It took around two or three years for the business case for social media and socalled Web 2.0 technologies to crystallise. Unfortunately, for those who had pinned their fortunes to the Web 2.0 mast, it happened just as the rug was pulled out from under the economy and the criteria for IT budget approval became exponentially stricter.
In the context of a global economic downturn, such soft benefits as ‘community cohesion’ and ‘improved knowledge transfer’ are unlikely to inspire CFOs to put their hands in their pockets, CIOs have told Information Age.
But Don Tapscott, the consultant and author whose Wikinomics book is one of the key texts on how Web 2.0 will affect business, is unfazed. The social media revolution is in his eyes inevitable and the recession will only accelerate it.
“Companies are making a mistake if they are looking for cost-reduction benefits alone,” he says. “Sure, you need to hunker down and control cost, but while necessary, that is insufficient.”
“The crisis should be thought of transformational,” says Tapscott. “It is an opportunity for companies to rethink the way they engage with the rest of the world. A recession is a terrible thing to waste.”
In his view, business models and strategies must be restructured to reflect the highly ‘networked’ nature of society in the Web 2.0 age. For Tapscott, social networks are nothing less than “the new operating system for businesses”.
Transparency and openness are central pillars of this highly networked society. Businesses that embrace openness will therefore be rewarded, Tapscott argues, and those that do not will suffer.
Tapscott points to the collapse of the financial services industry as an example of the folly of closed, opaque organisations.
“Banks have all these risk management algorithms, and data, but historically they saw them as a source of competitive advantage,” he explains. “Well, it didn’t really work out that way, did it?”
In light of the credit crunch, not only did the banks fail to achieve competitive advantage by keeping their risk management tactics secret, “they succeeded in conferring structural collapse onto the whole industry,” he adds.
“Now, the financial services industry needs more than just an injection of capital and some more regulation,” Tapscott explains. “It needs a whole new operating model based on transparency and sharing intellectual property.”
In this case, Tapscott argues, it will be the Extensible Business Reporting Language (XBRL) – an open source XML schema – that has the greatest impact. But all kinds of information technologies will be used to promote openness and transparency in business.
In his 2008 book Grown Up Digital, Tapscott argued that businesses must understand and incorporate the learning and working styles of the generation that has grown up with the Internet if they are to attract the best talent.
But since its publication, and for the first time since 2003, the number of jobs available to graduates in the
“There may be a surplus of labour,” says Tapscott, “but there is certainly no surplus of talent.” That means that competition for the brightest and best is as intense as ever. Or, as the CEO of an executive search agency in the
While Tapscott is certain that the economic crisis will prove the merit of his arguments, he acknowledges that not everybody feels the same way.
“Attitudes to Wikinomics are bifurcating. “There has been a knee-jerk reaction [to the recession] by some businesses who think it’s enough to cut costs and survive. But there is another kind of business that says that now is the time to change.”
Indeed, change is the only certainty for the coming year, Tapscott adds. “The next twelve months will see huge disruption, and not just in business. This is a serious situation we are in, and there is serious discontent. This is the stuff of revolution.”