Manuel Castells "The network becomes the social structure of everything."
By Manuel Castells; Eric Nee

(FORTUNE Magazine) – Manuel Castells is a professor of city and regional planning and sociology at the University of California at Berkeley. He is the author of the three-volume The Information Age: Economy, Society, and Culture. He was interviewed by Eric Nee.

The Internet is not simply a technology. It is the central technological medium of the Information Age. What it allows is the unlimited expansion of interactive networks in every domain of life. It is not one fragment of the technological system; it's the heart of the system. The network becomes the social structure of everything.

The Internet is the equivalent of the electrical engine in the industrial era, which enabled a form as important as the industrial factory and the large industrial corporation. It is the technological medium that enables networks to function in every single aspect of life, from business to social organization to media expression to financial trade.

The mobile Internet is projected to have, by 2004, about 350 million users, more than the current total of Internet users in the world. The power of communicating and processing will be in our hand--everywhere we are. Then the Internet really becomes the fundamental basis for our lives.

As information technology and the Internet diffuse all over the developed world, the consequences of this transformation are different, depending on cultures and institutions. The U.S. and Europe have two symmetrically opposite problems. The United States has the extraordinary advantage of entrepreneurialism and openness to immigration, which lead to both innovation and greater capacity to create wealth. The new economy is a U.S.-based economy because of its ability to create and to innovate. Europe has the extraordinary advantage of diffusing the social benefits of the new economy in a much broader way and bringing it to the majority of the population. Europe also has a much better education system, which down the line will produce a better-educated population. Look at Finland. There are only about five million Finns, but they are the most advanced information society in the world. At the same time, the Finnish society is highly integrated and has a strong social safety net for everybody. I wonder when people are going to start asking serious questions in the U.S. about how much we want to go toward a unidimensional development of an information-based society rather than a multidimensional development.

The great surprise of the Information Age is that it's not correcting inequality. On the contrary, it's aggravating inequality, because if you speed up the creation of wealth in a society in which education and cultural capital are unequally distributed, then you in fact increase inequality. In California in the 1990s, the average income has gone down, not up.

Networks are extraordinary, dynamic, lean structures that have no personal feelings. They kill or kiss. So together with networking logic and technological innovation, you need institutions that are able to manage this system. This is not the traditional welfare state. These are institutions that act on education, on health, on some basic social safety net, which ultimately feeds back into productivity. Because a society that lives on the basis of discarding high numbers of people, or not educating them, not integrating them, is a society that is going to lose steam very soon. The new economy as it is now is not sustainable.