How information flow empowers innovation – Part 2

With the advent of movable type printing and wide-spread literacy in the 16th century, society departed from its traditional person-to-person mode of information exchange and entered into a new era: since those days, ideas can travel independent of a human carrier. What did we do with this new freedom; how did the patterns of information exchange evolve over the past 500 years? Today I’ll continue my little time travel, taking a look at the key innovations that shaped those patterns, and trying to find out how those patterns shaped society’s ability to innovate.

Movable type printing offered unprecedented flexibility to storing and reproducing information in writing, while wide-spread literacy tremendously increased the general demand for information as much as it enlarged the supply of written information. Gutenberg was at the right place at the right time to trigger a virtuous circle in which a new technology and a nascent market mutually propelled each other forward. Printing became a regular business, and certainly one that was not constrained to copying bibles. Instead, pamphlets, leaflets, and treatise of any fashion soon formed the bulk of the information shared in print. Little later, the first newspapers were published. And at a similar time, the first postal services were established.

Now, you might observe that post and newspaper were not identical; but they had something important in common: on the basis of print and literacy, they forged a new pattern of information handling: the structured network. Both required some construct for dedicated point-to-point communication, i.e., correspondents or post stations. Such networks require upfront investment to create them, and substantial resources to sustain them: with this new pattern, information handling became a sizeable business. Over time, and with the thrust of the Industrial Revolution, that business gained momentum and became more sophisticated, until it eventually spanned the globe.

But information exchange still was paper-based, and its speed was defined the speed of horses, and later on by steam engines. It took until the early 19th century for a new technology to disrupt information handling again: the telegraph took the speed of information transmission to another dimension, as it enabled instantaneous communication. Yet, this new technology had a couple of drawbacks.

  • First, it required an infrastructure that had to be established: the telegraph wires that soon started to line the streets and railroads, and that finally stretched across the continents and under the oceans.
  • Secondly, the telegraph required skilled operators, one on the sender’s side to translate the message into the binary code that travelled over the telegraph wires, and one on the receiving end to decode to original message.

Despite these initial disadvantages, the adoption of the telegraph resulted in a tightly-knit information network: the world on a wire. It is without exaggeration that the telegraph has been dubbed the Victorian Internet to illustrate the importance it had at its time.

Still, just another half century later the dominant position of the telegraph was already challenged by the telephone. It worked at the same speed, it used a similar infrastructure. But it removed the complication of coding and decoding, as it carried the human voice directly. That simplification was vital to personal communication over long distances, and it made the telephone a success story. Without that need for trained operators, the telephone network could eventually reach into everybody’s home.

The next disruption came with radio broadcasting in the early 20th century. While as fast as telegraph or telephone, the radio didn’t require the wired network infrastructure; it was the first modern wireless communications technology. In addition, it had a key feature of the newspaper: in the true sense of the term “broad-casting“, radio enabled one-to-many information transmission. Just fifty years laters, the television added moving pictures to the equation, but it still used essentially the same concept: one sender, many receivers, one-way information transmission.

All these technologies started out from an entrepreneurial ambition to apply some of the latest findings of science. Over time, and with increasing adoption in society, they turned into substantial businesses with fierce competition between different providers. You’ll find an interesting discussion of the main 20th century information technologies (addressing telephone, radio, television, and even film) in The Masterswitch by Tim Wu. Under the programmatic subtitle “The Rise and Fall of Information Empires“, Wu observes a distinct pattern in the gradual evolution and development of all these technologies:

History shows a typical progression of information technologies:
from somebody’s hobby to somebody’s industry;
from jury-rigged contraption to slick production marvel;
from a freely accessible channel to one strictly controlled by a single corporation …
from open to closed system.

What Wu paraphrases here is the concentration of market power, and the success of the corporation. Due to their network character all these technologies required tremendous investment in infrastructure, and these will pay off most handsomely if your company dominates the market. Hence it is a sound business strategy to seek control over the technology specifications that define the market: you’ll want to set the industry standard. At the same time, you’ll seek to lock-in your customers, making it unattractive for them to switch to a different provider. Finally, at the stage of market consolidation, you’ll strive to grow your share of the market through mergers and acquisitions. Wu points out that this trend towards a monopoly can be retarded by legal action (e.g., anti-trust litigation), but the only way to really break it is – the advent of a new disruptive technology …

Of course we must acknowledge that concentration of market power is different from centralisation of information handling; monopoly aspirations shaped the development of all those technologies, regardless of their degree of centralisation. In fact, while the service provider’s economic interest inevitably favoured the concentration of market power, the customer’s desire to have easy access to a broad variety of information channels actually promoted technologies that supported more and more decentralised information networks. These various channels for information exchange are defined by their speed of transmission, their mode (one-to-one or one-to-many), and their direction (whether one-way transmission or two-way communication):

  • Books, newspapers and postal services served the exchange of written information over a distance, with some time delay. Postal services worked one-to-one; they were suitable for two-way communication. In contrast, books and newspapers worked in the one-to-many mode, supporting only one-way transmission.
  • The telegraph, despite its fairly complex handling, became the technology of choice for one-to-one, two-way communication, because its superior speed eliminated the time-delay of postal services.
  • The telephone overcame the downsides of the telegraph and took a dominant role in one-to-one, two-way communication. As an important added value, the telephone allowed for a far denser network, because every single home could be an access point.
  • Finally, radio and television broadcasting allowed for the instantaneous information transmission one-to-many, but only one-way. They have taken a large share of the information flow previously handled through books or newspapers.

Today, customers enjoy choice in the mode and direction of information flow, depending on their own preference and intention. But they will usually prefer easy access and instantaneous communication over complicated and delayed transmission. Higher speed, wider reach, and easier access promoted decentralisation as they empowered more people to participate in society’s information flow. As the number of active information exchangers increased over time, the network between them become deeper, broader, and more complex. Historically, what started out as a technical construct turned into an adaptive organic structure.

What did that development mean for society’s innovation capacity? If you agree with me that innovation depends on ideas and problems to meet so that solutions can be developed, then the density of information flow patterns and the intensity of the interactions therein are fundamental drivers for innovation. A society that promotes the open exchange of information between the largest possible number of individuals has better chances to solve its problems than a society that seeks to exert control over its innovation flow. Hence the adoption of technologies that enabled less centralised information exchange expanded the innovation capacity of society.

But there’s still one big elephant in the room; I haven’t yet touched on the internet and mobile communication. The looming question then is: What does this historic perspective tell us about the internet and the future of communication? Will that just result in an extension of the known information flow patterns, or will it create something entirely new? I’ll dare a projection in the upcoming post


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