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A Transvaluation of Business Values
Average reader rating: 0  
by Mathijs van Zutphen Science & Technology

Mathijs van Zutphen is philosopher, educator, artist and creator of VISH. At the Summit for the Future he participated in the knowledge stream Science & Technology.

Summary
The Club of Amsterdam’s first Summit for the Future, in January 2005, featured a host of innovative thinkers and doers discussing (preferred) future scenarios as our global village transforms itself into an integrated interdependent network economy following a trend away from tangible assets into a “knowledge society”. What emerged from the various presentations, seminars and discussion is an understanding of the depth of change that is occuring. These are not organizational social or technological changes, these are changes in the fundamental values on which our economic and cultural reality rests. In this paper, which may be considered a dispatch of the summit’s events, we will liken the changes to a philosophical concept of profound and sweeping transformation formulated by Friedrich Nietzsche. I have chosen to present a Nietzschian Transvaluation of Values in the form of a list of values that are shifting. The list was inspired by a number of presentations and seminars I was present at in addition to discussions and inspiration provided by many others present at the Summit.

… you better start swimmin’ Or you’ll sink like a stone For the times they are a-changin’ - Bob Dylan

Herakleitos taught us centuries ago that all the world is in constant flux. It seems as if this was never more true. Familiar sights and events are outdated shortly after they are introduced, as our world is transforming itself into something fundamentally different from what we were used to. Within one century we witnessed profound revolutions in transportation (cars, airplanes), communication (phones, internet), and manufacturing (mass production, mass customization), and we are still in the process of experiencing the full impact of these changes on our global society. Ageold institutions like the nuclear family, the nation-state and the Catholic Church are loosing their meaning. From one generation to the next a whole new order of things emerges. Is there any logic to the frantic change? Will the changes produce a new order, or is the system about to destabilize into perpetual chaos?

In the domain of technology the rate of change is truly amazing, but it’s not just the increasing number of gadgets, or the scale or ubiquity of new technology that is having the greatest impact. The bow and arrow changed our diet, the internal combustion engine changed the way we design our environment, the telephone reduced our vast planet to a global village; technology is capable of changing things beyond the domain of technology itself. Humans are essentially technological creatures; engineering is the key to our survival and success as a species. Our tools have an influence on what we do, how we work, and some of the changes we will be looking at have an intimate relationship to the use of impressive new instruments.

But that is just the surface. Technology is not what drives the changes today. Technology is what we use to get to where we want to go, it doesn’t tell us where we are going. Technology is making things possible that were pure imagination a short while ago, and this is profoundly re-shaping the world.

In times of chaos we have an innate desire to look for stability, and there is logic to that - albeit perhaps not an eternal one. When things change we look to the foundations upon which we stand to lend us support throughout the changes. Change is unsettling by definition, causing cautious creatures such as ourselves to become restless and confused. What can we still be sure of? Where is our solid ground? Which principles can guide us through the changes?

Principles are primary, they come first, as the term itself suggests. We understand reality, and we justify our decisions, on the basis of principles; they are like natural laws. The world around us might change, we might change, but we often preserve the principles we believe in throughout such changes. Not all questions dig equally deep. The question ‘why’ is more profound than the question ‘what’ or ‘how’, since it addresses motivation or motive. When we ask ‘why’ we are asking about the purpose behind an action or a decision, and the purpose is what matters because that is what gives us direction. The relative importance of a purpose is given by our values, in this sense the fundamental things underneath our principles are our values. Values drive our actions.

Our industrial era, supported by a materialist philosophical bias, has given us a functional yet limited interpretation of values: value is what we exchange in specific contexts we call markets, and so capital, or money, becomes the identifying mechanism of value. This restricted interpretation of value can be considered a key concept in our industrial worldview or paradigm, something like a meta-value.

Now then, will a reorientation to our fundamental values help us in our current crisis of grappling with rapidly increasing complexity and ever more change? The answer is no. It is the values underlying our paradigm themselves that are changing.

I use the notion of paradigm in the present discussion, because it is comprehensive while remaining sufficiently vague, so that we can avoid the necessity of strict definitions. Paradigms are structures behind the structures; they capture the implicit values that guide our actions. It is not the paradigm that matters in the present writing, or even fundamentally the underlying values, it is the change that we are most concerned with here. The changes that are occurring in the world today are truly a shift towards a different paradigm, because the foundations themselves are changing. We can change the way we do something, that doesn’t mean we have to change our character or our deepest beliefs, or our values. But we cannot change fundamental believes and values without changing the way we do things.

