Don Tapscott put it well in Wikinomics, when he wrote that “the Internet has caused transaction costs to plunge so steeply that it has become much more useful to read Coase’s law, in effect, backward: Nowadays firms should shrink until the cost of performing a transaction internally no longer exceeds the cost of performing it externally.”74 Most companies have taken this approach purely for operational and cost-cutting reasons: They save money by outsourcing jobs to lower-wage markets. But they miss an important point. In the Internet Century, the objective of creating networks is not just to
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