New Rules for the New Economy

By: Kevin Kelly

Kevin Kelly, Editor-at-Large of Wired magazine, provides a clear and insightful commentary on the information age and the role of network economics in today’s internet marketplace. In ten chapters, Kelly sets forth this number of rules for success in the new economy, and provides strategies one can implement to capitalize on the new set of rules. Kelly is especially adept at explaining his points through the use of metaphors that bring color and clarity to the readers’ eye. Kelly provides an interesting historical perspective on futuristic thought of network effects and enlists a host of acclaimed sources and references. However, somewhat like Icarus, Kelly tends to fly close to the sun in his hubristic descriptions of his vision of the future shape of the internet space and its role in the global economy.

Of his ten rules of the new economy, I found Kelly’s discourse in Chapter 6, entitled Let Go at the Top, to be perhaps the most compelling. The inability of established companies to overcome the incumbent disadvantage is an intriguing phenomenon within the new economy. Kelly describes the use of “skunk works” within large, established corporations as an attempt to stimulate innovation. A company’s willingness to let go at the top and explore initiatives outside their existing operations is “not an act against perfection, but against shortsightedness.(pg. 87)” Kelly cites multiple references in this discussion including economists Michael Porter and Joseph Schumpeter, as well as consultant Tom Peters who recommends companies should hire a Chief Destruction Officer.

In addition to his rules for the new economy, Kelly provides an interesting historical perspective on the development of network effects on the economy. In addition to citing Porter, Schumpeter, and Paul Krugman, Kelly makes multiple references to futurist Alvin Toffler and his book Future Shock, published in 1970. Kelly draws an interesting parallel between Toffler’s term “prosumer,” where the consumer also serves as the producer of a good, and the open software game applications currently popular on the internet.

Kelly’s writing style exhibits a flair for entertainment that is most distinguished by his prolific use of the symbolic metaphors. Most readers will appreciate these metaphors, which range from physics to biology to basketball, for their clarity as well as their color. In Chapter 2, Kelly uses the example of a lilly pad in a pond and its growth pattern of doubling every day to explain how internet applications applying network economics can immediately jump from scarcity to ubiquity almost overnight. Kelly compares current information age products to “itsy-bitsy lily cells brewing at the beginning of a hot network summer (pg. 35).”

Kelly’s writing style, while flamboyant and energetic, tends to describe his vision of the future in internet space with an air of confidence that is difficult to defend. For example, one of Kelly’s “lilly leafs”, the Iridium telephone, has proven to be unsuccessful project to date and it appears highly unlikely that it will reach critical mass, let alone, ubiquity.

While perhaps Kelly’s greatest flaw, this bold and confident style make New Rules for the New Economy an insightful, informative, and entertaining look into the effects that the internet and network economics will have on the global economy in the years to come.