So that's that then. The internet boom is over. Last week brought the now usual wave of casualties and lost hopes. TheStreet.com closed its British operation with more than 60 job losses, Ready2shop puts its website into 'hibernation', the Government's auction of the fixed wireless spectrum is collapsing, and the take-up of third-generation Wap mobiles is bitterly disappointing.
Infopunditry is at sixes and sevens. No more confident predictions that everything from the newspaper to the nation state is set to die before the advance of the new economy. No more talk of a new business model which frees dotcoms from the tedious preoccupation of making a profit. Instead, the dotcoms are watching their numbers being decimated. Their hope is to get to the 'other side' of the current evaporation of investor confidence when the old order will re-establish itself and everyone can become a millionaire again.
In this hope, they are wrong. The boom in hi-tech shares that cascaded out of the United States to infect the globe really was like seventeenth-century tulip-mania. It will never return in the same way; indeed, the greater risk is that the puncturing of the bubble will precipitate a recession as banks and institutional investors draw in their horns to cover their losses, thus triggering as vicious a circle of retraction as dizzying as its upward impulse during the boom.
The danger in this atmosphere is that we get as pessimistic about the impact of the new economy as we once got over-optimistic. The arrival of information technology is transformatory, at least for those parts of the economy and society where it goes with the grain of social possibility. IT is making every organisation more porous, with communication enabling new alliances and partnerships; the future organisational form will not be the traditional inwardly focused, hierarchically structured factory or office, but the externally focused network. But the trick to understanding what the network economy and society will bring is not to get swept away by the discontinuities between then and now - it is to understand what must endure.
This has been the Achilles' heel of infopunditry. The fact, for example, that an almost infinite amount of information is instantly available and communicable on the web is only a precondition for change, not its guarantor. Information has to serve an economic and social purpose. The reason why mobile-phone usage has taken off is that it has been socially driven. The mobile, and especially personalised text and voice-mail messages, permits a deepening of social interaction and our capacity to interact with other human beings - witness its role in teenagers' social lives. The mobile phone is not a tool to enable us to migrate to cyberspace; it is a tool that grounds us in human interaction.
This is why predictions that the net will see the end, for example, of the newspaper are so silly. Users of news websites use them in addition to, rather than instead of, their newspaper reading; it is something they have read that will typically trigger a search for more information on the net.
The newspaper remains a portable and accessible source of news, but just as importantly is a key link to membership of whatever cultural subgroup to which we belong; rather than plough through the hits that search engines provide or log on to receive our customised news service, we read the paper that we trust to have sorted out what is important for us - and whose selections we need to know because they configure who we are in interaction with others.
Indeed, newspapers are likely to become more rather than less important; they are trusted brands, landmarks that can guide us through a sea of information. The same rule applies to get any kind of fix on the future. Your projections have to pass the social interaction/social purpose test - and even then your chances of getting it right are pretty hit and miss. As Keynes observed, the point about the future is that it is unknowable.
But take the supposition about social interaction and think it through. IT should work best either where it builds on pre-existing social patterns or creates new ones, or where the relationship is already nothing more than contractual and so does not depend on social interaction. Thus, IT usage would grow explosively and dynamically in two main areas: those professional and cultural domains, such as consultancy and the media, where it reinforces necessarily dense patterns of social interaction, or in those areas where all firms, especially manufacturers, have simply contractual relationships, notably with their supply chain. And those are the areas where its impact is already huge. If my hunch is right, one overriding result will be to entrench and widen the already alarming inequalities in the structure of work, patterns of income and lifestyles.
So it is that there is a new, rich, individualistic but interdependent middle class emerging, centring on what John Knell, my colleague at the Industrial Society, has dubbed the free worker. These are the mobile, skilled individuals who can win business from the porous networked organisations as self-employed independents - everything from TV producers to business consultants.
Their entry card is their reputation and contacts book, and to stop their talented workers from joining their ranks employers pay premium salaries, encourage home-working and relax their dress codes. These are the members of 'hot' networks enjoying the boom in house prices in the privileged, drawbridge ghettos in which they live, educating their children privately and who tend to be dismayingly politically disengaged.
The losers are the anonymous workers for subcontractors in big supply chains, forced to bid for contracts in auctions mounted on the new procurement websites - and where relationships can be managed largely in cyberspace. The five great multinational car companies have just launched Covisint, the trade exchange that will post huge potential contracts on its procurement websites - but which will be auctioned by progressive lowering of the contract price.
This is an instrument for ensuring contract compliance at the keenest prices, and whose impact will be to bid down wage rates along with terms and conditions of employment. But the contract relationship was nothing more than contractual in the first place; IT simply reinforces the capitalist logic to its brutal conclusion.
What IT is doing, in short, is intensifying pre-existing trends, so that old arguments reappear in a wholly different guise. For example, the dotcoms that will survive and prosper will be those going with the grain - the auction sites and the specialist information providers. In public policy terms, though, the arrival of hot and cold networks, and the accompanying new inequalities, has the paradoxical consequence of remaking the case for redistributive tax policies, powerful social insurance and collective provision of schools and hospitals.
They help society to cope with and exploit the new economy and its consequences rather than being 'burdens' to be reduced, so that the much derided European social model becomes an advantage rather than a hindrance.
Information technology, notwithstanding its current travails, really is transformatory, but in ways few currently comprehend.
