Peter Drucker’s 7 Sources of Innovation as described in Innovation and Entrepreneurship (2006) provide a framework for understanding the current environment. The core effect of the internet since becoming widely available in the home and workplace has been disruption. The consumer-producer gap in information has narrowed, scores of middlemen have found their businesses irrelevant, and consumers are finding their voice and contributing their own opinions and experiences in a marketplace of ideas.
A series of unexpected or unanticipated events have preceded the growth of social media. After a period of rapid growth and interest in all things internet, rampant financial speculation and a lack of viable business models culminated in the popping of the dot-com bubble (Zweig, 2010). The US economy was later rocked by the collapse of Enron and the accounting scandals that followed (BBC, 2002).
In the United States, the impeachment of President William Jefferson Clinton and the contentious 2000 Presidential Election increased interest in politics and fed an appetite for online news outlets, such as the Drudge Report (Lasica, 1998).
The terrorist attacks in the United States on September 11th, 2001 served as significant marker events for both creators and consumers of social media. Callers found that land-line and cellular telephone networks were unavailable, due to either an overwhelming volume of calls or by physical damage. The physical damage to communication networks caused by the collapse or the Twin Towers (Eisenberg & Partridge, 2003) as well as the repetitive coverage from cable-TV news drove others to seek out information from online sources (Willmot, 20001). Users turned to digital mediums such as text-messaging, email, and instant messaging to let their loved ones know that they were ‘okay’ (Bel Bruno, 2001).
The attacks are often cited as catalysts for many bloggers as they attempted to make sense of the now changed New York skyline (Andrews, 2006). This interest in sharing personal experiences, frustrations, and anxieties was repeated again and again, through the lead-up to the Iraq War, the loss of the Space Shuttle Columbia, the London and Madrid bombings, Hurricane Katrina, the Sri Lankan Tsunami, the Californian wildfires, the Mumbai terror attacks, and the Haitian and Chile earthquakes (Thelwall & Stuart, 2007). The first decade of the 21st century ended with the election of the first African-American President of the United States and a global ‘Great Recession’ more severe than any previous economic downturn after World War II, intensely debated, discussed, and documented online.
The easy availability of pornography online drew widespread coverage in the media. Although it may be inappropriate to acknowledge, many of the non-text media types that populate the internet would never have become reality without the guaranteed market of sexual entertainment. Development of streaming audio, video, webcams, credit card payment systems, and virtual worlds were all developed in support of the delivery of pornography, laying the groundwork to mainstream adoption (National Public Radio, 2010).
Problems related to anonymity and pseudonymity accompanied stories of internet use. While individual stories of bullying, online predators, violent crime, terrorism, or stalking, are both heartbreaking and terrifying, as high-risk low-probability events, they are not typical of the average internet user’s experience.
Traditional intellectual property owners likewise blamed the internet for falling sales and declining profit margins. The music and movie industries have waged a high-profile and high-risk campaign against piracy, with little impact. Indications are that those who pirate content online are also instrumental in promoting content to others; Pirates are also some of the heaviest purchasers of content.
Despite media claims to the contrary, the internet and social media have not been found to have contributed to physical and mental health disorders such as depression, or having negatively affected social isolation (Hampton, Sessions, Her, & Rainie, 2009), civic involvement (Smith, Lehman-Schlozman, Verba, & Brady, 2009), or academic performance (Deris & Desjardins, 2009).
The internet – particularly in the form of instant messaging and texting – has been warned as the end of literacy and writing. The facts actually belay this point. Creativity and acquisition of new skills has actually been improving.
As of the spring of 2010, flash mobs have become a prominent feature of the evening news, as some area youth coordinate over social media to meet in flash mobs in Center City, Philadelphia (Osborne & Woodall, 2010). While their behavior is reckless and criminal, the typical flash mob is not, with the focus usually being silly pranks such as pillow fights, pant-less subway rides, or spontaneous public performances.
Employers are likewise exhibiting caution in both their IT and HR policies with regard to social media, primarily in terms of human resources, interviewing candidates for employment productivity, reputation, and information security. Although it is difficult to tie the metrics of social media to financial performance, preliminary research casts doubt on the negative workplace impact of social media. Despite these publicized concerns, businesses are implementing and integrating social media (Ganim-Barnes & Mattson, 2009).
The need for collaboration, remote work, information filtering, and knowledge management are all complicated by the regional, national, language and cultural differences made evident by outsourcing out labor and services. The decrease in cost and increase in computing power make it feasible to allow more work processes to occur virtually. It also has become far easier to survey large groups of people or volumes of content when searching for information.
Industry and Market Changes
The societal changes we are experiencing coexist with an accelerated rate of change fueled by technology, as evidenced by Ray Kurzweil’s Law of Accelerated Returns (2001).
There has been a rapid increase in the rate of technological adoption by consumers and business as well as exponential growth in computing. These accelerated changes have been fueled by exponential growth in a variety of underlying factors and conditions, such as the capacity of memory and storage, an improved cost-to-performance ratio for internet performance and cost, and a decrease in size for electronics parts and devices, as well as more rapid rates of adoption (Kurzweil, 2001).
Change in preferences
Adoption rates for the personal computer, residential internet access, and high-speed broadband have superseded those of earlier communication mediums (see ) and are likely to be superseded by an increase in availability and capacity of internet-capable mobile devices (Meeker, 2009).
Generational changes towards technology
There has also been a switch in technology adoption across generations, with Generation Y (Millennials) outpacing the Boomers and members of Generation X . This is not surprising, as younger users are online in numbers disproportionate to their share of the population.
The members of the Millennial Generation are sometimes referred to as “digital natives”, as they have been surrounded and immersed in technology their entire lives (Bennett, Maton, & Kervin, 2008).
As these new employees enter the workplace, they will be bringing their digital tools, experiences, competencies, and expectations with them (Jones & Fox, 2009).
Buyers Attitude & Priority Changes
Consumers have exhibited a preference for personalization in both their products and experiences, swiftly adopted the technologies such laptop or cell phones to use mobile internet or TiVo to enjoy time or place-shifted content. Subscription content such as newspapers and magazines are finding it difficult to compete with ’Free’ online alternatives. Record labels have struggled with steadily declining album sales while digital music purchases have skyrocketed. Legacy broadcast media such as TV and radio are often competing with video gaming and social media for consumers’ attention. Even professional photographers are finding business conditions challenging as the ease-of-use and quality of point-and-shoot digital cameras makes the novice appear like a professional.
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