Web science rules!

On flicking through the October 2008 edition of the Scientific American (SciAm) today  – the print version – I came across an article on IT: Web Science Emerges by Nigel Shadbolt and Tim Berners-Lee (p 60). Web science was launched as a formal discipline in November 2006. The SciAm article describes some of the emergent properties, including social networking, that are “transforming society”.

This posting draws out some of the thinking in the SciAm article and my thoughts on social networking in terms of the ability of people to participate online, the connections between networked people and the consequences for the firm. I’ll also outline some of my views on the importance of philosophy, sociology and psychology relative to economics in understanding the emergent properties of the Web.

Web science looks very interesting – it draws on mathematics, physics, computer science, psychology, ecology. sociology, law, political science, economics and more. Wow – as broad and deep as scientific and intellectual endeavor used to be in the 19th century – at at least as I understand it to have been – prior to the fragmentation and specialisation that occurred in the 20th century. I think that’s great. Some disciplines, and in my view particularly economics, have dominated thinking commercially and politically for too long. Economics is too narrow to be capable of understanding the complex emotional, social and biological factors influencing the decisions that people (either individually or in groups) are likely to take.

To illustrate the weakness of economics I will quote a couple of passages from the SciAm article: “networks thrive only in the light of the actions, strategies and perceptions of the individuals embedded in them….we need to know why people who contribute content [to the Web] link it to other material. Social drivers – goals, desires, interests and attitudes – are fundamental aspects of how links are made. Understanding the Web requires insights from sociology and psychology every bit as much as mathematics and computer science” (p 62). I would have added economics to that last bit.

Now classical economics assumes behaviour can be predicted by assuming what a rational, self-maximising person would do (in theory). The emerging disciplines of behavioural economics, cognitive economics and neuroeconomics provide sufficient tacit acknowledgement that classical economics is seriously flawed, i.e economics on its own just does not cut it anymore. That is nowhere more the case than with respect to the Web.

A broader, deeper understanding that is more inclusive of other disciplines – such as the emergent Web science – holds more promise than economics. And I haven’t even mentioned the global economic meltdown!
As Clay Shirky has observed, the imbalance of power between institutions and distributed groups is being adjusted through online social networking. Social networking has the potential to profoundly change the way that many people work and how business is done. It’s about being organised without organisations. I suspect that means the theory of the firm – which came out of classical economics as far as I understand – will need fundamental reconsideration. The issue is, has that job gone beyond what economics is capable of? Web science may hold out much more promise in getting to grips with the fundamental changes to society flowing from the Web, including new business models.

Social networking in 2030… or 2015?

I seem to be spending more time finding information about past events or reading publications that are two or more years old. One example is learning what the World Economic Forum’s Young Global Leaders had to say about the future of social networking by 2030. Here are three of their expectations:

• Networks that reach accross sectors, value-chains and national borders will be standard by 2030
• Markedly different company structures and forms of cooperation are likely
• About one-third of people in work will spend more than 10 hours per week online.

I wonder what the participants would say now? I’d bet they would bring forward their expectations a few years. Here in Australia some are saying that we are poised now for a period of accelerated development in social networking in the corporate sector. I’d agree with that. Whatever else that has contributed to the rapid rise in social networking over the last two years, the need to create value in the present economic environment is going to be another driver in the use of social networking. In the Foreword to Networked Citizens, Robert Ainger said that the value of networking in an economic downturn could “mean the difference between a business collapsing or capitalising”. I do so agree with that – there is a lot of doom and gloom about and not enough attention on opportunities. Leveraging social networking is an opportunity.

Institutional failure has taken a well deserved hiding recently. The widespread reduction in trust of financial institutions has been a value-destructive force of huge proportions. But then declining respect for institutions in the public and private sectors has been evident for some time now.

Now here is the twist. Trust has been a driver in the rise of social networking. In thinking about the work, people are increasingly reliant on their social network for ideas, to solve problems and to seek career opportunities. Social networkers look to each other to play games and to socialise or find out what hot (eating out, entertainment, the latest gadgets or where to go on vacation and so on). There is a lot of trust building up through online activities.

When an organisation hires a social networker, they actually take on more than an employee. I would be surprised if who a person networks with is not already integral to some employment decisions. Social networks of consumers are factors in a firms value-chain. Social networks are channels in the democratic process.

So trust in social networks is of considerable and growing social and economic importance. But how durable is that trust. Institutions and individuals have substantive legal and commercial frameworks in place to support their rights and obligations. What of social networks…particularly distributed social networks? Now that, I feel is a Big Issue…or soon will be.

Value Chain 2.0

I’ve just read Value Chain 2.0 by Xavier Comtesse and Jeffrey Huang 0f ThinkStudio. The authors hypothesis was that when consumers shift from being passive to active, they become integral parts of the value creation process – Value 2.0. I agree.

