'free' Information In The Internet Age.

1

‘FREE’ INFORMATION IN THE INTERNET AGE Some day, on the corporate balance sheet, there will be an entry which reads ‘information’, for in most cases, the information is more valuable than the hardware which processes it. (1).

Abstract As we have developed through the ages, tools have always been the key to adding value to both individuals and society. Information and knowledge are the ‘high-value’ tools of our present age. The rise of the Internet has led to a pre-occupation with ‘free’ information services. This article looks at how free ‘free’ information really is and whether we can continue to expect high-quality information to be available without cost. The Counterfeit coin It has taken us many generations to evolve from the Stone Age, through the Bronze, Industrial, and Post-Industrial Ages, to where we are now: the Information Age - or, at least on our way to entering the Information Age via a protracted stay in the Information Technology Age. During these successive ‘Ages’, getting the best use of the tool of that particular ‘Age’ spelt power and fortune. In the Stone Age, with its barter-based economy, it was the ability to make and use flint tools for hunting and farming which secured material advantage; in the Industrial Age, such benefits came from harnessing natural and man-aided processes and materials. This created individual and societal advance, thus bestowing the greatest benefits on the inventors and exploiters of these developments. The same applies to the Information/IT Age. Information is not only the tool, but, crucially, also the currency of the Information Age: we are in serious danger of debasing this currency by not adequately recognising its value, or the value of the people who originate, elaborate and circulate it. "Bad money drives out good" was the tenet of Sir Thomas Gresham, founder of the English Royal Exchange in the mid-1500's, and, if we substitute the currency of this new Age, we now read "Bad information drives out good". Anyone who has tried to tune in to a worthwhile television channel from their New York hotel room will have had direct experience of this, but there are far more serious implications in the business and political environments than in the entertainment sector. This article echoes André Gide who, in his 1925 book Les Faux-Monnayeurs, appealed: "Il faut donner un son pur, authentique" (one must emit a pure, authentic tone). Otherwise, he concluded, the counterfeit coin, as it passes from hand to hand, increasingly distinguishes itself from the genuine article, until the final recipient finds he has traded something of value for something which is worthless. This is the potential danger of taking information from an unknown source "at face value".

2

Commercial on-line hosts aim to collect the most authoritative information available (the "best thinking"), to put it into a context which enhances its value to those who require it for decision-making, and to recompense appropriately the organisations and individuals which originated it. Without this recompense system, it is clear that the information stream will sooner or later become uneconomic and will be substituted by inferior sources. As the information stock then deteriorates, so will the quality of decisions on which they are based. Bad information drives out good, with all the economic consequences. Information as currency In this new Age, information circulates at the speed of thought: weightless, stripped of the medium on which it has been dependent since the invention of writing, of papyrus, and, later, of the output from Gutenberg's and Caxton's printing presses. The best use of information tools represents the greatest single opportunity for both personal and societal advancement: it is no coincidence that - among many others - the world's wealthiest people, Bill Gates and Warren Buffet, trade in information and the tools to enhance its utility. We are already an Information Technology - an IT - economy: however, as was the case in the days of Gutenberg and Caxton, until now the emphasis has been not on the "I", but on the "T", not on information, but on technology - not the message, but the message-bearer. This is destined to change. Such a move, from technology to information, brings us to two hypotheses. The first asks: in which way is information a currency - what are the common characteristics of money and information? These are threefold: Information can be traded or bartered. Perhaps the most direct working example of this is the finance sector, where stockbroker research - which costs millions of dollars to produce - is "given" to the investment community in order to stimulate trades executed by the donor institution a clear instance of barter. In an increasingly service-orientated economy, while consultancy may not yet be bartered, "information" and not some tangible good, is the root of their proposition, and has a clearly defined value in the eyes of the customer. Information is a "store of value" - witness the huge information banks which exist around the globe, and on the sale of which, whole industries have developed, from high-margin, time-critical financial information, to the vast archives of legal and regulatory information, or of scientific, technical and medical data and latterly the increasing trend towards "marketing information" - i.e. personal facts about you and me, such as purchasing habits - so zealously collected by e-traders. Information can be invested in order to create more value. One example of this can readily be seen at conferences and seminars, as delegates compare notes and deepen their own learning with that of their colleagues in order to increase their own value to their organisations.

