Since Sloan Management Review published "Enterprise 2.0: The Dawn of Emergent Collaboration" in the spring of 2006, a lot has happened.  Many people have discussed the tools, technologies, approaches, and philosophies of Enterprise 2.0 in conferences, articles, interviews, and blogs.  Even more importantly, many companies have moved past discussion to deployment, and are building Intranets that resemble today’s Internet:  multi-voiced, egalitarian, social, dynamic, self-organizing, and benefiting from network effects.

My Enterprise 2.0-related highlights from 2006  include:

Conferences:

• CTC
• Office 2.0
• Interop NY
• The New New Internet
• Wikimania

It looks like the conference circuit will heat up in 2007.  The Fastforward conference, for example, takes place February 7-9 in San Diego and describes its focus as "Enterprise 2.0 and how today’s companies and individuals are harnessing technology to collaborate, innovate, manage knowledge and much more."  And the CTC conference, held yearly in Boston in June, has changed its name to Enterprise 2.0!

Conversations and Case Studies with, among others,

• Dresdner Kleinwort
• RazorFish | Avenue A
• Google
• SAP
• Cambrian House
• KnowNow
• SocialText

Articles in:

• Business Week
• The New York Times and the Times magazine
• The Wall Street Journal
• Optimize

And, of course, blogs and bloggers too numerous to mention.  I’d list a few, but I know I’d just wind up leaving out a colleague who’s been important to me.  So I’ll avoid that inadvertent snub and wait until HBS faculty blogs include a blogroll.

Across all of these, I’ve noticed many areas of agreement and convergence.  These include the ideas that Enterprise 2.0 is: 

• Composed of platforms where content is persistent and globally visible, not channels (like email) where transmissions can’t be easily traced or consulted.
• Lightweight:  not hard to deploy or learn
• Initially freeform and unstructured
• Eventually emergent and self-organizing
• Composed of SLATES (search, links, authoring, tags, extensions, and signals)
• A decent vehicle for capturing or pointing to knowledge.  E2.0, in other words, might fulfill some of the promise of KM systems.
• Largely dependent on human issues, not technical ones.

However, not all the news related to E2.0 was good news in 2006.  For me, the most disheartening event was Wikipedia’s "Enterprise 2.0" article being nominated for deletion from the online encyclopedia, and having to go through the articles for deletion process.  Like many of us, I am a huge fan and user of Wikipedia, and have held it up as a prime example of how technology lets large numbers of people come together, collaborate, and generate highly valuable outputs.  So it was a blow when a concept I’d helped originate was deemed by some to be unworthy of inclusion.  

Along with Ross Mayfield and a couple others I participated in the articles for deletion process. I was gratified when the official result of this process was that the article on Enterprise 2.0 be kept, then mystified when an administrator acted after this decision to strip much of the article’s content and rename it "Enterprise Social Software."  As of the time of this writing that title remains, and the article is considered a stub.  Of course, I or anyone else could change the title or beef up the article.  But I find that I just don’t have the bandwidth to slug it out with anyone who decides to disagree, and I’m apparently not alone.  The current version of the article has fewer edits and editors than did the original one.  It seems that those of us who are interested in the concept have moved on to other forums.  It also seems like Wikipedia’s deletionists have lost twice on this one; they lost the argument over deleting the article, and they also lost the interest of some people who were interested in contributing to the community.

My other 2006 disappointment was seeing attempts to expand the definition of "Enterprise 2.0" well beyond the one I proposed in May:

Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.

As I’ve written in a couple blog posts, some people are trying to broaden this definition to something like "all the interesting things that are happening in the enterprise software market."  I think this is a bad idea; it will lead to confusion, and to a loss of interest by senior executives within companies.  Who wants that?

