3/5

In the technology class, we concentrate on finding repeatable services that we can spread over all applications or customers in order to make money, basically what I see as the low-cost strategy. I find it interesting because in most other classes, this is not seen as a good strategy because other firms will always be able to do it better and there is a race to the bottom of cost structures. Therefore, firm should choose differentiation and focus because they have a better chance at being the top of those strategies. I obviously think that low cost can also be combined with another type of strategy. I think that this is really where the profitability comes in because it’s how do you basically turn differentiation and focus into a repeatable service. In other words, if we can automate extreme individualization, we can have the best of all worlds and I think technology is clearly the way to do this.

Another point that I found interesting in class was that much of the technology is made so that we do not have to spend our time doing mundane and simple tasks. This allows us to be creative and think of new ways to innovate. I think that this is great for people who like to think and can think at work. However, good or bad, I think many people go into work and do not want to think and choose not to think beyond their individual tasks and I think that the future will be extremely difficult for them. I’m not suggesting that we hold back technology because people are essentially not committed to doing their job the best they can. I’m merely suggesting that as the demand for mindless jobs decreases due to technology, it will become harder and harder for non-educated people to find gainful employment. This reinforces the video in class where we need to really concentrate on providing that education and guidance for our children and even adults in the current workforce. It reminds me of the anecdote about how we would never choose not to use the refrigerator because it would put the milk and ice delivery people out of business. We have to accept new technology, but at the same time ensure that those people who are being replaced are able to find a new niche in society.

3/3

One of the most annoying things about owning a computer is not having the ability to completely control what is put on that computer. As a lawyer, I understand the argument that everyone “agrees” to allow the programs to download to the computer. However, as a user of computers, I am constantly trying to protect against unknown effects on my computer. Because I’m not stupid, I know that those things are out there and I choose to minimize my exposure as much as possible to those dangerous programs. This was also brought up in class where the amount of exposure you allow yourself to have has a direct influence on how much risk you expose yourself to. I think that if I were not so risk averse, I could have access to much more information and online activities that are out there. The world is at my fingertips, but the threat of crap being put on my computer causes me not to want to do anything.

I found the European model much more intriguing and actually in tune with efficient free markets. A large part of the argument for contracting and free markets is the assumption that both parties know what they enter into. When they have the pop-up of the T&C’s where you just click “Okay” to accept the contract, this is not a very realistic way of receiving consent. In general, I am very protective of people’s rights to the freedom of being able to contract however they wish. However, I think that there should be boundaries set where the owners of the computer are protected from predatory behavior.

I wanted to say one last thing that, in addition to the increase in risk, technology can also increase the magnitude of the consequences. An example is the amount of physical space it takes to hold memory, such as flash drives. One can fit huge amounts of data on things that fit in one’s pocket. This means that a disgruntled employee could walk in with a couple flash drives and download basically an entire company’s sensitive collection of documents.

2/28

This is somewhat of a pre-emptive posting in case I miss Tuesday’s class. I will still try to post if I do make it to class though. Something I talked about in my blog before came up in class regarding the enforcement by second or third parties. It has to do with the amount of lies written in email compared to when written on paper. I think that this is exactly the reason why people should not believe much of what is said online, possibly unless there is some sort of community enforcement as on Wikipedia. It’s an interesting tradeoff where we have access to unimaginable amounts of information, but the quality of that information is always questionable.

The next point has to do with the evolution of media organizations. I think that many older media people are scared that the internet will replace them. However, I see the same or a greater need for media to perform a trustworthy analysis of the information available to the world to make that information actually useful to people. In other words, it could be argued that the core function of the media is to wade through the information out there and present only valid and trustworthy information to their clientele. I think that establishments like the Wall Street Journal are good examples of how reliable information can still draw in revenue in the face of the internet. However, I think that media companies do not realize the importance of reliable information. I’ve seen many TV channels use blogs and random people’s opinions and present them as “news.” I think that individuals will stop going to those media sources if they continue to provide this type of information. Therefore, media companies need to realize or choose what kind of media they provide and make a commitment to providing that quality level of information. Otherwise, they will be swallowed up by the new generations of technology.

2/24

I found it interesting when we were talking about the need for society and how the virtual worlds satisfy that need. I think people are wired to be around other people and when we spend most of our time alone at home, we feel that something is missing in our life. I think this is why the need is created for people to feel part of a community, but I don't think that a computer community actually fulfills this need completely. I think that it's close and can satisfy certain psychological needs, but as seen with the girl who committed suicide, it is not always real and people can be fooled into false comfort.

