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Technocapitalism and the Information Society

Luis Suarez-Villa


The information society is part and in many ways a product of a larger phenomenon that can be referred to as technocapitalism. Technocapitalism is an evolution of market capitalism that is rooted in rapid technological innovation. Technocapitalism has harnessed science and technology to market processes to an extent never seen before in human history).

The most important resources of the emerging technocapitalist era and the information society that it spawned are intangibles (see Suarez-Villa 2000, 2001, and the websites www.technocapitalism.com and www.innovativecapacity.com for more information on the dynamics and elements of this phenomenon). Creativity and knowledge are by far the most important resources of this new era, much as raw materials, physical capital or labor power were the fundamental resources of industrial capitalism and early industrialization.

The information society could not have emerged without the new technologies introduced by the rise of technocapitalism. Innovations in software, digital communications, microprocessors and computing that supported the emergence of technocapitalism have made it possible for the information society to develop and spread. The rapid and widely accessible diffusion of knowledge that has been the hallmark of the information society could not have occurred without those innovations. This relationship is usually overlooked by those who study the information society and its many remarkable facets.

The rise of technocapitalism and the information society it spawned are generating new organizational forms to try and meet the challenges posed by increasing competition, globalization, and the rapid flow of knowledge and information. An incipient deconstruction of organizations is occurring, where established norms and structures are giving way to new ones that rely greatly on intangibles, fluidity and flexibility. Such organizations, which are typically found in the sectors and activities that are most representative of technocapitalism, such as biotechnology, software, bioinformatics and nanotechnology, are becoming a model for organizations in other sectors.

Networks are the prime transformational tool of technocapitalism and the information society. Evidence of the rising importance of networks can be found today in most any economic activity, but nowhere more intensely than in the new, research-intensive and highly innovative organizations that are emerging and are most representative of technocapitalism and the information economy. In many respects networks have become, along with such intangibles as creativity and knowledge, the lifeblood of the new organizational structures that are emerging.

This contribution will provide an understanding of how the rise of technocapitalism and the information society have been supported by specific characteristics of networks, and the organizational changes that these phenomena are introducing in twenty-first century society. The most important characteristics of networks that support the emergence of technocapitalism and the information society will be considered in the next section. Four major aspects of networks that are having a major impact on organizations and the way they function will be discussed. The deconstruction of organizations will then be addressed by providing, first, a broad historical perspective on the evolution of organizations during the twentieth century. This part will be followed by a discussion of how the networks that underlie the information society and that have supported the rise of technocapitalism induce the deconstruction of firms and organizations. Although such deconstruction has affected the kinds of organizations and activities that are most typical of the emerging technocapitalist era, they are nevertheless affecting many other sectors as the information society spreads and reaches into most every aspect of life and work.

The Rising Influence of Networks

Networks are a very important element supporting the rise of technocapitalism. They pervade and underlie most every innovative activity in existence today. Networks make it possible to connect the most important intangibles of the technocapitalist era to market processes. As such, they are essential for understanding the kinds of activities and organizations that are likely to dominate twenty-first century societies.

The information society could not exist without networks. All of the services, industrial and institutional activities that are part of, or at least support, the information society depend on networks to fulfill their roles. The diffusion of knowledge, economic transactions, and the distribution of goods and services rely on network structures. The articulation of those structures and their means of control also often determine disparities of access to activities, favoring some participants over others and determining the distribution of rewards.

By and large, the organizations that are typical of the emerging technocapitalist era are networked organizations. Their development and survival depends on their network relations. In the new sectors that are likely to be most representative of this century, such as biotechnology, nanotechnology, genomics, bioinformatics or molecular electronics, networks will be fundamental for the survival of organizations (see, for example, Robbins-Roth 2000; Galambos and Sewell 1996; Liebeskind et al 1996; Powell et al 1996). These sectors depend greatly on research activities that are increasingly networked and involve collaboration, the diffusion of knowledge, the testing of discoveries, or the development of new products and services.

It is therefore not surprising that dynamic populations of networked and highly innovative organizations have emerged and are usually pioneers in the sectors named above (see, for example, Suarez-Villa and Walrod 2003; Coombs and Georghiu 2002; DiMaggio 2001; Fischer et al 1999; Liebeskind et al 1996). Many of those firms are linked to other organizations through networked alliances, or through outsourcing arrangements and joint ventures where networks are involved (see Suarez-Villa 2002, 1998; Robbins-Roth 2000; Cooke and Morgan 1998; Galambos and Sewell 1996; Suarez-Villa and Karlsson 1996; Suarez-Villa and Fischer 1995).

