The risk of being out-of-stock in  9  4  As at 6 March 2012. BIS central bankers’ speeches  Wal-Mart stores equipped with radio frequency technology has been found to be 30% lower than in stores without that technology.10 More resilient supply chain management has also been a trademark of a number of web-based companies. In September 1995, Pierre Omidyar created a website for online buying and selling.11 He did the programming over a weekend and launched Auction Web using the domain name he had bought for his freelance consultancy Echo Bay Technology Group (ebay.com). Omidyar put a broken laser pointer for sale. At the end of its first day, the site had attracted no visitors. Even as transactions grew, so did disputes between buyers and sellers. Transactions between anonymous traders created enormous information problems. With sellers knowing more than buyers about their goods, the market risked being flooded by “lemons”.12 For a time, Omidyar appeared to have created the first-ever global market for lemons. Information markets such as these are notoriously fragile. But the web, underpinned by its common language, provided eBay with a solution to its gigantic lemons problem. Omidyar adapted the site to allow buyers and sellers to give each other feedback on transactions, positive or negative. These scores created a method for buyers to assess risk. It also incentivised good behaviour. Bad traders were removed from the supply chain, while good traders were rewarded with reputational incentives to strengthen their links.
By drawing explicitly on the information embedded in the network, PageRank produced dramatically improved web search capabilities. By now, the graduate project had become a company called Google. The vast, growing multi-dimensional cats-cradle of global information could now be sliced and diced in fractions of a second. Navigating the web no longer required a specialist pilot; it could be mapped by a novice. The World Wide Web had been given an instantaneous backrub. That has yielded vast productivity improvements. Google itself is today valued at around $ billion, having gained in value by on average $ million every week of its life. Applications of Google’s network mapping technology grow by the day. For example, Google indicators produced from the analysis of the popularity of search terms such as “estate agents” or “motor vehicles” have outperformed some existing indicators of house prices and motor sales.19 And what has allowed the World Wide Web to be Googled in this way? A common language. (d)  Lowering barriers to entry  Creating a common language also has the potential to transform the industrial organisation of an industry. It does so by simultaneously expanding the frontiers of a global network and by lowering the barriers to entering it. This allows new companies, with innovative and superior product offerings, to quickly erode the market share of incumbents. Higher productivity and growth have been the fruits.20 Global supply chains are one example. Prior to GS1 standards, small suppliers faced an uphill struggle connecting to global supply chains.