Reducing The Barriers To Innovation

Steve Lohr has an excellent article on the rise of importance of startups – partly facilitated by the dawn of the internet. The second-generation Internet technologies - along with earlier tools like the Web itself and e-mail - are drastically reducing the cost of communicating, finding things and distributing and receiving services online. That means a cost leveling that puts small companies on equal footing with big ones, making it easier for upstarts to innovate, disrupt industries and get big fast. The phenomenon is a big step in the democratization of information technology. Its imprint is evident well beyond business, in the social and cultural impact of everything from blogs to online role-playing games. The transformation is real - In olden days, big companies that could afford to spend and focus on innovation reaped the benefits of greater efficiency, increased sales and expansion into distant markets. That pattern is being challenged by a bottom-up revolution, one fueled by a second wave of Internet technologies like the search services from Google, Yahoo and Microsoft and software delivered as a utilitylike service over the Web.