The kinds of organizations and sectors that are more representative of industrial capitalism (the predecessor of technocapitalism), in both its so-called Fordist and post-Fordist versions, have also become increasingly dependent on networks. Steel and automobile manufacturing firms are, for example, increasingly dependent on networks that encompass their suppliers and have become global in scope and scale. Much the same occurs for computer manufacturers who establish networks that include component suppliers and software designers. Internet-driven business-to-business (B2B) relations are structured through such networks and have led to considerable improvements in coordination. Just-in-time programming and coordination of inputs also usually involve networks between manufacturing organizations and their various suppliers in order to streamline production and marketing (see, for example, Meyer 1993). Hardly any productive organization has therefore been left untouched by networks.

What are the characteristics of networks that make them so important for the information society and the kinds of organizations that are typical of the emerging technocapitalist era? The discussion below will consider four general features of networks that are particularly relevant to the information society and the economic sectors that are likely to be predominant in the twenty-first century.

Increasing Returns to Scale

A network's value increases exponentially as it expands by including new members or by increasing access. Thus, the more extensive a network becomes, the more value it is likely to acquire. This characteristic of networks is diametrically opposed to a fundamental principle of economics that has underlain virtually all market-based theories during the past three centuries. This is the notion that value results from scarcity. For most networks, in contrast, value results from abundance (of access or of members).

As the number of nodes or members in a network increases arithmetically, the value of the network may expand exponentially. During the incubation period when a network is being established, increases in value may be slow or nonexistent. Initially, expanding the network may be costly. However, once a certain scale is reached, the value of the network may increase exponentially, and may continue to rise until further expansion is constrained by external factors. These can be, for example, competition from rival networks or a saturation of demand for the products or services it offers. After the turning point to exponential growth is reached, the marginal cost of expansion or of adding new members may become negligible, leading to a self-supporting dynamic where all participants benefit simply by adding new members.

For many kinds of networks, and particularly those involving the information society, the more extensive a network becomes the more valuable it is likely to be (see, for example, Weinberger 2002; Carr 2001; Pal and Ray 2001; Shapiro and Varian 1998). This network characteristic is, for example, largely behind the efforts of Microsoft to "bundle" its basic operating software (Windows) with such products as word-processing software (Word) and free e-mail service (Hotmail). Those seemingly peripheral products or services have allowed Microsoft to extend its network of customers and applications considerably, thus increasing sales of its basic product (Windows). At the same time, by making its basic product available as a "platform" to other firms that create applications for many different uses (such as B2B transactions, Internet video products or financial risk management programs), it has further increased its scale and returns (see, for example, Tsang 2000). A similar effect may be experienced by universities and organizations that become "e-diploma" providers, which could be the next frontier of educational massification (see Suarez-Villa 2001). An expanding number of students would make their networks more valuable and, as more disciplines are added to their programs and grading processes are automated, their returns to scale might increase rapidly. Such networks might then be further expanded by including organizations that want their employees trained for certain skills. For these kinds of activities, there may in fact be no diseconomies of scale.

Dilution of Hierarchies

Another important aspect of networks is their tendency to dilute hierarchies, as access is opened up and established levels of control disappear. Dilution in this case means that the power or authority of some (or all) levels of a hierarchy may be diminished, as participants find themselves able to interact or transact more freely with one another. The loss of hierarchy may in turn increase the scale of a network and its returns, as participation and the freedom it provides attracts more members.

Organizational hierarchies are therefore often at odds with networks and their atomistic or fragmentary character (see Evans and Wurster 2000; Ashkenas et al 1995). In the kinds of organizations that are typical of technocapitalism, for example, hierarchies are often also at odds with the need to sustain innovation through networks. This happens because much innovation, whether of products or processes, needs to bring in knowledge and collaboration from other organizations. Firms in sectors such as biotechnology or software seldom possess internally all the talents and knowledge needed to be successful in innovation and research (see, for example, Suarez-Villa and Walrod 2003; Orsenigo et al 2001; Robbins-Roth 2000; Forrest and Martin 1992). Therefore, flattening or diluting the organizational hierarchy may be indispensable to allow such externally-based collaborations to occur.

