The Information Economy.

• Author: Seninger, Stephen F.
• Position: Computer industry influence, United States - Brief Article

"Everything that can be invented has been invented." So said the commissioner of the U.S. Office of Patents in 1899, referring to the wave of innovations and technological change in the 19th century.

Apparently, the commissioner was mistaken.

We are currently experiencing an intense innovation burst in information technology--a burst that includes computers, the Internet, e-commerce, and wireless communication. Information technology--IT--is everywhere you look.

Is this innovation burst a fundamental shift within the economy, or is it more of a short-lived blip that will become a flamboyant flameout? Does IT have the same importance as electricity or the internal combustion engine? Only time can answer these questions, but evidence suggests that information technology is playing a major role in the U.S. economy.

As shown in Figure 1, IT is more than just the Internet or e-commerce. The core elements are computers, software, and telecommunications--particularly wireless telecommunications.

E-commerce and E-management

The Internet component of IT--one that has occupied much of our attention--has brought us e-commerce and e-management.

E-commerce involves buying and selling on the Internet among businesses and consumers in the following combinations:

* B2B (Business to business) - outsourcing for materials, resources, and other business services,

* B2C (Business to consumer) - normal retailing activities, i.e. Amazon.com and Dell.com,

* C2B (Consumer to business) - consumers bidding for airline tickets on Priceline.com, leaving airlines to decide whether to accept offers, and

* C2C (Consumer to consumer) - consumer auctions such as Ebay.com.

E-commerce continues to grow for several reasons:

* the ease of price comparison,

* greater choice, and

* electronic speed of transactions.

Electronic transactions erase the older distinction of geographic market areas, with the emergence of borderless markets and businesses that can locate wherever there is adequate Internet access.

IT and the Internet have changed the way businesses run. Based on information and communication systems, e-management interactions include:

* employee-to-employee - virtual teamwork through use of desktop video conferencing, application sharing, collaborative communications software, intra/extranets;

* organization to employee - telecommuters and contingency workers;

* organization to outside organizations - strategic alliances, especially in global markets with foreign...