Looking Ahead

I like the predictions for Enterprise 2.0 in 2007 made by Dion Hinchcliffe and Rod Boothby, and won’t try to go head-to-head with them.  Instead, I want to present a few scenarios for how E2.0 is going to progress in the coming year.  It’s very hard for me to believe that the trends we’ve been observing are going to sputter to a halt in 2007; there’s simply too much momentum, and too compelling a justification.  But it’s also hard to believe that all companies are going to try to deploy E2.0 tools and techniques, or that all of those that do are going to succeed in filling up the ‘empty quarter’ of non-adopters within their organizations.  I can envision three broad scenarios:

1. Niches.  Enterprise 2.0 remains confined to geek-heavy groups (e.g. IT departments), companies, and/or industries (software).  Techies and newbies use the new tools routinely as part of their jobs, but few others do.  And users of Enterprise 2.0 software will have to continue to use email with their older and more square colleagues.
2. Spotty mainstream penetration.  The management of some mainstream companies makes the necessary investments —  of money, time, and their own energy —  and succeeds in deploying an E2.0 infrastructure and getting it widely used.  Most of their competitors remain unaware, unwilling, or unable.
3. Deep penetration.  Blogs, wikis, tags, cloud views, RSS aggregators, etc.  become the principle collaboration tools used by most companies.

I think the third scenario is the least likely.  Enterprise 2.0 is too big a phase shift, and the 9X problem of email too real, to permit deep penetration by the end of 2007.  This implies that E2.0 deployment will continue to be highly uneven.  And this in turn implies, I believe, that these tools will be competitive differentiators, rather than levelers.  We’ll have to watch closely to see if this is in fact the case.

Happy New Year!

This blog is devoted to the impact of the Web and other information technologies on companies, not on culture. But partly because it’s the holidays and partly in response to Time’s declaration that the Web 2.0-enabled ‘You’ is the Person of the Year, I wanted to relax the boundary just a bit and discuss one of the persistent criticisms of Web 2.0 (and one I’ve also heard made about Enterprise 2.0). This is the idea that the profusion of online content is leading to a ‘dumbing down’ of our culture and/or society.

First of all, let’s acknowledge that there really is a sea change going on. Web 2.0 is a revolution, not an evolution, in content availability. Cheap gear has made it easy to generate multimedia material, and the Internet enables instantaneous and free worldwide distribution. Web 2.0 is the opening up of that distribution platform to just about everyone. This is a legitimate discontinuity, and it doesn’t feel like Time’s Person of the Year was undeserved

The question is, is this development to be welcomed or decried? The decriers most common worry is one of dumbing down — that Web 2.0 is yielding a sea of bad online content that threatens to drown the good.

There are, of course, many types of bad online content. Most of us would agree on what the worst is: it’s child pornography, hate speech, ideology-based incitements to violence, and other material that repels most people and makes suspect not only the producer, but also the consumer. If you saw a co-worker browsing a Web page full of this stuff you’d call the police or, at the very least, never have lunch with the person again.

The dumbing down argument is not really about this worst content, so let’s leave it aside and concentrate on Web materials that instead of being appalling are, well, dumb. It’s important to acknowledge up front that there are many types of dumb content.

First of all, there’s the stuff that that appears to be the product of a truly feeble mind. As the introduction to Time’s Person of the Year story put it: "Some of the comments on YouTube make you weep for the future of humanity just for the spelling alone, never mind the obscenity and the naked hatred." Like most of us, I’ve many times stared slack-jawed at my screen, amazed that someone took the time to click the ‘comment’ button, type away, and pass the CAPTHCA, yet couldn’t find the time to acquaint themselves with any linguistic, grammatical, or cultural guidelines for self-expression.

Another category of dumb content is that which suffers from really poor production values. Grainy YouTube videos, blogs that ignore principles of spelling, punctuation, and layout, cell phone pictures taken at the point in the party when the keg’s nearly empty — they’re all out there, in large amounts.

A third type is online material that shows people doing things that you find pretty dumb. One of my colleagues is always calling me into his office and showing me YouTube videos of driveway mechanics who do things like build turboshaft engines at home. He finds this stuff fascinating. I find it profoundly uninteresting. Even though my friend and the guys in the videos are clearly very smart, it all seems pretty dumb to me and I can’t imagine why anyone would want to watch it.

I’m even more mystified by the popularity of lip sync videos. This seems to me to be the last stage of a descent into what Malcolm McLaren presciently called ‘karaoke culture;’ endless recycling and re-consumption of cultural products, like bland pop songs, that weren’t that good to begin with.