Another similar topic is the idea of checking the email or facebook, but not getting a response. I've read a while ago that people have a need for positive stimulus and they get a positive stimulus by receiving an email/message. They also get a negative stimulus when they check and no one has written them. Therefore, this creates a desire to increase the number of friends on facebook or the number of messages they send out so they receive a message every time they log in. This leads to two effects. The first is that people (usually young people that do not understand) tend to invite or engage in communication with anyone who will listen. This is why they get into trouble because they communicate with strangers and people they don't trust. The second is that if you sum the stimuli, there is actually a negative net effect meaning that people tend to log in and not have a response more times than receiving an email. This also has to do with the fact that the negative is stronger than the positive. Therefore, people tend to be less happy by checking their email all the time because they expect to find a message every time. Anyways, I just thought it was a very interesting study and it shows how emotional needs can really influence people's behavior as well as be influenced by their surroundings.

2/19

The concept of ecommerce and internet business has always been interesting to me because the internet is a way, in my opinion, to create a much more efficient market because it reduces transaction costs by increasing the exposure of commercial parties. In other words, the traditional idea of a firm being a collection of long-term contracts starts to diminish as the internet allows firms to conduct business extremely easily. The theory is basically that individual agents in the economy would form firms that denoted a long-term commitment to doing business together, which basically meant they didn't have to negotiate terms for every daily task. With the internet, however, most of these negotiations can be extremely low cost because of the efficient market presented by practically everyone in the marketplace, at least for certain functions. For example, if I wanted someone to manage my HR, I would have to hire someone before because I could not be sure I could negotiate the terms each time I use the services. However, when there are multiple companies that I can outsource these functions to and the internet allows us to enact that transaction immediately, I can rely on a day to day (or at least more flexible) contract process to get work done. I find it interesting because I think that transaction costs and the adverse bargaining powers that are created by those transaction costs cause much of the economic inefficiencies (Coase theorem) in the market and the internet might be a way to eliminate some of those problems.

This is related, but I am also interested in how consumer spending is affected by the internet. There are two sources of online spending: replacement spending from brick stores, but also an increase in the turnover of money or the money velocity caused by having ready access to easily spend money online. Basically, before the internet it was "harder" to spend money because the person needed to incur significant transaction costs to go to the store, carry the goods home, etc. However, with the internet, you can spend money at the click of a button. You might pay for shipping, but fairly minimal. This causes the ability to turn over a dollar many more times each year because many agents are doing the same. So I sell something online and I immediately use that money to buy something online and that person immediately uses that money to buy something etc. The statistics indicate a huge spike in velocity in the 1990s, which I would attribute to the availability of the internet. Granted, the monetary policy should try to compensate for this effect because it will cause inflation. In sum, I think that the internet is changing gradually with the older generations, but will drastically change the economy and the way people do business as generations who grew up with the internet enter the workforce.

2/17

We only briefly touched this topic in class, but it also has to relate to a discussion I had recently with an engineering friend of mine. The topic is the short-term focus of results or outcomes either in a business or in a personal setting. In class, the point was brought up that projects need to demonstrate the ability to produce value and recoup the initial outlays very quickly. I think this has become a very big problem in our society. Before computers, people had to do that math or statistic by hand. This meant that when a supervisor wanted a statistic or an analysis of some kind, the turnaround might be three or four days. With modern computing power, many of those tasks involving calculations would take mere minutes, basically the time it takes to enter the data into the computer. An engineer uses calculations on a daily basis, but the main part of his job is to come up with solutions that go beyond the calculations themselves. His supervisors complain because they expect things immediately because that’s what they are used to. I think that our society has come to expect things in unreasonably short time periods, both at the job and at home. I thnk I talked about this before in my previous blog, but I thought I would relate this point as well.

Another part of this conversation was interesting because it basically describes the difference between explicit and tacit knowledge. The explicit knowledge was easily analyzed just by plugging it into the computer and figuring out the formula for the desired metric or statistic. However, the problems involving tacit knowledge are not easily or at least quickly solved. This takes time and the person trying to solve that issue would not be able to codify why or how they do so.

Finally, I don’t necessarily think that the two forms of knowledge are exclusive of each other. In other words, I think that some knowledge that is tacit can be turned into explicit with the proper complex analysis and understanding. However, I also think that the human brain is much more complex than we give it credit for. This means that, even though I think it may be possible one day to turn knowledge from tacit into explicit, we are far from understanding how the brain works and why people behave the way they do.

2/12

As I was not in class, I will discuss something I noticed about the reading. Breaking up services into modules can be a very efficient way of doing business. However, I think it also deserves a note of caution when you automate business functions beyond the functional capabilities of the individuals doing the work. For example, if you automate a mortgage issuance, the person issuing the mortgage will think less critically about the outcome. On the other hand, a person who does not use any automation will need to do the analysis themselves and will have a better understanding of the consequences of default. I think this was part of the problem with the mortgage crises in that people thought that the models were to be trusted and did not take the personal responsibility of issuing the mortgage. We should not make the same mistake in other applications of service technology.

