The role of entrepreneurship in the growth of the network society

1
The role of entrepreneurship in the growth of the
network society

• Terrence Brown
• IT-University/KTH School of ICT
• 15th March 2005

2
Image the opportunities, if

• Computing power was unlimited
• Bandwidth was ubiquitous and unlimited
• Storage was unlimited
• All of the above

3
ICT a key role

• Information and Communication Technologies (ICT)
  play a key role today in spawning new ideas,
  methods, processes, products and organizational
  change. It is, however, the commercialization of
  these new ideas, methods, and processes that
  create the value for users and customers, owners
  and society in general.
• Therefore, ICT is inextricably linked to
  entrepreneurship.

4
Entrepreneurship

• Entrepreneurship can be defined as the process of
  coordinating resources that exploit opportunities
  that exist in the environment or that are created
  through innovation in an attempt to create value.
• This process is therefore not limited to small
  firms or large firms, young firms or older firms,
  for profit firms or non for profit firms.

5
Explosion?

• Because of the level of communication,
  interconnectedness and empowerment the network
  society should bring, there should also be a
  virtual explosion of entrepreneurial activities,
  including but not limited to, a significant
  increase in new venture creation, which should
  further drive the needs and wants of growing and
  demanding economies.

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Purpose

• To present a possible vision of entrepreneurship
  in a networked society.
• Secondly, as we move closer to a network society
  there should be many questions that arise.
  Therefore the seminar will also to start a
  discussion that it is hoped will illuminate some
  of the key questions and begin the process of
  answering some (perhaps). Some of the questions
  include
• a) How will government and business interact?
• b) Will, in fact, a network society facilitate
  or hinder entrepreneurship?
• c) How will entrepreneur benefit from a network
  society?
• d) How will consumers benefit?
• e) Will a network society change the source of
  value created by entrepreneurship?
• At the end of seminar participants should leave
  not with a sense of closures, but rather with a
  sense of the possibilities.

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Network Society Defined

• Information Economy
• Global Economy
• Networked Enterprise
• Flexible work
• Weak Social Inclusion or safety
• The Culture of Real Virtuality
• Politics Media and Political Marketing
• Timeless time
• Space of flows

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Citizen-centric

• Citizens build their own future
• The power of the nation state is declining. It is
  becoming more and more difficult for governments
  to uphold the law, collect taxes and develop new
  technology. At the same time the need to protect
  public interests, preferences and domains is
  increasing and there is a considerable need for a
  vigorous and varied public domain.

9
Nation State

• The nation state is part of a process of
  transnationalism
• There is also a visible loss of political power
  and the direct democracy becomes stronger,
  amongst others as a result of ICT.
• Decision-making processes are more frequently
  being decentralized and that increasingly more
  tasks are being brought closer to the level of
  implementation.
• Hierarchical conception of the public domain may
  be rejected, thereby leading to an intense
  socialization of the nation state in which the
  government is an actor in the midst of many
  others.

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Rise of PostModernism
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Power of the mind

• In the words of Manuel Castells The promise of
  the information age is the unleashing of
  unprecedented productive capacity by the power of
  the mind. I think therefore I produce.
• According to Castells, those who possess social
  competences and understand the art of trustworthy
  cooperation will survive in the information age
• A unique environment for entrepreneurship

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Changes in Production are opportunities for
entrepreneurs

• Mass production to Flexible production
• Global Production Just-in-Time (Dell) and
• Targeted products Key example is the internet
  and culture (an audience of one)
• From broadcast to narrowcast, from three channels
  to 500
• Large and small firms combined in networks or
  production
• Not one dominant form, but a mix of forms
• Keiretsu
• Subcontracting
• Regional Model
• Global/Regional Global firms with strong
  regional ties
• Key reflections of this are
• Global business alliances
• Technology tools to manage global production
• Global business competition
• State transformed partner, supporter, advocate

13
Changes in Technology are opportunities for
entrepreneurs

• Semi-conductors and Computation
• Moores Law Every 18 to 24 months power of
  computing doubles
• Networked technology The Packet World
• Linking computation
• Increasingly embedded everywhere, and linking
  everything
• Binary Logic and Algorithms 0s and 1s, and
  algorithms
• And now the convergence Bio, Info, Nano
• Algorithms and binary logics everywhere!
• Two Key Points
• Tech as an enabler for the globalization and
  networked organization, but not the cause of them
• New Digital Architectures All technology, but
  especially information technology, has social
  beliefs and norms built into them.

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Entrepreneurship

• Bringing together Ideas, People, Money to solve
  problems
• Rules of thumb to Clarify, Pitch, Detail,
  Simplify, Promote
• Define your idea
• Communicate your vision
• Gather resources
• Create partners
• Implement sustainable solutions
• Five Questions for any entrepreneurial project
• What is the problem?
• What is the solution?
• Why should anyone care?
• Is it doable?
• Can you do it?

15
Transparent Economy

• In the Internet-driven network society anyone can
  find out anything. Companies must adapt quickly
  to a system that may lead to one of nearly
  perfect global competition.
• The only certain winner is the consumer. How?

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Resources

• If information is available ?
• Production can be managed ?
• If technology can be managed ?
• If capital can be managed ?
• What is left? What leads to competitive advantage?

17
Innovation as a Network activity

• Innovation is thus the result of numerous
  interactions by a community of actors and
• Institutions, which together form what are
  termed national innovation systems.
• Increasingly, these innovation systems are
  extending beyond national boundaries to become
  international.
• The interactions within this system influence the
  innovative performance of firms and economies.

18
Hierarchy of Networks

• The economy becomes a hierarchy of networks,
  driven by the acceleration in
• the rate of change and the rate of learning. What
  is created is a network society, where the
• opportunity and capability to get access to and
  join knowledge- and learning-intensive
• relations determines the socio-economic position
  of individuals and firms

19
Core Activities

• It is an economy where strategic networks are
  important. Due to nearly perfect competition,
  companies should seek out a core activity where
  they are best-in-class and should network
  strategically with complementary firms, which are
  best-in-class in their part of the value chain.
• Outsourcing, insourcing, right sourcing,
  bestsourcing

20
Distributed Companies

• We have barely begun our evolution into a network
  society, as sociologist Manuel Castells labels
  it, where the autonomous production units and
  even individual employees of many companies can
  easily be scattered and coordinated across the
  globe
• Does this lead to . . .

21
Distributed Government

• The monopoly of government based on geographical
  territories is increasingly challenged by the new
  logic of transnational economic organization. Law
  enforcement, sales taxation, consumer and privacy
  protection and a host of other issues in the
  borderless world of the Internet no longer can be
  solely addressed within the geographical context
  of the nation state, let alone the jurisdictions
  of state or local government.

22
Public/Private Competition

• Government is generally perceived to move much
  slower than the commercial world. Everyone talks
  derogatorily about red tape
• Meeting the new rising organizational
  expectations of citizens will be the ultimate
  challenge that governments face.
• Leading to
• Perhaps slow and delibrate for a reason?
• Consequences ?

23
Network Societys Impact

• New Economy is based on possibilities of
  productivity growth
• New space for entrepreneurial activity
• Growth is real and possible
• Question is regulation and distribution
• Decline in state power has increased corporate
  power and control of informational resources
• Intellectual property
• Digital divide is a real concern and issue, but
  in what sense?

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Industrial vs. Informational
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Image the opportunities, if

• Computing power was unlimited
• Bandwidth was ubiquitous and unlimited
• Storage was unlimited
• All of the above