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Why information should influence productivity 173chapter 2 in “Managing Information: Issues of Networks, Value, Policy, andPrinciples” unpublished PhD thesis, Massachusetts Institute of Technology,Cambridge, MA.—— and Brynjolfsson, E. (1995) “Communication Networks and the Rise of anInformation Elite: Do Computers Help the Rich Get Richer?,” Proceedings of theInternational Conference on Information Systems, Amsterdam, pp. 93–6.—— and —— (1996a) “Electronic Communities: Global Village or Cyberbalkans?,”International Conference on Information Systems, December 16–18, Cleveland,Ohio.—— and —— (1996b) “Internet: Could the Internet Balkanize Science?,” Science 274(5292): 1479–80.——, —— and Madnick, S. (1995) “Why Not One Big Database? Principles for DataOwnership,” Decision Support Systems 15 (4): 267–84.Von Hippel, E. (1988) Sources of Innovation. Oxford: Oxford University Press.Wasserman, S. and Faust, K. (1994) Social Network Analysis: Methods andApplications. Cambridge: Cambridge University Press.Watts, D. J. (1999) Small Worlds: The Dynamics of Networks between Order andRandomness. Princeton, NJ: Princeton University Press.—— and Strogatz, S. H. (1998) “Collective Dynamics of ‘Small-world’ Networks,”Science 393: 440–2.——, Dodds, P., and Newman, M. (2002) “Identity and Search in Social Networks,”Science 296: 1302–5.Weick, K. E. (1984) “Small Wins: Redefining the Scope of Social Problems,”American Psychologist 39 (1): 40–9.Wenger, E. (1998) Communities of Practice: Learning, Meaning, Identity. Cambridge:Cambridge University Press.Wernerfelt, B. (1984) “A Resource-based View of the Firm,” Strategic ManagementJournal 5: 171–80.Winter, S. G. (1987) “Knowledge and Competence as Strategic Assets,” in D. J. Teece(ed.), The Competitive Challenge, pp. 159–84. Cambridge, MA: Ballinger.Yang, S. and Brynjolfsson, E. (2003) “Intangible Assets and Growth Accounting:Evidence from Computer Investments,” discussion draft (available at: http://ebusiness.mit.edu/erik/itg01-05-30.pdf).Zander, U. and Kogut, B. (1995) “Knowledge and the Speed of Transfer and Imitationof Organizational Capabilities: An Empirical Test,” Organization Science 6: 76–92.

7. Labor in the network society: lessonsfrom Silicon ValleyChris BennerDuring the dramatic Internet-driven boom of the 1990s, Silicon Valley wasdescribed as the home of “the greatest-ever legal creation of wealth in thehistory of the world.” 1 For the young entrepreneurs, engineers, andcomputer professionals who benefited from abundant job offers, high wages,and sky-rocketing stock options during this time, Silicon Valley offeredseemingly limitless opportunities for economic prosperity. By 2003,however, conditions for workers in the region had radically changed. Stockprices crashed, making most stock options worthless, while in the space ofonly two years, more than 18 percent of total jobs in the Valley disappearedand average pay declined by an astonishing 22 percent (JV: SVN, 2003;Sylvester, 2003).A survey in June 2003 found that more than a quarter of all workers in theregion had been laid off in the previous two years, and that nearly 35 percentof families had at least one person in their household out of work for morethan three months during that time (Steen, 2003; Sylvester, 2003). Softwareprogrammers and web designers, who three years previously had beencomplacent in their secure futures at the core of rapidly expanding globalsoftware and Internet industries, were now found in the streets of SanFrancisco, protesting against the global outsourcing of their highly skilledjobs, which they feared threatened their future and very livelihood(Asaravala, 2003; Shinal, 2003).Many workers and analysts in the region have been surprised at this rapidchange of fortune. In reality, however, the volatility of the past three yearsmerely continues (in perhaps a more extreme way) the pattern of insecurityand volatility that has characterized work and employment in SiliconValley’s information technology industries for at least the past thirty years.As the information technology industries that have dominated the region’seconomy for the past half-century have developed, evolved, and grownthroughout the globe, rapidly changing technology, volatile competitiveconditions, and constantly shifting skill requirements have led employers toplace a high premium on labor flexibility. As a result, employment in the174

Why information should influence productivity 173chapter 2 in “Managing Information: Issues of Networks, Value, Policy, andPrinciples” unpublished PhD thesis, Massachusetts Institute of Technology,Cambrid<strong>ge</strong>, MA.—— and Brynjolfsson, E. (1995) “Communication Networks and the Rise of anInformation Elite: Do Computers Help the Rich Get Richer?,” Proceedings of theInternational Conference on Information Systems, Amsterdam, pp. 93–6.—— and —— (1996a) “Electronic Communities: Global Villa<strong>ge</strong> or Cyberbalkans?,”International Conference on Information Systems, December 16–18, Cleveland,Ohio.—— and —— (1996b) “Internet: Could the Internet Balkanize Science?,” Science 274(5292): 1479–80.——, —— and Madnick, S. (1995) “Why Not One Big Database? Principles for DataOwnership,” Decision Support Systems 15 (4): 267–84.Von Hippel, E. (1988) Sources of Innovation. Oxford: Oxford University Press.Wasserman, S. and Faust, K. (1994) Social Network Analysis: Methods andApplications. Cambrid<strong>ge</strong>: Cambrid<strong>ge</strong> University Press.Watts, D. J. (1999) Small Worlds: The Dynamics of Networks between Order andRandomness. Princeton, NJ: Princeton University Press.—— and Strogatz, S. H. (1998) “Collective Dynamics of ‘Small-world’ Networks,”Science 393: 440–2.——, Dodds, P., and Newman, M. (2002) “Identity and Search in Social Networks,”Science 296: 1302–5.Weick, K. E. (1984) “Small Wins: Redefining the Scope of Social Problems,”American Psychologist 39 (1): 40–9.Wen<strong>ge</strong>r, E. (1998) Communities of Practice: Learning, Meaning, Identity. Cambrid<strong>ge</strong>:Cambrid<strong>ge</strong> University Press.Wernerfelt, B. (1984) “A Resource-based View of the Firm,” Strategic Mana<strong>ge</strong>mentJournal 5: 171–80.Winter, S. G. (1987) “Knowled<strong>ge</strong> and Competence as Strategic Assets,” in D. J. Teece(ed.), The Competitive Challen<strong>ge</strong>, pp. 159–84. Cambrid<strong>ge</strong>, MA: Ballin<strong>ge</strong>r.Yang, S. and Brynjolfsson, E. (2003) “Intangible Assets and Growth Accounting:Evidence from Computer Investments,” discussion draft (available at: http://ebusiness.mit.edu/erik/itg01-05-30.pdf).Zander, U. and Kogut, B. (1995) “Knowled<strong>ge</strong> and the Speed of Transfer and Imitationof Organizational Capabilities: An Empirical Test,” Organization Science 6: 76–92.

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