In the pages that follow I will construct of list of values that are shifting, and so change the foundation of our reality. I have chosen to speak of these changes in terms of a Transvaluation of Values, in reference to Nietzsche’s concept of an Umwertung aller Werten. Nietzsche is the great diagnostician of European culture; no philosopher exposed the implicit moral mechanisms, and hence faults, behind our ideas, practices, and institutions more fiercely than he. His concept of Transvaluation expresses a depth and reach of change that complies with many of the insights developed during the few days of the Summit. I’m fairly confident that the old Prophet of Nihilism would approve of my use of his term.

Property is out, sharing is in.
Property is the foundation of our economic system; property rights are the backbone of our legal system. A number of things are happening that subvert this principle. New developments in business show us ways in which sharing rather than owning becomes the way of the world.

The scientific world has been structured around knowledge sharing for a long time, even in the face of political or institutional obstacles knowledge sharing remained a crucial element of scientific practice. Sharing is really the central idea behind the concept of a Knowledge Economy. Knowledge that is not shared cannot grow or be applied to create value, it cannot contribute to innovation or invention. Now the virtue of sharing is entering the business world, although many players are extremely reluctant to accept the new values.

Producers of ‘information products’ (books, music, film, games) have been facing a significant problem ever since technology made it possible for consumers to produce copies at home. Now that everything is turning digital the problem is exacerbated through the use of peer-to-peer sharing software like Napster, Kazaa and Emule. Anything digital can easily be copied, and if consumers can make copies for free, why would they pay for it? The property rights of products that are being shared are exceedingly difficult to protect. Distributors of digital products are making an active effort, but gain little results. It is not even very clear whether such peer-to-peer sharing has any measurable negative effects on the revenue of companies in the media industry, although they claim it does. If I share a movie with my peers, allowing them to make a copy of off my hard-disc, are all these copies necessarily lost revenue to the distributor?

Peer-to-peer sharing is here to stay. Even as corporations construct obstacles to sharing using regional codes and non-universal standards (DVD-R, DVD+R), copying film and music will only become easier; the trend is irreversible. Business models of vendors of information products will of necessity have to change. People will not buy what they can have for free. At the same time the market for information products will no doubt grow, but added value will no longer be a function of ownership.

Selling is out, giving away is in.
Production of effective and bug-free software is a painstaking process that takes time, effort, concentration and skills. Once you have a succesful product, why would you ever give it away for free? Many business models revolve around the continuous milking of the proverbial licensing cow 9e.g. Microsoft). Giving software away does not fit into our economic paradigm, but it is happening all over the place. A whole host of free web services is available: file sharing, blogging, email, mailgroups, knowledge exchange. Free information is available through resources like Wikipedia.

A range of software applications is available for free; useful tools like browsers, media-players, firewalls, chat modules, internet phone. The open source movement, with the operating system LINUX being the most dramatic example, shows most clearly the shift away from proprietary products. LINUX was developed by a community of experts that received no explicit rewards for their efforts, it is free for all to use, and open to any alteration or improvement. The central idea behind all these examples is that the value is not in the ownership of the intellectual property, or the selling of the product; the value is in skills necessary to benefit from the product. Value lies in knowing “how to”, in additional services.

This will surely change the business model of many a producer of intangible ‘information’ products. The open source movement has created so much business value it might be considered the key example of the new value of giving away. It seems that the idea is catching on elsewhere in the computer business. IBM illustrated its own compliance with the new rules by recently releasing 4000 patents, donating them to the open source community for all to benefit. Some experts expect all software applications on personal computers to be essentially free commodities within a few years.

Holding on is out, Letting go is in.
Buddhist call it upadana, the grasping mind, and it is part of the cause for human suffering. Of course the desire to possess and pursue is not considered a spiritual neurosis in our Western cultural outlook. The desire to posses is a revered quality. The more you pursue, the more success you will reap. Obsession is a respected driving motivation. Once you achieve something, hold on to what you have.

Never break up a winning team? Nonsense. Simon Jones, Managing Director of MIT’s media lab Europe, explains that the strategy of constantly forming new combinations, breaking up successful existing teams, is essential in activating creativity and innovative potential. The constant change feeds the creative process.

