As stated in this blog’s previous post, estimations on the costs of information overload go up to USD 650 billion a year for the US economy alone. Despite the magnitude of those numbers they still seem to underestimate the problem by far.

The reason for this is that those figures are only looking at the direct cost of information overload. For example, the stated figure from Basex of USD 650 billion is only reflecting the costs due to interruptions at work from communication media. The study is based on interviews at US companies which revealed that interruptions consume 28% of the knowledge worker’s day, translating into 28 billion lost man-hours per annum. Multiplying this with an average hourly salary, the cost figure of USD 650 billion is derived.

Many other studies that deal with information overload go into the same direction: the stated costs are mostly direct costs, such as lost productivity, diminished quality of thought, increased level of stress and so on.

However, there is another category of cost which is often overlooked because it is not that obvious. These are the indirect costs of information overload, i.e. the missed opportunities due to the “solutions” that we are forced to apply when dealing with IO. Those solutions, e.g. as suggested here, are mostly a form of cutting back on our consumption of information, leading to missing out on information that would have been valuable.

One example: every time we miss out on an interesting movie or documentary on TV we have just become a victim of information overload. Why? Because we could have screened the TV schedule the days before but decided not to due to the amount of information we would have had to go through. The benefit just does not compensate the loss of time; therefore we don’t bother and miss opportunities.

Obviously, there can be many examples found for this, both in private life and arguably more important in business as well. Everybody who is working at a big company has surely come across the phenomenon that we work on something only to find out later that it has been done already (or at least that there has been internal information that would have facilitated our work a lot). But doing extensive research on this beforehand would just take too much time and we would never get to do real work. Lew Platt, former chief executive of Hewlett-Packard, is quoted to have said “If only HP knew what HP knows”, which underlines this and shows that knowledge management’s main task is to deal with information overload. 

While it is not easy to quantify these indirect costs of information overload, something tells me that they are not smaller than the direct ones, but may actually be many times higher. Whatever the extent of those costs may be, if you take direct and indirect costs together, information overload does indeed seem to be one of the main problems of the year 2008, as Basex claims. And this is not likely to change much in the years to follow.

ManagingIO is a blog devoted to Information Overload and its solutions. You are welcome to comment on this post on ManagingIO.com. Also check out NextFeeds.com, a new free web service which tries to contribute to tackle information overload.
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¹ E.g. have a look at Bill Boyd’s article from Outsource Marketing and CNI’s report on effects of IO
² See some suggestions at WebWorkerDaily. More comments on potential solutions in following posts.