Institutions – Save it or leave it?

When I first graduated from engineering, I was fortunate to work for a telecom giant. It was the number 4 equipment manufacturer in the world, and the president told us the goal was to be number 3 next year (which we did). As new hires, we had training, great opportunities, and a lot of fun. The facilities were amazing. It was built like a university campus, with glass towers, complete with cafeteria, gym, skating rink and baseball diamonds, even our own ATM machines.

I will never forget those words from the head of the research, he said our research team was so strong with so many patents, that even if we stopped doing anything, we would still have enough to last us another 25 years. It was truly an awesome institution.

In 2009 that company declared bankruptcy.

In technology domain maybe more so than others, failure of institutions has been the norm. Although the human impact behind those failures are always painful to bear, technology advancement has only accelerated. In fact, failure of old institutions is almost always accompanied by the birth of new institutions, thus starting a new lifecycle.

History is filled with colossal failure of once mighty institutions, their significance often fading into distant memories. Dynasties fall, replaced by another. In nature, whole species sometimes disappear. New species emerge. Charles Darwin called it the “natural evolution”.

The Internet and associated technology advancement, whether it is processing power, bandwidth or storage, is constantly changing the cost equation. Sometimes those cost equations are the foundation of institutions. When those equations are no longer balanced, and if institutions are not able to adapt and re-balance, failures will occur.

The more meaningful question is, are new institutions replacing the old, to fill the gap socially and economically? History has shown that has always been the case, as the failure is often the direct result of the new. Wouldn’t we be better served by embracing the new, than trying to save the old?