Irving Wladawsky-Berger

Bubbles and Fundamentals

The recent events in the financial industry brought back memories of the Internet dot-com era of the late 1990s, only a short decade ago.

In the speculative dot-com bubble that developed during those years, a lot of people were talking about the rise of a new economy that rendered obsolete many business practices, including business models based on revenue, cash and profit.  They felt that in this new Internet economy, the emphasis should now be on increasing market share, clicks and eye-balls as fast as possible regardless of the impact on the bottom line.

There was a buzz in the air that in this new economy, "born-on-the-Net" startups had an inherent advantage over existing,” brick-and-mortar" businesses.  Because of their grounding in the physical world, it was thought that such old-fashioned companies could not possibly compete in this fast-moving digital space and were therefore headed for extinction.  Thus, many otherwise smart people rushed to invest in new Web-based companies regardless of their financial soundness, hoping to strike gold in this new economy.   

At the time, I was general manager of the IBM Internet Division.  Looking back at what we accomplished in those days, I am frankly almost as proud of what we did not do as I am of what we did.

Toward a More Distributed, Collaborative Government

There is general agreement that the corporation is going through dramatic changes in the 21st century, driven by a combination of advances in information technologies, the Internet, the fast-changing market environment, and the heightened competitive pressures brought about by globalization.  Business strategist and author Don Tapscott, whose research and writings have focused on the changing nature of companies, said it nicely in this article:

"We came to the conclusion that the corporation is arguably going through the biggest architectural change in a century.  Throughout the 20th century we created wealth through vertically integrated companies that did everything from soup to nuts. . . . But the rise of the Internet means that boundaries are far more porous.  A new model is emerging, enabled by IT and networks.  Vertically integrated companies are unbundling into business Webs, or what I call the open networked enterprise.  These are companies that think and act differently, that take a new approach to doing business in a highly networked world."

Companies are embracing a more distributed organizational style.  The foremost reason is the need to become more flexible and adaptable in response to changing market conditions.  A highly centralized organization may have worked well when markets changed slowly.  It was then possible to have a command and control approach to management, where authority and information flowed down from small groups of executives back in headquarters.

But, as we know, this does not work so well today, especially for global companies that operate within complex supply chains and industry ecosystems and need to react fluidly to dynamic market conditions all over the world.  The expertise is out in the field, where the rubber meets the road, as it were.  That is where people know what is really going on and what they should do about it.

The American Dream, Innovation and the Knowledge Economy

With few exceptions - support for research and education, diversity and immigration policy - my blog does not touch on political subjects.  But it is hard not to be thinking about politics, given our upcoming US presidential election, and in particular, the recently concluded Democratic and Republican conventions.

Beyond the relatively straightforward question of how I am going to vote, I have been struggling with how best to put into words my feelings about this coming election.  What are the key concerns of individuals, families and communities?  What are some of most important problems facing our nation as a whole?

There is clearly no single answer to these questions.  The conflicts in Iraq and Afghanistan, the war on terror, healthcare reform, energy, immigration and the financial crisis are clearly among the most important issues facing the next president.  But I wonder if, in the end, the most critical questions people are asking themselves around the country are less grand in scope but much more relevant to their daily lives.  How are our families generally doing financially?  Where will the good jobs come from that are needed to preserve and hopefully increase our standard of living?  How about our children?  Are they getting the proper education so they, too, can aspire to a decent, well paying job and a good standard of living?

These are the kinds of questions that bring to mind an old fashioned phrase from the 1930s,  “The American Dream,” even as we transition from the industrial to the knowledge economy and the 21st century.

Blogging at this Particular Point in My Life

Blogging has continued to play a central role in my life since I started this blog in May of 2005.  It is something that I think about a lot every week.  First, I need to plan what to write about, as well as how to best organize whatever subject I settle on.  Then there are the many hours of writing and editing.  When things go smoothly I can probably get it done in three to four hours.  But when a subject is tough and I need to work though how to best structure what I want to say, it can take quite a bit longer.

There are also the times when I am struggling with an entry - usually because while I think that I know what I want to say, I find out otherwise when I actually try to write things down.  I then have to set aside the subject, hoping that things will go better when I later get back to it.  Typically, this is what happens, although every now and then I do have to give up on a subject altogether.       

If this all sounds like work - it most definitely is.  It is something I have been doing every week for the last three and a half years without missing one so far.  Given its role in both my work and my life, every so often I like to focus an entry on blogging itself.  Let me then quickly review my personal evolution with bloogging leading up to its current state. 

An Update on Virtual Worlds

For the last three years I have been quite intrigued by virtual worlds and all the various capabilities we group under this term.  I believe they are ushering a new paradigm for user interfaces, as well as a whole round of innovative, more human-oriented, intuitive applications.

While many are excited by these possibilities, others remain skeptical.  Virtual worlds continue to be most popular in video games and massively multiplayer online environments.  Despite our high expectations, the number of virtual world applications in serious areas like education, business, and health care remains small.  Some think that this is just one more example of the kind of hype that the IT industry comes up with from time to time.

At this early stage, both fans and skeptics are right.  The promise is there, but it remains to be realized.  I, most definitely, remain positive.  Let me attempt to explain why. 

To begin with, what do we mean by serious virtual world applications?  While there will undoubtedly be many different such applications, I’d like to focus my comment on three specific categories.