Optimism and the Digital World

Optimism and the Digital World
By L. GORDON CROVITZ
Wall Street JournalApril 21, 2008; Page A15
http://online.wsj.com/article_email/SB120873501564529841-lMyQjAxMDI4MDI4MTcyMzE1Wj.html

In the 1850s, James Rothschild complained that it was a "crying shame that the telegraph has been established" because suddenly anyone "can get the news." The Rothschild banking empire was built through private couriers who ponied from one European trading center to another, profiting from market-moving news about business and trade. The telegraph ended such exclusive access. Almost as annoying, information became a constant. Rothschild complained, "One has too much to think about when bathing, which is not good."
This early Information Age became real time when Queen Victoria sent President James Buchanan the first trans-Atlantic cable. "The Atlantic is dried up, and we become in reality as well as in wish one country," editorialized the Times of London. "The Atlantic Telegraph has half undone the Declaration of 1776." Tiffany's crafted jewelry out of unused cables, and a popular novel of the era was "Wired Love," a Morse Code-era version of online matchmaking. The telegraph shrank the world, upended business practices, democratized information and confounded government regulators.
Today's digital world makes these challenges of the telegraph era seem quaint. Modern-day Rothschilds, and even the more workaday among us, are tethered to BlackBerrys. Our digital-native children simultaneously instant message one another, listen to iPods and watch videos - while doing their homework. Scientists now suspect that this next generation may be developing a different brain structure, reflecting online activity from toddler age.
This Information Age and how it affects us as consumers, businesspeople and citizens seems like a timely topic for a new column. My sensibility on these issues is that of a media practitioner for some 25 years so far, running media and information businesses, including as a former publisher of The Wall Street Journal. The focus will be on the accelerating impact of new technology. This column will also comment on public policy, seeking to discourage restraints on innovation while protecting sometimes conflicting concerns such as national security and privacy.
The media was one of the first industries to be roiled by new digital technology. Retailer John Wanamaker once quipped that he knew that half his advertising spending was wasted - he just didn't know which half. As a result of the efficiency of the Internet and other targeted media, many newspapers, magazines and broadcasters have had large declines in revenues and profitability. The largest media company in the world is Google, which produces little original content and indeed would instead call itself an engineering company. Silicon Valley is driving consumer choice and behavior at least as much as Madison Avenue.
We have many new choices in how we access news, information and entertainment. The number of professional journalists continues to fall, but the potential good news is that technology makes it possible for anyone to write and build an audience. New forms of online journalism are already filling the gaps. It was a Barack Obama-supporting blogger, citing her journalistic duty, who broke the recent big story of his comments in San Francisco about the bitterness of small-town voters.
There are hard questions to consider. For example, does the easy availability of information necessarily mean the advance of knowledge and wisdom? Endless information from many sources may or may not be as trustworthy as information handled by trained editors or through analog-era processes like academic peer review or independent ratings of financial instruments. Part of the answer may be new tools to capture the wisdom of crowds, such as the information art form exemplified by Wikipedia. The good news is that almost all public information is now available at the click of a mouse; the bad news is that unfiltered information overflow can leave people as confused as James Rothschild once was.
Despite the importance to the economy of technological innovation, public policy often stymies entrepreneurs. Rules for telecommunications, intellectual property and even immigration need to be updated for today's technologies - indeed to make tomorrow's technologies possible. Likewise, national security now depends on how well information dots about threats are gathered and connected. This requires a sophistication about mining and linking information through open, yet secure, systems that often conflicts with the hierarchical culture of government bureaucracies.
Still, technologists are optimists, for good reason.
My own bias is that as information becomes more accessible, individuals gain choice, control and freedom. Established institutions - governments, large companies and special-interest groups - need to work harder to justify their authority. As information and knowledge spread, financial and human capital become more global and more competitive. The uncertainties and dislocations from new technology can be wrenching, but genies don't go back into bottles.
The First Law of Technology says that "with every change in technology that affects consumer behavior, we always overestimate the impact in the short term, but then underestimate the full impact over the long term." The original dot-com era a decade ago was overhyped, but by now the Web has become a utility, increasingly available anywhere for any purpose. This is the Information Age, yet we're just beginning to gather the information and understanding to know how it changes our lives.