Shareware, open source, all these phenomena illustrate this new value. Once you have made an effort to produce something, the next step is to let it go, donate it to the world around you and no longer claim affiliation. You have to be able to let go.

Knowledge is out, Creativity is in.
We speak of our modern world as a knowledge society without really understanding what the concept means. Knowledge has always been essential to the creation of value, even an archaic profession like farming is significantly dependent on knowledge of plants and natural principles. We have in a sense always lived in a knowledge society. We use the term knowledge economy really to emphasize the increasingly non-tangible aspect of our economy. Knowledge has become a product that can be bought and sold. However, knowledge production is following the same outsourcing trend we have witnessed in manufacturing: production moves to locations where labor is cheaper. Knowledge has become a commodity, and price competition became the name of the game in knowledge production.

A central insight behind the Summit for the Future conference is that competitive advantage in Europe and other (post-) industrial countries will depend increasingly on innovation. Knowledge does not produce innovation. Organisations that produce knowledge (R&D labs, universities) do not of necessity produce creative new ideas that spark innovation, in fact they often fail, as Richard Hawkins points out poignantly. Creativity requires completely new organizational structures and practices. So we find ourselves in somewhat of a dilemma. The future of our knowledge economy, our ability to compete globally, depends not on knowledge but on the creative use of knowledge: innovation, yet we find ourselves obsessed with the protection of knowledge and traditional ways of increasing knowledge. It is what you do with knowledge that is key.

Individual reward is out, collective reward is in.
Our often-praised individualism is essentially a system of competition. This has been apparent from the advent of individualism onwards. Value is created as individuals compete with each other. Rewards are therefore individual. Our salaries are an example, it would be unthinkable to not be rewarded on the individual level. The idea that my own reward might depend on the effort of others, and that cooperation is a part of the evaluation of my own results is a heresy in our individualist paradigm.

But individuals can produce only so much value. In fact, as we move into an economic model that values creativity and innovation more than products and knowledge, we find that teams are much better at producing quality ideas. Everyone who has ever had a collective brainstorm session will have experienced the synergy involved; groups produce better ideas than individuals, and the end result is more than the sum of its parts.

MIT Media Lab Europe was an innovation factory with an exceptionally effective organizational philosophy, former manager director Simon Jones explains. One aspect of this philosophy is the focus on multi-disciplinary teams. The team creates the innovation together, in cooperation. There is competition, but between teams, not between people. Success is not rewarded to individuals but to teams. The result is always a team effort, contributed to by unique individual skills, but fundamentally a creation of the group.

Team rewards show up elsewhere. Scientific practice has long understood the value of cooperation, e.g. knowledge sharing, across institutes and borders, and team efforts to tackle problems are an integral part of scientific practice. Shared Nobel prizes are the scientific equivalent of team rewards.

Scarcity is out, Abundance is in.
A fundamental idea underlying our economic system is the concept of scarcity. It is used to explain the mechanism behind markets. Scarcity on the supply side increases demand, and hence produces a higher market price. Higher prices are good for profits, and so scarcity and profit form a strong bond. Scarcity is good.

As we move into an economy that produces less tangible goods we are abandoning the notion of scarcity. Knowledge is not scarce, the internet makes it abundant. We traditionally believe that creativity, good ideas that drive innovation, are rare and special things. We believe only rare and special people posses creativity and are able to produce innovations because of a unique creative capacity. We have allowed ourselves to become so alienated from our true nature and ubiquitous power of the imagination that we have created this myth of the rarity of creative talent. And it is a myth.

We are finding out that creativity is abundant. Innovation methods like TRIZ (www.xtriz.com) make innovation a matter of following a certain path, using the right tricks, choosing the right perspective. Innovation permits a structural approach, the way music does. In Jazz creativity is a result of training as much as in other contexts, with musicians studying different structural approaches to melody. You still have to add the ideas yourself, but a structural approach makes the creative process more effective. No more creative scarcity: innovations, solutions, inventions, creative ideas, they can be produced easily, in small teams, with little effort, by all of us.

Hierarchies are out, empowerment is in With the advent of agriculture in Mesopotamian society around 7000 years ago, for the first time the possibility of an economic surplus arises. Pre-agricultural societies, in the meso or neo lithium, were completely integrated into their surroundings. A few such societies exist still today. In such a society hoarding is irrational, and economic surplus does not exist, you take from nature what you can immediately consume and share.

