The number of Boomers responding to content posted online, as opposed to just passively consuming it, is also going up. For example, the proportion of older Boomers responding to content doubled from 15% in 2007 to 34% in 2008. According to Forrester, this is now a percentage that's high enough to target this group with a social application.

Joining social networks is also becoming a widely popular among the younger Boomers. Today, almost one in four younger Boomers are active in social networks, up from 15% in 2007.

The one thing that Boomers are less likely to do in the online world is actually create content - outside of updating their online profiles and leaving blog comments, that is. Boomers are still not involved heavily in writing blog articles or creating videos and posting them online. In 2008, 16% younger Boomers were involved in content creation (up from 12% in 2007) and 15% of older Boomers were (up from 8%). Although both groups saw an increase, it's still the least popular activity.

What This Means

For companies wanting to reach out to the Baby Boomers online, this data shows that spending at least a portion of your budget on social applications for the group isn't entirely a waste of time and money. The group isn't as active online as younger generations are, but their participation levels are now moderate and increasing.

The best bets for getting Boomers interested in your content is to create blogs or videos that relate to the life or work-style of Boomers, Forrester suggests. And if you're looking for feedback and contributions from the Boomers themselves - like comments or criticisms - make that process dead simple. Don't introduce overly complex sign up forms or processes. Instead, encourage low-effort contributions such as star ratings.

Marketers can also look into reaching Boomers through social networks now - specifically those favored by this generation like Classmates Online, Eons, BOOMj.com, TeeBeeDee, and even the AARP's online community. There is some participation in these social spaces now, but even more growth is expected over the next 12-month period.

This is a big story. That is why ReadWriteWeb is dedicating a new "channel" to Enterprise 2.0. I will be editing this channel and we are looking for part time writers to contribute. More on that later.

Peter Drucker, the greatest management thinker of all time, pointed out that the "firm" is a relatively recent innovation, designed to do the things that individuals cannot easily do on their own. Ronald Coase later created a theoretical model (Coase's Theorem) to describe why firms exist, based on the difference between internal and external transaction costs. If the transaction cost was lower internally, then it made sense to organize that work internally. If the transaction cost was lower externally, then it made sense to organize that work externally.

Coase's Theorem underlies countless management books on subjects around reengineering, outsourcing, core competency, spinoffs, spinouts and so on.

Enterprise 2.0 - first innings of a new game

This is a fascinating story for me. For 20 years I worked in traditional IT enterprise vendors selling to large enterprises. It was a great game for a while, based on the fact that you could get license fees for copying a tape, effectively 100% margin. At scale, after paying for a base level of R&D and sales, it was fantastically profitable.

Around the turn of the century, it became clear that this game was in the final innings. Larry Ellison, one of the masters of that game, announced that it was game over. Innovation in enterprise software was over, the problems had all been solved, the only thing left to do was sell to Oracle and let them restructure you. Ellison may actually believe this, but mostly it is self-serving. He, and other big incumbents would like start-ups and their investors to believe that the enterprise market is worthless. Leave it to the big boys. That is clearly self-serving.

And wrong. As Salesforce, Basecamp, Google Apps, Zoho, LinkedIn and countless other start-ups that we cover here on ReadWriteWeb, prove every day. One game is over, a new one is in its first innings. This is the best time to be a start-up in enterprise software. We will profile the vendor landscape and the opportunities for new vendors in the next post. For now, I want to focus this from the point of view of the enterprise, the buyer.

Large enterprises and globalization

The fundamental restructuring of enterprises is mostly a developed world story. In developing countries such as India, Brazil and China, huge new companies are being created. They have totally different challenges and a different opportunity. They are still in the phase of organizing scarcity, which requires the deployment of large resources - scale is an advantage. America and Europe did this in the years after the Second World War, the Asian tigers (Japan, Korea, Taiwan, Singapore) followed a few years later with a similar strategy. Now China is doing the same and, to a lesser extent India, Russia and Brazil.

We will write more about the emerging giants from the developing world and how they are impacted by social media in future posts. This post is focused on the challenges faced by large enterprises in the developed world. They don't need to organize scarcity, they need to organize for innovation. Nobody really knows how to organize for innovation, certainly not within traditional organizational structures. But we do know that scale is not an advantage and is often a disadvantage when the prize is innovation.

The perfect storm hitting large enterprises

Large enterprise face a "perfect storm". These are huge challenges. Start-ups that help them navigate these challenges in real and fundamental ways will do very well:

1. The demographic time bomb of retiring baby boomers. They have mastered the rules of the traditional enterprise and, with only a few years to retirement, they will tend to resist fundamental change. When they leave, they take with them accumulated decades of experience, knowledge that is not easily codified for handing down to the next generation.
2. The difficulty of bringing in Generation Y. This generation has grown up in the fluid world of social media. GenY are not enticed by rigid command and control structures controlled by a generation that does not want to hand over power. This is a big problem for enterprises. Ask a random sample of GenY how many view Fortune 500 companies as their ideal employer. If large enterprises don't get the best and the brightest in this generation, they will be in deep trouble from the start-ups and global challengers who do.
3. Enterprises are all about secrecy, structure and control. Social Media is exactly the opposite. Secrecy, structure and control have served real needs for a long time, they work. When the irresistible force of social media hits the immovable force of a traditional enterprise, it makes a loud noise. The strategies are not obvious. "We will make social media technology bend to our rules" will lose a lot of the real value. "Blow up all the rule books, let self-organizing networks evolve" may work out brilliantly, or it may blow up catastrophically; the risks are unlikely to be easily contemplated by existing management and investors.
4. Figuring out what is core and what is non-core is hard. Implementing that is even harder, when careers and power rest with the current definitions that assume that most activities are core and should be done in-house.

Historic opportunity

This is a massive shift. A bit of historical perspective helps. In 1955, 1/3 of the US GDP was controlled by Fortune 500 companies. By 2000 that share had tripled to 2/3. Within that cold statistic lies thousands of human stories of family farms, Mom & Pop stores and other small businesses trampled by WallMart, Agribusiness and other large companies. The drivers mentioned above may reverse that trend. It is not written in stone that large companies should control 2/3 of the economy.

That is huge opportunity for a lot of start-ups. There has never been a better time to be an entrepreneur. It also a huge challenge for the incumbents. Big companies need to re-define themselves in fundamental ways to find new ways to be big in a meaningful way.

Adoption of social media will be the central theme in that story.

The next post will focus on the Enterprise 2.0 market landscape and the opportunity window for start-ups. At a time when advertising is challenged and the VC window is a less open, this is a vital area of opportunity for start-ups.

Tell us what you think? Tell us where you sit - within the large enterprise trying to figure out how to manage this huge wave of change? Within a start-up or VC looking at the opportunities?

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UPDATE: Part 2, 11 Things Startups Should Know About Enterprise 2.0, is available now.