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29 August 2006

What if we tried to foresee what will follow the currently unfolding Knowledge Economy?

What if we tried to foresee what will follow the currently unfolding Knowledge Economy? What will be the new buzz word for corporate leaders in 2050?I will not attempt here to answer these questions directly but will use scientific predictions as metaphors to give us a hint.

While reading recently the very interesting scientific book “The Next Fifty Years – Science in The First Half of the Twenty-First Century”, a collection of 25 new essays by leading scientists edited by J. Brockman (A Vintage Original, New-York, 2002) I found three passages from three different authors that are relevant to my two questions above.

First, here is how Alison Gopnik (professor of psychology at the University of California at Berkeley) ends her essay “What Children Will Teach Scientists”:
“[…] At the end of the last century, knowledge began to become the most valuable currency, like land in a feudal economy or capital in an industrial economy. The new science of learning should tell us that knowledge is not just a prize to be won in some desperate test-taking struggle for places in the contemporary mandarinate. Instead it is, literally and not just rhetorically, our universal human birthright.”

The way I read this (based also on the reading of Alison’s whole essay about the science to understand learning) is that our societies will progressively realise that knowledge is what makes us, humans, so special. The value of knowledge would then take the forefront in all aspects of our everyday life. We would continuously seek better ways to acquire it, to retain it, to share it, to nurture it. Of course, this should have a profound impact on management and organizational cultures. By 2050, the fact that knowledge is a vital asset will be a given fact and competitive advantage will be won by those who will leverage it faster and more effectively. This should mean that organizations of this future will have as a constant priority to make all their collaborators as creative and innovative as possible. Everyone in an organization will be empowered and encouraged to create/innovate making some mistakes along the way but learning a great deal more. This seems to be compatible with the next extract below.

Mihaly Csikszentmihalyi - a Hungarian-born polymath, formerly chairman of the Psychology Department at the University of Chicago and currently Davidson Professor of Management at the Claremont Graduate University in Claremont, California – writes in his essay “The Future of Happiness”:
“[…] Among the things we learned is that people who are engaged in challenging activities with clear goals tend to be happiest than those who lead relaxing, pleasurable lives. The less one works just for oneself, the larger the scope of one’s relationships and commitments, the happier a person is likely to be. […]”

Mihaly sees that by 2050, societies at large but employers in particular will have understood that people are more productive when they are happier, and that people are happier if they have challenging objectives and if these objectives are clearly contributing to the corporate goals. This seem to suppose that individuals will be valued for their specific knowledge and competencies to go beyond what is initially expected of them, in order to create value for the organization.

This nicely leads us to the third extract of this book I believe relevant to the leveraging of Knowledge. I found it at the end of Brian Goodwin’s essay titled “In The Shadow of Culture” where he attempts to explain why he believes a “science of qualities” is developing, where feelings and qualities have at least as much importance as proofs and quantities. Brian (a professor of biology at Schumacher College, Darlington, UK - where he coordinates a master’s program in holistic science- and a member of the Santa Fe Institute) writes:
“[…] In the shadow of current science it is possible to see the components of a science of qualities which would restore qualitative evaluation to the place it occupies in our everyday lives, where judgments depend on quality as well as quantity. This restoration, together with the recognition that feelings belong not only to us but also to the rest of nature, in whatever form, presents us with a dramatically transformed set of possibilities for scientific knowledge, technology, and corporate and political action.
A shift in scientific perspective of this magnitude is not going to happen overnight, if it happens at all. It requires new forms of education at a basic level, in which the sciences and the arts are united to keep people whole and in which scientific and technological decision-making require participation by all members of civil society, with knowledge joined again to responsible action
.”

This extract is heavy in meanings and could open up many philosophical debates. I will only say this: if science does indeed go through such a drastic shift towards valuing qualitative judgment, it will have an even bigger impact on other parts of society such as the business world. Accounting would no longer rely on quantitative analysis and the value of a company would give at least as much importance to qualitative aspects such as its intellectual property, including the specific knowledge of all its collaborators.

Peter-Anthony Glick
http://leveragingknowledge.blogspot.com

1 Comments:

At 9:48 PM, Anonymous Han van Loon said...

Will the Knowledge economy lead us to other paradigms?

Scarcity models are based on use of limited resources by one or other party and have been the predominant form of resource use in past economic eras. Will so called abundance models (e.g. we share our ideas and create a new idea) replace them?

Scarcity models have dominated in the past and most probably will continue to do so. This has many bad consequences in societal and global terms but we have to face reality. It is because individuals (and managers in particular) focus on specifics (e.g. I have to meet my budget) that the big issues are often ignored. I find the fixation on quarterly financial reporting a particularly insidious recent example. I am glad to see a very few CEO are now objecting to this short sightedness.

