Home Geography The Internet as a Technology-Based Ecosystem: A New Approach to the Analysis of Business, Markets and Industries
The Nature of Hydrothermal Vents and their Formation
The appropriateness of the hydrothermal vent ecosystem as a basis for the analysis of the Internet and modern technology companies will now be explored in more detail. The first hydrothermal vent ecosystem was not discovered until 1977 (Lonsdale 1977), so current research is still comparatively limited. Scientists have commented that there is more knowledge of outer space than hydrothermal vent ecosystems (Gage and Tyler 1991).
Traditional (terrestrial-based) ecosystems that formed through photosynthetic processes (using sunlight as an energy source) were not considered to be appropriate for further analysis because their evolution had taken place over a very long time span, over hundreds and thousands of years (Dickinson and Murphy 2007). Alternatively, since hydrothermal vent ecosystems form very rapidly from growth to maturity in a few years (Tiwani 2014: 15) they were considered to be a more appropriate choice. Hydrothermal vent ecosystems are formed through the process of chemo- synthesis (chemical reactions). This process is hugely rich in minerals, and it has resulted in the emergence of what are considered to be the most productive ecosystems on the planet (Van Dover 2000). This is also true of high innovation companies which demonstrate high exponential growth (Ismail et al. 2014) due to Moore’s Law (Moore 1965) and the doubling of computing power every two years.
The hydrothermal vents are located at the bottom of deep oceans at depths of between 1500-4000 metres in the ‘Aphotic Zone’ which is impenetrable to sunlight. According to Van Dover (2000), 75 percent of all volcanic activity that occurs on planet earth is submarine volcanism. Since the analogy of volcanic activity is innovation, this would imply that the most disruptive technological breakthroughs are generated through deep-sea hydrothermal activity.
Figure 5.1 also illustrates how hydrothermal vent ecosystems form.
The movement of tectonic plates and volcanic activity creates cracks and fissures in the earth’s surface (crust) along ocean ridges. As seawater seeps into these cracks, it mixes with the hot magma below and then discharges geothermally heated water into the ocean (Gold 1999). This superheated water consists of sulphur-bearing minerals notably sulphides which create a large ‘mat’ of chemosynthetic bacteria around the vent chimneys (sometimes referred to as black or white smokers) from which organisms feed (Von Damm 1990). The ecosystem that is formed from this process is reliant upon the continued existence of the hydrothermal vent field as the primary source of energy; so an active vent (discharging ‘rich’ fluids) is essential to the life cycle of the ecosystem (Tivey 1998).
The organisms in a modern ICT ecosystem are individuals and organisations. The organisations in the HTV ecosystem are represented primarily by giant tube worms, vent mussels and giant clams (see Fig. 5.2). The individuals are the small crustaceans such as the Limpets and Amphipods. The ‘food’ and ‘energy’ that sustains these organisms is bacteria or data (structured and unstructured), information (processed data), knowledge and innovation
Fig. 5.1 The new hydrothermal vent ecosystem (Adapted from Van Dover: 2000)
(new products and companies). When the organisms (firms) feed off the bacteria (data) this processes it into information and when the organisms ( firms) reproduce this creates new products/services and new businesses.
The chemosynthetic bacterial mat surrounding the hydrothermal vent also represents accumulated data (see Fig. 5.2). This is formed from data (raw facts and statistics) at the lower level in the process. For example, the shift in the
Fig. 5.2 Hydrothermal vent nutrition source for clams and mussels (Adapted from Van Dover: 2000)
tectonic plates is the result of earlier radical innovations that have sparked new ideas and created new knowledge over many generations. The translation of the Bible into English, the invention of the printing press, compulsory education for all in Western countries and technologies such as the telegraph/ telephone, the microprocessor chip and personal computers are all contributors to disruptive changes that cause movements in the tectonic plates.
Research by Tolstoy et al. (2008) also revealed micro-earthquakes occurring along mid-ocean ridges on a regular basis that were triggered by tidal movements. An estimated 200,000 earthquakes were recorded between October 2003 and January 2007 on the fast-spreading East Pacific Rise. This can be compared to the ongoing incremental innovations taking place within ICT ecosystems that lead up to larger shifts in the tectonic plates that represent radical innovation.
