Few innovations have the capability of changing the entire competitive business environment. During our lifetimes, only the Internet has the potential to affect commerce as much as the nineteenth-century railroad did. “The impact of the rail network was like nothing the United States had ever seen before or indeed has seen since.”[2] To understand the long-term business potential of the Internet, it is first helpful to understand the railroad.
[2] Alfred D. Chandler and Richard S. Tedlow, The Coming of Managerial Capitalism: A Casebook on the History of American Economic Institutions (Richard D. Irwin, 1985).
Railroad (1825–1890) | Internet (1969–Present) | |
---|---|---|
New infrastructure | First water-independent transportation infrastructure | First global public information infrastructure |
Original purpose (not commerce) | Passenger traffic; military | Military and civil defense; research |
Importance of standards | Width of tracks (gauge) | Network and communications protocols (TCP/IP) |
New security challenges | Railway police hired to manage new crimes | Security protocols and standards |
Source of innovation | Steel production, accounting, logistics | Software, networking, fiber optics |
Accelerate fundamental economic trends | Industrial age (key enabler: steam engine) | Information age (key enabler: computer) |