Chris Anderson on Economics

Anderson's book on the Long Tail was an excellent study in the impact of the internet on economic trends (and the ability of unlimited storage space to change the way that we think about "mainstream" and widen personal interests), so expected this lecture to focus a little more on the psychological and cultural impact of internet sales, but he more or less ignored that to focus on economic trends in technology.



The four stages of development for technology aren't really a shock to anyone, I think. We all know that when an item comes out we wait a little while before we see a substantial drop in price and, if it is successful, a substantial increase in production.

Obviously, the decrease in price comes from a new thing losing its novelty (most people will pay a lot more for a new model car then they will for an older model, obviously with the exception of "vintage," but that whole concept of vintage defies the trend). The increase in production comes from a need to generate profit, but it also usually has something to do with the companies cheapening how they make the product, enabling bulk production.

Displacement is pretty common, just because new industries aren't created very often. The vast majority of products are matters of improvement more than innovation. It's a matter of taking, say, a common device and building software so that you can use your laptop to perform that function (like making phone calls on skype).

The free cycle is pretty interesting. There are some internet technologies that begin their life free (many web browsers, easily downloadable). I'm fairly certain that what he means is the approaching of "free," as very few things (as far as hardware goes) ever actually become free.

Now, as far as the freedom goes, basic studies in the impact of economics and innovation are always worth looking at. Living in a free market, the trends of that market spend a lot of time dictating our psychology, and it's worth understanding the impact.

As far as this particular lecture goes, it's so-so, but Anderson's book is really good, and gives a lot of insight into the modern market place (and actually addresses the long tale, which he kind of ignores in this lecture). Internet trending, like internet data collecting, is worth following, as it will define where we're going.