With the network age, we have real-time systems that instantly analyze and enable us to evaluate what’s happening and respond infinitely more quickly.
We have mobile computing that takes technology, power, information, and the capability of collaboration right out to front-line workers who can constantly make real-time adjustments.
From opacity to transparency
In the old model, there was opacity throughout the chain. And the new model has transparency throughout. So that an OEM, for example, can look all the way down through the network right to the base suppliers and find out what’s going on. And base suppliers can look all the way up to understand the market demand.
Companies can turn their customers into producers (or “prosumers”).
Companies can cooperate in vast peer-to-peer networks. Rather than supply chains, people cooperate together to create everything from a motorcycle – as in the case of the Chinese motorcycle industry – to the most sophisticated and complex product I can think up, which is the new-generation jumbo jet.
A new force for transformation
Because the Internet dramatically drops transaction and collaboration costs, traditionally closed, vertically integrated companies can now unbundle into networks.
And these new business-to-business networks are a real force for transformation:
- Collaborative innovation: Businesses can work together in new ways to create new products and services.
- Discovery: You can find new kinds of businesses out there and discover the appropriate price, rather the traditional approach with our fees and supply chains. Markets can help us business real-tie price discovery.
- Networked production: The third is the actual manufacturing or production of things. So, the Chinese motorcycle industry is really dozens of little companies that all cooperate together. They meet on the Internet and tea houses. There’s no OEM. There’s no Harley-Davidson. This is now 40 percent of global motorcycle production. And get ready for the US$1,000 car from China, using the same model.
- Instant insight: These business networks can also enable a new kind of analytics, where we can collect data and starts to analyze that data in real time because they’re connected. Data is collected socially, analyzed socially, and accessed through mobile devices. It’s much more visual and happens instantly.
Global solution networks
This is changing the way these ecosystems collaborate and cooperate. These companies can come together in a cooperative way, where they can reach out to customers and have a much faster and more powerful impact on markets then we ever could have imagined in the past.
Meanwhile, because of the Internet, not only does transaction costs drops in businesses, but so does the global transaction costs of cooperation and collaboration. Stakeholders, private companies, civil society, governments, academics, and individuals are coming together to create new kinds of networks. And these are now engaging tens of millions of people on this planet.
These new global solution networks, as I call them, are becoming material – and they’re a huge force to build a better world.
Watch below to hear Don Tapscott’s insight into the transparency of the networked age: