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The other half of the Web 2.0 equation.

By sara m.

Tim O’Reilly, Kevin Kelly, Anne Truitt Zelenka, Don Tapscott and Anthony Williams all seek to define the phenomena and philosophical principles of Web 2.0 and predict the economic, social and political impact of this most recent trend in information technology. These authors share the belief that the Web 2.0 is ushering in a new era of unprecedented significance that will change all aspects of our lives. They also share, albeit in varying degrees, a belief in the utopian promise of Web 2.0. Zelenka claims that 2.0 webwork embodies the ideals of authenticity and abundance, for example—in addition to profitability (Zelenk, 2008). Tapscott and Williams invoke democratic-sounding ideals to describe their concept of “wikinomics?: business and production based on openness, “peering,? sharing, acting globally, community, collaboration, self-organization and horizontal interaction (Tapscott and Williams, 2006, pg. 8–9). Moreover, they claim that wikinomics is ushering in a world in which knowledge, power, and productive capability will be more dispersed than ever before in history (Tapscott and Williams, 2006, pg. 12). Kelly is the most reverential of all, praising blogs and open source software for creating a vast and growing “gift economy (Kelly, 2008).? He credits hypertext linking with propelling a mass participation movement that has overturned traditional economic practices and founding a new culture based on sharing (Kelly, 2008). With the emergence of the culture of sharing, Kelly claims that “ … the Web has embedded itself into every class, occupation, and region.? He declares that online culture is now more than mainstream: “online culture is the culture (Kelly, 2008).?

Kelly’s declaration is recklessly sweeping and unfortunately, it exemplifies an extreme version of another theme common to these authors: techno- and ethnocentricism. Kelly claims the existence of universal online culture shared by “everyone?—yet everyone knows that a majority of the world’s population does not have access to computers or the Internet and is therefore excluded from online culture. Moreover, he assumes that all possible outcomes of the Web 2.0 trend are good and good for everyone. O’Reilly analyzes Web 2.0 in more neutral terms than Kelly but assumes the inherent value of the trend. Like Kelly and O’Reilly, Tapscott and Williams tend to glorify technology but acknowledge that in reality the Web 2.0 trend is “ … both a blessing and a curse (Tapscott and Williams, 2006, pg. 15).? They turn this observation into a threat however, warning that everyone must get connected or perish.

The utopian vision of the Web 2.0 era also suffers from a lack of critical analysis. In his blog posting, “The Amorality of Web 2.0,? Nicholas Carr calls out the assumption on which these arguments are based namely, that technology is inherently good. Carr argues that technology is amoral. The moral value of its effects depend on how it is used. The positions taken by Kelly and O’Reilly lack this objective view of technology. Carr challenges the credibility of their claims by asking whether it is possible that not all the effects of Web 2.0 era are good?

Testing Carr’s counterargument reveals that, with the weak exception of Tapscott and Williams, these authors ignore or gloss over the other half of the new Web 2.0 socioeconomic equation.
Consider the outcome of the contest sponsored by Goldcorp Inc. from the perspective of the mass participant and winner, for example. The winner of the contest received $575,000. Unquestionably, it was an attractive award but it was only a one-time payment. The Wikinomics authors point out that the winner’s ideas yielded “ … copious quantities of gold … [and] catapulted his underperforming $100 million company into a $9 billion juggernaut? that has become one of the most profitable mines in the industry (Tapscott and Williams, 2006, pg. 9). Stating the obvious, the authors conclude that McEwen and his shareholders are very pleased with the outcome of their experiment in openness: “One hundred dollars invested in the company in 1993 is worth over $3000 today (Tapscott and Williams, 2006, pg. 9).? Tapscott and Williams do not do not calculate what the contest winner lost by settling for a one-time payment of prize money, while the company continues to reap the rewards of her/his ideas. The authors praise Proctor & Gamble for pursuing similar practices in openness and mass collaboration: “Rather than hire more researchers, CEO A.G. Lafley instructed business unit leaders to source 50 percent of their new product and service ideas from outside the company. Now you can work for P & G without being on the payroll … can help solve tough … problems for a cash reward (Tapscott and Williams, 2006, pg. 13).? While this type of practice is definitely innovative and promotes participation, the rewards are not distributed equally to all participants. The company realizes the significant savings of a reduced payroll in addition to ongoing profits from contest winner’s ideas while contest participants receive a single payment of prize money.

