I just read Fred Wilson's post, Bits of Destruction. He sees the current recession as a transition; it's the end of the Industrial Era and the coming of age of the Information Era.

Wilson begins supporting that idea with a personal example:

I'm typing this on my blackberry in a hotel lobby in berlin, I'll hit send, and it will be published and read by roughly 5,000 people today. Compare that to what it takes to get the Tom Friedman column 'Time To Reboot America' which is sitting in front of me in the International Herald Tribune newspaper printed and delivered to me. Printing and distribution infrastructure cannot compete with bits on a wire and we are going to see that infrastructure end up in in bankruptcy a lot in the next 12 months.

He goes on to make similar comparisons in retail sales, auto sales, and banking.

Fred is very convincing. And the truth in what he says is powerful enough to make you forget other contributing factors for our recession, like the deregulation in the mortgage industry that led to the credit crunch. Where people have been spending beyond their means for years, suddenly they've cut back. That cut back almost defines the term "recession" in its own right...

But that really doesn't take away from Wilson's point. The pain of this recession (whatever its causes) will be multiplied by the death and restructuring of whole industries (if you can call banking an industry); those corporate deaths in the financial and other sectors will be a result of business model changes brought on by the advent of the Information Age. And when we come out the other side of this recession, we will probably see that the that Information Age has come more fully into bloom.

Could it have been different? Maybe not, but I'd like to think so. We should remember that at least part of this period of creative destruction (as Wilson calls it) is the result of a period of creative corruption. Especially in the financial sector, people used tools created by the Information Age together with opportunities created by deregulation for extremely selfish personal benefit. And the rest of the world be damned!

The fact that so many established businesses are unprepared to compete in the Information Age simply multiplies the affect...


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