Friday, January 08, 2010

Exploring Web Science Part 5 - New business models

I believe that technology arrives earlier than business models, The web's dominant business model is free services, zero prices serve to accelerate and attracting users. By relying on advertising revenues, web-based information providers can avoid fees to consumers, which in turn encourages use and appeals to the widespread preference for free goods, this is only beginning, latter we will see utility model where people start to pay monthly. we are paying for gas, electricity, phone etc. we will pay for our brain assets too.

The old principles no longer work in the new economy. Businesses have reached the old model's limits with respect to complexity and speed. The real problem is "a ruinously dysfunctional mismatch between today's business environment and the classic business model" Quite simply, the wrong model may transform a company into the vehicle of its own death."

Since the world is moving to a creativity based economy. The places that succeed will be the ones that stay ahead of the curve and are able to adapt quickly. This creative economy is based on creative people— I am talking about engineers, scientists, architects, and educators. These are the people who work with their minds to create new things with value. Creative people can live wherever they want. This means the creative economy is different from the older industrial or agricultural economies, where resources like iron or coal, or location on trade routes, The new resource is people, and they’re mobile. Will They move to places where there are other creative people for them to interact with? or move to native places? or wherever they move, mostly they work from home for any company across borders.

The Internet is supposed to make place irrelevant. With e-mail and the Web, combined with faxes, cell phones and FedEx, we could work from anywhere. A decade ago, there was a lot of talk about the “death of distance.”

"IT-based globalization is everywhere: a university student in Pittsburgh enrolls in a class where her professor lectures via videoconference from Qatar; an emergency room doctor working in Chicago receives the results of a CT scan from a radiologist in Australia; a musician in London uses the Internet to collaborate with a vocalist in Russia to record the next indie hit" (Daniel Castro and Scott Andes).

Currently, 60 percent of the PhDs awarded in engineering at US universities go to non-US students. The emerging question isn’t whether the US is the best place to train future researchers, engineers, and scientists but where they’ll put their skills to use after graduation. Globalization in and of itself simply means the world is getting smaller (village) and trade across borders is getting easier. Much of this change is driven by IT. IT has created a global economy in which workers must compete internationally.

Now, with IT innovations’ automation and transaction power, those tasks take significantly less time or can simply be done by someone else, somewhere else — leaving the Non-It professionals time to focus on the skilled elements of his or her job.

World is flat or spiky?
The view of World is flat or spiky is based on wealth or current economy model, in my view the world is divided in two - analog and digital. In digital world we are storing brain assets in the cloud or locally, brain assets will move from cloud to cloud, cloud to local, local to cloud and across country borders. Wherever innovation happens the digital asset will move there. Digital assets are like water that moves wherever the space (innovation) is. New business models emerge based on those new technologies which are harnessing the brain assets.

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