Research into another of the Wikinomics exemplary companies, Foxconn, reveals other negative effects of the Web 2.0 trend. Foxconn is one of the world’s largest manufacturers of today’s most popular electronics including iPods and iPhones, personal computers, mobile phones and Wii videogame consoles. According to Tapscott and Williams, the company exemplifies how the wikinomics business model is enabling young people in developing countries to join the global economy “on an equal footing (Tapscott and Williams, 2006, pg. 13).? They describe the company town run by Foxconn in Schenzen province, China, as a place where “people work, live, learn, and play on Foxconn’s massive high-tech campus, designing and building consumer electronics for teenagers around the globe (Tapscott and Williams, 2006, pg. 14).?

The perspective from within the Longhua Science & Technology Park belies this utopian depiction. In his article “The Forbidden City of Terry Gou? published in the Wall Street Journal Online, Jason Dean describes Foxconn’s business model and the disparity of wealth distribution between “participants? and owners. He reports that employees live inside the walls of a secured company compound which few outsiders are allowed to enter. Most employees work on assembly lines earning the legal minimum wage in China of about 60 cents an hour with the option of higher pay for overtime. Most employees work 6 or more days a week. Their monthly earnings including overtime pay range from $155 and $230/month before deductions for housing, food and health care. Meanwhile, Dean reports, Foxconn’s revenue has grown more than 50% a year in the past decade to $40.6 billion last year. It is expected to add $14 billion in revenue in 2006 (Dean, 11 August, 2007). The CEO, Mr. Guo, is himself now worth $10 billion (Dean, 11 August, 2007). Although allegations of labor abuses at the compound have not been confirmed, an investigation conducted by Apple (the company’s largest customer) concluded Foxconn’s practices generally comply with their policies regarding treatment of labor. It is grossly misleading to suggest that Foxconn workers are participating in the new economy “on equal footing? with Mr. Guo and the shareholders.

Dean’s report also suggests that the Foxconn culture and ethos also contradicts the Tapscott and William’s ideals of horizontal organization, “peering,? and sharing. He reports that Guo maintains a very top-down style management. For example, he has published a book of his own quotations that managers are expected to remember including the following: “No. 133: “The important thing in any organization is leadership, not management. A leader must have the decisive courage to be a dictator for the common good (Dean, 11 August, 2007).? Guo also reminds his workers that “The group’s benefit is more important than your personal benefit (Dean, 11 August, 2007).?

These examples indicate that Carr’s suspicion is correct: there is a dark side to the latest technological trend. Examining the other half of the Web 2.0 equation reveals that technology does not guarantee the good of all. It can and in some cases is, widening the digital divide and producing profits for a few at the expense of many. Rather than worshipping Web 2.0 technology, Kelly, O’Reilly and others would serve society better with less dramatic but more objective arguments that consider new developments from all perspectives, not an elite few.


Bibliography

Carr, Nicholas. “The Amorality of Web 2.0.? Rough Type. http://www.roughtype.com/archives/2005/10/the_amorality_o.php, 3 October, 2005.

Dean, Jason. “The Forbidden City of Terry Gou.? Wall Street Journal Online. http://online.wsj.com/public/article/SB118677584137994489.html?mod=blog, 11 August, 2007.

Kelly, Kevin. “We are the Web.? Wired. http://www.wired.com/wired/archive/13.08/tech_pr.html, 2008.

O’Reilly, Tim. “What is Web 2.0? Design Patterns and Business Models for the Next Generation of Software.? O’Reilly. http://www.oreilly.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html, 30 September, 2005.

Tapscott and Williams. Wikinomics: How Mass Collaboration Changes Everything. Portfolio Hardcover, 2006.

Zelenka and Sohn. Connect!: Web Worker Daily’s Guide to a New Way of Working. Wiley, 2008.

Comments

Very thoughtful most, Sara. Thanks for doing some research into the companies mentioned. We're not covering this digital divide in this course (although we do in WRIT 3401: Internet Tools & issues), but you've inspired me to put up some optional readings in next week's module.