Plenary Lecture 1 : Introduction and Overview : The Emerging Information Economy

A very straightforward talk by Roberto Verzola dealing with the emergign economy of information, explaining various terms, and tracing the paths each takes within a local and global context as well as offering new areas that need further thought and research.

documented by Andreea

Roberto Verzola is an engineer by training, and a long-time social activist. He introduced many Philippine and Asian NGOs to computers and the Internet, as Chair of People’s Access and Interdoc in the late 1980s and early 1990s. He set up the first email service for NGOs in the Philippines in 1992 and for this effort was recognized by the local computer industry as “Father of Philippine Email”.Based on his deep familiarity and extensive work with the new information and communications technologies, he developed a framework of analysis, revealing the social impact of these technologies, a unique perspective on ICTs from the eyes of a developing country activist. His work resulted in the book Towards a Political Economy of Information, published in March 2004. Verzola continues to advise Philippine NGOs not only on ICTs on sustainable agriculture, genetic engineering, renewable energy, nuclear power plants, and other technologies as well. He helped found the Philippine Greens in 1996 and served as its first secretary-general. Today he is its sustainable agriculture campaigner. He also serves as Adviser on Sustainable Technologies for the Philippine Rural Reconstruction Movement and a member of the board of Pabinhi, and sustainable agriculture network in the Philippines.

The Emerging Economy of Information

Info. Economy : an economy whose information sector has become the dominant sector of the economy
Info. Sector : that sector of the economy involved in the production, sale, distribution or use of information goods.
Info. Goods : goods whose value reside mainly in their information content rather than their material or energy content.

Types of Goods
Info. Goods: non-material goods; goods whose value reside mainly in their information content rather than their material or energy content, i.e resolving uncertainty: eg software, video, GMOs
Industrial goods : non-living material goods; dead raw material transformed by human labor to finished products, value comes from the energy expended in producing them; eg cars
Agricultural Goods: living goods; goods that grow by themselves; value is mostly in teh amount of matter contained; measured by weight/quantity; eg food
The above are all qualitatively different

The production sectors of an economy
Agricultural Sector : living goods sector; goods have their own internal logic of growth; human role is secondary (to take care of goods, help or provide support)
Industrial Sector : non-living, material goods; raw materials don’t become finished products without labor or machines; human role is primary (cut, hammer, extrude, melt); in conflict with agricultural sector
Info. Sector : non-material goods; power of creation and control; unlimited growth

The different economies
Info. Economy – its information sector is larger than its agricultural or industrial sectors; eg. USA
Industrial Economy – its industrial sector is larger than its agricultural or info. sectors; eg Italy
Agricultural Economy – its agricultural sector is larger than its industrial and info sectors; eg Indonesia

How Info. became a full-pledged commodity
Representation – langauge, digital format (allowing exact copies over unlimited number of generations)
Storage – development of paper, magnetic and optical media, reducing storage costs
Communication – technical control over portions of the electromagnetic spectrum
Processing – computers provide endless possibilities for info. products

Economics of Info. goods
Intangible; non-material
Little matter or energy used
Lower cost of producing more copies, especially with new technologies
THis is the key in understanding the information economy: The marginal cost of production is approaching sero (but entry-level costs remain high)

Near-zero marginal cost of production – consequence #1
“Information wants to be free”
“Knowledge shared is knowledge doubled”
“You do not lose what you give away”
“Information distributes itself globally” (leading to a global info economy)

Near-zero marginal cost of production – consequence #2
If the historically-set high price can be maintained…
and the marginal costs of production approaches zero
profit margins can be very HIGH

Intellectual Property Rights
IPRs(patents, copyrights) are the main form of ownership in the info sector
With IPRs (TRIPS) creating artificial scarcity
Investmenet flows from low-margin to high-margin areas (ie. from the agricultural and industrial sectors to the info. sector)
This internal logic transforms an industrial economy to an info economy.