One of the byproducts of the dilution of hierarchies through networks may be greater flexibility for participants. Such flexibility may allow participants to structure their internal operations to respond more quickly to changing conditions. In the firms and sectors that were typical of the post-Fordist phase of industrial capitalism, for example, networks often allowed some manufacturers to shift and choose between suppliers as demand for some products increased, and to structure just-in-time shipments to suit those changing demand conditions (see, for example, Meyer 1993). Such networks have also allowed many industrial firms to gain more flexibility by increasing competition between suppliers to achieve lower costs and better quality. As a result, firms have been able to target market niches selectively, based on price and quality features.

In some cases, however, the architecture of a network can provide an internal hierarchy of its own. Thus, even though the internal hierarchies of member organizations or firms may be diluted, an external or network-induced hierarchy may end up being established. This situation can occur, for example, by developing network nodes that selectively restrict flows to some members, or that create a division of labor within the network. Thus, flows of knowledge, supplies or sales may be more intensely directed toward some areas or members of the network, while flows to other areas are restricted. In other cases, barrier networks that segment entire parts or areas of the larger network from the other areas can also introduce a hierarchy within networks (see, for example, Suarez-Villa et al 1992; Suarez-Villa 1998). Even in such cases, a dilution of the internal hierarchies of participants is bound to occur, although they may end up being traded off with external or network-induced hierarchies.

Disequilibrium and Change

Networks can generate change on a systematic or continuous basis as they expand (or contract), interlink, co-evolve and incorporate (or dislodge) participants. By any interpretation, change that involves rapid growth (or rapid contraction) is usually disequilibrating. Such imbalance is often typical of many sectors, where new organizations are created while others fail, grow larger or contract.

The disequilibrium or state of imbalance caused by the characteristic fluidity of networks is often at odds with the theoretical notions of market equilibrium espoused by mainstream economics. If anything, the natural state of most market activities tends toward disequilibrium most of the time. Growth typically involves imbalance, and its dynamics seldom add up to any sort of equilibrium condition, even when a generous dose of imagination can be summoned. In cases where the intensity of interactions or transactions decline, the more common systemic state also often tends toward disequilibrium. At best, what can be said is that periods of slow change may occur, but this is usually a very temporary condition. Thus, the reality of most networks defies the standard economic assumption of transactions or exchange having a natural tendency toward some sort of equilibrium state.

Disequilibrium and change are a common characteristic of inter-organizational networks involving most any kind of activity (see, for example, Galambos and Sewell 1996; Fischer et al 1999; Suarez-Villa 2002, 1998). Members of a network often compete for sales and market influence both outside and within the network, coming up with new products aimed at overcoming the advantages of rivals. The diversity of competitive strategies can introduce a great deal of uncertainty in a network's dynamic, as some organizations grow larger while others fail. Similarly, competing networks typically try to pull away members from one another in order to increase their scale and returns. Switching from one network to another introduces uncertainty, as some networks find their scale (and returns) declining while others expand. Uncertainty in such cases can be a major contributor to disequilibrium, particularly when major fluctuations in network scale occur over a short period of time. The latter has, for example, been largely responsible for the economic troubles of many telecommunication firms, where intense competition for customers can lead to reductions in network scale, thereby lowering returns as the costs of serving each remaining customer increase.

For the kinds of organizations that are typical of the emerging technocapitalist era, network-induced disequilibrium and change seem to be a common feature of their operation. Networks involving research alliances are often the source of new ideas and projects that can upset a firm's strategy. Promising discoveries found through (or helped by) such networks can end up becoming a major internal priority, thereby displacing other projects or eliminating them altogether. Those networks can also induce firms to be acquired or to merge with others, if their research and production objectives converge or their lack of resources makes it necessary to consolidate their activities. In biotechnology, for example, inter-firm research networks are often an important source of change (see Orsenigo et al 2001; Robbins-Roth 2000; Liebeskind et al 1996). In the open software movement involving Linux, where thousands of specialists all over the world donate their time freely, all the innovations implemented occur through the network and the collaborative opportunities it provides (Wayner 2000). Moreover, by making the Linux software system freely available through the Web, the network opens itself to the continuous innovation of the software, provided through the usage or the tinkering of individual programmers. Such a state of continuous innovation can also be thought of as a form of continuous disequilibrium or change, which is vital for improving the software.

