But the Internet is only the beginning. Ultimately everything in the world that has a chip inside it can be connected to the net. The shrinking microcosm of the silicon chip and the exploding telecosm of network connections are creating the Network Economy. The massive connectivity of objects and individuals is growing into a tidal wave of signals over a global network that is changing the fundamentals of our economy. For instance, an axiom of our old economy is that value comes from scarcity.
Diamonds are valuable because they are scarce.
But in the Network Economy, value is created from plenitude. The fax machine is valuable only when the rest of the world has a fax machine. It is the relationship of things to each other that surges in value. In future, as the cost of producing an object falls steeply, it will be the network that invents, manufactures, and distributes them that will increase in value. In the Network Economy, success is exponential, not linear.