From mainline to modem: transporting the commodities of the day.

Glancing through a major business publication recently, I was struck by the similarities between two advertisements. The ads weren't comparable in appearance - in fact, their photos and graphics looked nothing alike - but in touting their respective companies the ads emphasized many of the same attributes: innovation, security, reliability. Both also stressed quality service and point-to-point connectivity.

These aren't exactly radical themes, but what I found striking was that one ad was for a network service provider and the other for a railroad. The former is a business built on the fibers of the Internet, a crucial technology tool for the turn-of-the-millennium CEO. The latter is a business built on wood and steel that provided a crucial technology tool for the CEO at the turn of the last century. While a number of interesting contrasts can be drawn between the economic environments of 1900 and 2000 - comparing the antitrust sagas of Standard Oil and Microsoft is one popular storyline these days - a more circumscribed look at the driving technologies of each era offers some interesting perspectives as well.

HISTORIC PARALLELS

Both the Internet and the railroad can trace their ancestry back at least one century before they became fully-developed technologies with broad societal implications. A model for a self-propelled steam engine appeared in England in 1797, almost 30 years before John Stevens built and operated the first locomotive to run on rails in America. The Internet's earliest roots are found in the 1836 invention of the telegraph, which revolutionized human communications with a dot-and-dash system that's not so far removed from the binary system used in today's computers.

Seminal developments in both industries occurred in '69. On May 10, 1869, the Union Pacific joined the Central Pacific in Promontory, UT, to complete the first transcontinental rail route. By 1890, just over 20 years later, nearly 200,000 miles of track formed the backbone of a vital transportation infrastructure. In 1969, 100 years after the golden spike was driven in Utah, the U.S. Dept. of Defense's Advanced Research Projects Agency (ARPA) established the "ARPANET" as a prototype communication infrastructure for the military. An infant system consisting of individual computers connected by leased lines, the "ARPANET" would, a little over 20 years later, become the backbone of a vital communications infrastructure known as the Internet.

IMPACT OF THE CENTURY

As the 19th century became the 20th, railroads had shown a clear superiority over canals and steamboats and gained a near-monopoly on freight and passenger transportation. (They also became the first major U.S. industry subject to economic regulation with passage in 1887 of the Interstate Commerce Act.) By 1900, trains carried 577 million passengers a year over nearly 260,000 miles of track, generating revenues of some $324 million.

Despite competition from airplanes and internal combustionpowered highway vehicles, railroads are hardly an anachronism a century after the Gilded Age. They have made significant technical modernizations - improved running gear and brake equipment, innovated shipping mechanisms and materials, on-line reservation systems, etc. - while deregulation, which came in 1980, has led to a number of organizational improvements.

Today, trains move 40 percent of the nation's total intercity freight, and U.S. freight railroads contribute $13 billion a year to the economy in wages and benefits to more than 212,000 employees. As far as human cargo, Americans logged about 14 billion passenger miles on intercity and commuter rail lines in 1995. Amtrak, which alone carried 54 million passengers in 1995, contributes nearly $1 billion in wages to local and state economies.

But as they approach the millennium, railroads also face modern problems. Union Pacific, the same operation that helped complete the transcontinental line in 1869, is learning classic 1990's lessons about executive arrogance, incompatible systems and cultures, and the impact of free trade as it struggles to make its merger with Southern Pacific work. Union Pacific's ability to address these problems could signify whether railroads will remain a relevant entity for another century.

As for the Internet, few doubt it will be a significant economic force. As of June 1998, approximately 122 million people were online worldwide, with 70 million in North America. According to a survey by Visa U.S.A., more than half of business procurement managers are ordering over the Net. Deloitte & Touche predict a four-fold increase in e-commerce over the next two years. A Federal Express survey says 75 percent of U.S.-based small businesses expect to use the Net for commerce in the next five years. Boston-based Yankee Group expects on-line consumer spending to grow to between $6 billion and $10 billion by 2000, and eMarketer estimates consumers will spend $26 billion shopping on-line by 2002.

But with the Internet facing its own operational and regulatory growing pains, only time will tell whether its evolution mirrors that of railroads. Will electronic commerce remain a truly important medium come 2100, when unforeseen economic conditions and sources of competition radically alter the business landscape? Rather than considering each new technology innovation between now and then in a vacuum, executives should examine a broad range of future operating environments to determine what the electronic infrastructure might look like and how the needs and opportunities of their organization could change within them.

In a Business Week article introducing his latest book, Titan: The Life of John D. Rockefeller, Sr., author Ron Chernow wrote, "The late 19th century was also a splendid time for consumers, who were dazzled by new products from light bulbs to telephones. In some respects, the Gilded Age was a period much like our own, distinguished by perpetual innovation and an explosion of new industries." Those comparisons are apt and make even more compelling the questions of how the year 2100 will resemble the year 2000 and how our technology needs at the turn of the next century will jibe with the technology available.

POWER TOOLS

Pensare is Italian for "to think," an apt name for the Los Altos, CA-based company whose intranet-based performance courses offer a fusion between two of everybody's favorite boardroom buzzwords: "corporate education" and "knowledge management." Partnering with top business schools, Pensare turns business texts into courses that take advantage of the on-line environment, creating what it terms a "knowledge community" in which expertise is developed, captured, and shared across the enterprise. The applications can be customized to integrate the specific competencies, case studies, and interviews that reflect a particular company's corporate culture and strategic objectives.

For more info, visit www.pensare.com or call 650-967-5000.

VOCABULARY BUILDER

cook*ie 1. a set of data about your surfing activity that a Web server records and stores in your browser 2. data a company can then set its server to retrieve from your browser, without your knowing, to learn more about your browsing habits 3. small sugar-based pastry best served with milk.

spam*ming 1. the mass mailing of unsolicited commercial e-mail messages, usually resulting from collected cookies 2. a "netiquette" violation named after the canned ham product and a Monty Python skit in which the word "spam" is uttered so often, that all meaningful dialogue is destroyed.