information society

THE INFORMATION AGE

Walter Wriston discusses the economy, and the Digital Era with Thomas A. Bass for Wired magazine in the October 1996 issue.

Wriston was there at the creation of the modern wired economy, when money began turning itself into bits and bytes and started flowing around the world through satellite transponders and fiber-optic cables. The basis for wealth, he says, has evolved from land to labor to information. "Information about money has become almost as important as money itself," he said -a famous remark now inscribed in the lobby of New York´s Library of Science, Industry, and Business.

"What is this revolution?

It´s the third great revolution in the history of the world. First came the neolithic revolution in agriculture. Then the industrial
revolution. Now we´re moving to an information society. revolutions aren´t made by gadgets and technology. They´re made by a shift in power, which is taking place all over the world. today, intellectual capital is at least as important as money capital and probably more so. But the world´s accounting system is based on hard assets you can see and fell. We don´t bookkeep intellectual assets. Take the relative market capitalizations of Microsoft and General Motors. Microsoft, which has no fixed
assets except for a few buildings in Seattle, has a market cap of $71 billion. General motors, which has lots of assets, has a market cap of $38 billion. The marketplace is capitalizing intellectual assets, while the accounting profesion is not.

After the revolution, what happens to money ?

The information revolution has changed people´s perception of wealth. We originally said that land was wealth. Then we thought it was industrial production. Now we realize it´s intellectual capital. The market is showing us that intellectual capital is far more important than money. This is a major change in the way the world works. Just like all the farmers who disappeared
during the industrial revolution, the same thing is now happening to huge numbers of people in industry as we move into the
information age.

What other changes are in the works?

In today´s revolution, the line between service and industry is being erased. Even the industrialists are beginning to understand this. They used to make Rotary Club speeches about America turning into a nation of hamburger flippers. Then after lunch you´d visit their factories, where you´d find three guys in a control booth, watchin screens and running the production line. Is this the service business? Is this the equivlent of hamburger flippers? Obviously, the vocabulary we use is obsolete. We´re witnessing a complete change in the concept of wealth, and whenever that changes, you have political change. People invested in yesterday will fight to the last person. People trying to invest in the future will push the agenda of social change."

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