Week X: The Business of Information and
Guest Lecturer: Libby Hemphill
Major Topics:
Guest Lecturer: Libby Hemphill
Major Topics:
- Basic concepts: information content as a commodity vs. IT as a good/service; information demand as "non-rival"
- "Buzz word" compliance: "mind-share;" bundling; "lock-in;" information infrastructure as a "public good"(?)
- Activating the "tails" of the demand distribution; niche- and thin-sliced markets
- Has the IT juggernaut ended?
- Problems of paying for infrastructure (with historical precedents)
- Different pricing models for information services
- Does industrial Michigan have a future?
Assigned Readings (more than
usual):
- A central set of issues this week involve the heated debate sparked by Nicholas Carr's article, "IT Doesn't Matter;" here's but one response to it (there are myriad others).
- A good example of a highly IT-oriented firm transforming manufacturing (under the rubric of "flexible production") is Flextronics. (It should be noted that UofM is a leader in research on reconfigurable manufacturing and even has a major facility dedicated to it).
- Here's a condensation of Chris Anderson's arguments in his best-selling, The Long Tail (2006), in a piece entitled, "The Rise and Fall of the Hit."
- In his recent article on the music business, bob frost examines the promise of disintermediation.
- Richard Lanham's book, The Economics of Attention (Chicago: U Chicago Press, 2006), isn't really economics per se, but it provides a radical break in the way we think of value—here's Chapter 1.
Recommended Readings:
- If you're intrigued by bob frost's analysis of the music biz, you'll find this piece on Rick Rubin of Columbia Records an interesting contrast; Columbia's hoping he'll save them—or at least give them a clue.
- The New Yorker's Malcolm Gladwell on the revolution in retail before e-commerce.
- Particularly relevant to the question of the possibilities of disintermediation, here's a column by Joe Nocera of the NT Times (2006-03-18), "Open and Fair: Why Wall Street Hates Auctions."
- The Cluetrain Manifesto nicely reflects the breathy overstatement of the dot-com boom, and it still informs many IT/New Media discussions today. Here's a short version: Cluetrain 95 Theses.
- Many free-marketeers argue that government regulation is part of the "Old Economy;" Lawrence Lessig argues that we still very much need regulation (this was before the California power scandal made the need for continued regulation obvious). It turns out that some think that the golden age of the Web is over, as corporate interests ham-handedly redesign it for their own ends.
- Here's a review of a couple of books that show how, despite the changes in the economy before and after the dot-bomb, "The media titans still don't get it."
- Lean manufacturing might be a part of the next big thing, but it can render the production process more brittle and fragile.
- In an interview, economist Brian Arthur discusses some key information economics concepts: lock-in and path dependence.
- One of the new faculty members at the School of Information, Lada Adamic, along with colleagues, explains what viral marketing is and how, using network theory, it works (or not!)
- A good piece in a questionable e-business strategy: how Microsoft is trying to manipulate a UN standards-making body in order to quash efforts to develop open standards for e-businesses' use of XML in web services; instead,Microsoft and IBM want b2b e-business transactions to be handled by MS' own proprietary software.
- A story about a genuinely disgusting piece of adware that runs on AOL Instant Messenger--it seems that the company, innocuously named buddylinks, dupes IM users into turning their "buddies list" into a set of spam targets.
- It would be nice to require this, but you're reading load is already a bit much this week; nonetheless, try this very smart piece by Varian and Shapiro on the economics of standards wars.
- James Surowiecki, a New Yorker finanacial columnist, offers a take on the history and transformation of the original high-tech firm, General Electric.
- America's favorite business pundit, Peter Drucker, chimes in here with his famous piece, "The Five Deadly Business Sins." [It's nice to see that business faces only five deadly sins, rather than the usual seven…]
- As part of the continuing conversation about consumption in the e-economy, Suroweicki (again!) examines how people perceive their own economic well-being.
- Many, not least of whom includes Steve Ballmer, ceo of Micro$oft, claim that open-source is a Commie strategy, but some argue convincingly that open-source can offer a new business model. Here's a primer on how open-source works.
- Finally, the gold-plated piece that's key to scholarship in Info Econ: Nobel- Prize winning economist Joseph Stiglitz, "The Contributions of The Economics of Information to Twentieth Century Economics." It's dense, and difficult, but if you can handle it, a masterpiece.
- In his typically wry manner, James Suroweicki argues that old economy or new, creating demand is what business is all about.
- Of course, for all of our enthusiasm toward lean, tight, and flexible manufacturing, we have to remember that measure to assure national security can force everything to grind to a halt.
Information in Business