This environment is highly complex and chaotic (Pascale 1999; McMillan and Carlisle 2007) and is prone to cycles of both bounded instability (incremental innovation) and explosive instability (radical innovation). In this environment, Pascale’s (1999) bedrock principle of equilibrium being a precursor to death applies since a healthy and thriving hydrothermal vent ecosystem is dependent upon continuing chemosyn- thetic activity or discharges of mineral-rich deposits to sustain life. Therefore, ongoing volcanic activity and active black smokers (representing new data, ideas and innovation) are critical to the survival of the organisms that co-habit this volatile ecosystem.
The organisms that have a symbiotic relationship with the bacteria (data and information i.e. their survival depends on it) are sometimes referred to as filterers. These would be high innovation, high-technology firms responsible for building, operating and maintaining the Internet. These firms would include infrastructure providers and network equipment suppliers such as IBM, CISCO, Hewlett Packard, SAP and the telecommunications companies such as Deutsche Telecom, Vodafone and AT&T etc. Individuals would include consumers and disseminators of information that are high users of Internet-enabled devices. These organisms and individuals would be located on the core ecosystem platform and in the extended ecosystem illustrated in Fig. 5.3.
Organisms that have a symbiotic relationship with bacteria are called symbionts. A symbiotic relationship with the bacteria (data) is where the
Fig. 5.3 The three levels of the developed hydrothermal vent ecosystem model (Walton: 2017)
bacteria (data) actually exists within the organism (firm) which results in very high growth levels compared to organisms that just graze from the data, which are classed as non-symbionts (Martin and Schwab 2012).
Those organisms that graze on the bacteria/information are categorised as individuals and firms that need information but not to the same extent as the symbionts or filterers mentioned above. These would be low growth, low innovation traditional businesses (brick-and-mortar) and less educated members of society who may have experienced the digital divide. These organisms are likely to be located in the periphery ecosystem (Fig. 5.2). Low innovation organisms (firms) are also classified as white smokers because the vent chimneys do not discharge rich minerals (bacteria/data).
The trophic structure or food web of the hydrothermal vent ecosystem is illustrated in Table 5.1 and Table 5.2.
When applying a trophic structure or food chain framework to the classification of organisms ( firms) within the hydrothermal vent ecosystem, it is not always possible to position an organisation at a single level in the food chain and assign a taxonomic classification on the basis of industry or sector. This is particularly the case when analysing high-technology firms such as Internet companies that operate across industries, and therefore, at different levels of the food web. The key reason for this is that the nutrient that sustains the ecosystem is data/bacteria which is common to all. The only differences are the physiologies of the various organisms
Table 5.1 Trophic structure of an ICT hydrothermal vent ecosystem (Walton: 2017)
Table 5.2 Trophic structure of an ICT hydrothermal vent ecosystem incorporating ICT firms (Walton: 2017)
within the ecosystem and how this influences their ability to process the data/bacteria, reproduce and survive the high temperatures and high sulphide levels. In this respect, the model is industry/sector agnostic since data and innovation are the only real sources of competitive advantage and means of survival. This may result in firms being viewed as adopting several types of nutritional strategy or behaviour.
For example, although Microsoft may have a symbiotic relationship as a primary consumer of information through its enterprise software and cloud capabilities (as a giant tube worm), it also adopts a highly predatory attitude in accessing other technology sectors such as computer gaming, mobile phones and search. It is, therefore, often seen to behave like a blind crab capturing other organisms including first order carnivores and primary consumers. This would be classed as a highly predatory mergers and acquisitions (M&A) strategy. Google’s search engine (its core business) also has a strong symbiotic relationship. However, other parts of Google’s business behaves in a different manner where scavenging, grazing, deposit feeding and predation occur. This type of omnivores and carnivores behaviour is, therefore, more reminiscent of a crab than a symbiont (Tunnicliffe and Jensen 1987). The leading Internet-based firms, in particular, appear to adopt a broad range of nutritional strategies (see Table 5.2 and Fig. 5.4 for the full range of nutritional gathering methods).
