Information Shock

Australia’s inquiry into the retail industry is “too late” to stop some retailers going out of business due to competition from offshore websites, said Gerry Harvey, executive chairman of Harvey Norman Holdings Ltd.
The government doesn’t appreciate the urgency of the threat facing domestic retailers from overseas-based rivals making use of the Internet, Harvey said in a telephone interview today. Harvey Norman is Australia’s largest furniture and electrical retailer.
“You’ve got every second person in the country importing things from overseas, evading duty, not paying sales tax,” Harvey said. “It’s gaining momentum at a rapid rate. Rather than clip it in the bud, they’ll end up doing something about it, but it will be too late. You’ve got an awful lot of retailers that are going to be going broke after Christmas.”

Shani Raja tracks the problem in Australia.
Information technology reduces the production chain, it results in a drop in actual output relative to potential. 

But that is part one of the Creative Destruction, we see where things are, and they generally appear in the wrong spot after information shock. So,  we shorten the production chain, dilate our view, and operate from the short chain. Eventually in part two we use the new technology to increase the production chain length.

This view helps us understand Microsoft vs Google. Google gets this process, so Google is driving us through the adjustment process with Android, open source and the cloud. Microsoft, on the other hand, tries to hold onto its gains in the shortened chain.