How the Wormhole Decade (2000–2010) Changed the World
Skip to content
Podcast | Insight Unpacked Season 1: Extraordinary Brands and How to Build Them
Economics Apr 7, 2016

How the Wormhole Decade (2000–2010) Changed the World

Five implications no one can afford to ignore.

The rise of the internet resulted in a global culture shift that changed the world.

Yevgenia Nayberg

Think 1999—what were the most pressing issues of the day? Perhaps Y2K and the dot-com bubble? Remember 6% interest rates, the flip phone, Sony Walkman, Bill Clinton and Boris Yeltsin, and when the French franc was still legal tender?

Add Insight
to your inbox.

No one would have bet that within a decade Arthur Andersen, Lehman Brothers, and Bear Sterns would be gone; global interest rates would be at zero and stuck there; not to mention that social media, iTunes, and the Internet of things would be ubiquitous; and privacy as we knew it would be over.

It is rare in human history that a single decade brings truly foundational change. But during 2000–2010 everything happened at warp speed—and in such a strange way that most people did not seem to notice the magnitude. It is as if we were all transported into a new universe through a wrinkle in the space–time continuum. So much so, that I have come to think of it as the “wormhole decade”—a period when the traditional rules of economic might, social status, and political hierarchy were completely rewritten.

A Brief History

The wormhole decade began with 9/11, the first major foreign attack on United States continental soil in nearly two centuries. Two months later Goldman Sachs introduced “BRIC” (Brazil, Russia, India, China) and the idea that these economies might grow in importance in the 21st century. At that time, they were together producing maybe 5–6% of global GDP. By 2010, with the Euro-zone and U.S. economies struggling, BRIC accounted for nearly 20%, soon to be 30%, of global GDP—a truly tectonic shift.

A 16-year-old in Mumbai now has so much data and network access at her fingertips, it is akin to what a Fortune 100 CEO had in the 1970s and 80s.

Meanwhile, the expansion of the Internet exploded the amount of data and information available, and the invention of smartphones and tablets created a world of unparalleled market transparency, creativity, and collaboration. A 16-year-old in Mumbai now has so much data and network access at her fingertips, it is akin to what a Fortune 100 CEO had in the 1970s and 80s.

With the founding of Facebook, Twitter, and Ted Talks, we learned about likes, retweets, and views—revolutionizing the way we think about social status, branding, and reputation-building. And such is the impact of social media that when a relatively inexperienced senator from Illinois ran for the US presidency in 2008, he was able to overtake political powerhouses because his campaign was the first to “get” it. With Uber’s founding in 2009, the taxi industries that crisscross the world’s capitals were upended in less than five years. Likewise, the image of a Tunisian street vendor setting himself on fire in late 2010 helped to catalyze revolutions across the Middle East and North Africa.

This rate and magnitude of societal change is unprecedented in human history. Now halfway through the second decade of the 21st century, have any of us fully understood the depth of these shifts and how they will impact us for years to come?

Implications: Five New Truths

1. Privacy is illusory; reputations are easy prey. We still had our privacy in 1999 but gave it away for free to Facebook, Google, Whatsapp, and Amazon during the wormhole decade. (If you only knew, George Orwell.) Today, everybody knows your business—literally. Personal and corporate reputations are under assault with cyberbullying, cyberwarfare, and evermore illusory intellectual property rights. And it is only going to get worse as more lives and ideas go online.

2. Simplicity and sensationalism win. In the war for hearts and minds on social media, it is more about feeling than thinking or remembering. Reason is becoming irrelevant. Just look at the ALS Ice Bucket Challenge—a wildly effective social media campaign for charity that engaged thousands, then was forgotten. And now in politics, fundraising and votes are secured through 140-stroke tweetable quotes and sensationalist sound bites.

3. The middle class and middle ground are under threat. While technology has brought the world closer, it has also given rise to a polarization of ideas and incomes. There are so many groups who want a voice at the table. With everything so public, concessions, which are key to diplomacy but can appear weak to outsiders, are virtually unpalatable. Just think about the deadlock in Washington, the surreal drama of the U.S. presidential primaries, even the growing tensions between religious sects throughout the Middle East. Participative government requires finding middle ground, but compromise is quickly becoming a lost art form.

4. Scale is no longer king, but rapid innovation and scalability are. In the 24/7 economy, product and idea life cycles have shrunk. You can’t fall in love with any idea for too long. The ability to pivot and quickly scale new ideas in reaction to market and sentiment changes is often more valuable than proven quality or existing distribution, as the “unicorn” market caps for companies like Uber and Airbnb have shown. And when investors can know your numbers at least as well you do, CEOs of companies with actual assets are constantly being challenged and held accountable—even if it means splitting a massive company in two, like Kraft, Abbott, GE, DuPont, or Xerox. Who’s next?

