« New Spectrum to the Rescue | Weblog | Books, Books, and More ... Books »

From Creative Destruction to Billionaire Creation

I've enjoyed writing in the past about Joseph Schumpeter and Creative Destruction - a key aspect of capitalism, which is unique in that under this type of economy and society, we are ever churning and creating new businesses, even as the capitalist economy destroys the old ones. But when I read something like I just read tonight, that academic classic seems somewhat dated.

JP Rangaswami, current CIO of Global Services at BT, has a blog, Confused of Calcutta, which I read on occasion. He had a great "musing" that I read tonight that I thought was highly complementary of Schumpeter's work from 40 years ago - updating it somewhat, if you will. The gist is to focus on the creation of great wealth and the value that comes about from the destruction of change and churn.

When hardware meant money, there were hardware billionaires. They made money Shifting Tin, and gave software away for free. And one day there wasn't any margin left in hardware.

Software ruled.

When software meant money, there were software billionaires. They made money Shifting Code, and gave services away for free. And one day there wasn't any margin left in software.

Services ruled.

When services meant money, there were services billionaires. And so on and so forth.

Infrastructure commoditises and is itself commoditised. Otherwise it wouldn't be infrastructure. When you dominate a market, you run the risk of becoming part of the infrastructure, and margins collapse as people look for differentiation beyond that infrastructure.

This process of active commoditisation takes place in every economic cycle, changing scarcities to abundances and, in the process, creating new scarcities. The latest scarcity is talent, human ingenuity. Not something that is going to be commoditised in a hurry. Musing about Open Source Billionaires, from Confused of Calcutta, a blog about information

With those thoughts in mind, think about the connection between Metropoitan Broadband and Attracting Talent, which I've written a lot about in the past month. If Talent is the current scarcity, then we should all be thinking about how to attract it - that is, if we want to be more competitive. And isn't it elegant to create a new abundance, broadband access, by abolishing a former scarcity with new infrastructure, and in so doing, address this new scarcity, access to talent?

Posted on April 28, 2007 at 08:12 PM

Comments


Post a comment




Remember Me?

(you may use HTML tags for style)