3

As Knowledge Management has been enriched by the vocabularies of finance and accounting, many expressions, such as "leveraging corporate intellectual assets" or "information audit" have been carried over. This further underlines the commonalities between information and liquid assets. The second hypothesis asks: what makes me think that we are in the Information Technology Age and only now moving into the Information Age? $1.8 trillion is spent world-wide on information technology; this represents 6% of global GDP. It had long been predicted that hardware would be replaced by software as the more expensive element. This is now the case - and it is surely ineluctable that, as software development increasingly is either shipped offshore or automated to reduce costs, the resulting information will also increase in value. And those who - as in the Stone and Industrial Ages - use it to their, and their organisation's, best advantage - will be the beneficiaries of this development. They will also be the principal architects of the new organisational and societal structures which evolve as a result. As manufacturing becomes better, cheaper and faster, more jobs will be shifted from production to service provision, enabling work to become more productive. Information will be at the heart of this evolution. Evolution and the knowledge worker In the Industrial and early Post-Industrial Ages, the principle of "best practice" was widely espoused. In the Information Age, commercial hosts can be seen as providers of "best thinking" - the largest collections of the most relevant information in its most appropriate form for the customer, whose job it is in the Information Age - when information is not only the raw material but also increasingly the coin - to join Gide in his plea. This can be done by validating the information coming into organisations and ensuring that the highestquality information is available to enable us to make the best possible decisions. Certainly this information has its price, but, in the long term, this price will be lower than would have resulted from reliance solely on a business model - as is so prevalent on the Web, which neither sees the originators (be they analysts, journalists, lawyers or whatever) sufficiently rewarded for their own inputs, nor intermediaries adequately rewarded and respected for their skills in obtaining and circulating them. But perhaps there is some factor which means that the economics of production in this latest Age differ from those in the previous Age - how else can the stratospheric values of "internet stocks" be justified, when many have yet to turn a profit? Given that the costs of producing and investing in knowledge are increasing, why is this not yet reflected in some of the offerings available to us - particularly on the World-Wide Web? Although I can now start an electronic newspaper on a shoestring (no printing presses or paper costs; no legal or personnel departments; an electronic instead of a print archive), the day that I produce a defamatory article, or have a labour dispute, my e-customers will

4

realise that the product and its credibility are turning into vapourware! The cost of ‘free’ electronic products The actual cost of a web site is $3.1m per annum (Forrester) and rising rapidly. So why would a publisher want to give me this for nothing? Bad News - he doesn't. Because of the limitations of payment systems, the need for security considerations on the Internet, and the experimental nature of most electronic publishing initiatives, he is taking a calculated risk. Unfortunately, as he sees an increasing percentage of his print revenues migrate towards electronic, he'll need to recoup his costs, because he still has substantially the same infrastructure to support. He can cover some of these costs through advertising, but customer tolerance is low, since advertising is more intrusive on the Web than on the printed page: the certainty is that the customer will pay. One "coin" that now has a higher value to the vendor in the information economy is biodata: the vendor can track the items you are interested in and sell your personal details to vendors of other items he thinks may be of interest to you. While this may be acceptable in a consumer environment for books and CD's, if you are a business working in a competitive environment, you need the assurance that your business is your own and nobody else's. The free aperitif To Milton Friedman "there is no such thing as a free lunch". Readers of Aslib Proceedings may have invested in an Aslib membership or a subscription to this publication in the belief that paying the appropriate sum and "losing" productivity by attending meetings and reading publications will benefit their organisations to, at least, an equivalent value. If Microsoft and Netscape/AOL are prepared to "give" us their browsers today - and one dare not even begin to estimate the development costs - it is just possible that this is commercially-motivated, either - as the American justice system is currently deliberating - in order to make life difficult for their less financially-secure competitors, and/or as an opening gambit in order to gain a substantial share in the exploding Internet market. Is it not likely, however, that, once these objectives have been met, they will want to see a return on their investments, and that these expensive utilities will then become chargeable? There is no such thing as a free lunch, but it is not an uncommon opening gambit in certain restaurants to provide a free aperitif. Free information or fool’s gold? A customer requires stability in his relationships with suppliers; stability means infrastructure, and infrastructure costs money. Internet production and connectivity may have saved on the physical production costs, but the others remain the same. Many online hosts are commercial organisations which operate to return profits to their shareholders and partners. This is the customer's assurance of the aim to be work with them to their mutual benefit for as long as they are convinced by the value proposition.