So by my own definitions there’s a whole ocean of dumb content out there, and more being added every day. And I’m pretty confident that the same is true for any single person’s definition of dumb; I doubt that anyone’s tastes are so broad that they’d enjoy most of what’s being contributed to the new Web 2.0 platforms.

The important question is, so what? What are the negative consequences of this rising sea of dumb content? There are a few possibilities here. 

One is that the dumb stuff could crowd out the good stuff, taking up all the available capacity. But since it’s free to contribute to virtually all of the Web 2.0 platforms I can’t see how this could be happening. Storage and processing are now so cheap that it’s feasible for YouTube, Flickr, MySpace, Blogger, Gmail, Friendster, etc. to let us participate for free. It’s easy to lose sight of just how remarkable this is. If you have access to a connected computer, you don’t need to have any disposable income to contribute to Web 2.0; financial constraints have simply vanished. So your content becomes part of the Web, whether it’s dumb or smart and whether you’re rich or poor.

Another pessimistic possibility is that with all this content available it becomes impossible to separate the wheat from the chaff — that the huge volumes of dumb stuff impair our ability to find what we want. But think how many mechanisms we have navigate to the Web, including the Web 2.0 portion, efficiently. There’s Google, of course, and the more I use it the more convinced I am that search is now the dominant navigation paradigm. Google’s main search engine returns results from Web 2.0 platforms like blogs, Wikipedia, and YouTube, and the specialized blog search beta is customized for the blogosphere, as are technorati and bloglines.

Most Web 2.0 platforms also include both tags and extensions, which are pointers to other content of interest. Extensions can be automatic (as with Flickr clusters) or human-based. Usernames are a simple example of human-based extensions; if I see that mikestopforth and I have bookmarked a lot of the same Web pages using del.icio.us, I’m interested to see what other sites he’s come across. Del.icio.us lets me peruse his collection (it also lets him keep some or all of it private.).

Finally, there’s the lunch table. A lot of conversations there start with "Did you see / hear / watch / read about (something on the Web)?" My human network, in other words, helps me navigate the digital one.

So the proximate threats from dumb content — that it crowds out the good stuff, or makes it harder to find — don’t seem that severe. But what about the vague, scary notion that the large amounts of dumb content are corroding our intelligence, judgment, or critical facilities? That they’re attacking our cultural immune systems and lowering our resistance? That they’re impairing our ability not to find good content, but to recognize it?

There are a few responses to this argument. The first one that occurred to me was to compare the Web and Web 2.0 to TV in this regard. And it’s clear to me that the Web has a long, long way to go before it matches either TV’s penetration into American life, or its banality. FCC Chairman Newton Minow got it just about right in his famous 1961 speech:

"When television is good, nothing — not the theater, not the magazines or newspapers — nothing is better.

But when television is bad, nothing is worse. I invite you to sit down in front of your television set when your station goes on the air and stay there without a book, magazine, newspaper, profit-and-loss sheet or rating book to distract you — and keep your eyes glued to that set until the station signs off. I can assure you that you will observe a vast wasteland."

The entertainer Ernie Kovacs summarized this state of affairs beautifully with his quote: "Television – a medium. So called because it is neither rare nor well-done."

A second response to the current-media-are-making-us-dumb argument is to point out that it’s as probably as old as any form of media. I won’t even try to summarize quotes from across cultures and across centuries about how bad things are getting; suffice it to say that there are a lot of them. People of much education and refined taste have always been sneering at the vulgarians at the gate, and predicting that they were about to overrun the citadels of culture. And yet somehow there always appear new generations of people with much education and refined taste, and new citadels that need defending.

But defending against homemade turboshaft engine videos? Some people actually like those, find them highly entertaining, and learn from them. And I imagine that many friendships, professional relationships, and even communities have been formed on the back of Web 2.0 content that I find dumb.

In addition, who exactly needs to be defended against lip sync videos? Sure, they’re dumb. But is there any evidence that they rot your brain or make you incapable of doing or enjoying anything else? What harm are they doing? If it weren’t for them, would we finally be working through The Canterbury Tales? I seriously doubt it.

I want to be clear that I’m not making any version of the post-modernist argument that distinctions among ‘high’ and ‘low’ forms of art and culture are false distinctions. I deeply believe that some cultural products are more complex than others, and so require more concentration and preparation to appreciate. Shakespeare, in other words, is more complex than Borat.

