Thursday, December 10, 2009

Then and Now

We love the new.  New has become a synonym for Improved.  New is novel, something we haven't experienced before.  New is progress.  New is fun.

But, as the old adage says, "There is nothing new under the sun."  You would think that technology would be the exception.  In the details this is, in fact, true.  We have only just begun to explore nano, bio, and eco technologies.  What we take to be new technology systems, however, are not so new. Here are a couple of examples in what I might call the Then and Now category.

Light-rail transportation (the Now) is being brought to cities that for years have had no public transportation except buses.  But light-rail is not a new concept.  You might think the Then parallel to light-rail is the streetcar but the better comparison is the interurban rail network that connected towns and cities in much more of a commuter-like pattern.  Interurbans were the marriage of the electric motors of the streetcars with the heavy coaches of the passenger train.  The interurbans exploded onto the transportation scene (particularly in the midwest) in the first fifteen years of the twentieth century.  From virtually no trackage at the turn of the century, by 1916 interurbans accounted for over 15,000 miles of track in the United States.  The reason for their emergence was the need for more cost-effective and frequent connections between small towns and cities that the railroads might not have served or served infrequently.  Another major factor was that while the automobile was becoming more common in cities, the roads between cities were poor at best and a more reliable transportation system was needed.

But most of the interurbans, while technically successful, were poor businesses from the start.  They were under-capitalized, expensive to maintain, and always starved for enough revenue-paying business to support themselves as private enterprises.  By 1930 and the Great Depression, most of the interurban companies had gone into bankruptcy.  The emergence of light-rail in the last two decades is largely predicated on a new business model:  public ownership.  The common gripes about light-rail is that they must be supported by taxpayers who don't use the system and that they only serve a small geography.  Those arguments are true for the first line that is built.  But like all networks, the power of the network goes up as a power function of the number of nodes in the network.  More lines bring even more power to the entire network.  Eventually, as can be seen in the robust networks in some of our larger cities, people choose to take the public transportation system even if they own a car.

So, light-rail is the reincarnation of an older concept of interurban rail networks.  The second New but Not-So-New concept is the mega on-line retailer.  Think Amazon.  Amazon revolutionized the book trade and has been moving into adjacent markets in other consumer product lines.  Their business model recognized the power of two things: the internet and package delivery services.  By selling to such a wide market, they can increase their volume and hence offer lower prices.  Neat but not new.

In the 1870's Aaron Montgomery Ward began his catalog retailing business in Chicago.  It was based on the concept of customers in the rural country-side ordering their products directly from his catalog and having them delivered by the post office.  He was one of the first to innovate the idea of a money-back guarantee return policy.  If you didn't like it, send it back.  No questions asked.  Ward's concept was quickly copied by Sears and for the better part of a century, these two catalog retailers were among the largest in the country.  They were Amazon pre-internet.  It is interesting to speculate how they might have survived had not the automobile created the shopping mall in the years before the internet.  If the internet had been born earlier, perhaps the catalog retailers would simply have morphed onto the internet and still be dominant.

My point is only that while a specific technology might be new, a technology concept can be reused multiple times.  Then and Now.  The new New.  There is nothing new under the sun.

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