Technology

In 1937, economist Ronald Coase published an article, The Nature of the Firm, in the journal Economica. Within the article, Coase argues that firms exist because there are costs inherent to free markets – such as costs of communication, of sharing information, of trying to find goods and services. Given these costs, Coase suggests that firms are formed because it is more efficient and less expensive to complete many of these tasks internally within a formal organization rather than outsourcing them to the market and thus incurring these added costs.

Alex Slawsby on the Innosight Blog looks at the nature of the corporation and how advances in information and communications technologies may be enabling a more modular approach to work, especially networked free-lancers, or e-lancers.

… the ‘e-lance economy’ may represent a modular stage of organizational evolution – indeed, an architecture of easily swappable or plug-and-play components (e.g. individuals or resources). In an age where closed, proprietary systems are recognized as inhibiting the ability of organizations to respond to or even identify innovation-borne change, modularity seems a promising answer; virtually every element of the value chain could come together on an ad-hoc, objective, modular basis without being hamstrung by the subjectivity and myopias brought on by business process and the long-term commitments to physical infrastructure, a capital investment in which innovation may quickly make irrelevant.

An example of this economy would be open source software development, with its lack of organisational structure and the ability for anyone with the right skills to plug in or out of the project, yet maintain the integrity of the code. A key question though is whether e-lancing will become the dominant economic model, as the corporation is, or only suitable for certain industries, such as the film industry’s project-based work model. If e-lancing is more effective in most industries and becomes our dominant work model, then organisations will have to rethink everything from HR to supply chain management.

Rather than including consumer concerns such as flexible fair dealing, time shifting, format shifting, parody, and the future of the private copying levy within the forthcoming bill, Prentice [Canada’s Industry Minister] will instead strike a Copyright Review Panel to consider future copyright reforms.

Michael Geist, Canada Research Chair of Internet and E-commerce Law at the University of Ottawa, once again shows that corporate interests trump the public interest in Canada.

It seems that this 2002 Supreme Court ruling is being completely ignored by the powers that be:

Excessive control by holders of copyrights and other forms of intellectual property may unduly limit the ability of the public domain to incorporate and embellish creative innovation in the long–term interests of society as a whole, or create practical obstacles to proper utilization.

Consider that before movable type, we didn’t have copyright laws because there was no available technology to easily copy text. Monks and scribes did the heavy lifting and shared within the literate world. Minstrels, troubadours and town criers passed on information orally to the non-literate. Enter the printing press and we see the Stationers Company with a comfortable monopoly on printing from 1556 until the Statute of Anne in 1710, which gave rights to authors and book buyers. Are we doomed to face the equivalent of the Stationers Company monopoly for a century before we get laws that reflect the realities of the digital age and give more power to individuals than corporations?

The early American economy blossomed by ignoring British copyright and patent laws, so that American goods could be produced and sold cheaply. If our government restrains our collective creativity through stringent copyright protection, will our economy be threatened by some country that cheaply produces the desired goods of the digital economy? These “business-friendly” government policies may be setting all of us up for a big fall.