I think that technology is a wonderful thing, but as we have reiterated many times in class, it must be where technology and business intersect. I found it very interesting that the two top drivers for the SOA projects were "need for change" and "competitive pressures." Neither of these seem to be matching the technology to the business application. Rather, they both seem like managers of the firms are looking for quick fixes to either gain a competitive edge or because they feel they need more technology. Firms should choose the technology based on how that technology can help their business practices or improve their business practices. This seems to be the reasons behind the other drivers (collaboration, demand) because those deal with communication and computation. In sum, I'm not really sure what was the reason behind those firms choosing SOA projects, but hopefully they're doing it for the right reasons.

2/10

I think the argument about the enterprise application is a little more nuanced than was presented in class. I think that there are problems at both extremes and the best value for a company is how to balance those extremes and fit exactly what the needs of the company are. I think that having one enterprise-wide system can be very efficient and good if the different groups within the company work together. On the other hand, there can be situations where the groups within a company should not be integrated and the independence creates benefits in that business mode. Said in another way, centralized systems work well for some, but decentralized systems work well for others. I think the same is true for technology solutions. We talked about intimacy and knowing the customer in class and I think that whether the technology is an enterprise-wide integration or buying the “best of breed” for each function, it really depends on the needs of the company. I think that when applications fail, it is really about culture. However, it is not always about an inability to adopt the technology. A new technology could cause a company to have to change its culture and that culture might be the source of their competitive advantage.

Another aspect of the technology that was briefly mentioned is the inability of many works to actually use the technology available to them. Technology has increased the capacity beyond the practical business application because many workers cannot use the technology. Also, the computing capacity of most computers is way beyond what most people would do in a given day, even if they know how to use it. Yet, computer companies are constantly upgrading and making new features. Granted, there are people that might need this increase, but for the most part, our tools greatly exceed our needs. I think that much of this innovation is because of matching the business needs, but the technology is only as good as the person who uses it. The theme of the class is that the intersection of business and technology drives innovation. It’s interesting because I would perceive almost all of the innovation being made only at the margin or the high-intensity users of technology.

2/05

It was very interesting how the concern of theft had very little to do with the actual assets that would be taken, but rather concentrated on the IP contained within. This makes sense when we discussed the effect of globalization and increases in technology where basically the aspects of a business that would make it profitable were human capital and technology. Basically, as long as the people are not hurt and the IP is not compromised, the core strengths of the business are still in tact.

The mention of perpetuity and long-term multi generational growth of a company was also interesting . I think that our culture has developed a very short-term outlook on many aspects of life, which has certain consequences. This has had an effect on long-term investments in property and in sustainability projects. For example, a hundred years ago, a person might plant a tree that would take thirty or forty years to grow, but they knew their children or grandchildren would receive the benefits. However, it is a very low chance now that someone will be living on the same property for the rest of their lives, not even thinking about children. Therefore, people choose not to invest in long term projects. I think that there is a basic problem that people do not look into the future while making decisions, such as the level of waste that is produced by an average household. We need to start thinking in terms of multiple generations ahead of us or else those generations may not be able to exist.

1/29

One aspect of future business where our class clearly disagreed was whether business will become more or less integrated. My original opinion was that business would be more integrated because we’ve seen shifts towards the one-stop-shop box stores of Walmart and Target away from purchasing our goods separately from the butcher, veggie stand, and other “specialty” stores. However, as I thought more, many modern companies and organizations have also become less integrated and rely on a network of extremely specialized entities. The example in class was Eli Lilly, where people who are not part of the regular R&D team are provided incentives to innovate, but are not integrated into the entire organization. The company, who specializes in manufacturing, basically outsources the research process to those who specialize in research. This is specialization at its best. In conclusion, I think that there might be a polarization. I see a trend in integration of networks (distribution markets, corporate conglomerates, social behavior, etc.), but specialization in specific skills (research and design firms, outsourcing non-core functions, etc.).

