Tag Archives: disintermediation

Bjork and Tina Brown: sisters of innovation

Bj├Ârk and Tina Brown have many differences but one common problem: They are watching the boat beneath them sink. Their print and music industries are being disintermediated by the digital revolution. They are struggling to respond to the blue-ocean and white-space and black-swan disruption that besets us all.

For more of this post, please go to the full post on the Harvard Business Review blog by clicking HERE.

Will New York City go the way of the newspaper?

The digital effect rolls on. The record store has been vaporized by iTunes. Retail is being disintermediated by Amazon. The newspaper has been dealt a mortal blow by Craig’s list, the print magazine by PSFK, Huffington, etc.  Clearly, education is next.

No one talks about cities.  However natural they seem to anyone born in the 20th century, cities are arbitrary constructions.  They are predicated on the idea that humans must congregate and colocate.  But this idea is contingent.  A "face to face" connection matters only when there is no digital alternative.  

And now there is.  We can interact digitally.  You can be in a cab in Singapore and I can be in a cab in Philadelphia and our voices have real fidelity.  If we don’t need to be in motion, we can use the camera build into our computers, adding facial expressions to voice.

The fidelity of teleconferencing is still pretty horrible.  Jack Conte and I tried to create a conversation on line Friday using Ustream and it was spectacularly unsuccessful. (I ended up called Jack on the phone, and he held the received up to his computer microphone.) But this is merely a technical problem.  By the end of the present decade we will have perfect fidelity of audio and video.  (See Cisco’s Umi for a glimpse of the future.)

And then what?  I wonder if it isn’t the end of New York City as we know it.  

Here are a couple of crude speculations that will indicate what I mean.  In a perfect world, we would have Steve Crandall build one of his amazing thinking machines to help us work this through.  In the meantime:

Let’s say there are 8 million people in NYC at any give time.  And let’s say 1 million of them are there as commuters, traveling in from New Jersey, Connecticut and Long Island each day.  

When there is TCWTF (teleconferencing with true fidelty), these people will no longer commute every day.  They will probably commute once a week, because, and here I am making the BFA (big, fat assumption) that some face-to-face contact is called for, especially when the people in question or idea workers, cultural creatives or, as I like to call them, Floridians.  

The commuters who now come in one day a week will need perches more than offices and the corporation will now be in position to cut space requirements substantially.  Let’s say they do so by 15%.  

We have remaining 7 million people who live in the 5 boroughs.  (Forgive me if I am way off. I just need some figures to paint the picture.)  Let’s suppose the 2 million of these residents qualify as idea workers or Floridians.  I think we can assume that some 80% of this group will give up their homes or rentals in the city.

No longer tied to the city by the need to be there everyday, these people will give up tiny living circumstances for something larger, cheaper and less onerously taxed.  (Again, I am assuming that these people will want to be in the city say a day a week.  Face to face contact will continue to be important.  This too may eventually change and then there won’t be anything stopping us from moving to the rain forests of the Amazon or the stormy coast of Newfoundland.  For the time being we will telecommute from Philadelphia or New Haven.)  

Now the city is really up against it.  With a decline in demand for office space and housing, the tax base will take a tremendous hit.  (Given the kind of taxes paid by idea workers and the companies that employee them, it’s not unthinkable that this exodus would remove something like a third of the city’s tax base.  This without actually reducing very much of the need for the services that taxes support.  Actually, Richard Florida is exactly the guy to run these numbers.  I hope he will favor us with some rough calculations.)

We might be looking at the return of the 1970s "downward spiral" scenario.  Tax base falls, social services falls, crime rises, the city becomes chaotic, even more people leave, and the tax base falls again.  The city tries to correct by charging fewer companies more, and more companies leave.  After all, the tech now makes this easier and easier to do. 

Thoughts, please!