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Get It Together: Interconnected systems are the future—if we’re up to the challenge.

by Kate Pavao

Increasingly, consumers expect their technology to work together. But John Palfrey, a professor at Harvard Law School, believes the promise of connected systems runs much deeper. “By embracing optimal levels of interoperability we can, on the one hand, solve major societal problems, like climate change, while also achieving economic growth and good things like consumer protection,” Palfrey tells Profit.

Book Cover Image

This won’t be easy, Palfrey says, noting “interoperability is something that requires lots of players to work together across public and private lines to get right.”

Here Profit talks to Palfrey about the ideas behind his new book, Interop: The Promise and Perils of Highly Interconnected Systems (Basic Books, June 2012), cowritten with Harvard Law’s Urs Gasser, and why executives need to think about the best ways to get their businesses connected.

On interoperability: “Interoper-ability means thinking about your technology systems and your data, but also your people and your institutional rules, to figure out how to work better with others and how to do that in service of your customers. Increasingly, we’ve gone from a world where siloed systems made the highest profit to a world in which the best business strategies in many industries are ones that are interconnected.”

Interoperability is something that requires lots
of players
to work together
across public and private lines to get

On pros and cons: “On a simple level, interconnected systems work better for people. But actually the consumer benefits go much deeper. Consumers can become innovators on these platforms. We see this in social media and on the Web, most obviously—the very notion of open APIs is a clear example. Privacy and security are the two obvious risks. We live in a world in which we continue to trade convenience for control of our personal information. The more that systems connect to one another, the more quickly information can move from one place to another, and we can lose more of that control.”

On regulation: “Often the best way is for businesses to come to agreements between themselves. There are instances, though, where the state does have to step in. Setting rules and procedures for what optimal interoperability looks like in any instance is the best way to start.”

On timing: “You need to put an emphasis on legal and institutional design, as well as technology design, up front rather than saying, ’Let’s try to build this in later.’ That’s almost impossible.”

Number of applications Twitter supports—virtually none of which were developed by the company (Source: Interop)

On big data: “This is a proxy for the idea of big opportunity—the notion that when we have enormous amounts of information that can be made to interoperate with itself, we can come up with answers that will solve societal problems. It’s a perfect case for why interoperability is very important. But big data is also about having sources that will allow us to connect previously unconnected facts to one another, which could be about individuals. I think this will put greater pressure on countries or states to have a strong privacy regime, as more and more big data solutions become the way to address big problems.”

Kate Pavao

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