As cattle is domesticated, and various form of grain based agriculture are developed, a good harvest means excess. The first banking system in Sumer was essentially a system to deposit quantities of grain. With surplus comes the possibility of seizure, and hence domination of the food chain: the life blood of society.

Our system of power is such that few have most of the power, and most have none. Under the influence of ‘enlightened’ theories of individual value, and - more importantly - as European monarchies started making room for a mercantilist middle class, power has slowly been decentralizing. Today we have fairly democratic societies, of the representative kind, in the affluent world. The global picture however shows an extreme inequality in the distribution of power, as Tom Lambert dramatically emphasized during his keynote address.

Dominance, the value underlying a social organization of power that favors asymmetric distribution of wealth, and exploitation of a weak majority, has made European countries, and spin-offs like the US, exceedingly wealthy, in the same way it created a wealthy class within these “western” nations. Domination is good if you belong to the winning class. Of course there is an inherent instability there, you can exploit a majority only to a certain degree; if you go too far you will provoke revolt. In order to avoid such threats, apart from actually sharing part of the power, elaborate conceptual systems - value systems really - have been constructed to explain the inevitability of exploitation, thus legitimizing the Dominance paradigm. Most religions contain some sense of obligatory servitude to a powerful lord of the universe. Darwinism, qualified with the adjective ‘social’, is the scientific theory used to justify the domination of one group over another within society.

The success of the system of dominance has made our society grow in size, influence and complexity. So much in fact that central power has become completely dependent upon elaborate bureaucracies for the management of this complexity. These organizations are so large and intransparant they tend to lead a life of their own. Some say that bureaucracies are truly the seats of power, but if that is the case it is only the power to obstruct, delay and stifle. In essence, the institutions we use to govern, manage, and make things work, are powerless in the light of many of the changes we witness today. Effective governing requires efficient information flows between the different levels of policy and execution. In the midst of an information explosion it is likely that these flows will jam, congest, and generally become insufficient, no matter how much technology you implement. As information inefficiency becomes a reality, policy becomes de facto impossible.

Our belief that these traditional domination-based structures prevent chaos from occuring, i.e. that hierarchies are effective ways to manage complexity, is being seriously challenged. The significant feature of the hierarchy is that power is centralized, decision and execution are seperated by layers of bureaucracy. Organizations with a centralized decision paradigm are hopelessly inadequate in dealing with changing conditions in organizational contexts as well as with the internal dynamics. Decisions are so many, and they are related to so many aspects or parameters, that it is impossible to lift - as it where - a decision out of its operational context and expect to make useful choices. Decisions flowing up and down hierarchical channels spell the death of the organisation. Examples abound. The institution and its resources essentially serve the decision making-processes themselves, and nothing else. They are divorced from purpose, and cannot have any legitimacy in the new world.

Empowerment is the new name of the game, where decisive power is delegated to the appropriate (decentral) context, and people are entitled to decide on issues and processes relevant to them. The leading principle on the basis of which people will organize themselves is no longer a central power, but a shared purpose.

This is merely an issue of organisational structure you might say, but at a more fundamental level the same shift is happening: superiority is being substituted by the idea that all participants have valuable contributions to make to the shared purpose. Issues of superiority become simply irrelevant. So dominance disappears as the principle that has been the very fundament of our social structure The future of political action, policy reform and social innovation lies in initiatives from citizens. Bror Salmelin, head of the European Commissions New Working Environments Research Unit, explains that rather than attempting to spark innovation in dedicated institutes, like universities or corporate R&D labs, we should be thinking about mobilizing the creative and innovative power of 450 million European citizens. Such concepts truly revolutionize concepts of social structure and value chains. Empowerment becomes an absolute condition to achieving this kind of collective, shared, creative, responsible society of connected groups of individuals across traditional boundaries.

Organizations are out, communities in.
Globalization, migration, economic interdependence, shorter product life cycles, calls for more democratization and participation, all these developments require organizations to design policies, or at least make effective decisions. At the same time decision processes are slow, intransparant and subject to a complex of sometimes opposing forces. As traditional policy creating institutions - governments and their departments, management teams - find it increasingly difficult to influence events in a fast changing environment controled by unknown parameters, the need for decisive action only increases. Of necessity alternatives to traditional organizations will emerge, for decisions cannot be procrastinated for too long in today’s world.