Decentralization and Devolution

Networks can promote decentralization within and between organizations by fragmenting decision-making and the means of control. Centralized decision-making may thus end up being split up and parceled to various members of a network, thereby spreading risks and responsibility. As a result, a network's architecture may develop nodes that offset one another's power. This distributional effect is a common feature of many networks, particularly when a division of functions and responsibilities among the various nodes can be clearly established.

Devolution is another common characteristic of many networks. This can result in greater autonomy for some participants, if authority is loosened up enough to allow independent action. Autonomy can lead to greater initiative by the nodes or participants of the network, and may be desirable when local or limited action is a desirable objective. This effect can also end up decomposing the lines of control to dilute hierarchies and boundaries within a firm or group of firms.

In the kinds of organizations that are typical of both technocapitalism and the information society, for example, groups are often established that operate outside the established lines of authority and control of an organization. Such groups are then usually left free to network with other components, inside or outside the firm. This sort of arrangement has led to many technological breakthroughs. At Sun Microsystems, for example, the Java software was created when a group of engineers was allowed to set up their own autonomous unit outside the firm's direct control, to experiment on their own and network with other firms (see Buderi 2000). Similarly, Intel started designing and making state-of-the-art microprocessors when it allowed a small group of engineers to deviate from its core business to experiment on their own. The biopharmaceutical corporation GlaxoSmithKline split its research unit into eight centers to boost its development of new medications, leaving each one to compete for resources within and outside the firm. The results obtained through this strategy have boosted its innovative capabilities by producing a new series of medications that incorporate new discoveries in biotechnology.

Spinning off units as independent organizations, a common practice in many large technology firms, can also be induced by the need for greater devolution of authority. This can allow the spun off units to connect with external networks that can provide new ideas, knowledge and methods. Decentralization and devolution are perhaps most intense in e-commerce networks, where individual participants retain complete control over their decisions to view, compare or purchase among all the various products and services available. In general, it can be said that the devolution and decentralization provided by networks is a desirable effect for many organizations, which might otherwise endure losses or find themselves stifled in the search for new products and services.

Deconstructing the Organization

The deconstruction of organizations is largely a product of the new organizational culture of technocapitalism, which is making innovation the top priority of many activities (see Suarez-Villa 2000, chapter 2). The emphasis on technological innovation and, more specifically, the need to sustain continuous (or systematized) innovation is placing enormous stresses on the organizational structure of business firms, changing many characteristics that had previously been taken for granted (see Suarez-Villa and Walrod 2003). The rising influence of networks is in part a product of this phenomenon, since many firms are no longer able to rely only on their own resources to sustain the rapid pace of innovation needed to thrive and survive (Suarez-Villa 1998, 2002; Orsenigo et al 2001; Robbins-Roth 2000; Galambos and Sewell 1996).

The rise of the information society is also a major support of the deconstruction of organizations, mainly because of the widespread access that it allowed to knowledge and information. In this regard, the rapid diffusion of knowledge and information has been a major support of organizational change. Knowledge about organizations, management, and organizational cultures are more widespread and easily available than ever before in human history, leading to a substantial amount of experimentation and creativity on most any aspect of organizational structuring and design. Networking has also been very much at the root of the rapid diffusion of organizational knowledge.

The term deconstruction here refers to the dismantling of various important features that were previously a fixture of many business organizations, and their replacement by new structures that are essential to sustain the new priorities of corporate life. One of those changes, mentioned previously, is the reliance on networks to seek the resources needed to sustain innovation. This is now a standard practice in the most innovative sectors of our time, such as biotechnology, software, genomics, bioinformatics and nanotechnology. Another change is the dismantling of internal hierarchies to facilitate the sort of interaction and cross-functional action needed to sustain continuous innovation (see, for example, Evans and Wurster 2000; Ashkenas et al 1995). A third type is the dismantling of lines of authority and control to encourage autonomous initiative by those who are most likely to come up with new discoveries (see Buderi 2000; Clarke and Clegg 1998). One result of this change is the setting up of autonomous organizations or the "spinning off" of entirely new firms, which can be more effective at targeting innovation. Another means of deconstruction is the new strategies that are being used to target and support continuous innovation, such as capturing the non-rival benefits of new ideas discovered by other firms, and the now more frequent practice of "spinning in" highly innovative (and usually small) firms that have valuable patents or innovations of their own (see, for example, Bunnell 2000; Rivette and Kline 2000; Kim and Mauborgne 1999). All of these changes, working in concert or in various isolated ways, are contributing to deconstruct many of our previous notions of how organizations work.