What I don’t believe is that the Globe Theater is going to be converted to the Sacha Baron Cohen Multiplex any time soon. I don’t, in other words, think that we’re about to lose our ability to differentiate complex products, or our desire to engage with them.  Pre-Internet technologies have given people and societies plenty of opportunities to succumb to banality, and to create and consume only cultural junk food. We haven’t completely given in to this temptation, have we?

To believe in Web-enabled dumbing down you have to believe that something about the current sea of online content and the new content generation tools is eroding two very deep-rooted human capabilities: the desire and ability to create complex works, and the desire and ability to consume them. I don’t think Web 2.0 is anywhere near that powerful.

Let me end with a couple very sharp quotes.  The writer Jonathon Franzen introduces his collection of essays How to be Alone with a mea culpa:

"I used to be a very angry and theory-minded person. I used to consider it apocalyptically worrisome that Americans watch a lot of TV and don’t read much Henry James. I used to be the kind of religious nut who convinces himself that, because the world doesn’t share his particular faith (for me, a faith in literature), we must be living in End Times. I used to think that our American political economy was a vast cabal whose specific aim was to thwart my artistic ambitions, exterminate all that I found lovely in civilization, and also rape and murder the planet in the process."

Franzen describes how he needed to leave this "prison of angry thoughts" in order to wrestle with something truly important: "the problem of preserving individuality and complexity in a noisy and distracting mass culture."

It’s true that Web 2.0 tools are increasing the levels of both noise and distraction in our culture. But that’s not all they’re doing. They’re also helping lots of people preserve and further their individuality. And if they’re not already, they’ll eventually start yielding complex and important work.

One of my heroes is The New Yorker’s longtime movie critic Pauline Kael, who had the gift of discernment.  She cared nothing for any pre-established categories of film (action, art-house, independent, foreign, etc.), trusted her own judgment, and always wrote with insight, clarity, and punch.  In her review of "The Road Warrior" (which she called ‘terrific junk food’ ) she talked about why she went to movies:

"to experience all the worlds that all the hacks and craftsmen and artists who worked in the movies could bring into being."

Web 2.0 is empowering all kinds of creators:  hacks to be sure, but also craftsmen and artists.  Shouldn’t we be truly excited to experience the best of the worlds they’ll put up on the World Wide Web?  

Happy Holidays!

You’ve probably heard by now that Time has declared "You" to be the Person of the Year, due entirely to Web 2.0.  The introduction to the cover story makes some interesting points:

"Sure, it’s a mistake to romanticize all this any more than is strictly necessary. Web 2.0 harnesses the stupidity of crowds as well as its wisdom…  But that’s what makes all this interesting. Web 2.0 is a massive social experiment, and like any experiment worth trying, it could fail. There’s no road map… But 2006 gave us some ideas.  Go on. Tell us you’re not just a little bit curious."

The article doesn’t mention Enterprise 2.0 –  the application of Web 2.0 tools, approaches, and philosophies within organizations, but the quotes above are as relevant for the Intranet as for the Internet. 

If you’re a business leader and you’re not just a little bit curious about Enterprise 2.0, why not?  Do you not want your organization to become any more lateralized, searchable, multi-voiced or self-organizing?  Do technologies that help put into practice managerial philosophies other than command-and-control make you uncomfortable?

Or are you completely happy with how people in your company intersect and interact?  Do they have all the tools they need to do so?

Or do you think that Enterprise 2.0 technologies are currently too insecure, unstable, expensive, hard to install, and/or hard to use to be worth the bother?

Or do you think that there’s really nothing new under the sun?  Are you so tired of IT hype that you’ve simply stopped listening? 

That, I think, would be a serious mistake.

I spent last weekend at the Workshop on Information Systems and Economics, catching up with ideas and people.  The workshop’s organizers scored a major coup by getting Robert J. Gordon to be our dinner speaker.  Gordon has been studying macroeconomic trends like productivity growth, income distribution, and the business cycle for a long time, and is that rare academic who has mastered every form of communication, from highly technical articles to more descriptive writing that places IT context with other major innovations to (as we learned) after-dinner speaking.

