Globalization and the power of networks
June 11, 2008
David Grewal recently wrote Network Power on the how globalization and our ever-increasing exposure to new networks affects our decisions and how we communicate. David guest-blogged about the idea over at the Freakonomics blog the other day. The message: Think about a measurement system.
Think about a measurement system. Sure, some people will claim that the metric system is intrinsically better than the Imperial because it's easier to calculate in a decimal system. But Britain didn't switch from Imperial to metric just because the latter is base ten. It did so because of what economists call "network effects." The value of any given coordinating standard -- like a measurement system or a language -- is worth more when more other people use it. And Britain's neighbors and largest trading partners generally do. There are "economies of scale" to being part of the larger network. Globalization has introduced a new coordination game among literally billions of people. With apologies to Thomas Friedman, the world isn't flat. But it is networked -- and we're all heading to Grand Central Station after one fashion or another.The link to keep reading.