Economics and Agent Society
I've been reading a couple of papers which suggest a paradigm shift in business strategy will surely be upon us soon. While these sorts of papers seem more like they're trying to sell copies of the "forthcoming new book" more than anything and are full of buzzwords, something in them resonates with how I think an agent society should be able to operate.
The idea according to Hagel & Brown (2005) is that we are increasingly moving from a "push" model to a "pull" model.
One point stressed by Hagel and Brown is that the reason this works well in practice for some large companies is partly because they have a vast number of subcontractors with different specialties, but also because they do take into account the social factors involved by sticking with the same subcontractors but switching around exactly who manufactures different parts and how they go together according to the needs of a product. Again, the Granovetter paper I mentioned last time is relevant to this.
Internally within companies this idea is being used as well. Within Cisco apparently there's a system whereby the salespeople have training courses relevant to the client they're about to see given to them on a just-in-time basis. The demand here is coming from the client side - they're pulling the employee into learning what they need to know, as opposed to the sales rep turning up and trying to sell whatever they usually sell. It sounds very efficient - for a big business that can afford to have all those training courses sitting around waiting to be used at least.
I think the main point of all this is that consumers do have options now, and businesses are in a position where they can tailor their products and their services far more individually while still on a massive scale. Examples of pull platforms are rife on the Internet - social networking programs are one example. The consumers are also the creators, the business just enables it. Google ads are another example, they aren't very sophisticated, but they're starting to go in that direction by only supplying ads that seem relevant to the viewer based on the page they're already viewing, leading to a much greater "hit rate" than ads that are just globally broadcast to all and sundry.
I think an agent society should certainly incorporate aspects of this. Every agent should be a creator not just work within the system. Quite possibly this means that an OS-agent relays data about the user on the computer it resides on and between the agent society and machine learning type techniques the user gets better service. In a trading arena it's less obvious, but the agents should evolve to form a structure which discourages cheating - as this kind of idea is really "eBay with agents" it's pretty much covered already anyway.
It's pretty much about the end user and tailored service enabled by greater flexibility and communication. There might be some efficiency lost as it's harder to have such a flexible product line (whatever the product is), but there are greater rewards for everyone when it works.
Having written this, the reasons this model should work within an agent society seem obvious - an agent society is already using something like this by definition. Nevertheless, it's still interesting to see this being suggested as a business model not just for the Internet businesses but for manufacturers and all all other businesses as well.
John Hagel, John Seely Brown - From Push to Pull - Emerging Models for Mobilizing Resources
Working Paper, 2005
Mark Granovetter - Economic Action and Social Structure: The problem of Embeddedness, 1985
The idea according to Hagel & Brown (2005) is that we are increasingly moving from a "push" model to a "pull" model.
Push models treat people as passive consumers (even when they are producers like workers on an assembly line) whose needs can be anticipated and shaped by centralized decision-makers. Pull models treat people as networked creators (even when they are customers purchasing goods and services) who are uniquely positioned to transform uncertainty from a problem into an opportunity. Pull models are ultimately designed to accelerate capability building by participants, helping them to learn as well as innovate, by pursuing trajectories of learning that are tailored to their specific needs.If one reads between the economist-speak it sounds like a good idea but without a lot of substance. Some of that substance is filled out in the rest of the paper. The immediate example that came to mind of this transition is the increasing use of "just in time" manufacture whereby manufacturers move away from the old model of making a whole lot of stuff and putting it in warehouses and then trying to sell it, towards producing items only as they are needed (or ideally just before). The point is that they aren't keeping a large inventory on hand, so that if the market changes they can quickly react.
One point stressed by Hagel and Brown is that the reason this works well in practice for some large companies is partly because they have a vast number of subcontractors with different specialties, but also because they do take into account the social factors involved by sticking with the same subcontractors but switching around exactly who manufactures different parts and how they go together according to the needs of a product. Again, the Granovetter paper I mentioned last time is relevant to this.
