Monday, January 11, 2010

New technologies and the internet

At the start of yesterday's post, Sunday Essay - a simple story from an old photo, I referred to the rise of the visual, a world in which the value of individual images had declined as images themselves became more common leading to the creation of what I have called visual wallpaper.

Neil Whitfield ran a post on the same day, How is the Internet changing the way you think?, pointing to an interesting discussion on The Edge Annual Question 2010 on the impact of the internet on the way we think: are we becoming pancake people, simply spread too thin?; is Google making us stupid?; and so on.

I have been advising on or writing on the impact of new technology and especially changing computing and communications  technologies for more than twenty five years. I suppose that I have been involved in one way or another in the application of most of the new technologies.

All new technologies combine positive and negative effects.

The first impact of the computer lay in data storage and process automation. This gave us significant process gains, underpinning the rise in productivity that has led to lower real cost products. The negative effects lay in the creation of unseen systemic rigidities, as well as a growing emphasis on measurement. There is nothing wrong with measurement, but it becomes a curse if (as has happened) it leads to a focus on just those things that can be measured.

  These trends were reinforced by the invention of the Mac and PC. This gave individuals the capacity to do new things on the desktop or, increasingly, at home.

When I first became involved as a policy adviser 1n 1983, the world was mainframe and IBM dominated. The first personal computers were around, but their impact had yet to be felt. IBM's dominant position seemed immutable. It was actually hard to get people to think outside a frame set by Big Blue. However, the speed of change would soon sweep IBM's dominance away.

The Australian Government was an early computer user. In 1967, for example, main frame computers were already being used in the Repatriation Commission to store and process information. By 1983, computers were central to data storage and major processing functions. However, while computers had increased greatly in power, the way machines were used would still have seemed very familiar to the IT people of 1967.

The excitement of the new personal computers lay in the way that they gave individuals power to do things that only a few years before would have required a mainframe. A new world was opening up, one full of excitement. In 1987, for example, we put on a demonstration in, of all places, an Armidale pub to highlight the new powers of multi-media.

With this focus on the power of personal computers to do new individual things, few of us realised the extent to personal computers would change the structure and texture of individual working life.

As I remember it, the first desktops went into my old Department towards the end of 1983. There was one stand-alone PC for each Division. People were encouraged to play with them, to become familiar. Less than ten years later, there was a networked PC on each desk. In 1987 we started our new consulting practice with one Olivetti. A few moths later we had half a dozen.

The practical effect was a transformation in work whose cumulative effects could only be seen in retrospect.

Take the dreaded email. While emails were in use quite early, a pilot survey my firm carried out for Australia Post in 1994 on the substitution of electronic for physical communication showed that use of email still faced resistance within Commonwealth agencies, especially from senior staff. However, the tip point had clearly been reached.

The single most important effect on individual work-life of the PC lay in the way it changed the relationship between workers and organisations. Suddenly, individuals were expected to do things that were once provided as central services. As early as 1990, individual managers in Austrade, for example, were complaining to us that they now had less time to do their real jobs. The real problem here, one that holds in 2010, is that the cash savings could be measured, whereas the losses in manager and staff performance were concealed. The PC had become device not for individual empowerment, but for central management and control.

Perhaps the most striking change of all has been the rise of the spread-sheet. The first version of Lotus 1-2-3 was released in 1983. The early spread-sheets were a bit clunky, but still a wonderful tool, so by 1987 we were using Lotus on a regular basis for budget and data analysis. Today, the spread-sheet has become absolutely ubiquitous. Everything has to be "modelled". 

I have been involved with modelling for a very long time. Econometrics was one element of my 1970 Master of Economics course, including those painful computer punch cards. Ten years later as Assistant Secretary Economic Analysis in the Department of Industry and Commerce, I was responsible for the management of the Department's involvement in the development of Peter Brain's econometric model as a rival to the Treasury model. Today I use rough modelling techniques all the time.

