Information, Technology, and Innovation: Resources for Growth in a Connected World

CHAPTER 24

The Internet and Other Networks

The Internet is both an engineering marvel, as much at the management layer as in its silicon and glass, and a powerful precursor to many of the possibilities we examine in this book: Whether we consider eBay, or Web video, or globally coordinated social protest, the way the Internet was designed and built establishes the limits of possibility for much of the modern world.

History has been made by a long series of networks. The Nile, the Euphrates, the Ruhr. England's navy and colonies. The railroads. Wires for electricity and for communications. Eisenhower's interstate highways. In the United States, first three then an explosion of television networks. FedEx's air freight system. Wal-Mart's trucks, marketing and supply-chain algorithms, and distribution centers.

These networks were built at particular times for particular purposes: The interstates could not haul rail cars and in fact helped drive U.S. passenger rail essentially out of business. Electric wires could not carry information. The scale of capital investment often made network owners, whether in the public or private sectors, expand into adjoining economic niches: Railroads often owned hotels, while AT&T not only completed telephone calls, it made both the customer premise and capital equipment necessary to do so. These complementarities were typically physical, and logical extensions of the core service.

These networks had clearly visible hubs: London for the British Empire, ...