Information Revolution Vs. Industrial Revolution

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INFORMATION REVOLUTION VS. INDUSTRIAL REVOLUTION

As e-commerce became all the rage in the late 1990s and as the Internet, World Wide Web, and other information technologies rapidly transformed the economic and social environment, many analysts, journalists, and scholars took the time to reflect upon the current transformations and breakthroughs and situate them in a broad, historical context. The fruit of these labors was the conception of the current era as the Information Revolution, akin in its historical importance and impact to previous economic revolutions, particularly the Industrial Revolution.

The attempts to theorize a new economic and social era—particularly one whose effects have yet to be fully realized—inevitably generated widely disparate definitions and characteristics of the Information Revolution, not to mention predictions, prescriptions, and levels of enthusiasm. Several key questions arise: Does the Information Revolution in fact constitute a historical epoch on a par with previous revolutionary transitions? What are the comparative features and effects of the Information Revolution and the Industrial Revolution? How did the Industrial Revolution alter previously existing conceptions of economics, social organization, the nature of work, cultural patterns, and so on? What needs to be done to either take advantage of the benefits of the Information Revolution, or—if one is of a different theoretical persuasion—what steps must be taken to mitigate its worst effects?

Since even the most enthusiastic proponents of the Information Revolution agreed that, in the early 21st century, the new era was still in its infancy, it remained to be seen whether the Information Revolution would truly revolutionize society on a scale comparable with the Industrial Revolution, which produced greater change in just two centuries than occurred in the rest of human history combined.

LOCATING REVOLUTIONS

The initial step in attempting to compare social epochs is to locate them historically and sketch a broad outline of what they entailed. At the most basic level, the Industrial Revolution calls to mind a succession of breakthrough inventions: the steam engine, the cotton gin, railroads, and so on. More broadly, the Industrial Revolution refers to an epoch that saw economic production shift from small-scale, relatively localized production based on individual skills and craftsmanship by artisans to large-scale, centralized production incorporating heavy, mechanized machinery and mass numbers of wage workers. In addition, the Industrial Revolution shifted the center of economic activity from agriculture to industry and manufacturing. Thus, the Industrial Revolution was marked by a series of sweeping social and economic transformations that upended existing paradigms.

As economies grew and became more integrated, the Industrial Revolution was generally marked by successive leading economic sectors. Viewed broadly, the Industrial Revolution can be broken into three major phases. The first phase, in the late 18th and early 19th centuries, saw the development of textiles, coal, and iron into modern industries. The second occurred in the mid-19th century, with the opening of new territories to economic development and the overhauling of transportation via the large-scale implementation of railroad systems, aided by developments such as the steam engine. The third epoch came in the early 20th century, when the development of the mass-factory and industrial machinery transformed the industrial and social landscape. Through the first half of the 20th century, the economic center was dominated by science-based technologies, particularly those related to steel, chemicals, the internal combustion engine, and electricity, such as automotive technologies and petroleum-based industries.

While each of these epochs ushered in sweeping changes and innovations, they also produced profound social disruptions, as individuals and groups readjusted their places in society, often resulting in great upheaval. Relatedly, each of these phases was marked by booming economic growth followed by periods of sharp decline as these technologies and processes took root in society, as the social dislocations played themselves out, and as the growth opportunities inherent in the new technologies exhausted themselves.

Like the Industrial Revolution and most historical periods, the Information Revolution wasn't as abrupt a cataclysm as the name might suggest. Rather, what became known as the Information Revolution, although largely associated with the closing decades of the 20th century, had direct roots in the thick of the Industrial Age. The most direct forebears to the Information Revolution appeared around World War II in the 1940s. This period was marked by heavy government investment in new technologies, particularly those of use by the military for the war effort. Among these technologies were electronics and computers, which shortly after the war began to be applied more broadly in the business world. By the late 20th century, the leading economic sectors, particularly in the United States, were those involving electronics, computers, high technology, telecommunications, and related service sectors. In the process, these technologies ushered in the information economy, centered on knowledge-based industries.

TECHNOLOGY

Like previous economic revolutions, the Information Revolution is marked most noticeably by a series of technological breakthroughs. In this case, the developments in electronics and computer technologies, along with dramatic changes in telecommunications, provided the basis for economic change. One of the central dates for the Information Revolution was 1959, when two scientists working separately—Jack Kilby at Texas Instruments and Robert Noyce at Fairchild Semiconductor—arrived almost simultaneously at the invention of the silicon chip, the device that inscribes electronic information in a microscopic space, allowing for the mass production—and mass dissemination—of computers. With the vastly enhanced powers of memory, calculation, and control placed in a microscopic chip, computers were poised to assume a central role in economic life. Following this breakthrough, computers came to constitute the central infrastructure of everything from office telephone networks to transportation control systems to industrial production facilities, setting the stage for further information-breakthroughs once the vastly enhanced communication powers of the Internet were unleashed.

