His thesis is that technology has created a new ecosystem. Students of economics are brought up to think of economic activity as the interaction between land, labour and capital. Today, says Dr Ye, these factors have been added to. Technology is as much an enabler as capital; collaboration and sharing dramatically alter the meaning of labour; big data and the associated information structures of the Cloud and machine learning are new factors of production.
The modern economy is a trinity of platform, sharing and the micro-economy — its hundreds or thousands of individuals collaborating through a technology platform to deliver a common purpose. It is doing for business what Amazon did for shopping.
A customer searches the web for a product which, once found, is ordered because the price, the delivery time and hopefully the quality looks right. No one pays much attention to whom the supplier is, nor even if it is in this country.
That principle is being applied to business. A company receives a request for a product. It has nothing in stock so it sources the components, just like an Amazon shopper. They arrive within hours and are assembled so the order is fulfilled. Hence “made on the internet”.
Contrast this with the way most businesses are organised, and have been since the industrial revolution. A firm designs a product and then forges long-term relationships with sub-contractors and independent companies to be the suppliers of the components it needs — sub-contractors may indeed design and develop the parts specifically to meet its specialised requirements. Then the company looks at the market, tries to get a feel for what the likely demand will be and sets its production levels accordingly.
If it is very lucky it gets it right, but normally it is engaged in a costly continuous adjustment, a juggling act between producing too much and having to finance unsold stock, or producing too little and seeing alienated customers buying from a competitor.
In theory all those problems disappear if you can deliver manufacturing on demand, and this Alibaba platform is the closest anyone has yet got to that, which is why it is such a revolution —and far ahead of anything in the West.
But its implications go well beyond the narrow world of corporate organisation. It also forces a rethink about how companies manage their supply chains, how people develop and exploit their ideas, how companies and people procure goods and services, and what governs the relationships between all these parties. It challenges how the world of work, and indeed society itself, is organised.
The platform makes everything transactional; people and firms can opt in or opt out. No one need work for a company but can instead pursue their own ideas. Dr Ye’s vision is that people with talent can do what they want. The world of work, he says, will be a much happier place.
In his world, technology should be seen as a source of hope, not fear and uncertainty.
