The Dark Side of Network Effects

by Simon St. Laurent

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Last week's power blackout (not to mention recent worms) seems to have inspired some more critical coverage of the "network effects" whose positive impacts have become a mantra of tech business and politics.

First, we have the New York Times noting that:

last week's blackout was vast precisely because of the interconnectedness that the network was meant to exploit and foster.... Taken together, the blackout and the worm underscore a far-reaching challenge in managing modern technological societies: the difficulty of reaping the benefits of networks - railroad networks, airline networks, telephone networks, power networks and computer networks, among others - while minimizing their vulnerabilities.

Then yesterday, over at Slate, Daniel Gross explores "the frailty, vulnerability, and age of the nation's private energy networks." Gross also explores the interconnectedness of our transportation and business networks, noting how the drive for efficiency (through centralized production and widespread distribution) comes with real costs.

I don't think there's a drastic change in the wind here, but it's good to hear writers exploring the possibility that network effects aren't all for the magically better.

Have you had to deal with the costs of network effects?


2003-08-22 10:35:42
Network Effects
Coincidentally, I just wrote two relevent blog articles on very different aspects of the Network Effect that might be of interest:

2003-08-22 10:54:49
Network Effects
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