TO UNDERSTAND the transition from First Wave economic stategies of the industrial era to Second Wave strategies, a metaphor is useful:

During the industrial era, large corporations were organized much like ancient Mediterranean slave galleys. They were big; they were cumbersome; it took them forever to change direction. Their workers supplied brawn, not brains. But if they pulled in unison, hard enough and long enough, they could get up some real speed.

Suddenly a new technology emerged: the sail (read the computer chip). The sail gave ships a new flexibility. Now they could change direction quickly as winds and currents shifted, and they could travel the globe. But sailing technology forced the ship owners to make fundamental changes -- to devise a Second Wave strategy They had to build smaller ships, get rid of their slaves and hire a skilled crew in which every member knew enough about the technology to do every job.

Government, meanwhile, played the role of harbor master. In the days of slave galleys, harbor masters had to make sure there were enough well-muscled slaves to man the ships. Galley captains could take care of the rest.

Sailboats were another matter entirely. They competed with thousands of boats a over the globe, in a world in which ship and sail design were constantly refined. Captains now needed access to highly skilled crews, constant research on new designs, sufficient capital to build new ships as the technology improved, and the latest in navigation technology and expertise.

The harbor master's job was not to run the ships, nor to pick those with the best chance of winning. It was to make sure they had access to the best in everything they needed. It was to analyze the competitive strengths and weaknesses of the harbor and then to organize it to produce winners.