What came first: Economics or Informations Systems? And where does Entrepreneurship fit in?

Written: July 1998, in Cape Town, South Africa; Updated: January 2000, in Cape Town, South Africa.

Imagine a world where separate people live by subsistence of the land. Imagine a single apple farmer. He has some cattle, a river passing through his land and enough food for only his family. This man's "farm" stays relatively the same with the same number of trees. One day the farmer cuts open an apple and notices that this one apple alone contains twenty seeds. He counts that there are only eight trees on his farm and, for the first time, notices the inefficiencies of simply letting trees grow randomly. He realises that if one apple produces twenty seeds, then each apple has the potential to yield, in theory, twenty more trees. He sees that if he plants all the seeds of all the remaining apples on his farm, he will have a vast number of trees once the newly-planted seeds mature.

Let us stop at this point and examine the thought processes of the farmer in question. Firstly, by merely having the idea to plant seeds in an organised fashion instead of allowing the apples to fall randomly and leaving the growth of future trees up to chance, the farmer has displayed the world's first sign of true entrepreneurship. Not only that but the farmer has stumbled onto finance as well! The seeds from his apples have been used to finance his venture. So far we see that entrepreneurship and finance preceed everything else.

With the introduction of the new farming technique, the farmer starts producing too much for his own consumption needs. He intends now to use his excess produce to barter for other goods. He thus needs to tell the community about his product thus creating product, place (distribution) and promotion. Later he starts bartering for goods in return for his apples and creates price. Thus he has the "4 P's" of marketing. So now we have entrepreneurship, then finance and now marketing.

As things progress and get out of control he realises the need for a production management system, but before he can do that he needs to know what happened historically and be able to control what happens in the future thus creaing the first information management system, then accounting system and then production management system.

As he employs people he realises that he can't pay them in apples as then they can't buy all the things they need. He creates a "promise to pay in apples", a promissory note! Now he has finally created the foundation of economics, i.e. by creating a monetary system.

The order therefore that our disciplines were created: entrepreneurship, finance, marketing, information management, accounting, operations/production management and finally economics.

So were does the internet fit into all this? At the beginning of the century Marconi invented Radio (1901) thus providing this century's must incredible achievement: Instant Communication. Although the telegraph was invented in 1774 by Lesage, it was only radio waves and all that came from it that really changed our lives as we know it. Before radio, our doings were only found out days or usually months later. We could get a head start easily. The telephone was invented in 1876. Until 10 years ago (1990) one needed to lift a telephone, whether it was to send a make a call, send a telex or a fax, or send a modem message, but the internet means that we can communicate without the telephone and it provides the world's library at our fingertips. Of-course the world has had a library before, in Alexandria (but the world was a much smaller place then). But now people can explore, inter-net with each other, and communicate involving bi-directional communication without lifting a phone.

The current major revolution: Wireless Technology. Isn't it amazing that with Wireless Technology we go straight back to Marconi?

David's Thoughts

David Lipschitz is the owner and managing director of Orbital Decisions®, an IT and IS consultancy in Cape Town, South Africa. He holds a Computer Science degree from the University of Cape Town (South Africa), a Computer Science Honours degree from Rhodes University in Grahamstown (South Africa), an MBA from Cranfield University (UK) and a Textile Diploma from the Cape Town Technicon (South Africa).

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