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volatility
This page looks at volatility, change and
innovation in the digital economy.
an exceptional era?
It has become fashionable to argue, like James Gleick,
that the pace of technological development and social
change has speeded up. Others such as Evans & Wurster
or Davis & Mayer claim that the business environment
is so volatile that commercial success now requires the
abandonment of 'traditional' ways of decision making and
corporate structures.
Those claims are entertaining. They're also dubious.
Preceding pages of this guide and the separate profile
on communications revolutions suggest that the 'age of the
internet' is no more volatile than past eras. Indeed it is
less so than many.
And irrespective of the practical value of 'traditional'
structures or ways of doing business - in 2001 the
"dinosaurs" still roam the land, unlike most
white-hot dot start-ups hailed by the gurus - even passing
familiarity with the work of Chandler, Cortada and others
suggests that much tradition in fact dates only from the
1960s.
fast money
The Internet Bubble (New York,
HarperCollins 99) by Anthony Perkins & Michael Perkins supplied a
prescient analysis of why the bubble was going to burst. We
forecast further pain for dot com speculators and Amazon.com wannabees
as they run out cash over the next four months and the absence of a
product or credible business plan becomes obvious to all.
Michael
Mandel's The Coming Internet Depression: Why The High-Tech Boom Will
Go Bust ... (New York, Basic Books 00) is less sensationalist than
the title suggests and a useful corrective to assertions by Gilder and
others that the business cycle is finito.
Irrational Exuberance
(Princeton, Princeton Uni Press 00) by Robert Shiller looks at fast
money, investment and speculation over the past decade, questioning
traditional academic wisdom about market efficiency and highlighting
recurrent announcements last century that a "new economy"
changes all the rules.
Andrei Schleifer's Inefficient Markets: An
Introduction to Behavioural Finance (Oxford, Oxford Uni Press 00)
explores the conflict between perceptions and 'fundamentals' in modern
financial markets. Capital Markets Revolution: The Future of Markets
in the Online World (London, FT 99) by Patrick Young
& Thomas Theys is a less academic account
of online financial services.
bubbles
John Kenneth
Galbraith's A Short History of Financial Euphoria
(New York, Viking 93) is a spritzy account of bubbles before the net.
There's a more detailed, although perhaps too sanguine, study of the 'tulip
mania' in Peter
Garber's Famous First Bubbles: The Fundamentals of Early Manias
(Cambridge, MIT Press 00).
Edward Chancellor's Devil Take The
Hindmost: A History of Financial Speculation (New York, FSG 99)
updates Charles Kindleberger's classic Manias,
Panics & Crashes: A History of Financial Crashes (New York,
Wiley 93).
We've noted Saskia Sassen's Globalization & Its Discontents: Essays On The New
Mobility of People & Money (New York, New Press 99) and Susan Strange's Mad Money: When Markets Outgrow
Governments (Ann Arbor, Uni of Michigan Press 98) elsewhere in
these guides.
risk
Peter Bernstein's Against The Gods: The Remarkable Story of Risk (New York, Wiley 96), William Sherden's The
Fortune Sellers (New York, Wiley 98) and Burton Malkiel's A
Random Walk Down Wall Street (New York, Norton 97) offer useful
perspectives on global volatility and forecasting.
For an academic - and
more heavy going - study of thinking about the history probability and
risk turn to Ian Hacking's The Taming of Chance (Cambridge,
Cambridge Uni Press 90).
the speed of change
James Gleick's Faster (New
York, Random House 99) is a quick tour through notions of volatility and
change in the 'age of the internet. It's better value than Davis &
Meyer's dot com tract Blur
- The Speed of Change in the Connected Economy (Oxford, Capstone 99)
or Clockspeed: How To Survive & Flourish In The Age Of Temporary
Advantage (New York, Little Brown 98) by "corporate
geneticist" Charles Fine.
They offer prescriptions for success in the age
of change and uncertainty .... but strip out the dot com jingles and is
'fast' faster, change quicker, life more volatile than the time of our
grandparents? It's unfashionable to say so, but we think not.
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