WikinomicsThe Perfect Storm

Amber C.Dawn M.Mark S.

People and the Web

Years Ago …..People were at the mercy of web

content providers..

A History Brief

• The World Wide Web was created initially to be sort of like a library

• Users would locate and view the content they needed

• There was no real interaction between the user and the content provider

• Users were limited to the content that was available by content providers

The New Web

• One way street interactions still exist between users and content providers

• The Web has evolved and social interaction between users is now a major function of the WWW

• The New Web has opened the door for new types of Collaboration

How the New Web is Changing the Way We Share

• One major change has been in the way people share their lives

• Sites like Facebook, MySpace, Twitter, and even mobile applications like Loopt allow users to connect and collaborate

• Users who were once only readers of web content can now author web content

The New Web is Changing the Way We Learn

• Sites like Wikipedia, eHow,Google, and Ask.com are changing the way we learn

• Anyone who has knowledge can share it without being a ‘computer expert’

• Accessing many of these types of sites do not have a cost associated with them allowing a wider audience to have access

How the New Web is Changing the Way We Do Business

• Companies are setting up blogs to get a comsumer pulse and make consumers feel connected with the company

• www.blogsouthwest.com• http://blog.toyota.com• www.coca-colaconversations.com

How the New Web is Changing the Way We Do Business

• Companies can access a number of free software development tools to develop software

• Application Programming Interface enable software to talk with other pieces of software

• IPhone API allows develpers to Apps for the Apple App store

The Demographic Watershed: Growing Up Collaborating

Net Generation Generation has grown up online▪ Bringing a new ethic of openness,

participation, and interactivity to workplaces, communities, and markets

Represent the new breed of workers, learners, consumers, and citizens

Born between 1977 and 1996 inclusive▪ Bigger than baby boom (over two billion

people)▪ Will dominate the 21st century

The Demographic Watershed: Growing Up Collaborating

Collaboration generation Instead of watching TV like their parents,

they are growing up interacting online▪ Not content to be passive recipients of mass

consumer culture▪ Spend their time searching, reading, scrutinizing,

authenticating, collaborating, and organizing▪ Can’t imagine life without tools to constantly think

critically, exchange views, challenge, authenticate, verify or debunk

▪ Actively creating media content and are hungry for interaction

The Demographic Watershed: Growing Up Collaborating

Skeptical of authority Sort through information on their own or with

their peers Greater self-confidence than previous

generations, but still worried about their futures Not insecure about themselves, but about the

external adult world and the lack of opportunity in it

Value individual rights▪ Right to privacy▪ Right to have and express their own views▪ Oppose censorship by parents and governments

The Demographic Watershed: Growing Up Collaborating

First time in history that children are authorities on something really important

Digital revolution is changing everything

N-Gen will rewrite the rules for communities, markets, and workplaces

New Shared Spaces

Net Generation’s modus operandi is networking Young people dominate many of the huge, online

communities from Facebook to MySpace Time spent on MySpace is about reclaiming private

space▪ Adults control the homes, schools, and activity places▪ Online communities are like a private bedroom where

teens can invite in one thousand friends Physical world becomes less welcoming and online

space becomes more vital and appealing▪ Fewer public spaces available for teens to hang out in as

more hang-out spots are deemed unsafe for kids

New Shared Spaces

Heart of MySpace is personal profile Filled with personal information▪ Interests, tastes, values▪ Favorite music, photos, video clips

Considered public display of identity▪ Comments provide feedback and affection, and are

generally expected to be reciprocated Key point is that online social networking is

uniquely attuned to the N-Gen’s habits and will continue to be part of social fabric going forward Youngsters are predisposed to connect and

collaborate with peers

Changing the World – One Peer at a Time

TakingITGlobal Best example of how N-Geners are using digital

technology to transform the world around them▪ 110,000 registered users in 200 countries▪ Website is in 7 languages, has five million unique visitors▪ Harnesses blogging, instant messaging, media sharing▪ Members profiles contain the languages they speak, the

countries they have visited, and the issues they care most about

Cofounder Jennifer Corriero describes the site as▪ “a platform to support collaboration among young people in

developing projects, in understanding and grappling with issues, and influencing the decision-making processes, especially around those issues that are directly affecting young people.”

