Social Impact - Economics

Perhaps the largest impact that commercialization of the Internet has had on society is a large-scale economic change. Because of the greater connection that the Internet has brought between countries, a truly global economy has emerged. Not only has the number of corporate Internet sites exploded, but many have also begun to offer additional versions of their home page in other languages. The ease of communication across national boundaries that the Internet has increased the scope of a single corporation. It is now easier than ever for American corporations to communicate with managers working in factories in other countries. The commercial Internet has also allowed people to sell things from their web sites, conceivably to anywhere in the world.

In addition to globalizing the economy, the commercialized Internet has also helped to foster an information and service based economy. The large amount of technical knowledge involved in operating a computer or network has increased the need for technically knowledgeable service people. Since any website can conceivably host an unlimited amount of content, workers have also been hired to fulfil this information need. Due to the increase in content and data, society has come to see information as a commodity. Entire businesses are made simply to manipulate data or create content (OTA 1990). Here in the U.S., there has been an enormous economic growth due largely to the success of Internet companies­the "dot-coms." The growth of American Internet companies lured many people into playing the stock market. Combined with the ease of online trading, the success of the dot-coms helped the U.S. to enjoy a period of economic boom.

Unfortunately, the growth of the commercial Internet has also hurt some sectors of the economy. The retail industry is very quick to blame the Internet as the source of their financial shortcomings during a time of economic expansion. They believe that, since people can now do their shopping online, fewer are making the drive to physical retail outlets. The impact of this might be lessened by the trend of many retail businessesą offering online versions of their usual stores.

Another problem not as directly connected with the commercialization of the Internet is the battle over copyright infringement. Since the Internet is a digital technology anyone on the Internet can make an exact copy of nearly anything with very little effort. This has caused a great deal of copyright infringement. Producers and owners of content (including words, pictures, and music) are all declaring that their profits are being hurt by the ease in which their content can be copied. While this is a problem that might have also occurred on a non-commercial Internet, it is still worth addressing the fact that it has changed the way that many people think about copyright law.

One other economic change that the commercial Internet has brought is the standardization of the networks. While it is not clear if this is a benefit, the fact remains that the connection of networks involved a great deal of standardization. Now that most computer networks "talk" to each other, there has been a need for common ways to "speak" (such as TCP/IP), and to interconnect. Typically technological arenas that are governed not by one body, but by the various business firms and market forces have difficulty in deciding on one standard. When many different players are attempting to have their technology become the standard, the growth of a technology is slowed. This has not been the case in the development of the Internet. The fostering of the technology by the government helped to create a standardized way of operating the network. A similar problem occurs when very few (often two) vendors are trying to standardize their version of a technology. While there is some disagreement whether this is a benefit of a fault, it is again clear that with the care of the government in its development, this was not the case with the development of the Internet (Greenstein).

Another question regarding standards is if the act of standardization encourages innovation. While it may seem that a standard may be a hindrance to innovation, it is generally the case that businesses "do not have sufficient incentives to embed interoperable technology in their equipment," (Greenstein). It appears that in the case of standardization, the course that the government followed in the development of the Internet helped the network to grow into the creature that it is today.

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©2000 John Thomson, Jr