Between late 1999 and the first half of 2000, I wrote 115 pages for my thesis as the final part of obtaining my MSc in Economics at Erasmus University Rotterdam. In it I argued that the digital economy would run on different rules than the industrial one, and that Europe was going to have a unique opportunity. I got the rules right. I got Europe wrong.
As I start writing Augmented Ideas, I want to use some of the building blocks I researched a quarter of a century ago. The framework I used then lifts cleanly onto today, which is part of this newsletter’s raison d’être.
It starts with how information stopped being analogue and became digital.
[THESIS 1999, Chapter 3]
In the digital economy, information can be completely digitized into bits. Data, text, audio, and video can be digitized into files, which use multimedia technologies for its creation, storage, and use. This is the essential difference between the digital economy and the industrial economy, in which information follows an analog or physical form. It is the difference between the physical world and the virtual world.
Furthermore, network technologies create the possibility of exchanging these digital files around the world at the speed of light. The fundamental transformation of the form and speed at which information behaves and travels is the core engine behind the contemporary digital revolution.
The framework was not all mine. Don Tapscott coined the term digital economy and his Blueprint to the Digital Economy shaped a good deal of what follows. The thesis also stood on other shoulders such as Carl Shapiro and Hal Varian‘s Information Rules for the network economics; Larry Downes and Chunka Mui‘s Unleashing the Killer App; and Michael Porter and Ronald Coase for the industrial-economy foundations. Where I quote my own text below, the ideas underneath it are often theirs.
