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In the industrial society, the CEO was the one who conquered new markets, commanded, and controlled. He was the unquestioned top of the pyramid.
Now, a new type of CEO appears, as in the example of ASKO. This new CEO jealously cares for his new production tool—the human persons working with him. Thus, his emphasis is the complete opposite of the old type of CEO. Everything depends on the human mind, which is the only thing capable of applying knowledge to knowledge in order to create new knowledge. Thus, the new CEO has completely reinvented his role. He has had to become the one who makes sure that his staff, his new production tool, comes back to work the next day and does not go to a rival with all his implicit and explicit knowledge.
The new CEO must also increase his staff’s creativity by introducing them to the “networks of excellence” and the “communities of practice” where knowledge is exchanged to create new knowledge. Thus, he helps the sharing of the network knowledge. He can also help networks develop an auto-control of the production quality of his staff—as in the above ASKO example, the head of a translating venture who involves all of the concerned users by creating a users-network around his staff.
This type of CEO does not perform the same function as his predecessor. This new function is certainly not easier, but it is less violent and less patriarchal. There is still competition, but also collaboration in networks. Some writers are beginning to speak of “coopetition.”
This no longer is the same world.
The approach of the new CEO also is less and less “materialistic.” One sees the creation of associations like Business Spirit. There is now even a Business Spirit Journal online.
And as much as the industrialist often was described as a warrior, the new businessman is not only the one stimulating network creativity, but also the one who breathes a good spirit into his business. Some are starting to conceive the role of this new businessman as a mission, a responsibility toward humankind. That is what appears as a trend, certainly minor, in respectable organizations of business leaders like the World Business Academy, which considers that profit is only the consequence of the way business exerts its responsibility toward the common good of humankind41.
The World Business Academy helped set up the Cotrugli Business Academy in Zagreb, Croatia, of which I have been the dean since 2004. The academy is a new type of business school trying to address the change of the role of the businessman. Concretely, we offer our students in the Executive MBA Program a two-pronged approach. The first prong includes classical subjects, like accounting, business planning, organization and industrial management to prepare the students, some of whom may have known the communist era, to become familiar with the industrial economy in which they are immersed. But we also offer a second prong to prepare them to be this new type of manager in the knowledge society. The matter there is to perfect their human qualities, their internal alignment, to create in them a good spirit in business and to enable the creation of new knowledge networks. And the academy also shows them that it will be less and less possible to avoid taking care of the environment—and teaches them social inclusion. Corporate social responsibility (CSR) and sustainability become a must for them because they are more and more influencing the intangible assets of the companies.
The success of our academy has been striking—probably, because we address the real needs of business, and the silent expectations a majority of the younger generation.42
The actual system of competition is based on the secret of manufacture. If somebody has the technology that the competitor does not know, the one who has the technology earns part of the market. Similarly if, during a war, one of the enemies owns a new weapon unknown to the adversary (whether gun powder or atomic bomb), he will have an advantage in battle. Is this not, in fact, one of the keys of the history of Western conquests in the world?
However, as Harlan Cleveland43, statesman and member of the intellectual elite of the U.S., observed in 1985, the secret tends to disappear in the knowledge society because “information always leaks.” This means that secrecy will become less and less possible in the years ahead. As he wrote,
“Information is porous, transparent. It has an inherent tendency to leak. The more it leaks, the more we have, and the more of us have it. The straitjackets of government ‘classification,’ trade secrecy, intellectual propriety rights, and confidentiality of all kinds fit very loosely on this restless resource.”
The consequence is that hierarchies based on exclusive ownership of knowledge and intellectual propriety are crumbling, quietly but rapidly. Harlan Cleveland and the World Academy of Art and Science, of which he was the president for years, announced the twilight of patents as long ago as 1990.
In addition, public opinion appropriates to itself faster and faster that which just yesterday belonged to the world of “secrets.” The Internet has contributed greatly here, the most striking example being that of the Apple iPod® and the direct uploading of music through the Internet—with of all the resulting ownership fights. Another example is the battle of the Third World governments for the generic medicines that the pharmaceutical companies are quietly in the process of losing step by step.
