New Rules for the New Economy
10 Radical Strategies for a Connected World by Kevin Kelly
The great thing about this book is the way Kevin Kelly summarizes, gives examples, and puts in plain words what many others have said about the new economy. The ten rules Kelly presents are not a revelation, each and every one of them has already been presented and discussed by different people, but Kelly does a great job of articulating things together and giving strategies to succeed in this new economy.
Kelly emphasizes the key role of communications and connectivity, the network economy is made up of infinite nodes that connect and communicate everything and everyone, creating infinite opportunities, increasing returns, chaos and new rules to survive as an individual and as a company.
The network economy is different from the traditional economy, and thus in order to survive the first thing we need to change is our view of the economy and the way it works. Scarcity no longer drives value, the traditional supply and demand curves are now completely upside down, productivity is not the goal, products and services tend to be free, destruction is as important as creation, and disequilibrium and uncertainty are the norm.
The 10 Rules:
1. Embrace Swarm	When connected into a swarm, small and dumb thoughts become smart and valuable. What the new economy does is connect, connect chips, people, businesses, things, and by connecting them it makes them smarter and creates value. Decentralization is key; there is no center in the network economy. For the most part the network governs it self, only some leadership is needed in special occasions.
2. Increasing Returns	We are already familiar with the term from Brain Arthur’s article. Each new member of the network adds increasing value. If you succeed in creating a standard (e.g. palm pilot, windows, etc) nothing but more exponentially increased success will come.
3. Plentitude, No Scarcity	Value in the new economy comes from plentitude and not from scarcity. As oppose to gold or petroleum the more there is of something the more valuable it becomes. Especially if we talk about opportunities, the more we explode, the more new ones we create.
4. Follow the Free	The learning curve that creates lower costs every day is even more true and universal in this new economy. Our already well-known Moore’s Law comes into play here. All products and services will adhere to the law, and higher quality will come at lower costs every day. This creates the inverted curves of supply and demand, in the new economy the supply increases when prices go up, and the opposite happens with the demand curve, the more something is used, the more demand it generates. At the end of the day, Kelly predicts everything will tend to be very close to free.
5. Feed the Web First	The web, the network is the economy, if it is not feeded, and enhanced, there will be no business for anyone. There is no point on trying to maximize your individual value, if the value of the network is not maximized. “Blow everything to bits” and feed it into the network.
6. Let go At the Top	If you don’t destroy to create again, even what is working right now, there will be no evolution. The lack of innovation is the only thing capable of stagnating the new economy. Only the individuals and companies capable of “devolving”, starting from scratch, innovating and adapting to change will survive (sounds like OB, and is very true for the new economy)
7. From places to Spaces	Geographical placing is no longer as important; geography will always exist, but will not limit our possibilities. Space is an electronically created environment where connections, relationships and opportunities are infinite. Interestingly this rule implies that intermediation increases with the network economy, contrary to what some think, the new economy creates niches form intermediaries, “everything in a network is intermediating something else”.
8. No Harmony, All flux	In order to succeed you have to live in the edge of chaos. “Ironically only by promoting flux long term stability can be achieved”. Few to no rules are needed in the new economy (ironic coming from the guy writing the rules). It is important to acknowledge that in the same way success is rapidly created in this new economy, failure is easily achievable, one day you are in the top, and the next in the bottom.
9. Relationship Tech	The key role of connectivity is to create relations; everything in the new economy is based on relationships. Technology permits the development of infinite relationships on the net. And at the end of the day, trust must be developed between parts in order for the relationships to last.
10. Opportunities before Efficiencies	This rule can be directly derived from the increasing returns. Every new opportunity that is created brings new opportunities with it. Thus individuals and companies should invest time in searching for opportunities rather than solving current problems. (Our well-known rule from The Goal, is better to do the right thing, than to do the wrong thing right).
Kelly refers many times during the book to the biological nature of the new economy. The network economy is better explained as a living organism with biological behavior, which grows and changes shapes, governs and reinvents itself, and is unpredictable. (It is a good thing that we learned in QA how to deal with uncertainty and unpredictability, key competence to survive in this economy).
Book Review By: Sandra Forero