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When we talk about the “networked” economy, many people assume that this refers to the way that the Internet has revolutionized many facets of business and life. While the Web has transformed the world, the forest we may be missing for all the online trees is the way in which all kinds of physical and organizational networks, not just digital ones, are poised for any even bigger leap in the Smarter Planet era.

A better understanding begins with a simple question: what is a network, anyway?

Three of the connotations that are most meaningful in the Smarter Planet context are:

  • A complex, interconnected group or system
  • An extended group of people with similar interests
  • An interwoven or interrelated number of things

Consider all these examples.

Transportation systems – including roads, railways, airlines, shipping companies – are all networks. So too are the various ways in which goods and services are manufactured, produced and sold. Think of supply chains, distribution centers and logistical services.


Financial systems of all kinds, from banks and investments firms to stock and bond markets, real estate listings and transactions and all institutions that help manage the flow of money, are all networks too.

Human organizations of every type, from neighborhoods and towns, to cities, states, and nations, from businesses and civic to public communities and learning institutions are all networks of people. Add to that things like museums, amusement parks, archives, foundations, interest groups and the like.

Our electricity and utility infrastructures are of course networks that are deeply entwined in human civilizations.

Our brains are a neural network. Space satellites. Pools of cable TV, magazine, and newspaper subscribers. Healthcare providers and patients. Legal and law enforcement systems. Credit card holders and services. Scientific collaborators. Families. Religions. Pipelines. Toll booths and ticket machines. Entire industries. Political parties. Even terrorism.

In the modern era of computers and the Internet, we’ve come to equate “network” with the information technology meaning of the term, i.e. a series of points or nodes interconnected by communications paths. Or in the case of the Web, an almost endless series of interconnected networks and subnetworks.

What’s key here is that all the preceding examples of networks –- social, commercial and informational –- existed long before digital networks came along.  Yet in only little more than a decade, we’ve almost come to see physical, interpersonal and economic networks as synonymous with their digital and online incarnations.

But the key idea about Smarter Planet is that the digital and physical will converge in profoundly literal, and deeply conceptual, ways. One might begin to think of this melding — the digiphys, to coin a term — as two sides of the same coin.

The Next NetWorks
As powerful as this intermingling of human and digital networks has been, something bigger is on the horizon. It is summed up, at least metaphorically, in what’s come to be known as Metcalfe’s Law of network effects….that the value of a network is proportional to the number of users of the system.

How? In short, all of the aspects of human civilization that are networks have made huge strides through the first phase of the Internet, but the next phase will see the size and  interconnectedness (and therefore the value) of these various systems skyrocket. The reason: billions of new users, as well as trillions of new network nodes, via new devices, sensors, pieces of software, and new kinds of ways to manipulate all of these things.


The result will be a shift from relatively crude networks to more complex systems that can become more intelligent, that is, more interactive, more self-aware, more information-rich and more useful to participants.

Some people don’t see this transformation as more than just pat of an ongoing continuum of technology improvement. I would contend that this emerging meme or paradigm is a disruptive change, more like the arrival of the Internet itself.

And like it, the smarter planet era promises to be an evolutionary phase change like moving from ice to water, or from single-celled organisms to larger animals.

Yet despite how truly revolutionary the opening act of the Internet has been, we aren’t particularly amazed at how far the world has come. I can now do more on my Blackberry on the train to and from Manhattan — all kinds of Web-based work, answering email and scheduling meetings, online banking, uploading photos to Facebook, updating Twitter, etc. — than I could have ever done by most computers just a decade ago.

Conversely, people have a hard time projecting the same trajectory of change and innovation into the future.  My bet is that even just five years from now the world will be transformed by emergence of the New NetWorks that will form the foundation of a worldwide intelligent infrastructure.

Consider the century-old telephone. Today, it not only is increasingly digital and mobile, but every aspect of the system it is connected to it is increasingly intelligent and more capable. Caller ID lets you know who is phoning you, and call histories, speed dial and even voice activation mean a user rarely has to remember or dial a number. Voice mail means you never miss a message. Location awareness brings a whole new realm of possibilities in terms of services and utility. Mobile phones are even beginning to serve as transactional tools.  And wireless broadband technologies now mean that billions of users will have the entire universe of Internet innovation in their pocket.

As all of our first-generation Internet-enabled networks evolve into systems with all kinds of richer intelligence embedded in them, they can begin to serve the pressing needs of a world that Tom Friedman’s describes in his forthcoming book as Hot, Flat & Crowded.

Intelligent systems may be emerging just in time to help us deal with all of its most pressing challenges: energy and climate change, a sustainable model for economic growth, and the political stability to become a new world fueled by new innovation capabilities.

In some sense, we already have the blueprint of a complex, intelligent system: human civilization, science and the Internet model. Thus the first challenge is to marshal our collective will and energy around the possibility of creating all the various flavors of intelligent systems that we may need to grow and prosper, economically, culturally and globally.

If we succeed, we promise to redefine the key concept we started with, from network to NetWork, from an organizational construct to one that suggests a dynamic and ongoing process of value creation.


Your Friendly Neighborhood Smart Planeteer,

JackbhiheadJack Mason
IBM Global Business Services

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Posted by: foto bugil
December 17, 2011
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Not only is “the value of a network is proportional to the number of users of the system” but also the interconnectedness of its users. This is the premise of social media networking. e.g. In a fully-meshed network, 5000 people will yield 12,497,500 pairs of friends

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Has there been any meaningful analysis done on how much electrical power is consumed and how much CO2 is emitted to power these intelligent networks? I’ve read assertions that a Google search takes half the energy as boiling a kettle of water and emits 7 grams of CO2. Google has refuted this to be too high. At any rate, multiply by the number of searches per day and it becomes significant (some 2 billion Internet users and more than 200 million searches per day).

Posted by: David
October 17, 2010
10:05 am

If I consider the physical network (that which we call the Internet) as the top of my hierarchy and if I consider the logical networks consisting of interest groups (each group with its own set of topics and interests). And the logical groups may themselves have sub-groups within them, in addition to the potential for overlapping groups. There is no question that is a useful “network” from which we, the users, can harness value.

Practical problems include the ability to search for groups and sub-groups by topic or keywords. Or in the current Web 2.0 paradigm, using tags (generated by users).

Search engines are infinitely useful (can’t web without them) albeit that they are highly limiting in delivering ultimate value. With hundreds of thousands of search results where the top 1000 get shown, it is limiting. But results have to be ranked. There has to be a better way.

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