We see more and more forms of organization with a political or social content arise out of communities. These communities rally around an issue that makes sense to the participants as individuals. That is the power of communities. There are many examples. In the virtual world we have newsgroups, essentially topic related web based discussion groups, and mailing lists, which achieve the same communicational goals through email exchange. We see Internet based networks of professionals like Linked In, or openBC, grow, as people start to see the benefits of presenting themselves in these contexts and connecting to others.

In the mortar and brick world citizen’s initiatives like 2004 Nobel Peace Prize winner Wangari Mathaai’s Green Belt Movement are having a powerful impact on people, society and the environment. We have witnessed powerful examples of the mobilisation of political action with protests against WTO policy in Seattle and Genoa, courtesy of the communications facilities provided by the multi-nationals the protests were directed against.

Thomas Schael, Marketing Director of an online community of people who share knowledge (www.knowledgeboard.org), intends to accelerate the revolution with technology specifically designed to encourage the creation of communities. He has himself witnessed how easily and naturally communities can grow, and is convinced of the power of such forms of self–organization.

Governance is out, Leadership is in.
The idea that people need governance is as old as our oldest monarchies. Even long before the Pharaohs ruled their desert domain the dominator king wielding absolute power over his inferior subjects defined the prototype of society, conspicuously illustrated in the epic of Gilgamesh. Citizens are effectively dispossessed of their ability to make their own choices and determine their own destiny. Subjection to the will of the king is absolute, no transgression is allowed. This idea still pervades our liberated, democratized, and individualized society, which is still - after all - reinforced by rigid institutional structures. The concept has been with us for so long, has become such an essential aspect of the mythology of our culture, it has become an implicit, invisible principle of organization. Such powerful yet unconscious principles often seem impossible to change.

Yet things are changing. Rapid technological change in the business environment, and increased competitive pressure caused by globalization of operations require other decision-making processes. A management model based on control, on governance, is needlessly cumbersome and slow. The competitive edge on process innovation that the Japanese and other Asian “tigers” have created is a direct consequence of their leadership model. The sage king of oriental mythology and philosophy is one who empowers the people. A less visible leader is better, and it is really the king who serves the people than the other way around. This has allowed decisions about improvements in the manufacturing process to be implemented quickly and effectively. The desire to control has proven to be an expensive anachronism. A leader is not one who governs, but one who creates leaders around himself. A leader empowers the people, and it is the people who create the value that benefits all.

Success is out, failure is in.
Everyone loves a winner, right? We worship the heroes from the world of sports or entertainment who flaunt their success unabashed in glossies and TV shows. Examples of success, they are truly considered winners. A person is judged in terms of social or economic success, in Europe as much as in America. We focus on success, analyze it, broadcast it, wallow in it, envy it, and desperately pursue it ourselves.

Success, especially in combination with smug complacence, leads to failure ... yet failure, combined with perseverance, is the road to success. MIT Media lab’s experience shows the value of failure, making failure a central aspect of the organizational model. Nothing is more educational than a failed project. As such it is the greatest contributor to eventual success. It is said that Thomas Edison had to try out 10.000 different ideas before he was able to finally produce a functioning lightbulb. One might say there is an inevitability about success, but it must be reached through the combination of failure and perseverance. This is something we can now start to understand and appreciate.

Monopolies are out, diverse markets are in.
The biggest winner in a business context is rewarded with a monopoly, Microsoft currently being the most manifest example. A new wave of mergers and acquisitions seems set to create more global monopolies in the areas of pharmaceutical products and consumer goods. But these are manifestations of a dying paradigm. Monopolies do not produce (lasting) competitive advantage. In fact, they most likely produce the opposite.

The dynamics of an increasingly interdependent global economy of manufacturers of components simply does not condone monopolies. As products become more complex, relations between producers of different components become more important. Strategic decisions become interdependent and have consequences far beyond their immediate context. This is exemplified by IBM’s decision during the development of the first Personal Computers to outsource the production of processors (to Intel) and the operating system (to Microsoft) in the early 1980s. It effectively destroyed Big Blue’s monopoly, and reduced the former giant to just another player in a dynamic market place. Change is too rapid to rely on the perceived safety of a strong position in a limited area of the supply chain. Charles Fine has introduced the term temporary advantage to express the immanent instability of a company’s position in its larger (supply chain) context. Survival in the world of temporary advantage means a constant shifting and adjusting of strategy. Monopolies are impossible to defend in such a context, and that is a good thing. We don’t need monopolies, monopolies are bad for innovation, and thus bad for business. They increase complacency, decrease the quality of customer services and obstruct development and growth.