These changes are important to any consideration of the information society, because they are likely to spread to most (if not all) sectors and activities, given the increasing importance of innovation as a generator of value for most any type of business. Indeed, most professional publications dealing with business organizations today are emphasizing the need to innovate systematically across all business activities, regardless of sector. Professional business magazines, such as Business 2.0, Fast Company, Strategy+Business, Smart Company or Red Herring, which (among others) are representative of the mindset fostered by deconstruction, endlessly tout the importance of innovating in most every area of business, regardless of focus, sector or activity. An increasing number of books on management methods and practices is also taking notice of this unfolding phenomenon (see, for example, DiMaggio 2001; Buderi 2000; Clarke and Clegg 1998; Scase 1999; von Krogh et al 1998; Thrift 1998; McKenna 1997; Pisano 1997).

Historical Perspective

Some historical perspective on the evolution of organizational characteristics may help our understanding of what deconstruction involves. Deconstruction is a very recent phenomenon, which coincides with the emergence of the information society. Although it is impossible to place a precise date on its emergence, the late 1990s seem to be the time when various features associated with it started to become noticeable. Even today, the full parameters of deconstruction are not known. However, a number of characteristics that contrast with previously established practices can be cited.

Table 1 provides an overview of the contrasts between three eras of market-driven evolution. In the emerging technocapitalist era, the overwhelming emphasis on innovation and creativity has led to much emphasis on research and development (R&D). The result is a new type of firm that might be called experimental, mainly because it relies so much on experimentation through research, creativity, knowledge and experience. This new kind of organization could not have emerged without the information society and the rapid diffusion of knowledge that it fostered.

The experimental organization of technocapitalism is one highly focused on continuous (or systematic) innovation. However, in many other aspects its experimental (or fluid) character is also revealed. For example, the traditional boundaries between departments in many of the firms that can be considered typical of technocapitalism are either fluid or do not exist. Cross-functional fluidity (between departments) has therefore led to major changes in the way internal control and responsibility are administered. As a result, hierarchies in many of those organizations tend to be flat or at least very shallow, compared to the hierarchical organization of the firms that were typical of industrial capitalism (see, for example, Crainer 2000; Tolliday 1998).

Table 1. Organizational eras and characteristics


Predominant Enterprise Organizational Tactical Main Vital technologies

Middle Fordist Mass Production Vertical Production Electricity,

Industrial production efficiency integration labor, raw petrochemicals,

Capitalism materials, telephony

(1910s-1960s) capital

Late Post-Fordist Flexible Production Vertical Skilled Computers,

Industrial production programming decomposition labor, raw electronics,

Capitalism materials plastics


Technocapitalism Experimental Research Continuous Deconstruction Creativity, Biotechnology,

(1990s-?) and innovation knowledge software,

development digital networks,

Taking experimentation to its limits, it is not surprising that many firms typical of technocapitalism have become solely dedicated to research and innovation, leaving production and marketing to other organizations. For example, in biotechnology, genomics firms have tended solely engaged in gene-decoding and patenting activities (see Spengler 2000; Brown 2000). Testing and production of new medications based on their research is therefore being left to other firms that are highly specialized in those endeavors. Similarly, in the advanced semiconductor sector, the tendency now is for the most innovative firms to devote themselves solely to research and design, and to leave production to other firms. In many cases, these kinds of firms have become veritable inventor-firms, owned by the researchers who hold the most patents or produce the most value for the organization.

It has not been too long since flexible production, the main emphasis of the firms that were typical of late (or post-Fordist) industrial capitalism, became a popular term among management specialists. However, flexible production, with its emphasis on production and coordination, seems far removed from the kinds of organizations that are representative of technocapitalism. This is not to say that flexible production does not continue in many firms in diverse sectors. However, it is clear that the kinds of firms that hold the greatest promise for the future (because their discoveries may hold the most value), are very different in their orientation and culture. Production was itself largely decomposed during late industrial capitalism, as transaction costs declined and technical expertise spread, leading to the outsourcing of tasks that were previously held internally by many firms. That development involved a radical departure from the practices of the firms that were typical of middle (or Fordist) industrial capitalism, with their emphasis on mass production and the vertical integration of most every major aspect linked to their production processes (see, for example, Crainer 2000; Tolliday 1998).