Changing the World – One Peer at a Time

TakingITGlobal Next task: reforming education▪ Intend to engage participants in active

projects that make a difference in their community▪ Using virtual classrooms, they will unite

teachers and students from all over the world to work together on group research projects using blogs, posting artwork, and collaborating via class wiki

The N-Geners as Prosumers N-Geners have many options for

information and entertainment Bulletin boards, price comparison sites,

blogs, and instant messaging provide easy and unprecedented consumer scrutiny of ads and sales pitches

Trust peer opinions and social networks over advertising and media

Word-of-mouth and reputation have become very powerful, and can be hard for marketers to control

The N-Geners as Prosumers Not content to be passive consumers

Increasingly satisfy their desire for choice, convenience, customization, and control by designing, producing, and distributing products themselves▪ Napster was first, then came Kazaa, BitTorrent, and

Limewire▪ File sharing accounts for half of the world’s internet

traffic▪ N-Geners are renegotiating copyright and intellectual

property▪ Won’t let outmoded intellectual property laws get in

the way

The N-Geners as Prosumers More than half of U.S. teenagers (57%) are

“content creators” Half of all teenagers age 12 to 17 = 12 million Content includes blogs, personal web pages,

sharing original content (art, photos, etc.) or remixing content found online into a new creation

Blogs are most popular form for sharing personal thoughts, opinions, and interests

Opportunity exists for business world to bring N-Geners into enterprise as co-creators of value▪ Innovations will have to be fundamentally reconfigured to

suit the collaboration style of N-Geners in order for it to work

The Wiki Workforce

N-Gen brings unique characteristics to the workplace High technology adoption, creativity,

social connectivity, and diversity not seen in other generations

Will transform the workplace and the way business is conducted to an extent not seen since the 1950s

The Wiki Workforce

Old corporation structure was hierarchal, with the boss being the authority on everything

Unorthodox methods of collaboration will influence management structures May lead to multidisciplinary

management teams with authority split into different areas

Will pose tough challenges for employers seeking to adapt to the new generation

The Wiki Workforce

Bottom line is that the N-Gen work ethic gives them a leg as inherent innovators Will demand highly collaborative and

collegial work environments that balance life and work, and fun most of all

Companies that cannot adapt will be left on the sidelines, unable to attract new workers from the Net Generation

The Collaboration Economy Coase’s Law

A Firm will tend to expand until the costs of organizing and extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market.▪ If you can get it cheaper from someone else, don’t do it

yourself Before the 1990s, gathering information for new

products and processes was cost prohibitive▪ Made sense to integrate all necessary processes into

one company▪ Transaction costs outweighed the benefits of

outsourcing

The Collaboration Economy Coase’s Law

Transactions Costs ▪ Search costs▪ Finding suppliers with appropriate goods

▪ Contracting costs▪ Negotiating price and contract conditions

▪ Coordination costs▪ Meshing the different products and processes

With the availability of the Internet, the law is still valid, however transaction costs have plummeted to the point that large organizations have to focus on the opposite:▪ Bringing their internal costs below what outsourcing would

cost

The Collaboration Economy Transaction costs are reduced due to the

availability of industry exchanges and online clearinghouses.

Coase’s Law, which used to provide a neat explanation for why corporations grew to gigantic entities, now explains why traditional corporations are being thrust aside by an entirely new kind of business entity.

The Business Web

Is a new Entity, also known as the b-web Companies Retain their identities but function

together creating higher returns Built around Interenterprise collaboration MP3.com, Napster.(Cost the record companies

300 million To be successful companies need to constantly

adjust their boundaries. Boundary decisions are at the heart of strategy

B-web collaboration is a tedious process Those who orchestrate a b-web have to look

globally

The Global Playing Field

The Globalization issue is much bigger than India and China

The Global Playing Field

The 1900’s was the American century and now the 21 century will belong to Asia, China and India

The “Chindia” Region encompasses a third of the global population

Innovation Cities are emerging in China. Companies leveraging technology, low-cost structures and physical proximity.

US and Europe will not dominate due to the high wages and healthcare costs

Must diversify activities geographically and develop robust global innovation webs.

Small businesses can now compete globally by outsourcing almost any business function

In the collaboration economy, the real advantage of globalization are the endless possibilities for growth, innovation, and diversity.

Globalize or die and Collaborate or Perish

Riding the Perfect Storm

Ingredients: Global Platform for Collaboration, A Generation that grew up collaborating and a Global Economy

Keep in mind that collaborative forms of organization is as long as human history

Social cooperation didn’t start with the new Web or NET Gen. Technology has enabled a new model.

A new world is emerging where anyone can “Plug and Play.”

The world of wikinomics- in which the perfect storm of technology, demographics and global economics is an unrelenting force for change and innovation

Conclusion

The New Web N-gen is re-writing the rules Social Networking Technologies that have enabled

transction costs to plummet The B-Web Globalization

Any questions?