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At this point, it should be obvious to nearly everyone that we are in the throes of a revolution every bit as sweeping and significant as the Industrial Revolution of the late nineteenth and early twentieth centuries. Changes in technology and digital convergence-the merging of the computer, communications and information industries-are having a profound effect on virtually every aspect of our lives, and we have only recently begun to suspect how truly profound the effect will be. Digital information and "the digital networking of human intelligence" have become critical components of our economy.
Don Tapscott has been tracking and predicting cultural and economic changes fueled by technology since 1981. In Office Automation (Plenum Press, 1981), Tapscott predicted that computers would prove a double-edged sword, and this theme is echoed throughout The Digital Economy. Tapscott chronicles the increasing pressures on organizations to transform themselves through the total quality movement of the 1980s and the trend of business process reengineering of the 1990s. The reason such transformations typically fail is resistance to change: it is far easier to streamline processes and to cut costs by reducing the number of employees than it is to transform customer service, responsiveness and innovation.
Information technology (IT) makes the global economy possible. In a global economy, programmers and other knowledge workers in China, India or anywhere else in the world can become "virtual aliens" by telecommuting to work for U.S. corporations. The use of IT makes it possible for a wide variety of work to be done where the worker lives instead of in a central office or plant. In previous times, knowledge had to be transmitted by physical means: letters, reports, cash, checks, invoices, face-to-face meetings or telephone calls. Once it has been digitized, information can be transmitted at the speed of light from one location to another, thus eliminating many of the communication barriers caused by time and distance.
The new economy...