Tuesday, October 14, 2008

Google’s Knol , Technology Adoption, Increasing Returns to Scale, and Paul Krugman

Over at Underlying Logic, Eric Simpson, discusses Google’s new web encyclopedia Knol. Knol is in some sense is competing with Wikipedia, but the difference is that article are written and attributed to an individual author. The idea is that as more people link to an article, the article gains in rankings. Good articles like websites on Google’s search engine will rise to the top.

So what’s the problem? I was thinking of writing an article, but I wasn’t sure if Knol was popular enough. There are few article on there and few with people who seem reasonably credentialed. We might think of the value (or expected value) of me writing an article to be related to the number of articles already written. As more articles are written and Knol becomes more popular the more likely I am to write an article.

A similar problem occurs when countries try to adopt technology. In a developing country a businessman may only pay for internet service if others are also paying for internet services. This is because having e-mail access is a lot more valuable if people you want to e-mail actually have e-mail access to. For a lot of technologies the value of adoption is related to the percentage of other people who have adopted.

The difficult thing is how to get the first few people to write a Knol article or adopt a new technology. As Paul Krugman has suggested, economies cannot adopt new technologies that cost more but are more productive, unless enough others adopt. (See this article, which may be too technical for some)

So what’s the solution, in both cases it might be a “Big Push”, in the case of Knol pay a few well known experts to write articles, increasing Knol’s credibility. In the case of economies it might be to provide incentives to particular sectors to help those sectors grow and making it easier for other businesses to adopt technology.
Bookmark and Share

No comments: