Don Tapscott, chairman of Alliance for Converging Technologies and author of The Digital Economy (McGraw-Hill, 1996), is a leading authority on how to survive the transition from an analog to a digital economy. He recently spoke to Inc. Technology about the issues facing businesses, government, and ordinary people as we all confront that transition.

On a new kind of leadership:
People wonder how the digital economy will change the way we do business. One thing that will change is leadership. The traditional "boss" will fade away and be replaced by collective, or networked, leadership. And hierarchies will be replaced by empowered team structures. At Alliance for Converging Technologies, all key decisions are made by a collective leadership of key stakeholders. To do this, we use computers and the Internet to communicate with one another. The idea of collective leadership is hard for entrepreneurs to understand. Because they've usually taken big personal risks and made huge investments in their companies, it's hard for them to let go.

On educating employees:
Hiring people who know everything about information technology is out of the question. In the old economy, life was divided into two stages: a period of learning and a period of working. In the new economy, working and learning must become one and the same. For small companies that lack the training resources of larger companies, the only way to ensure that employees continue to learn is to take advantage of new ways of learning: interactive multimedia, free Internet discussion groups, Net-based research, and so on. Some CEOs get this and some don't. Those that don't are falling off the face of the earth.

On small companies and the digital economy:
It's easier for small companies to maintain agility and focus than it is for large companies. Because they sit a lot closer to the razor's edge, any shifts in the market can mean life or death. So small companies often recognize the importance of actually transforming their organization when the need arises. Encyclopedia Britannica is a good example. The company realized that in order to remain competitive, it had to completely change its product from a book to a subscription service on the Internet, shift its customer base from individuals to large institutions, and take its distribution channels out of the physical realm and into the digital. Now it's ready for the new economy -- something that business-process reengineering, typically used by large corporations, could never have prepared it for. Redesigning processes and cutting costs would not have dealt with the fundamental problem, namely, that in the digital future, nobody is going to buy traditional encyclopedias.