5. We are moving to an alternative universe (via the 24/7 portals that we hold tightly in our hands). People of all incomes, ages and life experiences struggle daily with an overwhelming amount of information. We spend so much time on handheld devices that we have almost stopped living “real.” Family members and work colleagues alike struggle to be as present face to face as they are to their virtual relationships on e-mail, Facebook, and Instagram. Even people waiting in lines don’t look at each other or out at the world anymore—only downward, at their screens. Research shows us that we can’t resist the addictive pull, yet we are not getting smarter, more fulfilled, or nourished as a result. Just more isolated, distracted, and discontent.

Indeed, it is a strange new world. And we all need to wake up and catch up. Some of the most fundamental rules of human organizing have just been rewritten, and few people seem to realize it.

Featured Faculty

Michael L. Nemmers Professor of Strategy

Most Popular This Week
  1. Your Team Doesn’t Need You to Be the Hero
    Too many leaders instinctively try to fix a crisis themselves. A U.S. Army colonel explains how to curb this tendency in yourself and allow your teams to flourish.
    person with red cape trying to put out fire while firefighters stand by.
  2. How Experts Make Complex Decisions
    By studying 200 million chess moves, researchers shed light on what gives players an advantage—and what trips them up.
    two people playing chess
  3. What Went Wrong with FTX—and What’s Next for Crypto?
    One key issue will be introducing regulation without strangling innovation, a fintech expert explains.
    stock trader surrounded by computer monitors
  4. What Triggers a Career Hot Streak?
    New research reveals a recipe for success.
    Collage of sculptor's work culminating in Artist of the Year recognition
  5. How Much Do Campaign Ads Matter?
    Tone is key, according to new research, which found that a change in TV ad strategy could have altered the results of the 2000 presidential election.
    Political advertisements on television next to polling place
  6. What’s the Secret to Successful Innovation?
    Hint: it’s not the product itself.
    standing woman speaking with man seated on stool
  7. Which Form of Government Is Best?
    Democracies may not outlast dictatorships, but they adapt better.
    Is democracy the best form of government?
  8. Immigrants to the U.S. Create More Jobs than They Take
    A new study finds that immigrants are far more likely to found companies—both large and small—than native-born Americans.
    Immigrant CEO welcomes new hires
  9. How Are Black–White Biracial People Perceived in Terms of Race?
    Understanding the answer—and why black and white Americans may percieve biracial people differently—is increasingly important in a multiracial society.
    How are biracial people perceived in terms of race
  10. Yes, Consumers Care if Your Product Is Ethical
    New research shows that morality matters—but it’s in the eye of the beholder.
    woman chooses organic lettuce in grocery
  11. What Donors Need to Hear to Open the Checkbook
    Insights from marketing on how charities can grow by appealing to different kinds of donors.
  12. Why Well-Meaning NGOs Sometimes Do More Harm than Good
    Studies of aid groups in Ghana and Uganda show why it’s so important to coordinate with local governments and institutions.
    To succeed, foreign aid and health programs need buy-in and coordination with local partners.
  13. What Went Wrong at AIG?
    Unpacking the insurance giant's collapse during the 2008 financial crisis.
    What went wrong during the AIG financial crisis?
  14. The Complicated Logic Behind Donating to a Food Pantry Rather than Giving a Hungry Person Cash
    If we were in need, we’d likely want money. So what accounts for that difference?
    Donating food is paternalistic aid
  15. Product Q&A Forums Hold a Lot of Promise. Here’s How to Make Them Work.
    The key to these online communities, where users can ask and answer questions, is how many questions get useful answers.
    man sits at computer reading Q&A forum
  16. Podcast: What the FTX Meltdown Means for the Future of Crypto
    The implosion of the crypto exchange has sent the industry reeling. We dig into what happened and whether cryptocurrency, as a concept, can weather the storm.
  17. What the New Climate Bill Means for the U.S.—and the World
    The Inflation Reduction Act won’t reverse inflation or halt climate change, but it's still a big deal.
    energy bill with solar panels wind turbines and pipelines
  18. To Improve Fundraising, Give Donors a Local Connection
    Research offers concrete strategies for appealing to donors who want to make an impact.
    Charity appeals that frame the message around local connection tend to be more successful as a result of the proximity effect
  19. Post-War Reconstruction Is a Good Investment
    Ukraine’s European neighbors will need to make a major financial commitment to help rebuild its economy after the war. Fortunately, as the legacy of the post–World War II Marshall Plan shows, investing in Ukraine's future will also serve Europe's own long-term interests.
    two people look out over a city
More in Economics