Student - Femba Program

Is the Information Revolution Dead?

If history is a guide, it is not.

By W. Brian Arthur

At the peak of the Internet frenzy two years ago, when the Nasdaq was over 5,000 and

dotcom millionaires were buying spreads in the hills above Palo Alto, it seemed that the

information revolution would go on forever. Little tech companies were popping up

everywhere, and small investors were reaping returns that made them feel like geniuses.

Then the bubble burst. It burst, management guru Peter Drucker tells us, because "the

information industry as a business wasn't going anywhere." The information revolution had

been hyped, exaggerated. Neither computers nor the Internet, Drucker says, had added

much to the economy.

Is the information economy going nowhere? Is its revolution over? In Silicon Valley,

certainly, the prospects look bleak. But history suggests that such pessimism is misplaced

-- that the information revolution's best days might actually lie ahead.

Looked at without historical context, the information revolution appears to be unique,

comparable to nothing we know about from before. Looked at as part of history, it is

merely one in a series of technological revolutions that have been occurring since the mid-

18th century. Each of these revolutions has been different: The Industrial Revolution, from

about 1760 to 1820 in Britain, replaced handcrafting with machinery and brought the

factory and mill system. The railway revolution, from about 1825 to 1875, again in Britain,

saw a great connecting of commerce and the coming of steam power. The steel and

electricity revolution, from about 1875 to 1920 (the action now shifts to the United States

and Germany), was an age of massive engineering and the electrification of the economy.

The great manufacturing age, from 1910 to 1970 or so, brought us mass production and

automobiles and cheap goods aplenty. And our own revolution, which started with the

microprocessor in about 1970, brings us the age...