Topic: Thomas Cooley Explains the Role of Technology in Creating New Markets
Thomas Cooley: I’m Thomas Cooley. I’m the Dean of the Stern School of Business at New York University. I’m also a professor of economics.
Question: What role will technology play in the new economy?Thomas Cooley: Certainly access to information. A lot of the issues, a lot of the market failures in economics occur because of information asymmetries. I know something that you don’t; and in a trade, I can take advantage of that.
So, I think, what the real impact of technology in economics and on markets has been in the development of more sources of information, faster information, easier access to information.
And also, it’s improved our ability to make markets work, to create markets where they didn’t exist. So if you think about, online markets for goods or online markets for anything, we can trade risk, we can trade energy, we can trade advertising time, we can trade all kinds of things in markets that couldn’t have existed without the technology for buyers and sellers in desperate locations to come together in these virtual marketplaces and trade things.
That gives us the ability to realize what the prices of things ought to be, how the market values things. So, I think, markets have become lot more efficient because of that. And there are more markets.
Question: Do you expect rapid innovation in the finance sector?Thomas Cooley: That’ll ebb a bit for sure. Some of the products that were created, some of the innovation was very destructive. So I think we’ll see a change in the way markets are organized.
We won’t see credit default swaps being created and traded bilaterally, but it’ll be done more through clearing houses so that there’s a higher degree of transparency about what’s going on.
And then, I think, we won’t see some of the silly financial instruments that we’ve seen recently. I think there’ll be a coming down of the crazy securitization process. I think securitization still has an important role to play but it kind of ran amuck in recent years.
Question: What technology platforms will most facilitate growth?Thomas Cooley: I think global collaboration is going to be incredibly important in lots of dimension in technology and in improving the transmission of technology and the development of new ideas. So I think the possibilities of global collaboration that technology has created are just enormous. I think we’ve only seen the beginning of what that can accomplish. So I think it’s enormously important.
And you’ll see, I believe, increasing news of technology and education in transmitting the very best ideas globally. And I think that’s certainly a part of the future of education in this world.
Question: How important is social media to the future of commerce?Thomas Cooley: I don’t blog, partly because I don’t have the time to do that and be a columnist and run a major educational institution and do research. So blogging on top of that will be more than I can handle.
But I do understand the importance of it and social media, so I pay a lot of attention to whether my columns get picked up by aggregator sites. Because I know then that many more people will read them. And it’s a fascinating phenomenon, I have to say. It’s such a hot medium and such a fast cycle. It’s really quite remarkable.
Question: Will teleconferencing replace face-to-face interaction?Thomas Cooley: I think there’s still enormous value in face-to-face communication. And I don’t think that that’s just because I’m of a certain age that I have those feelings. I think people value that.
What I do think is changing is the sort of the use of media and other forms of communication to add to that experience. So in advance of a lecture, students can learn a lot about the person who’s giving the lecture, get material delivered online so they can do their preparation when it’s convenient for them in various ways. They can get information from their handheld devices or from their laptop in various places. And then, they can have the interpersonal experience.
And then, they can go back. And if there’s something they weren’t clear on and view yesterday’s lecture online via streaming video. Or if they had to miss it, they can have the experience of seeing it.
So I think the media is actually added to the experience of the lecture, made the interpersonal part of education more valuable. But that part will always be there.
Discuss
Victoria Brown on May 15, 2009, 2:29 PM
Dean Cooley’s point that technology has helped to create markets where they didn’t exist, or actually create markets, like the on-line one in its entirety is spot on. It also helps us to determine correct pricing for products, considering technology, the Internet specfically, allows the easy flow of information to quickly correct inefficiencies.
Claire McKellar on May 19, 2009, 1:08 PM
just learned about this series today. Really great clips. how did you get all these people to participate? I’ll keep watching
John Bosley on May 28, 2009, 1:30 PM
me too.
Jackson Rodney on June 3, 2009, 5:35 PM
I’ve been following Cooley for some time now and he may be the one of the few people willing to speak up and call the economic crisis for what it is, a big government screw up by way of dumb policies leading to bad outcomes. His points on technology are all well and good, but I’d love to see more of him on the crisis and the botched recovery (like the other clip in this series) — that’s where this gentleman truly shines!
Staci Collier on June 5, 2009, 10:55 AM
I think he’s spot on with his mention that the possibilities of global collaboration are just now being realized.
The increasing use of technology and collaboration globally is definitely going to change the way we do business and open up new and innovative opportunities. Just look at what social media has done in the past year. . .
Arthur Bland on June 10, 2009, 2:32 AM
Claire, same thoughts. Great marketing tactics maybe! ;) Thomas, excellent tips. Keep them coming! ;)
Colin Bailey on June 11, 2009, 3:20 AM
I think a question that needs to be pondered is this: How do we make the best use of technology in our lives and still not lose the “human touch” that gives our interactions more meaning?
Cooley admits that he doesn’t blog, but does he read a newspaper each morning? I do both. He sees the value in it- but doesn’t have the time. I think that the use of teleconferencing and on-line education are great in terms of saving time and are more efficient, yet something is lost when that direct, in-person, contact is made. I’ve noticed that many older Americans are uncomfortable with using the internet and even refuse to buy cell phones.
As for myself, I use modern technology everyday, but I still send birthday cards in the mail and get my news from the both web and magazines and newspapers. Internet and high technology excite me and make me work faster and more effectively, but holding a good book in my hands and losing myself in great literature or interesting history comforts me. Let it be said though, I dont miss having to go to the library and using The Readers Guide to Periodical Literature and waiting for a copy or microfilm machine thats functioning to do some research!
Bradley Talbot on June 11, 2009, 6:29 PM
Cooley makes the comment at the very end of his talk that face to face education will always be there, but with online educational institutions like the University of Phoenix, face to face interaction with professors has already gone the way of the dodo for some people. Face to face learning does not exist for them and they are incented to continue learning that way because it is significantly cheaper than traditional schools.
Cooley makes it as an off-handed comment, but come 20 years or so… who knows!?
Eliot Spaulding on June 11, 2009, 8:31 PM
I too was surprised to hear that Cooley does not blog – at least not on regular basis. And actually I don’t necessarily see blogging as social media. Blogging is just a new step in the evolution of journalism, but it does not provide nearly the level of connectivity that real social media and sharing sites do. Blogging tends to be a one way street.
But I’m curious how involved he is with social networking sites like Linked-In, or even Facebook.
Maria Garcia-Reyes on June 12, 2009, 11:44 AM
The fact that Cooley does not blog on a regular basis does not bother me in the least. As he put it, he is plenty busy enough.
I agree that new media solutions for education are going to be the wave of the future. To tell the truth, I’ve had great experiences with online learning. I was able to learn at my own pace, go back to review subject matter, and through the system that I used, I could interact with teaching aids to ask questions. I did not miss out on the personal experince of being in the classroom at all.
Callum Fitzpatrick on June 12, 2009, 2:01 PM
Cooley talks about global collaboration, but I still see language barriers as big problems – particaurlly in the places where there are the largest emerging markets like China and India. The vast majority of people in those countries do not speak English. I think that our school systems should focus more heavily on langauge training for those regions.
Add a Comment
You must be logged in to comment. Log in or Register