7 Chapter 2 Literature Review: Markets, Intermediation and E ...

2.2 Drawing Parallels with Todays Economic Development
The parallels of the historical period 1830-1900 with today’s economy are the rapid
development and diffusion of new information and communication technologies
(ICT), the opening up of markets to wider competition, new opportunities for
intermediation, and the creation of new sales channels. Much current e-commerce
research ignores these parallels by taking a short-term view of technological change.
This section tries to redress this shortcoming by placing these new developments in
the light of the above established literature. It will be argued that although modern
ICT development has had far-reaching and unpredictable ramifications, similar
patterns can be found from the analysis of the previous two sections, and that these
similarities are informative of a broader perspective of economic change.
In recent times with the development of ICT we have seen increasingly fast and
ubiquitous networks through which all types of digital information flow. This
technology enables teleworking, the convenience of digital information storage and
retrieval, and increasing automation of repetitive work, among other benefits. Many
improvements have been possible thanks to the rapid communication of up-to-date
and accurate information. In business terms, this allows not only a better customer
service, but also greater internal efficiencies, brought about by improvements in
inventory management, reduced product cycle times, etc. As an example of the impact
of new ICT, Electronic Data Interchange (EDI) is examined in section 2.4.
As discussed in the previous section, researchers, economists and historians
examining market and organisational structure, have given their attention to key
issues about the conflict between competitive and cooperative relations in markets,
and about how best to balance between markets and hierarchies as alternative ways to
organise production and distribution. Markets have the advantage of flexibility in that
activities which become unproductive or unnecessary can be easily exchanged, and
that elements have a better opportunity to excel in their specific roles. However,
market mechanisms do not usually produce good information flow. Integration via
hierarchies has the advantage of improving coordination and control between the
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