Slow pace of fast change

Bhaskar Chakravorti, author of 'The slow pace of fast change: bringing innovations to market in a connected world,' recently gave an interview in Ubiquity that provides a good introduction to his work.

Paul David and others have made the point that it takes a long time for innovations to fulfill their economic potential, especially when the innovation involves a general use technology. For example, the main productivity gains from the introduction of electricity were achieved when firms started moving machines around on the factory floor to create a more efficient workflow. However, before that could happen, firms not only had to invest in electrifying their production plants, they also had to invent an entirely new business model.

Chakravorti takes this argument one step further. In an interconnected world it is often not sufficient that firms adapt to new technology one by one; to benefit from a new technology different organizations (often public and private) need to coordinate their activities.

If you dial 911 from your home phone and you forget to say where you are or you collapse, the emergency system will be able to find you because there's an address tied to your phone. But if you are on a cell phone ... there's no address attached to it and the 911 systems will have no information popping up on their screens.

You need the wireline players to upgrade their networks, because they connect from the cell phone that works into the 911 call centers. The 911 call centers need to upgrade their systems so that the latitude and longitude data shows up on their computer screens. All parties must make investments. Simply putting the pressure on the wireless system is not enough. This is a classic example of the basic dilemma that I talk about in the book. You have the technology to solve the problem, but it will take a long time for that technology to translate into fast change, in terms of plugging this hole in our national security system, because all the different parties must coordinate their choices.

As a game theorist interested in networks, Chakravorti works on the mechanisms that can bring about the necessary coordination, identifying individual players' choices and incentive structures to work out a strategy that will nudge everybody in a common direction.