This analysis contributes to the expanding literature on the economic and social consequences arising from the Participative Web. My last two postings (in reference to changes in the work place and social capital value accruing from social networking) are also subsets of the Participative Web.

Participation is reshaping the media too – instead of passively sitting back to take whatever broadcasters and publishers distribute, consumers are now producers and distributors – prosumers as they say.

Instead of passively taking in media accounts of political developments, citizens are now journalists and they communicate directly online with senior politicians. So it goes on.

The authors of Value Chain 2.0 observed that a company’s support environment (especially Internet-based industries):

• does not belong to the company itself anymore, but to the “whole ecosystem in which the company is immersed” (page 5). Being an ecosystem, there are multiple stakeholders
• the internal processes of a company must connect with the non-linear, complex and networked realities of the participative economy
• the value chain 2.0 is only valid for companies that have opened up their value chains to integrate their customers.

The authors refer to the ‘infrastructures’ of a company connecting directly with the infrastructures of the other stakeholders. On the face of it, that sounds reasonable but I am left scratching my head some what. There is an assumed complementary relationship between value chain 1.0 and 2.0. But it seems to me that dynamic is really the tricky bit. How much would value chain 1.0 change in the course of connecting with value chain 2.0? Will a new and as yet unknown value chain emerge? Possibly.

More on network capital

OK, I’m really pleased with the responses I’ve had to my last posting. I’m certainly keen on looking into social network value…and have started doing so.

Some of the other networking I’ve done over the last couple of months has been triggered or fostered through this blog as well. I’ve had some really useful exchanges with ‘friends’ and followers on other social networking sites recently too, and my networks in Australia, China, North America and the UK in particular have continued to expand. With one exception, I’ve got to say I’m really pleased with the way my social networking activity has gone of late. Kind of like on the road to achieving a vision. That’s got to be good!

I now have several expressions of interest to collaborate that I am keen to follow-up with, and some research referrals to pursue. I’ve read a couple of really interesting papers that I’ve found to be instructive and stimulating (on network citizens and social capital value) and I’ll be sharing my views on these soon. So the richer experience for me of late has been in establishing deeper relationships and less from the weaker links in the form of feeds and tweets etc. Of course, the weak links remain of value – like following and being followed by the Australian Prime Minister (or at least his office) and Leader of the Opposition on Twitter. Actually, Twitter remains an incredibly useful way to find out what others reactions are to events and developments. So, there has been much happening for me, and all of this during a time when I’ve had a couple of breaks from being online.

The exception is that I’ve not had the space or interest to be that active in some of the social networking and social media sites where I have a presence. I guess it is all part of the learning process for me right now…and I am sure new tools to help find, interpret and aggregate social networks and feeds are on the horizon.

I am gaining in social network value…some of which will be useful at work. Sure, I can add value at work while enhancing my own sense of value. That’s cool. But it does beg a question from a general perspective (not personal): how much value is accrued to the firm/organisation from the networking activities of individuals? Just a share of it in fact i would say, with the proportion of value to the firm or individual respectively dependent on context. That’s almost suggestive of some kind of sliding scale or continuum of value.

Enough pondering for now. It’s time to eat!

Measures of network capital

Social networking and social media are changing the way economic, social and political activity is organised, content is created and distributed, and how influence and reputations are built and maintained. The growth and importance of social networking and social media has been outstanding, quick and global.

For business, effective social networking outside organisational boundaries creates value through tapping into cost savings or knowledge networks that lie beyond the capacity of any one firm to retain. Social media has an international reach that is not possible within the confines of traditional media. Traders have customers around the world, nations connect with citizens around the world. For government agencies and not-for-profits, social networking beyond jurisdictional boundaries creates influence and agility. All organisations benefit from the scale advantages of reaching beyond institutional boundaries.

What measures are obsolete now? What theories of the firm, of management and of political science are dated? What the positive and negatives inter-relationships between the established institutions and practices and digital networking?

Who are the masters of networking online? Why are they masters? I’m talking about more than who wears suits and who does not.

Substantive socio-economic changes are under way. How are they…or perhaps, how should they be measured? What are the quantifiable as opposed to qaulifiable measures? How should networked influence be measured? Can these measures be scaled to an individual, a firm, a community, a nation? What should an organisation do to leverage the advantages of social networking and social media? What are the pitfalls or disadvantages of social networking? How do communities, regions and nations compare? What are the cultural, political, economic and geographical influences on the effective use of social networking and social media? Who are the losers? Who are the winners?

Enough questions to be going on with. I intend to get to the bottom of them. Perhaps prepare an index of measures or benchmarks. Who would find such an index to be of help?  I know that many of the questions I’ve posed would have been asked by others, and some of the answers would have been identified.

But I am not aware of an index of network capital. Would that be of interest to you as an individual, to your organisation or to your country?

Contact me at conem2 at gmail dot com.