One thing that will shape our future is personal choice. Our class discussion revolved mostly around how technology will improve business or standard of life in the future, but did not address how people will choose to embrace the technologies. The economist in me wants to say that everyone makes the “correct” decision by balancing short-term interests and long-term interests. However, I believe that after the fact, most people would not have made the same decisions if given a second chance after the fact. For example, we are, supposedly, more “sophisticated” now than at any other time in history in food and nutrition. However, this generation is the first in history that has a life expectancy lower than the previous generation, due primarily to obesity. The increased knowledge helps us understand what can help the body, but it also provides the ability to consume much more fat, salt and sugar than previously available. I would argue that the shorter life span is because of personal choice and preferring the short-term enjoyment of the fat, salt, and sugar over the long-term interest of living a long and healthy life. I would think that people at the end of their life would prefer to live longer years rather than eat the fat, salt, and sugar (this can be debated). My point is that advances in technology or knowledge are only good if they help humans achieve what we really think is worth achieving. This opens up an entirely different debate, which I will not continue today.

1/27

The discussion about whether outsourcing business is a national security risk was interesting because one's opinion is closely tied to their ideas about what a nation-state is. One could argue, as I do here, that at a society, in the very basic sense, is merely a collection of business transactions. Business transactions are merely a way of the market distributing resources. Also, a society is merely a collection of people that use resources in a way that everyone is better off than each individual trying to go out and find resources on their own. Out of a society, a nation will be formed to protect the production and use of these resources from other groups of people. Therefore, in a way, the only threat to national security that exists is outsourcing business processes. Granted, it really depends on how one defines everything that goes into these thoughts. This is not to say that I disagree with outsourcing. In fact, under this line of thought, outsourcing actually combines both "societies" into one. However, the problem is with how the nations have formed because the national interests may conflict with how the resources move between the citizens of differing nations. I could go on forever with some of these topics.

The next topic is the online law services. I am obviously bias to this issue as I will soon become a lawyer and charge for my services. However, this raises some points that I think are related to outsourcing and the use of technology to solve business issues. I think that the professor was probably fine in setting up his LLC with the online service because it did not seem to be a very complicated or extensive business. However, the thought purchasing legal services online seems like an extremely risky thing to do because things can be so much more complicated than most people think. My point is not about law, but more about how people need to be conscious about what the consequences are when they use technology or outsource. There are certain things that should never be outsourced because the consequences of getting something wrong is too great.

1/22

In my study of law, I find the study of enforcement mechanisms very interesting. There are three levels of enforcement: first person, second person, and third person. There have been studies in law and economics that certain behaviors can change based on what kind of enforcement mechanism is in place. A few comments in class were made about the "creepy" aspects of online behavior and this made me think of what exists to enforce either the societal norms or legal norms online. For example, people do and say things online that they would never do or say directly to other people and the third party enforcement is not very established online. Therefore, the only enforcement is through the first person or relying on each individual to just decide what to do themselves. I don't really know where to go with this other than saying I think it would be interesting to study enforcement mechanisms and behavior online as compared to the studies that have already been done.

The second thought is that trust will become more important as technology allows more "trickery" against other players in the economy. I think that trust has always been important, but with very simple business transactions the possibility of tricking the other person is limited certain factors. For example, the simplest transaction trading one apple for one banana only requires that each party has quality fruit. There is not much more uncertainty. However, as the business transactions involve larger time components (buying stock) or greater level of complexity (buying a super computer), the parties need to have more trust between them in order to complete the business. In other words, as the amount of information increases in the world, the asymmetry of that information makes it much easier for people to commit fraud and then walk away. Therefore, trusting that the other party will not try to take advantage is the key to a continuing business relationship.

1/20

I know this was not the point of the class ,but the first thought I had while the class was answering the quesiton "why are you cool" was that we are becoming less "cool" individually because of the availability of a worldwide labor supply. Before technology allowed a company from Minnesota to reach talent in China, India, or anywhere that has electricity, the company would hire based on the limited skill sets available to it within a limited geographic area. Now, a company can basically hire any skill set they need, regardless of geography. For example, if a company in Minnesota needed someone who spoke Chinese a hundred years ago for some reason, they would probably have a hard time finding someone locally and that person could require a higher wage. Now, the Minnesota company would have billions of people as possible applicants, which means that skill sets become more of a commodity as more people around the world are "the competition."

The second thought was regarding the economic cycle changing as a result of technological innovation. I have heard of a generational phenomenon that the economic cycle works in a series of three generations. (Though I do not remember where I read this and cannot name a source) However, the two ideas greatly coincide. The idea is that generation one comes up with an idea or innovation in either product or process and then grows very quickly in developing the business or economy as a whole. The second generation has grown up with the innovation making it efficient in use or implementation and has been able to learn from their parents how to conduct the business activity effectively. However, the third generation actually decreases productivity because of a "spoiled child" behavior by riding off the previous accomplishments and also finds the innovation old or outdated to their needs. I believe this phenomenon can be seen at a family business level as well as a macroeconomic level. I think that this and the innovation cycle we talked about in class might be very similar ideas.