Network-induced Deconstruction

Networks are a major influence on the deconstruction of organizations. Their most important effect involves the intensification of external relations and exchanges that are sustained by all the advances in information technology. They can, for example, provide access to the kinds of resources that sustain innovation, involving the exchange of materials, personnel, knowledge or information needed for research and production. The software platforms that can sustain research unit-to-research unit (R2R) and business-to-business (B2B) links are an example of the means being developed to support those exchanges (see, for example, Suarez-Villa 2002).

Network-induced relations are making it possible to become more specialized in research. Such specialization can induce organizations to outsource activities like production, marketing or distribution to other firms. This single-minded focus on research and discovery is a reflection of the higher value attributed to those activities, in comparison with, say, production and marketing. This development is in sharp contrast with the benign neglect accorded most research units in the glory days of industrial capitalism, when production was the most important preoccupation of firms. Then, the firms that had any research units at all typically relegated them to peripheral roles, often isolated from the main focus of the organization (see, for example, Reich 1985).

For organizations that are production-oriented, network relations can make it easier for them to specialize in the operations that they can do best (quality and cost-wise), and that are most profitable. In contrast with the old days of vertical integration, when many firms sought to internalize most any activity related to production, many manufacturers today find it all too easy to specialize in a few activities and externalize others. As a result, the value chain in many sectors is being rapidly broken up among many different firms that become more specialized in specific activities or niches. Internet-based networks have accelerated this phenomenon considerably, by making it much easier to find new suppliers and coordinate activities or deliveries with them.

A second effect of network-induced relations is the reduction of transaction costs. Such reductions are to a large extent driven by the widespread use of the Internet and all of its support platforms for business exchange. Internet exchanges now make it possible, for example, to circulate an order instantaneously to a galaxy of potential suppliers, who can then bid on it. The reduction of transaction costs in turn makes it easier to externalize activities, by subcontracting them to firms that are specialized and can produce with lower costs (see, for example, Evans and Wurster 2000). In many cases, those firms can add value (in addition to providing lower cost) by producing higher quality products.

Lowering barriers to entry in many activities is another network-induced effect. Many of the barriers to entry that once protected large companies are disappearing. An effect of this phenomenon is that it is allowing many small firms to thrive, by providing them with access to orders and markets that would not have been feasible before. Moving away from vertical integration becomes easier when the value chain can be broken up among more specialized firms. This dynamic can reinforce deconstruction, by making it both easier and economical to outsource internal activities to other firms. The outsourcing firm can then concentrate on the areas it considers to be of greater value, leaving the other (less valuable) activities to firms that might be better able to cope with them.

Speed is a network-induced effect that has gained importance with the spread of the Internet and of software platforms involving inter-organizational transactions. For the kinds of firms that are typical of the technocapitalist era, parallel experimentation and testing are now becoming common when they join alliances (see Suarez-Villa 2002). Such tactics can cut down the time needed to innovative considerably, making it possible to sustain continuous innovation. However, increasing speed is also benefiting firms that are more representative of industrial capitalism, in both old and new technology sectors. In traditional manufacturing sectors, such as automobiles and consumer appliances, it is now possible to go from ideas to products in a matter of months. Networking with suppliers has made this possible by obtaining feedback quickly on a new idea or potential new product. Also, as suppliers become more involved in product design, it is possible for them to work out their production programs more quickly.

Increasing competition is yet another network-induced effect supporting deconstruction. The spread of information on a potential new product is making it possible for many firms to bid on its specifications. Competition, in turn, induces firms to focus on their more valuable activities in order to increase profitability and gain favor with investors and shareholders. The Internet has also made it possible for many firms to monitor competitors' activities, thus increasing the likelihood of counter-strategies and imitation. It is possible for some firms, for example, to monitor other companies' production lines over the Internet to check orders and see when supplies are needed or demand is likely to change. In research and development (R&D), predatory actions are also being made more feasible as firms scour networks for ideas and discoveries, leading to second-mover strategies that cut down the lead time between the introduction of a new product and that of its rivals (see Suarez-Villa 2000, chapter 2). The result is increasing competition even in activities that previously were more isolated from the rough-and-tumble world of marketing.

