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 / Fourth Quarter 2002 / Issue 29(originally published by Booz & Company)


Best Business Books 2002: Networks

Network Theory’s New Math

Some are born connected, others achieve connection, still others have connectedness thrust upon them. Everyone is networked. Everyone is either a node or a hub in someone else’s network. Much as the quality of life is influenced by the quality of our networks, our standard of living is increasingly determined by network standards. To paraphrase Marshall McLuhan, we shape our networks and then our networks shape us.

The notion of networks as a dominant organizing principle to explain how the world really works has attracted enormous interdisciplinary interest. Physicists are talking to mathematicians who are talking to sociologists and economists who are talking to physicists. In barely a decade, networks of researchers have sprung up to research networks. Executives are beginning to turn to these experts for usable insights into the network dynamics shaping both threats and opportunities in business. (See “Karen Stephenson's Quantum Theory of Trust,” by Art Kleiner, s+b, Fourth Quarter 2002, for more on networks and the corporate organization.)

This is no surprise. Transportation networks have striking similarities to telecommunications networks. The Internet’s technological behaviors map well onto the ecological behaviors of the biosphere. The complex interconnections between people in research laboratories around the world can be cost-effectively etched onto the design of silicon chips. Similarly, the myriad networks that define corporate connectedness are alike. Economies aren’t merely marketplaces; they’re networks. Executives need to understand network forces, not just market forces.

As Albert-László Barabási, author of Linked: The New Science of Networks (Perseus Publishing, 2002), writes, “The diversity of networks in business and the economy is mind-boggling. There are policy networks, ownership networks, collaboration networks, organizational networks, network marketing — you name it. It would be impossible to integrate these diverse interactions into a single all-encompassing web. Yet no matter what organizational level we look at, the same robust and universal laws that govern nature’s webs seem to greet us.”

These laws of networks may prove as robust and universal as Newton’s laws of motion. But making network laws, which like Newtonian laws are steeped in mathematics and metaphor, comprehensible to the layperson is hard work. The New Yorker’s Malcolm Gladwell took a successful first cut with his best-selling The Tipping Point: How Little Things Can Make a Big Difference (Little, Brown and Company, 2000). Three new books published this year go far beyond tipping points to present to the conceptually curious reader important theories that reveal the hidden order of complex networks.

Barabási, the author of Linked, is a physicist and leading researcher in the field who uses the Internet as his dominant research medium for analyzing the peculiar properties of networks. His book is ideal for those looking for the perspective of a network researcher and practitioner; it’s even spiced with a few equations. Mark Buchanan’s Nexus: Small Worlds and the Groundbreaking Science of Networks (W.W. Norton & Company, 2002) is the product of a physics Ph.D. who writes for the noted scientific journals Nature and New Scientist. Although Buchanan draws heavily on Barabási’s work, his intellectual focus is the intriguing so-called small-world networking theories of mathematicians Duncan Watts and Steve Strogatz. Small-world theories, which are derived from theoretical mathematics and practical reality, prove that seemingly distant, disconnected, and disparate populations, events, or actions can be easily linked to one another. Like many scientists-turned-writers, Buchanan is a bit of an ideologue who seems more comfortable discussing network ecologies than network economics. Then again, because of the transcendent nature of networks, the distinctions between ecology and economics aren’t that great.

The least scientific but perhaps most stimulating work for business readers among the three is Howard Rheingold’s Smart Mobs: The Next Social Revolution (Perseus Publishing, 2002). Rheingold is neither scientist nor technologist, but he knows how to talk with those who are and extract the essence of their thinking and concerns. His previous books on virtual reality, virtual communities, and the history of digital innovation in Silicon Valley remain cult classics for the digerati. What makes Smart Mobs so intriguing is not Rheingold’s ongoing love affair with the potential of network technology, but his sure grasp of how people play with that potential.

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