Greer McPhaden

E-Business I – 885A

August 26, 2000

 

NEW RULES FOR THE NEW ECONOMY: 10 Radical Strategies for a Connected World.  Kevin Kelly, Penguin Group, 1998.

 

As the name suggests, New Rules for the New Economy: 10 Radical Strategies for a Connected World by Kevin Kelly, explores ten new ways to prosper in the economy of the late 20th Century.  It is a world affected by and dependent upon technology and networks that touch everything from our food to our modes of expression and creativity.  Because this new economy is not only different from the old, but changing more rapidly every day, the old rules that worked in the industrial revolution, the rules the past few generations of managers and businesspeople have come to rely upon, are inappropriate and inadequate.  Kelly’s rules are diametrically opposed to conventional wisdom.

 

Kevin Kelly’s Ten Rules for the New Economy

1.      Embrace the Swarm.  Power is decentralizing.  Don’t be afraid of it.  Embrace and encourage decentralized power and decision-making.

2.      Increasing Returns.  As networks (the basis of the new economy) grow, their value grows as well.  Using them increases their value, instead of decreasing value.

3.      Plentitude, Not Scarcity.  As copies become cheaper and easier to produce, value will be determined by abundance, not scarcity.

4.      Follow the Free.  Costs and prices will always fall, so take advantage of that eventuality and attract human attention, the true valuable commodity by pricing your product as close to free as possible.

5.      Feed the Web First.  As networks or customers, suppliers, etc. take over they will hold more value than any firm.  Focus where the value is and develop the networks.

6.      Let Go at the Top.  Learn how to abandon successful enterprises in light of their inevitable obsolescence, and search for the next success.

7.      From Places to Spaces.  As physical places are replaced by anytime-anywhere-anything spaces, the opportunities for intermediaries and mid-sized niches grow.

8.      No Harmony, All Flux.  Turbulence and instability are becoming the norm.  Use strategic disruption to create innovation.

9.      Relationship Tech.  Soft (relationship) technology is taking the place of hard (atoms) technology.  Focus on creating technology that facilitates and helps relationships.

10.  Opportunities Before Efficiencies.  New opportunities, though inefficient to discover, are more valuable than increasing efficiency on something that already exists.

 

The paradox is that Kelly essentially entreats us to turn everything we already know on its head.  He has created a new set of rules that will work for us now, or rather in 1997 when the article the book is based on appeared in Wired magazine.  But at the same time, he illustrates that the overwhelming characteristic of the new economy, beyond its reliance on networks and technology, is its furious pace.  Kelly’s ten rules sound more timeless than his specific examples (at one point he suggests that Apple Computer needs to innovate or die), but I came away with the unnerving feeling that because of the swiftly moving technology and tectonic shifts in the economy, I shouldn’t get too comfortable with these rules. The new “new economy” may be just around the corner, and I don’t want to be blindsided like the old industrialists who are still clinging to the rules of the smokestack economy.  Everything is changing and changing so fast that we must do everything completely differently.  These are in fact new rules for this economy.  But if things continue to change this quickly or even more quickly, I have to assume that the rules are going to change again for the next economy.