volatility

This page looks at volatility, change and innovation in the digital economy.

     an exceptional era?

It has become fashionable to argue, like James Gleick, that the pace of technological development and social change has speeded up. Others such as Evans & Wurster  or Davis & Mayer claim that the business environment is so volatile that commercial success now requires the abandonment of 'traditional' ways of decision making and corporate structures.

Those claims are entertaining. They are also dubious.

Preceding pages of this guide and the separate profile on communications revolutions suggest that the 'age of the internet' is no more volatile than past eras. Indeed it is less so than many.

And irrespective of the practical value of 'traditional' structures or ways of doing business - in 2004 the "dinosaurs" still roam the land, unlike most white-hot dot start-ups hailed by the gurus - even passing familiarity with the work of Chandler, Cortada and others suggests that much tradition in fact dates only from the 1960s. 

     fast money

The Internet Bubble (New York: HarperCollins 1999) by Anthony Perkins & Michael Perkins supplied a prescient analysis of why the bubble was going to burst. 

Michael Mandel's The Coming Internet Depression: Why The High-Tech Boom Will Go Bust ... (New York: Basic Books 2000) was less sensationalist than the title suggests and a useful corrective to assertions by Gilder and others that the business cycle is finito.

Irrational Exuberance (Princeton: Princeton Uni Press 2000) by Robert Shiller looks at fast money, investment and speculation over the past decade, questioning traditional academic wisdom about market efficiency and highlighting recurrent announcements last century that a "new economy" changes all the rules. 

Andrei Schleifer's Inefficient Markets: An Introduction to Behavioural Finance (Oxford: Oxford Uni Press 2000) explores the conflict between perceptions and 'fundamentals' in modern financial markets. Capital Markets Revolution: The Future of Markets in the Online World (London: FT 1999) by Patrick Young & Thomas Theys is a less academic account of online financial services. 

     bubbles

This site offers a detailed examination of the dot-com bubble and its antecedents in a detailed profile.

John Kenneth Galbraith's A Short History of Financial Euphoria (New York: Viking 1993) is a spritzy account of bubbles before the net. There's a more detailed, although perhaps too sanguine, study of the 'tulip mania' in Peter Garber's Famous First Bubbles: The Fundamentals of Early Manias (Cambridge: MIT Press 2000). 

Edward Chancellor's Devil Take The Hindmost: A History of Financial Speculation (New York: FSG 1999) updates Charles Kindleberger's classic Manias, Panics & Crashes: A History of Financial Crashes (New York: Wiley 1993).

We've noted Saskia Sassen's Globalization & Its Discontents: Essays On The New Mobility of People & Money (New York: New Press 1999) and Susan Strange's Mad Money: When Markets Outgrow Governments (Ann Arbor: Uni of Michigan Press 1998) elsewhere in these guides. 

     risk

Peter Bernstein's Against The Gods: The Remarkable Story of Risk (New York: Wiley 1996), William Sherden's The Fortune Sellers (New York: Wiley 1998) and Burton Malkiel's A Random Walk Down Wall Street (New York: Norton 1997) offer useful perspectives on global volatility and forecasting. 

For an academic - and more heavy going - study of thinking about the history probability and risk turn to Ian Hacking's The Taming of Chance (Cambridge: Cambridge Uni Press 1990).   

     the speed of change

James Gleick's Faster (New York: Random House 1999) is a quick tour through notions of volatility and change in the 'age of the internet. It is better value than Davis & Meyer's dot-com tract Blur - The Speed of Change in the Connected Economy (Oxford: Capstone 1999) or Clockspeed: How To Survive & Flourish In The Age Of Temporary Advantage (New York: Little Brown 1998) by "corporate geneticist" Charles Fine. 

They offer prescriptions for success in the age of change and uncertainty .... but strip out the dot-com jingles and is 'fast' faster, change quicker, life more volatile than the time of our grandparents?  It is unfashionable to say so, but we think not.



    next page (e-business models)