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Jonathan Aronson ARNIC Presentation April 11, 2008
My co-conspirators Peter F. Cowhey John Richards Donald Abelson
The Big Picture ,[object Object],[object Object],[object Object]
The Traditional Model for ICT: Leverage a Dominant Position ,[object Object],[object Object],[object Object],[object Object],[object Object]
IBM Dominance ,[object Object],[object Object],[object Object],[object Object],Interfaces not transparent Leverage:  Superior performance in integrated processors yields highest MIPS integrated with systems software Bundled packages of products for enterprises
Microsoft Dominance ,[object Object],[object Object],[object Object],[object Object],Interfaces not transparent Leverage:  DOS/Windows becomes the standard desktop environment Then offer a package of related applications and specialized software to large enterprises
AT&T Dominance Before 1984 Leverage:  Control of Local Transmission Network  "leverage point" Interface is transparent, but rivals cannot rent local network on competitive price and performance terms ,[object Object],[object Object],[object Object],Local Network
Can Google Do It Again? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Why Google Won’t Dominate  – The Modular Revolution ,[object Object],[object Object]
How the Modular Revolution  Evolved – Policy & 1 st  Two Stages ,[object Object],[object Object],[object Object],Computing and terminals – the “cheap revolution” in computing and terminal equipment costs and performance  ,[object Object],[object Object],[object Object],Communications networks – growing bandwidth at plunging prices 1 2
The Cheap Revolution Scientific American, January 2001 Number of Years 0 1 2 3 4 5 Performance per Dollar Spent Data Storage (bits per square inch) (Doubling time 12 Months) Optical Fiber (bits per second) (Doubling time 9 Months) Silicon Computer Chips (Number of Transistors) (Doubling time 18 Months)
How the Modular Revolution  Evolved – Policy & 2 nd  Two Stages ,[object Object],[object Object],[object Object],Software and Web Services ,[object Object],[object Object],[object Object],[object Object],Content  (Digital Media) – YouTube 3 4
Why Winners Don’t Take All in the New Era  Source: Gartner (August 2006) Figure 1. Percentage of OS-Specific (Generally Windows)  vs. OS-Agnostic Applications Figure 3. Application Development Mix — New Applications Figure 2. Number of OS-Specific (Generally Windows)  vs. OS-Agnostic Applications in Our Model Organization (Installed Base)
Some Examples of Modularity and Market Evolution ,[object Object],[object Object],[object Object],[object Object],vs.
Challenges and Opportunities ,[object Object],[object Object],[object Object],[object Object],[object Object]
Opportunities ,[object Object],[object Object],[object Object]
Four Examples to Consider ,[object Object],[object Object],[object Object],[object Object]
The Rise of New Network Uses Source: Krishna Nathanson, IBM, 2006
Global ICT Spending by Technology  ($US Billions) ,[object Object],2007 2006 2005 2004 2003 2002 2001 2000 1999 1,800 1,500 1,200 900 600 300 0 Hardware Software Services Communications
Policy is Political Policy is Political and Cannot be Micromanaged ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Four Guiding Principles Principle 1:  Enable transactions among modular ICT building blocks Principle 2:  Facilitate interconnection of modular capabilities Principle 3:  Facilitate supply chain efficiency, reduce transaction costs Principle 4:  Reform domestically to help reorganize global governance
10 Norms to Implement Principles A. Institutional Design Norm 1:  Emphasize flexible, sometimes experimental, choices of agents, including mixed authority structures   when delegating authority globally.
Norms to Enable the Modular Supply Chain B. Enabling the Modular Supply Chain  Norm 2:   Invest heavily in the creation of virtual common capabilities for the Internet, and its successors, in a competitively neutral manner. Norm 3:   Reinforce the growing competitiveness of the supply  chain by partly refocusing competition policy .