Abundance models exist at a micro but not at macro economic level. Grameen Bank is really an evolution of Cooperative societies. In Australia in the 1980s-90s (and many other places), many cooperative society lenders were set up to provide housing loans. Individuals rushed to them for loans because they were cheaper (individual benefit) than banks. Banks lost customers. The societies ran on thin (and somewhat risky) margins. The
banks lobbied the government and by various means, many of these societies collapsed. In one case, a state government denied it guaranteed the cooperative society (governments often guarantee banks and other lenders to ensure their credit rating is better - thus resulting in lower interest costs). In Sweden, there is a common form of cooperative - people join together to run a sporting club, say a yacht club, and share all duties (night watchmen, maintenance, cleaning etc.) so that they reduce their individual costs a lot. You would expect
they would like to socialise with each other because they share a common interest, but in fact they don't socialise with each other as much as you would expect(there is a seeming lack of social community). Yet these cooperatives flourish because the common interest is the individual interest (save money).

The knowledge economy. The question that arises in my mind is what does the knowledge economy make different in producing economic benefits? I believe ideas in themselves have little or no value (I always assess value by its utility and a lot of people have good ideas that never are communicated and used). It is when ideas are used (to create practical application or to create ideas that then have practical application) that they have value. It is why I believe the sharing of ideas that lead to new ideas is important because it affects our thinking, but does not create an abundance model that in itself affects the economy.

The idea (knowledge) has to pass 'gatekeepers' - mostly individuals (but radiating outwards to groups, organisations, etc.) who select what to use. The gatekeepers have the resources to use knowledge. This also applied previously during the feudal, industrial, service and informational ages/economies. Gatekeepers remain powerful today. This raises the question every person (and especially managers/leaders) have to ask: "/Am I a gatekeeper?/". If so, how do I make decisions?

Since I believe that individual choice predominates (not exclusively of course as negotiation can occur and I believe teams can strongly influence choice), it is imperative that individuals (especially gatekeepers) make choices in a holistic manner (take a long term and comprehensive view). Often that is very difficult because of the predominance of scarcity model oriented managers and leaders. That is why I believe decision makers, leaders and managers need to change their way of thinking and acting and embrace holistic approaches. That is why the focus of my book: "Reach for the STARS. Leadership and management in the new millennium." starts from the individual perspective and expands to teams, organizations, and global perspectives.

In the book, what I am saying is that I can change my thinking, my actions, my behaviour, my norms, my values, my beliefs. I cannot change these things in other people anywhere near the extent I can change myself. I model this in a cultural model, and I do change management so I have some grasp of what is possible to change. Somewhat simplistically, people change when it is in their individual interest to do so. Knowledge is an input to people decision making in whether to change or not. When I refer to individual motivation and individual interest, I use Maslow's hierarchy of needs. At the higher levels (community belonging, self actualisation, transcendence) satisfying an individual need increasing leads to satisfying a societal need. Maslow's Transcendence level in particular is not well understood. Many people in western societies equate it to some form of saintliness. As a result, many people have removed it from the hierarchy. I believe it has a different meaning. Nelson Mandela is no saint, he admits it himself, but he transcended South African politics, the effects of his detention and his former dissident (terrorist?) activity to achieve what he did. Frederik de Klerk who freed Mandela and allowed democratic elections that removed his own party from power
underwent a similar transcendent change, but of course most people want to forget him, because he was formerly an apartheid leader. They are two examples of individuals who transcended their background and thereby helped
change their society in South Africa.

Do you need such Star people? The questions are:
/"Does a knowledge economy really foster change in gatekeeper power more than previous economic models?"
"Does a knowledge economy reshape people thinking and acting?"/
"/Is transcendence required in the knowledge economy to promote a sustainable and equitable world?"/

My opinion (in reverse order) is:
Transcendent action certainly helps to make big societal changes, but it
is not necessary to make sustainable and equitable societal changes. I
believe that fulfilling individual needs at any level of Maslow's
hierarchy can help to make a more sustainable and equitable society and
world. Each time I choose to walk, cycle, wear warmer clothes because my
home is a bit cooler that day (i.e. not turn on heating), I am
fulfilling individual needs at Maslow's lowest needs level -
physiological needs. Each of these actions has a positive effect upon
reducing my carbon footprint and its effect on global warming . So I am
satisfying an individual need with an individual action that has
positive societal implications. Hence it is easy for each person to act
in a more sustainable and equitable manner with small actions.
Knowledge does not of itself reshape peoples thinking and acting. More
importantly, it requires an open-minded attitude to new knowledge and an
ability to re-evaluate previously held opinions, behaviours, norms,
values and beliefs (i.e the individual thinking, value and belief
system). I try to model that in my knowledge life cycle in the book.
When enough people change their value and belief system and thinking
approaches, they can create a power to influence the system and its
gatekeepers (e.g. national leaders, politicians, corporate leaders,
managers, each other). But we must start with ourselves first and work
outwards.

The same principle needs to be applied to leadership and management.
When I use holistic managerial decision making, I make decisions that
not only have short term application (e.g. I meet my budget), but also
long term benefit (I create a more sustainable world). My book explains
how to do this at individual, team and enterprise levels. When enough
people make even relatively small and easy decisions holistically, the
combined effect can be very positive (just as the opposite can be
catastrophic). In that sense, the rise of knowledge (with or without the
economic aspect) can provide the foundation for people to make better
holistic decisions.

--
Best regards

Han van Loon

Leistungs Consult
Performance matters
------------------------------------------------------------------------
Websites: www.lc-stars.com and www.starswebworx.ch/starsweb
Process Engineering and Assessment Books

 

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