National is out, Global is in.
To most of us globalization is process that has been slowly influencing our economies and the world over the past few decades. Of course we have lived in a globalized economy since the advent of capitalism and the earliest European colonizations, but we have never felt globalized. Our minds are molded in ways that make us prefer to think in terms of national identities. In international policy nationstates are the dominant entities, even as the global reality is shaped by multinational corporations with no connection to nationality at all.

In contrast to this view the students present at the Summit taught us a valuable lesson. They have grown up in a world that effectively is global. To them, and more so to even younger generations, it does not make sense to design policies or think about challenges within the confines of a national perspective. They see events fundamentally as global issues, they email and chat to friends all over the world, and share their views with exchange students from different continents. They view themselves as global citizens. The understanding that causes and effects have a global impact is a fact of life to them. The interdependencies between communities and citizens of this planet are so obvious, the concept of nationality is like an obstruction. In the world today, one cannot not think globally.

Reaction is out, Vision is in.
The future is unpredictable, a vast unending era ahead of us; mysterious, dark, unknowable, forever beyond our reach. We proceed cautiously as we progress onwards through the inevitable passing of time, carefully holding on to what we know about today, cautiously inventing conjectures that are re-adjusted as the future becomes the present.

Why are we so modest? Certainly not out of a natural sense of humility. We are creating the future right now, in our decisions and actions and the inevitable consequences they have. We have a strong tendency however to disempower ourselves in relation to our future, as if not we but some (malignant?) divinity steers our destiny. Why not make the realization that the future is something you create the starting point of our decisions?

Wendy Schultz explains how the concept of preferred futures captures this idea. It is important for futurists, and all other mortals as well, to not just discuss possible scenarios but to make choices about them. We have to not just think about the future, but build it in a deliberate manner. Creating a vision means shaping the future, that is the significance of the “Vision thing”. Stephen Covey means to teach us the same when he speaks of starting with the end in mind as a crucial habit for shaping our lives. Trivial as it may seem, creating a future is as simple as imagining what you want it to be. Our vision becomes what mathematicians call a chaotic attractor: an implicit yet definite shape that unites all complex dynamics into a single whole.

Prediction is out, Chaos is in.
In our planning we have learned to predict coming events by extrapolating from the present. Now the future remains fundamentally unknowable, but this attitude gives us some leverage. For example: expected GDP growth is a matter of calculating past GDP growth, adding a number of predictable trends, e.g. increased consumer confidence increases demand which increases output, and you can qualify what will happen in the future. This mode of operation is no longer effective. The Club of Rome’s 1972 doomsday report ‘Limits to Growth’ failed to live up to its predictions. The perceived connection between economic growth and inflation was demolished by the ‘stagflation’ era in the 1970s and 80’.

Systems thinking has been the school of thought preoccupied with such counter-intuitive phenomena. The unexpected events are produced by emergent properties, properties of systems that cannot be described or explained in terms of properties of their constituent parts. These Phenomena are produced by subtle influences of implicit parameters, interdependent, and capable of producing profound effects from small fluctuations.

Nowhere is the dynamic complexity more apparent than in our globalized financial markets, which suck in ever larger quantities of currency. In this case the dynamics are produced by the expectations of participants themselves. In the words of philantropist and financial wizard George Soros:

The more the theory of efficient markets is believed, the less efficient markets become.
(George Soros, The Alchemy of Finance)

We need to become aware of this principle of complexity and interdependence, lest we forever persist in our destructive ignorance. The internet boom and bust of the late 1990’s shows how rapid developments combined with ignorance creates global business disasters. Generated by an irrational exuberance about the impact of the internet, investors lost their capacity for scrutiny and sound judgement. The burst of the bubble came as a welcome adjustment, yet led to an unjustified lack of confidence in the power of e-business models, and subsequent undervaluation of shares.

Specialization is out, integration is in.
In his 1980 explosive analysis of modern history, Alfin Toffler describes specialization as one of six key principles behind Second Wave societies, i.e. industrialized societies that have industrialized and adopted the values implicit values of the industrial system. We have designed our production processes along a division of labor, each assembly line worker is involved with a small fraction of the entire process. Division of labor is the seed of specialization, but it has matured well beyond manufacturing. In all levels of society we find ‘professionals’ who are really specialists in some limited area of activity. Science has eagerly incorporated the principle of specialization to produce a veritable jungle of disciplines and subdisciplines in which we understand more and more about less and less. All this specialization serves a desire for efficiency and control, but it is stifling the creation of ideas.