Gordon has apparently taken to heart Keynes’s statement that "when the facts change I change my opinion.  What do you do, sir?"  He was one of the last serious scholars to accept the conclusion that IT was having a positive and significant impact on productivity in the US, but he came around when the data showed him clearly that this was in fact the case.

Now, however, he’s joined a growing chorus of voices who are arguing that the strong relationship between IT investment and productivity growth has broken down recently.  If this is accurate, it’s quite bad news.  Productivity growth is a primary engine of economic growth and, ultimately, of increases in standard of living.  If the wonderful, unprecedented, and unanticipated productivity increases we’ve been enjoying since 1995 are in fact coming to and end despite our continued investment in computing, and despite the fact that computers continue to get much more powerful over time, then we have a problem.  

The argument that the party is over rests on three pillars.

• Raw productivity growth data
• Analyses breaking down this growth into components
• Qualitative explanations of why IT isn’t giving us as much as it used to

Let’s take each of these in turn

Raw Data.  From 1995 to the 2nd quarter of 2004, US productivity grew rapidly.  From the 3rd quarter of 2001 to the 2nd quarter of 2004, for example, the average annual growth rate was 3.87%, and the growth rate of a smoothed-out trend line was 2.92%.  From Q2 2004 to Q2 2006, however, actual annual growth was only 2% and growth in the trend line fell to 2.68%.  This is a fairly sharp reversal —  one that threatens to take us back to the anemic 1972-1995 productivity growth levels.

Analyses of the components of productivity growth.  Productivity growth is broken down into its main components using a combination of detailed data from the US government and rigorously conducted analyses.   This ‘growth accounting’ approach is clearly explained in the short paper "Potential Growth of the US Economy: Will the Productivity Resurgence Continue?" by Dale Jorgenson and Mun Ho at Harvard and Kevin Stiroh at the Federal Reserve of New York (an older, freely available version of the paper is here).  Like many others, Jorgenson, Ho, and Stiroh (JHS) pay special attention to IT’s role in productivity growth.

They make the point that output grows when workers work harder (more hours) and/or smarter (more productively).  The three contributors to working smarter are higher labor quality, more and better tools (a phenomenon called ‘capital deepening’) and a more mysterious catchall category called ‘total factor productivity (TFP) growth’ which "reflects the labor productivity growth not attributable to capital deepening or labor quality gains.  This is often associated with improvements in technology, but also includes changes in utilization rates, reallocations of resources among sectors, increasing returns to scale, and measurement error."

JHS break out IT’s contributions to both capital deepening and TFP growth, and find that both were highly important:  IT accounted for more than 30% of the increase in TFP growth from1972-1995 to 1995-2004, and almost 2/3 of the increase in capital deepening.

This paper’s most recent data, however, are from 2004.  Furthermore, it treats 1995-2004 as a single time period.  In his talk to us, Gordon said that recent analyses by Jorgenson, Stiroh, and others have found that essentially all the increased IT capital deepening that took place during this time period was over by 2000.  In other words, since the turn of the century we’ve fallen back to the same rates of IT capital deepening as existed prior to 1995, when productivity growth was so sluggish.  This isn’t too hard to believe, given the sharp slowdown in IT spending that occurred after the Y2K ‘crisis’ passed and the dot-com bubble burst in early 2000.

As a result, Gordon argued, it’s reasonable to conclude that IT couldn’t really have been responsible for the strong productivity growth increases we enjoyed between 2000-2004.  After all, we weren’t adding IT to the economy during those years any faster than we were from 1973-1995.

Qualitative Explanations for the Slowdown.  Gordon also made the point that while computers continue to get faster (and thereby continue to contribute to TFP growth, as it’s calculated), we already have computers that are fast enough for most any task most of us want to perform.  This certainly seems true for most knowledge workers, who have machines that are powerful enough to handle Word, Excel, and Powerpoint.  It’s also true for lots of engineers and scientists, who now have desktop machines that can run highly detailed and accurate simulations, and crunch huge amounts of data.