All of these network-induced phenomena are part and parcel of the information technology revolution. Without the easy access to knowledge and information that is at the heart of the information society of our time, they could not have the widespread effect now being felt by many organizations. The network-induced effects considered in this section are therefore becoming practically unavoidable for any networked organization engaged in competition or vulnerable to the pressures introduced by the globalization of markets and technology.


The rise of the information society and of its underlying phenomenon, technocapitalism, is one of the most distinctive features of our time. Never before has technology been as closely tied to market processes as it is today. The imperative of technological innovation now dictates organizational agendas as never before, based on such intangibles as knowledge and creativity.

Networks are perhaps the most important element of the information society. They are also vital for the kinds of organizations that are representative of technocapitalism, and that drive technological innovation. At no time in human history have networks have become as important as they are today. Most every aspect of work is touched by them, and the access they provide often determines how effective organizations and firms become. Networks have also become a vital element for sustaining technological innovation in the most advanced sectors of our time, such as biotechnology, software design, nanotechnology, computing and bioinformatics.

The organizations that support those technologically advanced sectors and activities are substantially different from those that were typical of previous eras, such as early twentieth century industrial capitalism or late industrial capitalism. Networks and the imperative need to sustain technological innovation are inducing a deconstruction of organizations, introducing greater fluidity and flexibility than was heretofore possible. The networked organizations that are commonly found today in the most technologically advanced sectors and activities are therefore becoming deconstructed organizations.

Several questions that perhaps deserve future attention come to mind as one observes the effects of networks on organizations in the information society. One of them is the extent to which the deconstruction of organizations is a sustainable phenomenon. Can the deconstructed organizations that are so typical of the most technologically advanced sectors and activities of our time be maintained, or will they be a short-lived effect of a transition process involving the emergence of technocapitalism? Fluid and flexible organizational forms are also inherently fragile, and it may be too soon to take it for granted that this kind of organizational form spawned by the information society and its networks may endure.

A second question that can be raised deals with the disparities that arise if the globalization of technology creates a "winner-takes-all" phenomenon in the most technologically advanced sectors and activities. Deconstructed organizations and firms that endure the inherent instability of global competition and, by luck or strategy (or both), manage to dominate their sector may become more powerful than national governments or even international organizations. Such a situation would most likely lead to their monopoly power over the networks they control. A situation in biotechnology similar to, say, Microsoft's in software, would have major implications for health care and nutrition around the world, as entire populations find themselves with little choice and no voice on one of the most important aspects of human survival.

Finally, it is becoming obvious that networks and the deconstructed organizations they foster are vital for the distribution of the most important intangibles of our time. Creativity and knowledge cannot be reproduced without organizations and networks that provide a strongly supportive culture. The times of the lone inventor are long past, given that most any new technological discovery today requires the kind of resources and support that only an organization or firm can provide. This "platform" of organizations and networks is vital for tapping and renewing the talents that are needed for technological innovation. An issue in this regard is whether those intangibles will become mere commodities, much as raw materials or factory labor were during the times of industrial capitalism.

It is hoped that this contribution may stimulate others to look into the many aspects of technocapitalism and the information technology revolution that is sweeping through our time. This contribution has merely tried to bring attention to some aspects that are thought to be crucial for understanding these two linked phenomena and their product, the information society. There are many other aspects that need to be considered if we are to have a fuller understanding of this emerging new era. Please feel free to contribute your thoughts and comments on this contribution and the ideas it provides.


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Luis Suarez-Villa
University of California
School of Social Ecology
Irvine, California 92697-7075, US
e-mail: LSUAREZ@uci.edu
IFRD World Forum on the Information Society
Luis Suarez-Villa is Professor of Social Ecology and of Planning, Policy and Design at the University of California, Irvine. He specializes in technology and innovation, and their relationship with socioeconomic development and regional analysis. Dr. Suarez-Villa has undertaken research in his areas of interest in the United States, Western Europe, Asia and Latin America. He has twice been awarded Fulbright fellowships and has received numerous awards from academic organizations for his research.
Dr. Suarez-Villa's first university diploma was in architecture and architectural engineering, but his academic interests subsequently evolved into the fields of economics, public policy, planning, regional science and sociology. He received his doctorate from Cornell University and has been a faculty member at the University of California since 1982.