The Internet has turned 19th-century economist Joseph Schumpeter’s gale of creative destruction into a hurricane. Freed from a host of physical constraints, business models that are more code than concrete are being invented and reinvented at head-snapping speed. Hundreds of startup factories and e-business incubators are dramatically shrinking the gestation time for new businesses.
Moreover, the torrent of VC money that has been pouring into favored sectors such as B-to-B hubs and optical networking has radically accelerated the pace of competitive evolution, as a swarm of nascent companies that compete for the same market space. The Internet has spawned a Cambrian explosion of new competitive life forms.
And the frenzy will only grow. For a while there is much about the future that cannot be known, this much is sure: We are rushing toward the world in which everyone and everything will be connected to everyone else and everything else. Virtually any piece of knowledge on the planet will be instantly accessible. Narrow-band voice and text will give way to image-rich broadband media. And why is this so terribly significant? Because the pace of economic evolution has always been a function of the number and quality of interconnections between individuals and the ideas they hold.