Of course, one of the preeminent—and least expected—hallmarks of the Information Revolution is electronic commerce. E-commerce, in theory, takes the potential of the information economy to its logical conclusion by propelling commercial activity into the borderless world of hyperspace, where transactions for everything from groceries to industrial equipment take place with little regard for geography and with nearly instantaneous satisfaction of commercial wants. Of course, as of the early 2000s e-commerce still had a long way to go before turning this theory into a smooth reality; e-commerce models were still in the gestation process, and no clear paradigm had emerged to set the stage for the explosive e-commerce growth most analysts expected was on the way. But even in its crude earliest versions, e-commerce already altered conceptions of business strategy and relationships, and on the consumer side e-commerce overhauled customer expectations of speed and convenience, pushing the field of business competition to new grounds.

ECONOMICS

Throughout the Industrial Revolution, there was a common expectation of more or less continued economic growth, a concept largely foreign to previous epochs in which subsistence and extremely modest growth were the norm. Average annual growth rates throughout the industrial world during this period, particularly in the United States, rose from virtually nonexistent to about 2 percent—leading to a doubling of the average standard of living every 36 years.

The engine of this rapid growth was technological innovation. New technologies provided new avenues for investment and growth; capital flowed heavily from one technology to another, and often from one location to another in accordance with technological developments. Innovations—be they new products, industrial processes, communications, or transportations—generally proved a boon to certain economic sectors into which investment capital flowed. Over time, the applications and effects of those innovations and investments proliferated and spread throughout the economy, but with inevitably diminishing returns for the capital investment; eventually, capital must seek out new technologies and new avenues for investment.

By virtue of annual growth rates, if one were to locate the true onset of the Information Revolution immediately following the Cold War with the dissemination of the Internet to critical mass, one would find similar characteristics. For example, the economic boom of the 1990s saw annual growth rates in the United States leap above 3 percent for the first time in decades, simultaneously keeping inflation in check and generating healthy profits for continued investment. The slowdown in the U.S. economy of the early 2000s gave pause to some commentators, but it remained to be seen how much of a setback that downturn would prove to be; while some skeptics argued that the slowdown proved that the 1990s boom was an anomaly based on speculative bubbles, others argued that the recession was a mere market adjustment amidst a profoundly new economic era.

The Information Revolution also features a new era of economic globalization as geography gradually disappears as a barrier to economic activity. The world economy has undergone enormous globalization processes before, particularly in the late 19th and early 20th centuries, but the process was continually ebbing and flowing with the winds of political and social change. The level of globalization fostered by the Information Revolution, however, is altogether unprecedented in human history, as the speed with which information, transactions, and capital can travel virtually anywhere in the world render distance almost obsolete, at least in certain key economic sectors.

SOCIAL RELATIONS, WORK, AND DEMOGRAPHICS

The Industrial Revolution changed where and how we live. For instance, while the early stages of the Industrial Revolution gave birth to the modern metropolis—huge cities acting as economic and social centers—the later stages of the Industrial Revolution, such as that involving the development of the internal combustion engine, gave rise to suburbs, highways, and dramatically increased personal mobility. Thus, that revolution completely overhauled both the geography of the industrial countries and the way social life was organized. Whole communities were destroyed and built as a direct result of these economic breakthroughs—often in just a matter of decades.

It was unclear just what the overall effects of the Information Revolution would be in changing social relationships and geography. The creation of the information superhighway, for instance, could conceivably have effects on demographics as dramatic as—but very different in character from—those caused by the Industrial Revolution. For instance, with geographic location diminishing in importance to the production process, people may be freer to live in remote locations; at the least, people may be less bound by their work lives to certain locations, potentially leading to vastly new kinds of communities and other social organizations.

In terms of social relationships and relationships to the production process, the Information Revolution has indeed led to radical transformations. The mass-scale, centralized-factory paradigm of the Industrial Revolution featured a production process in which individual workers were relatively "de-skilled" compared to their predecessors, and had only to perform minute functions requiring little training and with little overall understanding of the production process as a whole. As a result, companies were able to produce at vastly accelerated rates while keeping costs down, leading to tremendous profits that, in boom times, afforded them the option of paying higher wages in order to quell labor unrest. On the one hand, this created an economic environment in which centralized, hierarchical managerial bureaucracies were essential to organize production and maintain control over the production process. On the other hand, the centralized factory created an atmosphere in which it was relatively easy for workers to organize themselves for greater remuneration for their labors.

