“By 2005 or so, it’ll be clear that the internet’s impact on the economy has been no greater than the fax machines.” These are the famous or, rather, infamous words of the world-renowned economist and Nobel laureate Paul Krugman.
It is hard to find a worse prediction in recent history, because the Internet has completely transformed our economies, our lives, and even, the whole world.
One of the largest effects of this has been a complete overhaul and transformation of the ways we do business. This seems quite clear now, but how did so many economists think the Internet won’t have a large effect just a few decades ago.
- Is the internet fully utilized today?
- Can we still expect productivity gains thanks to it?
These are all questions we’ll attempt to answer in this article.
Why Did Most People Think the Internet Won’t Have a Big Impact?
Our economic systems are more complex than ever before. Since the end of world war 2, we’ve lived in a highly-connected, highly knowledge-heavy, information-dominant economy, and the trends keep showing more and more jobs will rely on specialization and comparative advantage going forward.
In such a highly complex and large economic system, it takes a lot of time before a technology is fully absorbed and productively used in the economy. We see this with many inventions in history – even the printing press and the steam engine didn’t transform businesses overnight, but rather, it took decades and even centuries for these technologies to be fully widespread and utilized.
That’s why, when a new disruptive technology is introduced, its initial impact will always be very limited. Some economists failed to see that this limited initial impact doesn’t mean the Internet won’t be a game-changer later on.
Is the Internet Used to Its Full Potential?
Actually, the Internet transformed our economy way sooner than we expected. It took the steam engine more than a century to completely change every aspect of production and management; it took the Internet only two decades.
This is because of the qualities of the Internet. It is more flexible, more easily accessible to businesses everywhere. The nature of the Internet made the changes proliferate much faster.
Although, as the growth of Silicon Valley and the startup culture shows, the Internet is still not fully utilized and there’s still a lot of productivity gains and cost-saving techniques that aren’t widely implemented.
What are Ways Your Company Can Use the Internet to Save Money
So far, we’ve talked about the Internet, its history, and its impact, but it was rather abstract and generalized.
Now, we’ll discuss how you, as a business owner, can use the Internet to reduce costs, increase productivity, and save money in the long run:
#1. Business Process Management Software
Business processes refers to the various tasks, employees, contractors, etc. you’ll need to deliver a certain service to customers or consumers. Each process typically involves many people, usually more than one department, and produces a lot of data.
To manage all of this, you need to use a BPM software program. It’ll make your employees more productive and allows you to analyze the data easier.
#2. Increased Communication
Increased communication is a wonderful thing in the workplace if done correctly. Most business analyses show that long meetings make employees more unproductive and aren’t useful – being able to communicate on the fly and disperse relevant information throughout your company is extremely important.
The communication channels, however, should only be used for work-related information.
E-commerce is the biggest driver of growth on the Internet. It is extremely easy to expand and deliver products if you create an e-commerce platform. Even Youtubers are using startups like Fourthwall to get into the e-commerce business.
Creating and promoting an e-commerce business will lessen the needs of having physical locations and help you reach a bigger audience. It is a very common-sense step to take.