Internally within companies this idea is being used as well. Within Cisco apparently there's a system whereby the salespeople have training courses relevant to the client they're about to see given to them on a just-in-time basis. The demand here is coming from the client side - they're pulling the employee into learning what they need to know, as opposed to the sales rep turning up and trying to sell whatever they usually sell. It sounds very efficient - for a big business that can afford to have all those training courses sitting around waiting to be used at least.
I think the main point of all this is that consumers do have options now, and businesses are in a position where they can tailor their products and their services far more individually while still on a massive scale. Examples of pull platforms are rife on the Internet - social networking programs are one example. The consumers are also the creators, the business just enables it. Google ads are another example, they aren't very sophisticated, but they're starting to go in that direction by only supplying ads that seem relevant to the viewer based on the page they're already viewing, leading to a much greater "hit rate" than ads that are just globally broadcast to all and sundry.
I think an agent society should certainly incorporate aspects of this. Every agent should be a creator not just work within the system. Quite possibly this means that an OS-agent relays data about the user on the computer it resides on and between the agent society and machine learning type techniques the user gets better service. In a trading arena it's less obvious, but the agents should evolve to form a structure which discourages cheating - as this kind of idea is really "eBay with agents" it's pretty much covered already anyway.
It's pretty much about the end user and tailored service enabled by greater flexibility and communication. There might be some efficiency lost as it's harder to have such a flexible product line (whatever the product is), but there are greater rewards for everyone when it works.
Having written this, the reasons this model should work within an agent society seem obvious - an agent society is already using something like this by definition. Nevertheless, it's still interesting to see this being suggested as a business model not just for the Internet businesses but for manufacturers and all all other businesses as well.
John Hagel, John Seely Brown - From Push to Pull - Emerging Models for Mobilizing Resources
Working Paper, 2005
Mark Granovetter - Economic Action and Social Structure: The problem of Embeddedness, 1985
posted by Rowan at
11:54 AM
3 Comments:
I guess I'm missing something.. how is an agent already doing this by definition?
If an agent exists to trade, or play prisoner's dilemma games, or whatever, how is that parallel to Just-in-time production?
I guess you're saying the agent already predicts what it's partner/opponent is going to do and plays accordingly, but is that really the same having a backlog of courses which can be taken as clients become available who need that skill?
As for switching subcontracts about, what does that achieve?
But back to Cisco. This interests me. You seem to be saying that Cisco provide consultants to solve clients' networking problems. However technology is dynamic, and so instead of having people who've told everyone that optic fibre is the way to go and forevermore shall be, you have a lot of people with some basic knowledge, and whenever a client rings asking for such-and-such, they train someone in it.
However training takes time, so it's a while before the client is served. That's inefficient and bad for business, so you have to train them Just-in-Time. But there's every chance that the course they've just done then ISN'T one that's needed here and now, so they'll have to do another... I can't help but think there's some tradeoff there between that, and having specalists who focus in one certain area and take a course, work as a consultant in that area (sell what they've always sold), but every 6 months or so be pulled out of the consultancy team back into training, and get 'upgraded' on a regular basis, so rather than trying to predict what people want and training one person specifically, you train a team and keep them up to date with all things that are likely to be useful, broken down into categories so the workers specialise in one category..
By
Anonymous, at 10:46 AM
It isn't at all parallel to just-in-time manufacture, but the point is that all of the agents are contributing to the society (whatever kind of "society" it is, this is radically different between the ideas I've suggested). Each of the agents is already a creator as well as a consumer. Just-in-time manufacture is just one example of the "pull" model, and in fact it's only part of the way there.
With Cisco - I paraphrased rather dramatically there. Cisco apparently has an "e-learning system" in place which includes a large number of modules with some kind of clever searching and recommendation system. From the paper: "For example, if a sales person has scheduled a sales call with a financial services company, the e-learning system might poactively suggest that the sales person review a new learning module on new product features that are of particular interest to financial services companies." etc etc.
So it ensures that representatives of Cisco are saying the same things about the same products, while more specialised knowledge is learnt as necessary. In theory at least, this works very well.
By
Rowan, at 11:32 AM
Ah, okay. All makes more sense now.
By
Anonymous, at 11:59 AM
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