5

The situation where information is being produced at a cost, but provided free-ofcharge, is not sustainable, so, while we should take advantage of this apparent generosity in the short term, we should recognise that it might ultimately prove to be "fool's gold". So, if information is the coinage of the new economy and we are no longer production workers, but knowledge workers, can we draw up a balance sheet of the actual costs of the production, distribution, and utilisation of the primary raw material of the internet economy? In addition to the infrastructural and associated maintenance costs, there is the very obvious cost of losing staff in cyberspace who, along with their valid Internet research, may also surf off into domains of personal interest - some of which can be very demanding not only in terms of time, but also of bandwidth. There is also the increased risk (and associated cost) of importing a virus into the organisation. On the Web, many things are not what they seem - just as people can assume fictitious identities to hide behind their e-mail activities, cyberspace prevents us from distinguishing between credible, authoritative publishers and "advertiser-sponsored" commercials. And perhaps the greatest cost of all is the cost of misinformation. Since information is now distributed at cyberspeed within an organisation, this "false coin", once injected into a company's corporate consciousness, can be very difficult to remove: acting on it could have very expensive consequences. The balance of probabilities To take an example: if one assumes that for each of the 24,000 publications contained in the Lexis-Nexis data base, there is an average of 100 journalists, analysts, lawyers and commentators, we have a reservoir of approximately 2,400,000 dedicated thinkers and writers whose authoritative and unbiased information is available. That represents an annual wage bill of - say - $240 billion. The balance of probabilities is that this particular collection of best thinking will cover most of the information needs of its target audience, and certainly more than any individual organisation could afford to support independently. The Web is, then, running a considerable deficit in the sphere of business-to-business information; however, that is certainly not to say that all information on the Web is without value (academic, scientific and technical circles being a clear exception). This excludes fields such as patent and other information which is provided free by government organisations, since, while free to the consumer, the actual bill is picked up by the tax-payer. The need for due diligence It can not be a positive sign for the information industry or its customers that two global giants and competitors in the financial information sector - Reuters and Dow Jones – have decided to combine their aggregation businesses in order to enhance their chances of commercial success. Reuters' fortunes particularly were built on providing timely

6

information, starting with carrier pigeons between European cities in 1849. And even this proposed concentration within the information industry is only the latest in a succession of mergers, or even failures. There is no such thing as a free lunch: if we as customers do not insist on commercially viable models, the certain consequence is a reduction in the choice of our suppliers as vendors such as Data-Star, Dialog (in its original form), Apple e-world, Europe Online, Maxwell Online, Individual, CompuServe, Genie and many another which have gone out of business, merged, or else changed their business models in order to secure their future. So let us, as knowledge workers at the dawn of the Information Age, and, therefore, its principal architects and beneficiaries, not accept Gide's pessimistic conclusion to Les Faux-Monnayeurs: "Dans la vie, rien ne se resout, tout continue" ("in life, nothing is resolved, everything continues") but fulfil our functions as custodians of our organisations' information assets by exercising due diligence over its quality as it is introduced, and by ceaselessly questioning its actual value and ultimate cost. While it might appear to be free in the short term, we might find the long-term cost not to be justified when we uncover the full facts. References 1. Admiral G.M. Hopper (Ret’d). Quoted in: Using the principles of war and Knowledge Management, by P. Luzwick. Information Security Bulletin, vol. 4, no. 5 (July 1999): 17-28. 2.

Gide, A.