Simon Caulkin reports on the bright young masters of the Web universe
This year $20-billion of business will be done on the Internet. That’s about the size of the economy of Vietnam or Iraq, and three times the figure for economic commerce, or e-commerce, last year. By 2000 the total may be five or even 10 times as much again.
The figures are of course conjectural, but more interesting than the raw totals themselves, however extraordinary they may be, are their implications.
Business on the Internet is not only beginning to change the shape of industries, it will also in time alter the way they are run: the Net generation is coming.
It is easy to see that what the telephone did to the economics of retail banking, the Internet – which cuts the cost of doing transactions further – will do in spades for many other sales and distribution businesses.
Many people have heard of Amazon.com, the online bookseller that is using its lower cost-base to undercut the conventional book trade. But what if the same scenario were applied to retailing of every kind? If just 10% or 15% of shoppers avoided the supermarket trip and did their weekly grocery shopping by computer instead, a large part of the vast supermarket real estate would become unviable or redundant at a stroke – or at the click of a mouse.
In other areas, “disintermediation” is speeding up the economy (and cutting prices to the consumer) by removing middlemen. Direct sales, as offered by Dell Computer in the United States, are just part of it. Estate agents in the US now find they have to compete with a countrywide network of property owners buying and selling homes on the Net.
The same is true of travel. Consulting a travel agent could soon become a thing of the past: the cheapest air fare, and the ticket to get you to your destination, are only a couple of mouse clicks away.
These changes in the economic value chain are paralleled in the workplace. For instance, the number of software programmers in the US doubled between 1984 and 1994 from 500 000 to one million – and by the millennium it will have nearly doubled again. (For comparison, employment in the US car industry is 800 000, around the same as in 1950, even though the population has increased by 100-million.)
And the Net itself is starting to generate direct employment. It goes without saying that in the four years since the Internet took off, almost every large international company has put up a website. The first generation of pages are, to put it bluntly, rather crude. A survey last month of 100 top corporate websites by Shelley Taylor & Associates found that while one or two corporate sites were excellent, many were frustrating to navigate, discouraged direct contact by customers, employees and investors, and gave little management information.
Most companies, the survey concluded, had “failed to respond to the opportunities presented by the Internet”. However, as companies recognise that the Web is not just a gimmick, they are beginning to devote resources to it.
Who are the workers performing the strange new jobs of “cyber commander”, “Web wizard” and “Web mistress” – just three titles that have been spotted in corporate cyberspace? One thing’s for sure: they are not the gentlemen in suits from the boardroom floor, most of whom don’t know their HTTP (hypertext transfer protocol) from their HTML (hypertext mark-up language). Some of them, according to Shelley Taylor, don’t even know how to call up their own company website.
Web power is, of course, in the hands of younger people, who have grown up with the multimedia technologies and are dubbed the “N” or Net generation. For them, the Net and its technologies are no more mysterious than television was to their parents.
Taylor is convinced that in the future the corporate website will be not be an add-on, as now, but the company’s living centre. How the company’s website works is how the company works. If this happens, many companies will find themselves in the near future effectively dependent on a workforce that is different from any other in corporate history.
In the US, hip companies know that the way to get cool webpages is to use those best qualified to author them — schoolchildren. Child labour is back. According to some reports, children from the age of 10 are earning up to $80 an hour on their computers. Thriving companies set up by teenagers are commonplace.
In the stable world of the past, points out Nicholas Negroponte of the Massachusetts Institute of Technology’s Media Labs, it might have been true that those who didn’t know history were condemned to repeat it. In a world of extravagant possibility such as the Internet, the reverse is the case: those who know the past are likely to be its prisoners, at least technologically.
Another reversal: skills that were strictly non-vocational in the past are now in demand. Who would have guessed that fine arts would be a suitable background for the new generation of Internet jobs? Yet as companies compete to make their websites more appealing and intuitive, a real niche is opening up for young people with distinctive and adaptable artistic talent.
In Growing up Digital (McGraw Hill), Don Tapscott argues that the change has the potential to generate not only political upheaval but nasty intergenerational conflict. While their seniors have the wealth and control the channels, the young have the technological whip hand.
The young know better than the old; the pupils are controlling the curriculum; and the infants are in charge of the nursery.
Perhaps the World Wide Web will end up achieving what even Tom Peters could not: liberating management from the iron grip of white, middle-class, middle-aged males.