Knowledge brokers and the decline of corporations
© Copyright 1994-2002, Rishab Aiyer Ghosh. All rights reserved.
Electric Dreams #36

An information economy will have little use for traditional corporations with their hierarchy of managers and employees. Decentralization will be taken to its extreme limit, with the individual as the smallest economic unit of production. Greater and freer networking between individuals will lead to more efficient channels of communication, to flexible organizations of information capital and expertise.

Corporations are formed for a number of reasons. Their primary function is to collect - to bring together in a legal and often geographical entity a group of people, capital and expertise; and to present a unified interface to the rest of the world. Improvements in technology and resulting changes in society will make much of this unnecessary. The spread of anonymous digital commerce and multiple privacy-protecting identities may, in fact, make rigid corporate structures impossible to sustain. As more of the present advantages of a corporation become available to individuals, companies will have to yield greater control to them through flexible structures in order to exist at all. Of course all this is primarily applicable to information age industries - oil refineries will be less affected.

Many knowledge workers already telecommute. Working from home (or laptop) offices, telecommuters don't need a corporation as a physical place of work. The corporation needs knowledge workers because of their information capital. Knowledge workers themselves usually require little capital other than information, their own or that of other workers. What the traditional corporation offers are sophisticated ways of getting all that knowledge together and presenting it to end users, the customers.

However, it is becoming easier and cheaper for those who want services to communicate directly with those who provide them, and for knowledge workers to share information without intermediaries. By limiting individuals' resources to others within an organization, rather than the pick of the world's best, intermediaries may even have a negative effect on productivity. In the past, such hoarding of trade secrets provided an edge over the competition. In the future it will be very difficult to keep information secret - a fallout of advances in cryptographic technology has been the appearance of spontaneous anonymous markets for knowledge, allowing individuals to bypass their employers to benefit from their expertise.

The model for future information corporations already exists. Stock exchanges (and investment banks to some extent) are very loosely held organizations. There is some amount of common infrastructure and interface to customers, but there are relatively few restrictions on flows of information and capital. The more participants depend on their own capital or expertise, the more they directly gain. A choice of the best alternatives is always available.

A knowledge exchange can be even more open. Customers will always have access to the best resources; and providers of services themselves will be able to source additional expertise from anywhere in a global information market.

The information economy will work when the fluidity of knowledge is at its peak. This will be achieved by removing restrictions on the distribution of capital and expertise, by decentralizing the economy to the maximum where individuals join forces depending on their changing needs and abilities, by letting knowledge workers become knowledge brokers.

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