Wednesday, September 29, 2010

A Discovery of a Serious Mistake Made in the Real Market Process and a Suggested Solution for the Current Economic Crisis

Many experts and government officials are trying to solve the current economic crisis and revitalize the economy, but to no avail. I believe that our economic crisis is getting worse day by day, moving inexorably toward a depression.

I have discovered that a serious mistake has been made in the development of real transaction systems and applications through the use of IT and networking technology over the last twenty to thirty years of the Modern Information Age. Real transactions are directly restricted by time and space. There have also been many different and complex rules and standards in the real transactions across the world. So, in developing those systems and applications, we should have simplified them and constructed a fair rule and standard by directly overcoming the restriction of time and space with IT and networking technology, instead of just simplifying them by manipulating the constituent factors of transactions, such as products, services, providers, and customers, which instantly increases the efficiency and productivity of real transactions only to a limited degree. Unfortunately, there is no such case in the world as of yet. I believe that this is one of the most serious mistakes we have made in the Modern Information Age.

Since e-procurement became available, we have developed numerous transaction systems and applications, including various collaborative function systems, such as eBay,, and numerous logistics and supply chain solutions in the real market process. Let us look at some examples. E-Bay’s auction system is an effort to simplify the rules and standards by a product or a service, and’s e-seller system is an effort to simplify them by a company (i.e., a seller). However, they made the mistake of giving up the opportunity of facilitating competition among providers. The developers of eBay’s or’s e-marketplace system or home shopping system have tried to simplify them by the character of products or services. In this case, only products or services that are not sensitive to the rules and standards can be efficiently traded through these systems. Some big companies have tried to simplify them by their buying powers to manage their purchasing alone (e-buyer model). Most of collaborative function systems and applications have been developed through simplifying them by services of individual functions. There are many other cases, but almost all of them have this characteristic that might be attributed to the desire to immediately increase productivity and efficiency. However, strangely and ridiculously, nobody has recognized yet what mistake we have made in developing those systems and applications.

Because IT and networking technology have been mostly used for manipulating the constituent factors of the transactions, the employment situation has continuously worsened in the market; through efforts to reduce the number of transactions and functions in a chain of linearly constructed transactions and to increase the efficiency of a function through collaboration with all sectors of the market and also through a mutually complementary relationship between the supply side and the existing market process. The more the Information Age has developed, the more the employment situation has worsened, and policies aimed at the improvement of the employment situation have been unsuccessful. That is, no matter how powerful the adopted expansionary economic policies and stimulus plans were, they have been ineffective and useless. If we do not fix that mistake, I strongly believe that this economic and social tailspin cannot be stopped. It could even develop into a worse crisis. I believe that mistake must be the real cause of the current economic crisis.

If the restriction of time and space is effectively overcome by appropriately using IT and networking technology, I believe that a system like the Internet could be developed in the real market process. Then, numerous applications could also be easily developed in the real market—similar to what happened to information transactions during the Internet Revolution—and numerous new businesses and jobs would be created in all sectors of the market. I believe that constructing a system like the Internet in the real market process is the most effective and viable solution for ameliorating the current economic crisis and for revitalizing the economy.

I believe that our economy is now in imminent danger. We do not have time to delay any longer. To stave off this impending crisis and to revitalize the economy, we should develop a system like the Internet for the real market process and realize it in the market as soon as possible, before it is too late. 

l        Ho-Hyung (“Luke”) Lee ( is by training a lawyer, an international businessman and entrepreneur – and an inventor.  He is currently the president of Ubiquitous Market System, Inc. (UbiMS).

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