Gordon encouraged us to argue with him, and so we did.  A number of us pointed to productivity-enhancing digital tools like voice recognition software that aren’t mainstream yet, but soon will be.  Gordon replied by asking how much the nation’s productivity would be improved by this technology, especially since we’re already punching in data using our keypads rather than talking to a human operator.  Others pointed out that IT is enabling large-scale offshoring.  Gordon granted this, but countered that only a small portion of US workers were eligible to have their jobs completely transferred to Bangalore.

His broad point was that IT definitely delivered a productivity jolt to the US economy in the late 1990s, but that that era is past.  He encouraged us to think of other  innovations that transformed the economy more deeply and over longer time periods —  electricity, the internal combustion engine, the telephone —  and ask ourselves if the digital tools we’re so enamored of are really equally important.  He even asked us to compare computers to air conditioning, which allowed entire regions of the country to be productive year-round.

Gordon’s explanation for the 2000-2004 increases in productivity growth centers on ruthless corporate cost-cutting and high-powered incentives (i.e. stock options) for good performance.  He asked us why an IT-based explanation still made sense, given reduced IT capital deepening and reduced need for ever-faster computers.

It may have been the wine, but I decided to suggest just such an IT-based explanation to him.  I summarized the case study on Cisco that Warren McFarlan and I wrote in 2004.  We found that even in such a successful, well-managed, and IT-friendly company there were still significant opportunities to use technology to drive out inefficiency and redundancy and improve execution.  I ventured that if this were the case at Cisco, it was surely also the case at many, if not most, other companies.

Gordon summarized this as the ‘optimist’s view’ and allowed that it might be accurate.  There could be, he paraphrased, large-scale inefficiencies and untapped opportunities within companies and across their value chains , and IT could be a great tool for re-engineering business processes to improve things.  As he acknowledged, Erik Brynjolfsson has for some time been describing these IT-enabled changes as ‘intangible assets,’ showing that they’re correlated with IT investment, and highlighting their importance.

But Gordon pushed back on the optimists’ view.  He reminded us that companies have been re-engineering their processes and value chains as long as there have been companies, and that there has been a rich mix of legitimate innovations, tools, and fads around process and performance improvement over the past hundred years.  This mix has included total quality management, Six Sigma, re-engineering, just-in-time, quality circles, lean manufacturing, Taylorism, Sloanism, etc. etc. 

Is IT, he wondered aloud, really such a great leap forward in companies’ abilities to better themselves that it’s more than another process improvement program?  Does modern IT really deserve a place alongside electricity and the internal combustion engine?  

This is exactly the right question for us technology enthusiasts to focus deeply on, and the only honest answer is that we don’t yet know.  Over time, careful analysis of the productivity data and well-designed research of the kind Gordon is so good at will settle this issue.  Until we accumulate enough history we can only hypothesize, and propose theories and explanations.  But this theory-building work is highly valuable.  It generates testable hypotheses, and also provides guidance to companies and managers who must make decisions and investments now, and determine how heavily to rely on IT-based improvements.

My hypothesis is that IT actually is a game-changing innovation of the same magnitude and importance as electricity, the IC engine, the shipping container, etc.  As I wrote in November’s Harvard Business Review, I view IT as a general purpose technology (GPT) —  an innovation so important it leads to a long-term jump in an economy’s normal march of progress.  

Why?  Because IT no longer consists mainly of computers that assist with the execution of a discrete task, and assist more the faster they get.  This is a small (and, I think, shrinking) portion of what IT is used for these days.  The big portion is designing and deploying new structures for accomplishing work–  data repositories, business processes, and entire ‘organizational blueprints.’  In my field research I’ve seen this over and over again.

But what about Gordon’s rebuttal that corporate improvement, and improvement tools, are nothing new?  I agree completely, but one of the really interesting things about IT is that it supports and even subsumes other improvement methodologies and philosophies.  IT can let business leaders:

• Design a new process centrally, then roll it out widely (CVS, Alibris, Los Grobo)
• Convert a formerly decentralized organization into a highly centralized one (OTISLINE), then later reverse this trend (Otis).
• Tap into the ‘wisdom of crowds,’ both within the four walls of a company (Google) and across a distributed community (Cambrian House)
• Provide a single face to the customer for cross-functional and even cross-organizational business processes (Dubai Port Authority)
• Remove a bottleneck (MK Taxi)
• Tightly specify the information employees should provide (Evergreen) or let them post whatever information they want (DrKW)

And no matter which of these flavors of improvement a company settles on, IT provides some interesting and unique additional benefits as the new ways of working are being rolled out.  In particular, the new routines can be:

Specified with great precision and granularity.  Today’s enterprise systems let designers define almost any element of a multi-function business process.  This great specificity is one of the reasons that it takes so long to configure these systems.  

