This last Friday, I was able to see some exciting new applications utilizing Google Earth and the Electronic Cultural Atlas Initiative work at UC Berkeley.  It struck me how the distribution of information through the network, combined with applications that centralize the ability to create clustered applications, like Google Earth, re-shape the landscape of information utility.  Nary a library in sight.  

I really am quite depressed about libraries.  They are wonderful community centers, computer labs, and archives for the ancient - paper things.  What they were - places that bought books and journals and then made them available on loan to others - is not going to be of much relevance for long.  They will be purchasing agents, houses for some types of services, perhaps.  Most everything else will live elsewhere, on the network.  

I think a lot of the work that libraries perform now is an investment in an object, like a book, or journal, as an object in-and-of-itself.  The largest amount of this work is sub-optimal for how people want to find and consume information-based objects.  Libraries catalog things, making them monuments for descriptive metadata, but the cathedrals are lost for people who can find their scripture online. The very paradigm of search that traditional metadata enables is of intrinsically low value for most users today.     

When I am awake too early in the morning thinking about such things, I occasionally thing back on work that I did in graduate studies in sociology.  I studied economic sociology, generally; specifically, what happens when industries are confronted with dramatic and profound shifts in how their business is conducted - either manufacturing, or product R&D.  

One of the things that I studied was the death of the traditional steel industry in the U.S.  Big Steel was threatened by a lot of things from the 1960s onwards, including the arrival of minimills, which were a dramatically different way of making steel.  But my studies of the death of steel suggested that they had held an opportunity to dramatically re-invent themselves, and were acutely aware of the changing environment in which they engaged themselves, and yet for a variety of complex reasons they choose not to invest in the re-creation of their industry. Their choice was not, to be clear, to emulate minimills, but to modernize and enter markets in related areas - high-end  fabrication, special purpose steel, ceramics and other high-heat and -pressure chemical and physical transformations.  These were roads largely not taken, in the U.S. 

And early in the morning hours, I think of libraries. 

Below I cite from one of my papers some descriptive information about minimills (think Web 2.0, and Google, and new paradigms for information discovery and delivery).  Folllowing that, I speculate on what Steel lost, and how.  As I have intimated, it is not my argument that minimills killed Big Steel's viability, any more than Google kills Libraries.  Certainly it was an important and critical threat in their market environment.  Rather, I argue that for a complex set of reasons, Big Steel chose not to make decisions which might have maintained their pre-eminence, and even while their world was changing irrevocably, they had held a gift, an opportunity, to help re-define what they were.  They let that moment slip through their hands.  

I think about libraries.  I wonder where libraries are in that moment, and if there are things -- and I think they will have to be dramatic things -- that will preserve their role, even grow their importance, in our societies -- to be something more than a nook in which to sit quietly, reading or watching information that rests elsewhere, and a pleasant place to spend time with friends.  Those are wonderful things.  But they are called "cafes."

On minimills -

 Independently owned minimills in the U.S. began springing up in quantity in the late 1960s, and they had captured a quarter of the American market by 1985.  Many of these plants were a result of backward integration by steel fabricators who realized huge savings by producing their own inputs. 

Their success would have been impossible before the 1960s when Big Steel controlled the market and was still relatively efficient.  But as new methods suitable for small production runs became available, a niche for minimills which utilized efficient techniques for local customers appeared.  The minimills out performed foreign competition by using scrap metal as input and by avoiding expensive transportation costs of finished products; they out-performed nearby integrated mills through superior production techniques and by supplying specialty products.

By the 1980s, minimills were increasingly direct competitors to the largest steel firms, expanding both their capacity and their line of goods.  Nevertheless, the Big Five [steel firms] did not attempt to emulate the minimills.  Not only would it involve prohibitive write-offs of very expensive investments in integrated mills, the construction and production technology was so different that they were not equipped to handle them.  Minimills built their facilities without bells or whistles and with an eye toward planned obsolescence.  Integrated producers did not know how to "build tight, build quick, and build cheap." 

The chairman of Florida Steel, which operated five minimills, described his plants in terms not applicable to integrated steel plants:

. . . A market or minimill is a concept . . . the concept of a steel producing facility with relatively low capital costs.  It is modern and efficient equipment that produces sufficient hot tons to be rolled into a tailor-made finished product and then sold in a closely defined market with maximum flexibility in pricing, production, equipment advances, and particularly total employee participation.  Each criterion is important but overall flexibility is the key.

On the last and lost chance -

The range of choices available [to Big Steel] in the 1950s and 1960s was unusually wide. Very rarely does an industry such as steel confront a unique moment where its cash flow is high enough and spending constraints low enough to allow long term flexibility in planning.  Steel was responsible for a large proportion of both the country's gross domestic product and of its exports.  Because of its critical role in American  industry, steel's decisions had tremendous ramifications for the entire economy. Any decision by steel executives which altered the industry's economic performance would impose a new reality on a vast constituency.

As early as 1950 and as late as 1965 steel companies could have invested billions of dollars to upgrade their facilities with technology that would enable them to compete internationally for the foreseeable future.  Since they were relatively healthy well into the 1960s they could have accomplished this largely without investment capital, and avoided an unreasonable debt burden which would them beholden to lenders.  

But consider the downside of this strategy.  As early as the mid 1950s, American steel confronted declining levels of plant utilization, declining stock values, and an acquisitive minded market.  Steel executives needed to increase dividends and overall profitability in the short term.  Modernization would produce the reverse effect, since the costs of reconstruction would mean reduced profits and dividends.  Price rises and diversification into quickly profitable industries, mainly through acquisitions, therefore became the favored course, with modernization postponed until the threat to stock prices was passed. But the recession overtook them before modernization could be seriously attempted.

The decision not to invest early enough in overhauling the technological foundation of American steel changed the environment in which steel operated; the entire topology within which they had to act was consequently altered.  Options which had been available in the 1960s had disappeared; the option which had seemed most unnecessary and most unlikely -- getting out of steel -- was the one they were forced to pursue.

In the 1950s and 1960s, therefore, power was inherent in the steel industry.  By the 1980s, the steel industry seemed to lack any power at all. Through is actions, steel had eradicated its own influence over the social fabric. We believe that the power which was invested in steel was a result of a complex of historical forces.  Big steel did not become powerful through its own efforts --  it became powerful due to its necessity in a rapidly growing economy heavily reliant on basic manufacturing industries.  But its loss of power was a consequence of two decades of decision-making mistakes.

Steel was careless with its gift.