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From the invention of the printing press to the telephone, the radio, and the Internet, the ways people collaborate change frequently, and the effects of those changes often reverberate through generations. In this video interview, Clay Shirky, author, New York University professor, and leading thinker on the impact of social media, explains the disruptive impact of technology on how people live and work—and on the economics of what we make and consume. This interview was conducted by McKinsey Global Institute partner Michael Chui, and an edited transcript of Shirky’s remarks follows.

Interview transcript

Sharing changes everything

The thing I’ve always looked at, because it is long-term disruptive, is changes in the way people collaborate. Because in the history of particularly the Western world, when communications tools come along and they change how people can contact each other, how they can share information, how they can find each other—we’re talking about the printing press, or the telephone, or the radio, or what have you—the changes that are left in the wake of those new technologies often span generations.

The printing press was a sustaining technology for the scientific revolution, the spread of newspapers, the spread of democracy, just on down the list. So the thing I always watch out for, when any source of disruption comes along, when anything that’s going to upset the old order comes along, is I look for what the collaborative penumbra is.

For instance, around MakerBot, which I was on the board of back when it was an independent company, most of the company, for the obvious reason, was focused on the possibilities of 3-D printing and the output of 3-D printers. But the thing I was most interested in was Thingiverse, which is the website where people were sharing and talking about their objects.

And you could see these things happening where somebody uploaded a little model for a radio-controlled, 3-D printed shell for a little radio-controlled car. And they said, “Here’s this thing. It looks great. There’s only one problem: It doesn’t work, because it’s too heavy. But I’m uploading it anyway.” And then other people who were good at figuring out, “Well, you can take the weight out here and there,” turned it into something workable. No one person made that radio-controlled shell.

So the collaborative penumbra around 3-D printing is a place where you don’t have to have someone who can do everything—from having the idea to making the mesh to printing it. You can start having division of labor. So you’ve got all of these small groups that are just working together like studios and still able to play on a world stage.

And all the way at the other end of the spectrum, you’ve got these collaborative environments where almost no one has to coordinate with anybody else. When I upload something to Thingiverse, or I make an edit on Wikipedia, it’s not like I need anybody else’s help or permission. So the collaborative range is expanding. The tight groups have more resources, and the loose groups can be much more loosely coordinated and operate at a much larger scale. And I think the people who think about collaboration want to know what’s happening to it, and the answer is everything.

Upending supply and demand

We’re in a world now where, unlike the old “you print the magazine in advance” model, demand creates supply. There’s not any of that sort of publishing bottleneck friction anymore. And so that has a predictable effect on price. And in fact, almost every information business that the Internet touches, the first thing it does is it rips the guts out of the scarcity model. It did it for music, it did it for books, it’s doing it for movies, it’s doing it for newspapers.

And the thing I came to, thinking about this problem, was abundance breaks more things than scarcity. Society’s really good at managing scarcity. If something is really valuable but hard to do, we develop a profession and we have all these pricing models, blah, blah, blah. Once something becomes so cheap that it’s not worth metering anymore, that’s when real social change happens.

The idea of open-source software as an alternate way of making operating system-scale code bases, that’s only possible when communication is so abundant globally that it may as well be free. So that’s the first set of effects you see.

The other set of effects, which is more narrowly targeted at the media industries, is that typically the new companies don’t take the profits of the old companies; they make the profits of the old companies go away. You end up having to shift from operating in a position of scarce resources and abundant profits to a world of abundant resources and scarce profits. And the design of businesses and organizations in that second world is very different from that first world.

Creating success from failure

It’s very often the case that what people set out to do as Plan A turns out to be effective and important, not because it works, but because it shows them what doesn’t work. I use the example of Wikipedia. Wikipedia started as the Hail Mary play out of something called Nupedia, which was a complete disaster. Nupedia was going out of business nine months in, and the Wiki was Plan B.

So this huge success turned out to be the thing that the group of people who’d failed at Nupedia were finally willing to try at the end of the process. And every now and again, you get a visionary set of founders who come up with Plan A, and Plan A works unbelievably well. You get a Google or an Amazon. And those are great when they happen.

But you also get things like Wikipedia or Twitter. Twitter was Plan B out of Odeo. Odeo was about to tank. They’re, like, “Well, we’re going to run out of money. There’s got to be something else we can do.” And the mission statement for Twitter was not, “We want to own the kind of public-facing set of headline-style observations.” The mission statement for Twitter was literally, “I want to keep track of people, using our cell phones.” That little sentence was how the whole thing got kicked off.

So I think one of the things to recognize, I use the analogy of a rocket ship: You can’t get a rocket to the moon just by aiming it. You also have to give yourself the ability to course correct. And when we look around at the landscape of really big successes, very often what we see is that the course correction turned out to be more important than the initial direction.