Obama’s policy crossroad will be on the web
By: Mark Tapscott
Editorial Page Editor
December 29, 2008
Barack Obama will either be the last liberal president of the 20th century or the first Internet chief executive of the 21st century. It will become clear earlier rather than later in his White House tenure which he will be.
It’s all in the boundary costs and it will split Democratic Party politics right down the middle.
What in blazes are boundary costs, you ask? In business, a basic management question is always whether it makes more sense to do something required to produce a product within or without the firm.
In the 20th century model of centralized organization for mass production, vertical integration produced economies of scale that made it cheaper to do as much as possible within the organization. It cost too much to locate and bargain with suitable outside suppliers.
Now with the Internet, the 21st century model is one of mass collaboration, which emphasizes horizontal integration to produce economies of scale. So, it’s quickly becoming cheaper in a growing list of industries to team with outside suppliers for everything from product research and design to final production and marketing.
As Don Tapscott and Anthony Williams explain in “Wikinomics: How mass collaboration changes everything,” the Internet has so radically shifted boundary costs to the point that “every company needs to constantly adjust their boundaries to meet ever-changing demands and opportunities.”
Think of the difference between Henry Ford’s gigantic Rouge River plant where raw products supplied by Ford-owned subsidiaries from around the world entered at one end and emerged from the other as finished cars and trucks, and Google, where outsiders continually develop valuable new applications that create value for the host company, suppliers, collaborators, customers, even competitors (who are sometimes also partners).
There’s no fundamental reason why government should be exempt from this reality. At some point in his presidency, Obama will reach a crossroads where he will have to choose between the two models and the policies and politics that define them.
My hunch is that moment will come on the health care issue sometime in the next two years. Since his election victory in November, Obama and his key health care advisors have made it clear he plans to move toward a Medicare-like national health plan, with government bureaucrats running the health care system for everybody. That’s classic 20th century, top-down centralized, big government liberalism.
The problem is that, while this approach satisfies old guard liberal special interests like federal bureaucrats, trial lawyers and labor unions, it puts Obama on the wrong side of the Net-Geners at the heart of his campaign who provided its technological sophistication and youthful idealism.
Net-Geners view the world through a different lens. Because they’ve grown up in a digital world, the workplace values they most esteem include “speed, freedom, openness, innovation, authenticity and playfulness,” according to Tapscott and Williams.
It won’t take Obama’s younger troops long to realize there can never be any room whatsoever for such values in an expanded federal health care bureaucracy overseen by a new Federal Health Board. I mean, come on, speed or innovation from bureaucrats who typically require a minimum of 18 months just to develop one new regulation?
Net-Geners know that it’s never been easier or cheaper for buyers and sellers worldwide to find each other. They grew up googling consumer research and thriving on the incredible rapidity with which people with common interests can find and educate each other.
And because many of them do it every day with their jobs, they know how resources and partners can be linked at dizzying speeds from around the globe to create incredible new products.
At some point soon, they will look at each other and say “we can do this for health care, too, but who needs a Federal Health Board?” When that happens, Obama will have to choose whether his presidency will represent the dead hand of liberalism’s past or the web-centric future of empowered individuals continuously making life-choices at cyber-speed.
In the 21st century, the invisible hand is working on a laptop. The news just hasn’t reached official Washington.
Mark Tapscott is editorial page editor of The Washington Examiner and proprietor of Tapscott’s Copy Desk blog on dcexaminer.com.
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