly discovered devotion to the miraculous properties of the Internet now brings along with it, like a roaring tide, the tendency to display oneself to the world in the form of a web page. This might give one an air of modernity, but it has little to do with the incorporation of information technology to aid the running of businesses, institutions, administrations or collectives of different types and interests.

When Greenspan decided to promote the dissemination of new technology throughout the economy, the Web did not exist. What did exist, just as it does now in Europe, was an obvious need to improve the internal communication of companies and adapt it to emerging processes for the reorganisation and adjustment of information flows to optimise decision-making processes. This was –and still is– one of the key factors in the US economy taking off. What gave it a kick start was a remarkable modification of the internal organisation of businesses by which the distances between those that possess information, knowledge and experience and disseminating them throughout the structure in, above all, transverse flows, were reduced. Both information and informational technology, but particularly the latter as far as the creation of virtual environments with great problem-solving capacities was concerned, proved to be very efficient at fulfilling this task.

“Information technology and informational technology” is the label that defines a wide range of systems of different kinds and characteristics, everything from the fax to local networks and Intranets. However, they also include conceptual designs for knowledge management, rationalising the decision-making process and imbuing that information and knowledge with value. In this way, the new innovative agents within the company are redefined, as well as the clients within the new environment –many of whom do not bear the traditional portfolio–, productive units are improved or other new ones developed, the integration of suppliers is scaled-up and new areas of distribution are opened up.

What is created, to sum up, is an environment of new relationships defined by the virtuality of the networks and by the new opportunities they afford, putting the company in a particular position on a market with very different characteristics to those of the real market. That gives the US another advantage, since the incorporation of these technologies in business has sparked off an information and knowledge market which forms part of the general economy. On this side of the Atlantic, not to mention Latin countries, the thought of paying for information or knowledge managements is considered almost a mortal sin, a kind of guilty and despicable onanism.

This is discouraging particularly for companies that discover that the Internet does not mean just the small sum paid for a web page (however much they might be charged for it by some people), but the flow of substantial investment and uncertain innovations which, to begin with anyway, seem to swallow up their traditional business. Innovations that, moreover, seriously affect the habitual mechanisms of control and organised hierarchy, question tried and tested methodologies which are nevertheless aimed at fading markets and “attack” business culture entrenched in the idea of the illusory power of information and knowledge within organisations. The longer they take to discover that today’s business lies in the incorporation of internal systems that reorganise these information and knowledge flows converting them into active strategies within the new economy, via the systematic application of informational and conceptual technologies online, the greater the risk that the threats we now hear bandied about all over the place will come true.

Translation: Bridget King