In comparison, the Information Revolution presents something of a paradox. With computers, information technology, and high-tech communication systems dominating the business environment, production can be scattered across diverse locations and coordinated at high speed with great precision. This allows businesses to concentrate their particular production facilities where they are optimally efficient—for example, where labor costs and regulatory red tape are minimal—leading to greater profit margins. Moreover, the movement toward computer controls creates a less egalitarian environment for wage workers than the mass assembly-line model, since it creates a hierarchical advantage for those highly educated workers with technical skills, and thus decision-making could potentially be decentralized and located at the various production facilities. At the same time, however, despite the geographical dispersion of production and the more nuanced worker relationships, information systems give top management greater direct control over the production process. By systematizing facilities via computers that provide reliable information across wide networks, top executives have a diminished need for middle-level managers, leading to the wave of downsizing and restructuring that characterized the 1980s and 1990s.

Moreover, the geographical dispersal of production facilities and the enhanced means of computer controls overhauled the relationships between workers and the nature of work itself. In the information economy, work is much more flexible, favoring more fluid schedules and multitasking, in which workers are expected to perform several jobs more or less simultaneously and respond to immediate demands as they arise rather than coordinate their work solely by the clock. This radical restructuring of work in the late 20th and early 21st centuries had a profound impact on the role of organized labor in society. Flexible schedules and dispersed production facilities render the traditional models of labor organizing extremely difficult, and by the early 21st century no dominant model of labor organization had emerged to suit the information economy.

The transformation of work was potentially even more dramatic than that produced by the Industrial Revolution, given that, in the information economy, nearly every profession was likely to undergo radical alteration as computer systems and the Internet infiltrate the farthest reaches of the economy. In the Industrial Revolution, many knowledge-based occupations, such as accounting, were relatively unaffected qualitatively by the sweeping changes produced by industrial development. The Information Revolution was unlikely to leave many layers of work untouched, as everyone from knowledge-intensive workers to manual laborers to government officials would likely see the routines they came to know swept aside in favor of more computer-intensive processes.

Industrial parts producers, for example, are accustomed to working an assembly line in more or less consistent fashion, building products destined for distribution via long-established logistics partners. With information technology leading to supply chain management, just-in-time manufacturing, and mass customization, production processes were being retooled to facilitate greater flexibility in production scheduling, while distribution and transactions were increasingly channeled through handfuls of industry-specific Internet-based marketplaces. As a result, hiring, training, scheduling, production organization, sales, and marketing were unlikely to closely resemble their traditional Industrial Revolution models.

CONTINUING DEBATES

At the theoretical level, there were still radically divergent takes on the Information Revolution and what it means. Enthusiasts, such as Francis Fukuyama, proclaim that we have entered a radical new age full of sweeping transformations and profound economic, social, and political possibilities. Fukuyama argued that the wealth of information at consumers' fingertips—combined with the ability to seek out and shop for exactly what they want without regard to borders and other restrictions—would lead to a market-led democratization that went far beyond the possibilities of the welfare-state democracies of the Industrial Revolution. Fukuyama pursues this argument to its conclusion, insisting that private companies would increasingly assume many of the duties previously performed by governments. He argues that corporations powered by information technology and responding to the speed of the market are much less cumbersome and can more easily and flexibly respond to demand than can governments. Moreover, while Fukuyama sees the Industrial Revolution as massively disruptive of the traditional family unit, he argues that the Information Revolution holds possibilities of reconstructing the nuclear family as a central social network.

One of the best-known theorists of the Information Revolution was Manuel Castells, professor of sociology and planning at the University of California at Berkeley. Castells presented a more nuanced interpretation of the sweeping changes wrought by information technology than either the hyper-enthusiasts or the alarmists. While Castells argues against critics' claims that the Information Revolution was producing a numbing glut of information, he points out that information technology was not the panacea for global ills that it was sometimes painted to be. For instance, according to Castells, proponents looking to information technologies as the preeminent tool for development and democratization around the world misjudge both the severity of current poverty and disenfranchisement and the likely effects that rapid IT-led globalization would have on those peoples.

Castells argued that as powerful new information technologies are grafted onto and reshape the existing economic order, their development will produce not only vast new concentrations of wealth, but rising inequality, social exclusion, and psychological bewilderment on a global scale. Castells sees the technology-centered vision, in which social ills are fixed via technological means, as fundamentally flawed. While maintaining great faith in the powers of Enlightenment values of reason and science to propel humankind to a better world, he cautioned that, "there is an extraordinary gap between our technological overdevelopment and our social underdevelopment."

For instance, Castells argues that the social benefits inherent in these new technologies will not automatically spread to those peoples most in need. On the contrary, Castells sees the trajectory of the technology and their effects as largely dependent on the nature of the societies and institutions implementing them. Authoritarian, exclusionary, inegalitarian societies, according to Castells, will likely use information age technologies as tools to consolidate power, expand social divisions and inequality, and increase the level of exclusion. More egalitarian societies, on the other hand, were more likely to use information technologies for democratic, egalitarian purposes. In other words, information technologies aren't inherently positive or negative; rather they are more or less neutral tools, the effects of which depend on those in a position to establish a framework for their application.