Norms for the Network Infrastructure The 10 Norms C.  Norms for the Network Infrastructure Norm 4: Use  a light regulatory touch regarding pricing, investment,  and assets crucial to providing ICT networks and services. Norm 5:  Narrow and reset network competition policy .   -  all networks must accept all traffic from other networks . -  adopt a narrow scope for rules to assure network neutrality - separate decisions about peering from decisions about  about interconnection when dealing with VAN functions
Norms for Consumer Services (1) Norms for Consumer Services D. Norms for Consumer Services Norm 6:  Government policies generally should not restrict experiments  new applications by limiting mixing and matching of services Or  through  pricing rules that limit experimentation Norm 7:  Create rules for the globalization of multimedia AV content that balance the goals of encouraging the trade in services and fostering legitimate domestic media policies. Norm 8:  Use networked ICT techniques and changes to tip practices toward new markets for trading and transacting digital rights.
Norms for Consumer Services (2) Norm 9:  Enhance property rights for personal data and create mechanisms to allow commercial exchanges involving those rights on standard terms .   Norm 10:   Users may take their information with them when  they depart from specific applications and experiences and own their “click-streams.”.

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Global Governance in the Digital Era

  • 1. Jonathan Aronson ARNIC Presentation April 11, 2008
  • 2. My co-conspirators Peter F. Cowhey John Richards Donald Abelson
  • 3.
  • 4.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11. The Cheap Revolution Scientific American, January 2001 Number of Years 0 1 2 3 4 5 Performance per Dollar Spent Data Storage (bits per square inch) (Doubling time 12 Months) Optical Fiber (bits per second) (Doubling time 9 Months) Silicon Computer Chips (Number of Transistors) (Doubling time 18 Months)
  • 12.
  • 13. Why Winners Don’t Take All in the New Era Source: Gartner (August 2006) Figure 1. Percentage of OS-Specific (Generally Windows) vs. OS-Agnostic Applications Figure 3. Application Development Mix — New Applications Figure 2. Number of OS-Specific (Generally Windows) vs. OS-Agnostic Applications in Our Model Organization (Installed Base)
  • 14.
  • 15.
  • 16.
  • 17.
  • 18. The Rise of New Network Uses Source: Krishna Nathanson, IBM, 2006
  • 19.
  • 20.
  • 21. Four Guiding Principles Principle 1: Enable transactions among modular ICT building blocks Principle 2: Facilitate interconnection of modular capabilities Principle 3: Facilitate supply chain efficiency, reduce transaction costs Principle 4: Reform domestically to help reorganize global governance
  • 22. 10 Norms to Implement Principles A. Institutional Design Norm 1: Emphasize flexible, sometimes experimental, choices of agents, including mixed authority structures when delegating authority globally.
  • 23. Norms to Enable the Modular Supply Chain B. Enabling the Modular Supply Chain Norm 2: Invest heavily in the creation of virtual common capabilities for the Internet, and its successors, in a competitively neutral manner. Norm 3: Reinforce the growing competitiveness of the supply chain by partly refocusing competition policy .
  • 24. Norms for the Network Infrastructure The 10 Norms C. Norms for the Network Infrastructure Norm 4: Use a light regulatory touch regarding pricing, investment, and assets crucial to providing ICT networks and services. Norm 5: Narrow and reset network competition policy . - all networks must accept all traffic from other networks . - adopt a narrow scope for rules to assure network neutrality - separate decisions about peering from decisions about about interconnection when dealing with VAN functions
  • 25. Norms for Consumer Services (1) Norms for Consumer Services D. Norms for Consumer Services Norm 6: Government policies generally should not restrict experiments new applications by limiting mixing and matching of services Or through pricing rules that limit experimentation Norm 7: Create rules for the globalization of multimedia AV content that balance the goals of encouraging the trade in services and fostering legitimate domestic media policies. Norm 8: Use networked ICT techniques and changes to tip practices toward new markets for trading and transacting digital rights.
  • 26. Norms for Consumer Services (2) Norm 9: Enhance property rights for personal data and create mechanisms to allow commercial exchanges involving those rights on standard terms . Norm 10: Users may take their information with them when they depart from specific applications and experiences and own their “click-streams.”.