Information, the means to act upon the flows of information is only a resource as long as it is timely. The time span in which information really makes a difference is neither intrinsic in the information itself nor in the flow upon which it intends to act but is determined by the relation between the node and flow, by the purpose of action. For the dealer in the capital markets 15 minute old quotes are worthless, for the journalist who prepares the daily summary for a newspaper they are valid, and for the analyst who tries to develop models for predicting the future movements the quotes of the last couple of years may be of crucial importance as a testing-ground for his models. Differentiation Information is difference and the nodes survive as long as they can make a difference, that is as long as they can produce information that is valid for others. Highly differentiated nodes can group together in order to respond to newly arising opportunities and dissolve after their mission is achieved.
Differentiation is reduction of complexity.
Vast amounts of data are reduced according to the inner structure of the node to specific information. This information, the difference between the node and the flow and among the nodes, is the basis upon which the flows are redirected and new connections are established and old ones maintained. Increasing Returns and the New World of Business. A Necessary Unit. The Executive as Dropout.