I like to watch IBM as the best simple measure of how well the whole corporate sector is doing. Most of the revenue at IBM comes from its work enabling corporations to do business with each other, so as the corporate sector fades, IBM is forced to adjust. In its latest report IBM’s revenue is down for the 12th quarter in a row and down more than 10 percent year over year. Most of this latest decline is likely the result of currency fluctuations but some must represent the long-term trend. Looking at more stocks, the whole corporate services category is languishing, though there are exceptions, such as Cisco and SAP, holding their own in the face of the broader trend.
I am beginning to think that the rise of the quasi-expert is leading in a roundabout way to a change in the role of the corporation, and more immediately, a change in the nature of the large projects that companies like IBM excel in. A quasi-expert is someone who knows just enough about a subject to get useful answers from a search engine, discussion board, or reference book. As these technologies improve quasi-experts are suddenly everywhere, taking work away from the real experts that have studied a field for ten years or longer. In information technology, the last few years have seen a drastic decline in the kind of large-scale project failures we used to read about several times a month. Are the quasi-experts saving projects from failure by quietly correcting the mistakes that happened along the way? I think that must be part of what is happening.
When quasi-experts improve the work results of companies like IBM, this is not necessarily good for revenue. A project saved from going $100 million over budget is $100 million in revenue lost to someone. The high-margin revenue that comes from being hired to pick up the pieces of a failed project is harder to come by these days. The same trend could continue. With so many quasi-experts around, what do you need IBM for? To ask the question another way, what do you need the corporate structure for?
To see how far quasi-experts can go, you only need to look at the mobile applications that businesses left and right are encouraging us all to use. There are no true experts in mobile application development; the field is too new for that. Every app you see was created by people who were “faking it,” if you want to call it that, looking things up at every step of the way. If this approach can create so many high-quality apps (along with, I must hasten to add, a greater number of low-quality ones), it can also create all the other pieces that tie the world together. It is not hard to imagine where this could be heading. After a quarter century of people solving problems of every kind just by looking things up, the role of the large corporation in connecting the world has to be called into question.