As Richard Hawkins, senior strategist at TNO, explains, universities are no longer capable of producing valuable innovations. The specialists inside their field patiently toil ahead, but create little innovation. New ideas arise where different disciplines touch each other, and innovation is created across traditional institutional boundaries. Specialization is standing in the way of creativity and progress. We need to integrate knowledge domains across disciplines, open communication channels between experts, and rid our selves of institutional and conceptual boundaries. Static balance is out, dynamic balance is in.

There exists a traditional concept of balance as an equilibrium, a static opposing of forces that creates stability, like a scale with equals weights on each side. Such a static concept of balance is no longer applicable to the powerful dynamic balance that can be used to harness creativity. One of the drivers behind the success of MIT Media Lab Europe is the way it incorporates constant change. All employee contracts last two years, and are never renewed. Fresh blood is continuously flowing through the system. Projects have immutable deadlines, and teams are constantly under pressure. No peace and quiet, no status quo, no standing still.

Managing Director Simon Jones uses the metaphor of a modern fighter jet. Jets are inherently unstable systems that are able to operate by constant corrections executed by a complex system of computerized sensors and feedback loops. The airplane is constantly on the brink of being uncontrollable, and that is what gives it its agile maneuverability and power. It is what Capoeiristas refer to as the balance in unbalance.

“Contradiction bad” is out, “contradiction good” is in.
In logic there exists a rule that ensures that contradictions by definition lead nowhere. The rule is called Ex Falsum Sequitur Qoudlibet (“from the contradiction follows everything”), and is an essential ingredient in the Reductio ad Absurdum argument, where a contradiction, the Absurdum, is derived to prove the opposite of what was assumed. Contradictions imply the breakdown of the system in which they occur, for this reason they have to be avoided at all cost.

Valeri Souchkov, an expert in the TRIZ method for catalyzing innovations, explains that contradictions are, in fact, good. Contradictions form the essence of a problem, and so they are the root of the solution. A well-formulated contradiction points the way to the solution. Finding the contradiction becomes a coveted step in the creative process that leads to innovation. This attitude is reminiscent of Ayn Rand’s view of contradictions, as expressed in Atlas Shrugged. When you encounter a contradiction, it is time to check your premises, at least one of them will have to change. Breaking down the boundaries of the well known, courage to reject familiar principles, these are ways towards new insights and inventions. Accepting the contradiction creates the kind of Zen-like mindset that is necessary for truly creative innovation.

Uniformity is out, diversity is in.
Uniforms are powerful cultural symbols. Military uniforms impress, corporate dresscodes (navy-blue tree piece suits) give us a sense, or illusion, of professionalism, schoolyard conventions guide conduct by determining what “cool” brands are acceptable. All uniforms are criteria we use to gain social acceptance. We subject ourselves to these (implicit) codes in order to fit in. Speaking of concepts like national identity or cultural values, we do the same. We try to find a mold, and postulate that all those we consider peers should fit in, presupposing that that is what an individual wants above all else: to fit in. We even attempt to stand out, and emphasize our uniqueness, by following conventions. No-one understands this better than the marketeers behind “rebel” brands supposed to express individuality Uniformity does not serve progress in our new knowledge economy.

Innovation and creation are products of diverse minds, intermingling perspectives, irreconcilable positions, and flexible thinking: the opposite of uniform behaviour. Innovation in this sense requires the abolishment of uniform ways of thinking, combining and organizing. If we regret the disappearance of traditional values in our multi-cultural reality, we should realize that we need even more of it. In fact, the cultural diversity within the European Community creates a powerful competitive advantage in a world where value creation is increasingly driven by creative innovation, according to Bror Salmelin.

In closing
These ideas are written down here to unhinge your mind from the comfort of familiar presuppositions. They are meant to wake you up, provoke you, empower you at the same time, and above all help you develop your own ideas about the crucial issues we’ve been discussing. It is important that we shape our future deliberately, and that we make ourselves responsible for doing so.



Visit also the Summit for the Future: Science & Technology and the sections with books, articles and links.


See also the Summit for the Future 2005

 

 







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