Replicated and scaled up with high fidelity.  A process embedded in IT work the same in the 100th location as it does in the first, and will process all transactions the same way.

Propagated with confidence that they’ll actually be executed as designed.  In many circumstances, once a new process has been embedded in Enterprise IT it’s simply not possible to execute it the old way.  These technologies act as a ratchet, making backsliding impossible.  Re-engineering efforts that don’t involve IT often fail because people simply ignore the new methods and keep doing business the same old way.  IT can be used to remove this option.

Deployed across a very large footprint.  It was said in imperial China that "The mountains are high, and the emperor is far away."  Local authoirities could operate with lots of autonomy because there were only weak mechanisms for oversight and ensuring compliance.  Today’s IT, in sharp contrast, provides quite strong mechanisms.  This helps explain why so many big technology efforts are so contentious:  local authorities realize that the new tools will empower the emperor to shape and monitor their work, and are not thrilled.

In summary, I believe that because of these capabilities IT belongs on the short list of modern GPTs.  Like previous general purpose technologies IT is having a deeply transformative effect, which will take many years to play out completely.

But what about the evidence Gordon cited in his talk —  evidence of a recent productivity slowdown, and of only a weak link between IT and productivity growth since 2000?  As discussed above, part of the answer for the weak link is that we’re not adding IT to the economy as fast since 2000 as we were from 1995 to 2000.  But that doesn’t necessarily mean that pace of IT-based business transformation has slowed down; it just means that the pace of hardware and software buying has slowed down.  Given what we know about the long time lags between the purchase of enterprise IT and its impact, it’s easy for me to believe that the systems we were buying in the late 1990s delivered their value earlier this decade.  Gordon attributed the strong 2000-2004 productivity growth to deep corporate cost-cutting, but I think previously purchased IT might well also have been delivering part of the kick.

There’s also an intriguing possibility that IT’s benefits are now showing up elsewhere in the productivity statistics.  As discussed above, the TFP growth measured by JHS and others is a bit of a catchall category; it includes the impact of faster computers — the ‘IT-related contribution’ —  and all productivity improvements that couldn’t be assigned to any other source —  the ‘other contributions.’

From 1973-1995, these other contributions added only .09 to the yearly average labor productivity growth of 1.39% (all other sources combined contributed the remaining 1.30).  From 1995 to 2004, however, ‘other contributions’ leapt up to .59.  During this period, in other words, unattributed sources added over half a percentage point to yearly productivity growth, whereas they were previously adding less than one tenth of a percentage point.

Any guesses about what I think is going on here?  It seems quite plausible to me that this measured-but-unattributed catchall category is where IT’s productivity benefits are now showing up.  Gordon told us that be believes the spike in this category is temporary and related to cost-cutting.  He also said that some other economists believe it’s permanent, but don’t know what’s causing it.

I also believe it’s permanent, and I think IT is at least partially underlying it. Information technology is changing work and boosting efficiency in the US in many different ways, and is in aggregate having a large and positive impact on productivity now and into the future.

Of course, if the data continue to show productivity declines I’ll have to revisit my optimistic hypotheses and opinions in the intellectually honest tradition of Keynes and Gordon.  Let’s all stay tuned —  I can’t think of a more important number for us to watch and discuss.

Today’s New York Times Magazine’s cover story is "Open Source Spying."  The teaser after the title asks "The nation’s intelligence agencies are giving their cold-war-era computer systems a complete makeover.  But will blogs and wikis really help spies uncover terrorist plots?"

It’s a fantastic and fascinating article, and should be read by anyone interested in Enterprise 2.0 or national security.  It describes how the agencies’ IT current infrastructures are extensively fragmented, partly by design and partly because of uncoordinated investment, and how this fragmentation dramatically impedes analysts’ abilities to do their most fundamental job:  connecting the dots.  