As technology firms are forced to innovate and build platforms to compete against one-another, this means that they develop their own individual ecosystems that incorporate multiple organisms and these reside at different levels of the food web. Although the core business of the firm may belong to a single taxonomic group and may reside at one level of the ecosystem (the ‘Core Ecosystem Platform’); as the firm extends and innovates beyond its core business (the ‘Extended Ecosystem’) and develops its platform, newer organisms enter the ecosystem or are acquired through predation such as mergers and acquisitions (see Fig. 5.2).
The organisms within the hydrothermal vent ecosystems live for extended periods anaerobically. Anaerobic respiration is a type of respiration that does not use oxygen (Simon and Klotz 2013). Where oxygen is scarce or non-existent in the hydrothermal vents, the organisms survive because they have oxygen-binding proteins. This is particularly characteristic of the symbiont groups where there is a symbiotic relationship between the organism (firm) and the bacteria (data). This energy source can be compared to the financial returns gained by the ICT firms that convert their food (data and information) into information, knowledge and innovation which ultimately leads to financial gain (oxygen).
Modern platform ecosystem firms operate different business models to traditional firms in that they forego profits during their development stages often offering products free of charge (or at cost price) in order to create network effects and develop their ecosystems (Anderson 2009). Amazon is a good example of a firm that has survived on limited oxygen (profits) in order to grow and expand to a large size (Amazon Annual Report 1997). The unique asset-light structures of modern Internet-based companies enables them to operate with lower oxygen levels (profits) than traditional brick-and-mortar firms because they are highly cash generative and leverage infrastructure provided by other firms (organisms) such as ‘cloud’ platforms, telecoms networks and other tangible assets. High growth ‘Unicorns’ such as Uber and Airbnb do not own costly fixed assets; so scaling quickly is possible at near-zero marginal cost (Rifkin 2014) thereby requiring little ‘oxygen’.
Hydrothermal vents also occur along mid-ocean ridges. The midocean ridges total more than 75,000 kilometres (Van Dover 2000) and they are located at the boundaries between the tectonic plates. These are sometimes referred to as ‘spreading centres’ because the tectonic plates are pulled apart leading to the emergence of hydrothermal vent fields (Elsasser 1971). The network of mid-ocean ridges represent the global Internet platform and the volcanic activity and spreading centres are the innovation that creates the hydrothermal vent ecosystems. The Internet is, therefore, considered to be an innovation platform and ecosystem in its own right. Fransman (2010) referred to the Internet as not only being a ‘network of networks’ but a ‘platform of platforms’. Fransman (2010: 22) also said that the Internet had become a key and ubiquitous infrastructure paralleling other infrastructures such as electricity and roads and that it was shaping virtually all economic activity.
The average rate at which the sea floor spreads apart at mid-ocean ridges is not uniform throughout the entire ridge system, and this can be fast or slow. Almost 50 percent of the active ridges are slow spreading, including the Mid-Atlantic Ridge. The East Pacific Rise is the only fast to superfast spreading centre (Van Dover 2000). Lonsdale (1977) identified three spreading rates based on slow, medium/intermediate and fast. Midocean ridges are therefore highly segmented in geological terms. This influences the spacing of hydrothermal sites. The mid-ocean ridge along the East Pacific Rise and the Southern East Pacific Rise is, therefore, more comparable to modern technology ecosystems for a number of important reasons.
First, the East Pacific Rise mid-ocean ridge typically has fast or superfast spreading rates compared to the mid-Atlantic Ridge (which is slow moving) and this results in higher levels of hydrothermal activity and more vent sites which subsequently translates into greater levels of innovation and a richer ecosystem (Gregg et al. 1996). The fast moving ridges, therefore, represent high levels of Internet penetration and the North American Gang of Four (Amazon, Google, Facebook and Apple) plus Microsoft and the Chinese BAT (Baidu, Alibaba and Tencent) are seen as being located at the superfast spreading centres. Where Internet infrastructure is still relatively undeveloped and/or there are high levels of censorship, these are represented by slow moving ridges which might include continents such as Africa and Latin America.
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