Innovation, Privatization, and the Birth of a New Network
In less than a decade, the Internet went from being a series of loosely connected networks used by universities and the military to the powerful commercial engine it is today. This book describes how many of the key innovations that made this possible came from entrepreneurs and iconoclasts who were outside the mainstream--and how the commercialization of the Internet was by no means a foregone conclusion at its outset.
Shane Greenstein traces the evolution of the Internet from government ownership to privatization to the commercial Internet we know today. This is a story of innovation from the edges. Greenstein shows how mainstream service providers that had traditionally been leaders in the old-market economy became threatened by innovations from industry outsiders who saw economic opportunities where others didn't--and how these mainstream firms had no choice but to innovate themselves. New models were tried: some succeeded, some failed. Commercial markets turned innovations into valuable products and services as the Internet evolved in those markets. New business processes had to be created from scratch as a network originally intended for research and military defense had to deal with network interconnectivity, the needs of commercial users, and a host of challenges with implementing innovative new services.
How the Internet Became Commercial demonstrates how, without any central authority, a unique and vibrant interplay between government and private industry transformed the Internet.
Do online communities segregate into separate conversations about “contestable knowledge”? We analyze the contributors of biased and slanted content in Wikipedia articles about U.S. politics, and focus on two research questions: (1) Do contributors display tendencies to contribute to topics with similar or opposing bias and slant? (2) Do contributors learn from experience with extreme or neutral content, and does that experience change the slant and bias of their contributions over time? Despite heterogeneity in contributors and their contributions, we find an overall trend towards less segregated conversations. Contributors tend to edit articles with slants that are the opposite of their own views, and the slant from experienced contributors becomes less extreme over time. The experienced contributors with the most extreme biases decline the most. We also find some significant differences between Republicans and Democrats.
Does invention agglomerate, and if so, where does it agglomerate? In this paper we examine changes in patterns of agglomeration in invention over time, using data on patent applications from all granted US patents.
The experience of Encyclopædia Britannica provides the canonical example of the decline of an established firm at the outset of the digital age. Competition from Microsoft's Encarta in 1993 led to sharp declines in the sales of books, which led to the distressed sale of the firm in 1996. This essay offers new source material about the actions at both Encarta and Britannica, and it offers a novel interpretation of events. Britannica's management did not misperceive the opportunities and threats, and Britannica did not lack technical prowess. This narrative stresses that Britannica's management faced organizational diseconomies of scope between supporting lines of business in the old and new markets, which generated internal conflicts. These conflicts hindered the commercialization of new technology and hastened its decline.
Evidence from Encyclopædia Britannica and Wikipedia
Co-authored by Feng Zhu
Which source of information contains greater bias and slant-text written by an expert or that constructed via collective intelligence? Do the costs of acquiring, storing, displaying, and revising information shape those differences? We evaluate these questions empirically by examining slanted and biased phrases in content on U.S. political issues from two sources-Encyclopedia Britannica and Wikipedia. Our overall slant measure is less (more) than zero when an article leans towards Democrat (Republican) viewpoints, while bias is the absolute value of the slant. Using a matched sample of pairs of articles from Britannica and Wikipedia, we show that, overall, Wikipedia articles are more slanted towards Democrat than Britannica articles, as well as more biased. Slanted Wikipedia articles tend to become less biased than Britannica articles on the same topic as they become substantially revised, and the bias on a per word basis hardly differs between the sources. These results have implications for the segregation of readers in online sources and the allocation of editorial resources in online sources using collective intelligence.
As the cost of storing, sharing, and analyzing data has decreased, economic activity has become increasingly digital. But while the effects of digital technology and improved digital communication have been explored in a variety of contexts, the impact on economic activity—from consumer and entrepreneurial behavior to the ways in which governments determine policy—is less well understood.
Economic Analysis of the Digital Economy explores the economic impact of digitization, with each chapter identifying a promising new area of research. The Internet is one of the key drivers of growth in digital communication, and the first set of chapters discusses basic supply-and-demand factors related to access. Later chapters discuss new opportunities and challenges created by digital technology and describe some of the most pressing policy issues. As digital technologies continue to gain in momentum and importance, it has become clear that digitization has features that do not fit well into traditional economic models. This suggests a need for a better understanding of the impact of digital technology on economic activity, and Economic Analysis of the Digital Economy brings together leading scholars to explore this emerging area of research.
Co-authored by Frank Nagle
Researchers have long hypothesized that research outputs from government, university, and private company R&D contribute to economic growth, but these contributions may be difficult to measure when they take a non-pecuniary form. The growth of networking devices and the Internet in the 1990s and 2000s magnified these challenges, as illustrated by the deployment of the descendent of the NCSA HTTPd server, otherwise known as Apache. This study asks whether this experience could produce measurement issues in standard productivity analysis, specifically, omission and attribution issues, and, if so, whether the magnitude is large enough to matter. The study develops and analyzes a novel data set consisting of a 1% sample of all outward-facing web servers used in the United States. We find that use of Apache potentially accounts for a mismeasurement of somewhere between $2 billion and $12 billion, which equates to between 1.3% and 8.7% of the stock of prepackaged software in private fixed investment in the United States and a very high rate of return to the original federal investment in the Internet. We argue that these findings point to a large potential undercounting of the rate of return from IT spillovers from the invention of the Internet. The findings also suggest a large potential undercounting of “digital dark matter” in general.
