Source: Technology Review
by Haim Mendelson
Information technology has, of course, played a major role in reshaping business models over the past 20 years.
The basic social conventions of the preceding Industrial Era were all built around the notion that people physically moved in response to needs. For instance, if you wanted to buy something, you went to a store. If you wanted to build something, you worked in a factory.
But in the Internet economy, value creation doesn’t require that kind of physical movement, and income accumulates not in the form of cash, but in terms of clicks.
By changing the focus of innovation from atoms to bits, and from hardware to software, IT has dramatically accelerated the process of new business-model creation. Developments such the convergence of virtual and physical identities, models and reality, and those atoms and bits are likely to change the nature of the firm and, with it, the essence of innovation. Read the rest of this entry »