“Small is the new big” and large organisations should ask themselves whether their size still affords them the benefits of the past in a world that is dominated by technological change, according to Glenn Reynolds, University of Tennessee law professor, and the first guest speaker in the Cayman Financial Review’s new speaker series.
Mr. Reynolds presented how trends in technology empower ordinary people, a case he makes in his book “An Army of Davids: How Markets and Technology Empower Ordinary People to Beat Big Media, Big Government, and Other Goliaths”.
Mr. Reynolds offered examples of how the Internet and social media have driven down the cost of communicating and access to information in fields as diverse as micro-brewing, music, movie making and blogging.
“What we are talking about here are some trends in technology and how they interact with trends in the economy and other things with the basic effect of empowering individuals and smaller groups of people to do the kind of things that you used to have only with larger groups of people,” he said.
Himself a prolific blogger, with his website instapundit.com one of the most widely read political blogs in the US, Mr. Reynolds argued freedom of the press is no longer limited by the cost of the printing press. Similar cost effects are prevalent in the music industry and in other niche businesses, which, solely based on the Internet, could not have existed previously.
“Over and over in all kinds of areas we have seen a real see change brought about by technology. Where the 19th and 20th centuries were dominated by the need for economies of scale and scope that really only big organisations could have, we now have a situation where in fact it is often advantageous not to be big,” he said.
As small organisations and individuals are less complex and have fewer of the complications inherent in large organisations, the availability of new information technologies should lead large organisations to question whether many of their functions could not be stripped away by individuals operating on a smaller scale. In addition, Mr Reynolds said many of the arguments in favour of a larger size, such as reputation, are often overrated.
Applying this analysis to his personal area of expertise, legal education, he said he believes the current approach driven by the big law firm model will be gradually replaced with a more entrepreneurial skills-based and client-centred approach.
Even in the field of politics, where political parties used to be able to do what small individuals could not do, the top-down approach does no longer work as well and more horizontal politics eliminating the middle man are coming to the fore, he said. The Tea Party or Occupy Wall Street movements are examples of like-minded people getting together on like-minded subjects rather than forming a large coalition.
The benefits of these movements are that a lot of people may suddenly get involved in politics and work toward a common objective before they disperse again. The lack of a fixed presence also makes these movements hard to corrupt, Mr. Reynolds said.
But while the use of social media and new information technology “is the way to go if you want a massive explosion of energy and creativity”, the downside is that “people can be lured in by excitement rather than by what is important” and “often you don’t have a lot of follow through and if there is nobody with enough power to corrupt, there is also nobody with enough power to be accountable for what happened”, he said.
Related Videos
