[Infowarrior] - Optimism and the Digital World

[Richard Forno]

Optimism and the Digital World
By L. GORDON CROVITZ
April 21, 2008; Page A15
http://online.wsj.com/article/SB120873501564529841.html?mod=todays_columnist
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In the 1850s, James Rothschild complained that it was a "crying shame that
the telegraph has been established" because suddenly anyone "can get the
news." The Rothschild banking empire was built through private couriers who
ponied from one European trading center to another, profiting from
market-moving news about business and trade. The telegraph ended such
exclusive access. Almost as annoying, information became a constant.
Rothschild complained, "One has too much to think about when bathing, which
is not good."

This early Information Age became real time when Queen Victoria sent
President James Buchanan the first trans-Atlantic cable. "The Atlantic is
dried up, and we become in reality as well as in wish one country,"
editorialized the Times of London. "The Atlantic Telegraph has half undone
the Declaration of 1776." Tiffany's crafted jewelry out of unused cables,
and a popular novel of the era was "Wired Love," a Morse Code-era version of
online matchmaking. The telegraph shrank the world, upended business
practices, democratized information and confounded government regulators.

Today's digital world makes these challenges of the telegraph era seem
quaint. Modern-day Rothschilds, and even the more workaday among us, are
tethered to BlackBerrys. Our digital-native children simultaneously instant
message one another, listen to iPods and watch videos ­ while doing their
homework. Scientists now suspect that this next generation may be developing
a different brain structure, reflecting online activity from toddler age.

This Information Age and how it affects us as consumers, businesspeople and
citizens seems like a timely topic for a new column. My sensibility on these
issues is that of a media practitioner for some 25 years so far, running
media and information businesses, including as a former publisher of The
Wall Street Journal. The focus will be on the accelerating impact of new
technology. This column will also comment on public policy, seeking to
discourage restraints on innovation while protecting sometimes conflicting
concerns such as national security and privacy.

The media was one of the first industries to be roiled by new digital
technology. Retailer John Wanamaker once quipped that he knew that half his
advertising spending was wasted ­ he just didn't know which half. As a
result of the efficiency of the Internet and other targeted media, many
newspapers, magazines and broadcasters have had large declines in revenues
and profitability. The largest media company in the world is Google, which
produces little original content and indeed would instead call itself an
engineering company. Silicon Valley is driving consumer choice and behavior
at least as much as Madison Avenue.

We have many new choices in how we access news, information and
entertainment. The number of professional journalists continues to fall, but
the potential good news is that technology makes it possible for anyone to
write and build an audience. New forms of online journalism are already
filling the gaps. It was a Barack Obama-supporting blogger, citing her
journalistic duty, who broke the recent big story of his comments in San
Francisco about the bitterness of small-town voters.

There are hard questions to consider. For example, does the easy
availability of information necessarily mean the advance of knowledge and
wisdom? Endless information from many sources may or may not be as
trustworthy as information handled by trained editors or through analog-era
processes like academic peer review or independent ratings of financial
instruments. Part of the answer may be new tools to capture the wisdom of
crowds, such as the information art form exemplified by Wikipedia. The good
news is that almost all public information is now available at the click of
a mouse; the bad news is that unfiltered information overflow can leave
people as confused as James Rothschild once was.

Despite the importance to the economy of technological innovation, public
policy often stymies entrepreneurs. Rules for telecommunications,
intellectual property and even immigration need to be updated for today's
technologies ­ indeed to make tomorrow's technologies possible. Likewise,
national security now depends on how well information dots about threats are
gathered and connected. This requires a sophistication about mining and
linking information through open, yet secure, systems that often conflicts
with the hierarchical culture of government bureaucracies.

Still, technologists are optimists, for good reason.

My own bias is that as information becomes more accessible, individuals gain
choice, control and freedom. Established institutions ­ governments, large
companies and special-interest groups ­ need to work harder to justify their
authority. As information and knowledge spread, financial and human capital
become more global and more competitive. The uncertainties and dislocations
from new technology can be wrenching, but genies don't go back into bottles.

The First Law of Technology says that "with every change in technology that
affects consumer behavior, we always overestimate the impact in the short
term, but then underestimate the full impact over the long term." The
original dot-com era a decade ago was overhyped, but by now the Web has
become a utility, increasingly available anywhere for any purpose. This is
the Information Age, yet we're just beginning to gather the information and
understanding to know how it changes our lives.

Write to informationage at wsj.com