I am not an econometrician nor a financial modeller. I could not use SPSS to save my life, while Excel pivot tables are still a bit of a how to do mystery. Throughout, my focus has been on the use and sometimes abuse of modelling as a tool, a means to an end.

In 2007 I went back inside the Public Service system. In the period since I left Canberra I had dealt with public service agencies all the time, State and Federal. However, this was my first involvement as an "insider" at an operational level for twenty years.

The culture shock was quite profound, for I was seeing at first hand the system and cultures created by the computer revolution in that particular working environment. I had really been sheltered from the practical operational impact of the changes because I had effectively been in charge of my own work for the whole period since leaving Canberra. I really struggled to have an impact in a rules-based  environment where the scope for individual initiative and innovation was constrained at all levels.

While I am using my own experiences to illustrate this story, this is not an autobiographical piece. My focus is on the conceptual and operational impact of technological change. I am making the point about the way that computing technologies have facilitated measurement based command and control approaches because it sets a clear context for my next point.

Underlying the changes that I have been talking about were major changes in communications technologies.

Today it is hard to imagine just how important the invention of the telegraph was. For the first time in human history, news, information and instructions could be transmitted in short time across vast distances. One side-effect was that, again for the first time in human history, central agencies could actually hope to exercise a degree of immediate if still limited control.

When I began work, electronic communication was limited to the fixed line telephone, cables and the telex. The first fax came into the department in, I think, in 1980. This was a wonderful device, although the use of thermal paper as to create a real survivability problem. In 1980, too, my Branch subscribed to an on-line data base based in Canada to give us faster access to a wider range of statistics.

When we set up the consulting business in 1987 we had both fax and telex, although the telex was in in clear decline. We rarely used it. The fax was wonderful because it facilitated 24 hour operations across time zones. We also used via one staff member who was an academic the early equivalent of the internet. 

For the first few months we operated from home, turning two of the rooms into office space. I remember my wife and I coming home one night. Eldest had just been born, and we had had been out to a private dinner. It was 11 pm. Suddenly the fax machine clicked into action. We were bidding on a space contract in conjunction with a UK firm.  There, coming through the fax, were their amendments to our draft tender. I grabbed the fax and sent a reply at once. It was so exciting.

By 1987, the potential impact of the changes in communications technology were becoming clear. In particular, it was clear that the highly regulated national global telecommunications system regulated through the ITU (the International Telecommunications Union) had reached its use by date.

We explored this in detail in our first major publication, The Australian Communications' Environment (Aymever, Armidale, 1987). Here we pointed to the impact of convergence and the rise of migratory telecommunications services, leading to migrating economic activity.

While our predicative success was remarkably good, we did not foresee the rise of the internet in the form it took. In 1988-89, we earned well over $250,000 in fees from the sale of information services, with revenues growing quite rapidly. Within a few years, the internet would wipe out this market area because people could do it for themselves.

The internet is distinctive, if not always for the reasons portrayed. Whereas previous changes had in fact facilitated central control over the individual, the internet gave greater individual power.

One of the features that stood out in my early personal research on Australian history and especially the history of the country movements in Australia, is just how long it took to create new geographically dispersed organisations or movements. The reasons for this are simple.

The development of any new movement takes time because it depends upon the creation of common views and of links between people. When communication was limited to post or an imperfect and expensive phone system or to expensive travel, things just took time. For both better and worse, the internet has short-circuited this process. Things can happen fast.

This poses a fundamental challenge to Governments of all types and to organisations of all types.

At Government level, Governments such as that in Iran react because the internet threatens state control, other Governments because of perceived social threats, the need to control certain types of behaviour. Whatever the reason, the results are very similar, control access.

At organisation level, organisations depend now on the internet to help them function. However, they are also concerned that individual behaviour may damage the organisation. Again, the response is to try to control access.

Obviously there is a balance issue here. That said, the issue of control of the internet is, for the immediate future, the central issue that will determine the future impact of the new technologies. My feeling is that Governments cannot in fact assert control. They have to learn how to manage the consequences. My feeling, too, is that if they do manage to assert control, then the value of the internet will be severely truncated.     

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