As author Clive Thompson points out, dot-connecting for a fluid and highly decentralized enemy like al Qaida means something very different than for a monolithic, siloed, and hierarchical foe like the Soviet Union.  And the agencies’ existing knowledge management and groupware systems (which is essentially what they are), which have consumed billions of dollars of investment, really aren’t well-suited for the new task. And some efforts, like a $170 million FBI case management system, have simply been abandoned.  

Thompson is astute and even-handed about the challenges faced by E2.0 efforts within the agencies, and the article is far from uniformly optimistic.  Yet I found that it contained some very encouraging news.  First and foremost, it appears that many of the most important people at the top of the recently-established Office of the Director of National Intelligence (DNI) sincerely want E2.0 to take root.  These people include the CIO, the head of analysis, and his CTO; I imagine these gentlemen have some clout, and know how to get things done within the establishment.  

They’re certainly willing to solicit and try new ideas.  the DNI has experimented with blogs and wikis, including an ‘Intellipedia‘, and sponsored the Galileo Awards, where analysts could submit essays describing new approaches.  The title of the winning essay should gladden our hearts:  "The Wiki and the Blog:  Toward a Complex Adaptive Intelligence Community."

It also seems the DNI is making some smart choices with its E2.0 initiatives.  They’re building a three-tier Intellipedia, for example, that will mirror the existing access levels of Top Secret, Secret, and Unclassified.  I hope they’re ensuring that searches in the more tightly restricted environments can also return results from the lower levels, and that some form of tagging exists.  

The article touches on a number of subjects familiar to readers of this blog, including:

• The efficacy of link-based search.  Thompson writes that "Searching Intelink [an inter-agency Intranet and document repository] thus resembles searching the Internet before blogs and Google came along —  a lot of disconnected information, hard to sort through."
• The frustrations of technically friendly newbies when they walk into old-school computing environments.  The article opens by describing the reaction of one Web 2.0-savvy new analyst to the tools at his disposal within the Defense Intelligence Agency: "The reality was a colossal letdown."  
• Resistance by  middle managers.  Wilson Dizard, a longtime government technology watcher, is quoted as saying that "You have all these little barons at N.S.A. and C.I.A. and whatever, and a lot of people think they’re not going to do what the D.N.I says, if push comes to shove."
• The threat of security breaches.  Although I think security risks within corporations are often overblown, they’re deadly serious in intelligence work.  The identities of confidential informants can be revealed, and moles like Robert Hanssen can sell the information they find on internal networks.   
• The huge role of top management.  Given bureaucracy, massive investment in legacy systems, and the inertia of large organizations, it’s pretty clear nothing significant will happen unless people at the top drive change.  
• The importance of many types of contribution.  "The most valuable spy system is one that can quickly assemble disparate pieces that are already lying around — information gathered by doctors, aid workers, police officers or security guards at corporations."
• The advantages of an Intranet over the Internet.  Intellipedia has not been subject to vandalism, probably in part because all contributions can be traced to their source.  
• The ability for new connections to form.  "Intellipedia’s Nigeria page will… attract contributions from other intelligence employees who have expertise [the head of analysis] isn’t yet aware of —  an analyst who served in the Peace Corps in Nigeria, or a staff member who has recently traveled there."
• The minimum efficient scale for emergence.  The article questions whether the most restrictive Top Secret Intellipedia will have enough members to yield good content.  

The article presents a wonderful case study for any organization considering or embarking on E2.0 efforts, and I have trouble thinking of a situation where it’s more important to get it right.  

If there are a lot of people in the agencies who want to catch bad guys more than they want to protect fiefdoms, and if there are no horrible early PR disasters or security breaches, and if people see that contributing can actually help their careers, then E2.0 should take off in the US intelligence community.  I hope like crazy that the first of these conditions is already true.  The other two are not foregone conclusions (remember the prediction markets within the Department of Defense that got branded as ‘terror markets,’ and had to be shut down?), but neither are they highly unlikely.  

After reading the article, I have some confidence that the intelligence agencies will be able to transform themselves by adopting Enterprise 2.0 tools, methods, and mindsets.  The top and the bottom want the transformation to take place.  Let’s all hope this is enough.