Are you a member of the club?

I came across this Economist article on networks. It contrasts the old style networks such as those based on university, school or other affiliation with on-line networks such as LinkedIn, Xing and the like.

“An active, open online network is far more competitive in today’s globalised business environment than local, closed networks such as alumni groups or freemasonry,” argues Reid Hoffman, founder of LinkedIn. Online networks’ most compelling advantage, in addition to openness and efficiency, is the chance they offer to connect across borders and among different sorts of people.

I think that is true based on my own experience. Yet as the final paragraph in the Economist article notes:-

Nevertheless, the old structures will not fall away soon. Indeed, Mr Serfaty argues that online networks can reinforce offline ones. A graduate of HEC (École des Hautes Études Commerciales de Paris) might use the school’s own website to look for any alumni working at, say, Google, he says. But using Viadeo’s tools, he can also do a broader search for anyone who attended HEC and knows someone working at Google, so the network becomes more powerful. Online networks make it easier to gather information on firms and their employees, argues Jean-Michel Caye, a specialist in human resources for the Boston Consulting Group in Paris. But if you want to influence a big decision or secure a job, he says, “it’s still the old networks that really count.”

As always, it seems that who you know still counts.

In a small country such as NZ, that may be even more the case. Which may not in fact be an equitable or healthy situation.

Should being a member of the ‘club’, whatever that ‘club’ is, be a determinant in the 21st century?

It seems to me that there are some potential governance issues in this regard, which perhaps need to be given more thought.