Trade among Economies
Information: (eg. $100 CD from USA); a person makes a copy within 1 minute; high profit margins
Industrial: (eg. $100 oven toaster from Italy or a bicycle from China); a few person build 1 unit within a few hours; medium profit margins
Agricultural: (eg. $100 rice from Indonesia); many persons produce 10 sacks in three months; low to negative profit margins

Gaining wealth by charging rents
The propertied class of a monopolistic information economy are rent-seekers
They control the information resources (software, hardware, infrastructure, etc.) and charge resnts for the use of this resource
These are the landlords of cyberspace
These rentiers are cyberlords
(Area of research: sociology of rent-seekers)

The landlords of cyberspace
info cyberlords : owners of software, video, music, databases, industrial designs, genetic info
industrial cyberlords; owners of isps, communication lines, phone networks, radio/tv stations, media networks, cable
bureaucrat cyberlords: control over TLDs, IP #, formats, radio frequencies

The core conflict opposing value systems
1) Sharing : you don’t lose what you share (economics of abundance), expand the commons, social gains are potentially very high, development (expansion of information freedoms)
2) Monopoly : stop the sharing to maintain a highi price (artificial scarcity), privatize information, profit margins are potentially very high, development (expansion of information markets)
Sharing is a direct threat to the US economy

Low-cost ICT deployment in developing countries
Appropriate (intermediate) technology
Free/open sofwatre (GPL)
Public stations with no recurring charges
Systems of community/public ownership to minimize private rent-seeking
However, low-cost ICT is not enough!

Built-in ideologies in ICTs
Ideology : mind-set, deeply embedded bias
English: needed to master technology (learn their tongue, acquire their taste)
Globalization: subsidy by local users for the global players (varying costs, same fees)
Automation: replace people with machines (this bias vs labor extends to global flows)
Technofix: technology will solve our social problems (what about new problems technofixes create?)

More hidden biases?

Strong arguments for the following biases:
centralism: DNS, IP # assignments, formats, ownership
working alone : individual, not common, use of tools/equipment; own workstation
instant results: quick responses; imatience with slowness
unlimited growth: design should scale up, without limit
unaccountable social behaviour: transitory relationships; ease in cutting social connections

Any gender bias? (research needed)

Dissect each technology for built-in biases!

Three challenges of ICT4D (ict 4 development)
lower cost : making ICT cost (entry-level and recurring) more affordable to the poor
embedding values : ensuring that built-in biases in ICTs are closer to our ideals of a free, socially-just, culturally-diverse, gender-sensitive, and ecologically-friendly world
technological independence: making ourselves less dependent on technological fixes to solve our social problems (hard!)

Low-cost ICT : the SRI campaign

system of rice intensification (SRI)
traditional media to ‘cast the net wide’
using mobile-sms to ‘close the loop’
low-cost training with VCDs (video cd)

Low-power FM : a built-in bias for the local
FM station costs the same as a laptop
affordable cost of participation (10-20 USD one-time cost per radio set); 1-2 usd recurring cost every few months (for batteries)
Limited reach encourages use of local language, focus on local issues
Respects the farmers’ oral tradition
New from FRB! : low-power TV station

Alternatives to IPRs
Work in harmony with the nature of information by shifting to non-monopolistic ways of rewarding intellectual work (eg GPL)
(note: this is a social solution not a technological fix!)

The economy we want
not : 70% info econ, 20% industrial econ, 10% agricultural econ
BUT : equal info econ, industrial econ, & agricultural econ..

An economy whose different sectors are all in dynamic balance (ie harmony), complementing each other to provide citizens with material sufficiency and an increasingly wider diversity of jobs and leisure.

The development model we want
not linear BUT ORGANIC

The mechanistic, linear model can lead us to an evolutionary dead-end, without a way out.
The organic, multi-brancing model of development gives us a diversity of options.
Do we want an “information society” or a socially-just, ecologically-friendly one?

Lessons from systems design
results of systems design: complex hardware, software, global econ
some results successful, others not. why?
systems design involves balancing two fundamental design criteria: efficiency (maximizing output/gain) and reliability (minimizing risk of failures)
reliability is the blind side of economics, which has been cofused mostly on efficiency

Systems design for economies
modularization (modules=national economies?)
interaction through well-defined interfaces
loose coupling between modules, tight coupling within modules
avoid global variables (WTO, IMF, WB?)
solid theoretical basis for trade barriers, controls, regulation, independent economies
lower efficiency, but higher reliability

Systems design in biology?
intermodule coupling = breaking species barriers
higher efficiency, but lower reliability
higher risk of failures (genetic crashes?)
risk reduction = precautionary principle

Not covered by the presentation above:
ICT & bubble economy
privacy and surveillance: spam, traceability; databases on citizens
safety and health issues: effect on fingers, hands, posture, eyesight; health and environmental impacts of chronic exposure to artificial electromagnetic radiation; toxic waste from ICT production

documented by Andreea