Thus it is as if a virtuous circle of sharing and transparency has established itself thanks to the opening and the sharing of knowledge. This new open logic seems to me the bearer of the future, but also of new conflicts between the old and the new vision. We alluded to this fight when we spoke about the debate between the “open-source” attitude expressed at IBM and the patenting attitude expressed at Microsoft.
One must be careful to not underestimate those who will attempt everything to avoid a change of vision and preserve the priority of secrets and patents. There actually are important battles, on many fronts, to preserve the intellectual property of discoveries, music, artisanship, and art works in general. This is entirely understandable since artists also need to live. The way to remunerate knowledge may fundamentally change without us being able to say exactly how. And there is the problem. Nobody knows exactly how the change will affect such or such spheres of the industrial activity. Some will continue to reproduce the system and the industrial approach with all their strength, because they do not see the transition. One can understand this, even if this fight does not represent a probable way toward the future. Some will also find it “logical” to manipulate the human brain to subjugate it to the machine, and such logic will be considered creative in the sense of the industrial and mechanical logic of the 20th century. They will have, it seems, no ethical problems since in this “modern” and rational vision,“ all that is rational is scientific, thus acceptable, and beyond ethics.”
We will come back to this in the next chapter on the negative scenario. It corresponds to the rightmost column in Table 1, above, and it is already at work everywhere.
We are not very far from Orwellian scenarios.
Our collective subconscious tends to distrust the word “management.” It is afraid of human manipulation that might hide behind the word. Now, however, a spectacular turnaround of the management theories is under way. Peter Drucker, a pioneer and a respected authority on the matter, announces a refocusing of management toward the human in the post-capitalistic society. These are amazing words were written by somebody who is not susceptible to be targeted as a “leftist” or a visceral critic of capitalism. But, for him, it is no longer the machine that can dictate its logic to the human. On the contrary, the machines (computers) now must become the “human friendly” to be sold. In business schools, it is unusual to lecture on these new developments.
Peter Drucker explains the definitions changes of management44 thus.
“When I first began to study management, during and immediately after World War II, a manager was defined as ’someone who is responsible for the work of subordinates.’ A manager in other words was a ’boss,’, and management was a rank of power. This is probably still the definition good many people have in mind when they speak of ’managers‘ and ’management.’ But by the early 1950s the definition of a manager changed into one who ’is responsible for the performance of people.’ Today, we know that that is too narrow a definition. The right definition of a manager is one who is ’responsible for the application and performance of knowledge.’ This change means that we now see knowledge as the essential resource. Land, labour, and capital are important chiefly as restraints. Without them, even knowledge cannot produce. Without them even management cannot perform. But where there is effective management, that is application of knowledge to knowledge, one can always obtain the other resources.”
And he concludes with this sentence, which is like the summary of the book:
“That knowledge has become the resource, rather than a resource, is what makes our society ‘post capitalist.’ This fact changes—fundamentally—the structure of society. It creates a new social and economic dynamic. It creates new politics.” (p. 45).
To such sentiments, one often hears objections such as: “But all these businesses will disappear like in the crash of California,” and ”After all, this knowledge economy is like a bubble of soap that will burst at the first financial crisis.”
Verna Allee is a friend of mine and works as a consultant. She lives in Martinez, California, on the other side of the hill, behind Berkeley. In 2004, she was asked to work on a very advanced research project building a roadmap to sustainable development in the knowledge economy45. This research project shows that the engine driving businesses toward sustainability is not only public opinion, but the growing importance of intangibles in businesses stock evaluation. Verna is also the first author in the world to have graphically described the intangibles in her most recent book, The Future of Knowledge. She works for many large businesses in the U.S. and knows very well those of Silicon Valley. She also works in Europe, namely in Norway and for the European Commission.
In this context, she gave a lecture at the European Commission on the state of affairs of the businesses in Silicon Valley. In her lecture, she said that most businesses did not understand the need to pass from the industrial to the knowledge society. They simply kept their industrial vision, their pyramidal structure, and their traditional approach to profit, to customers, and to society. Only their products were becoming more and more non-material. They all collapsed in the “dot-com crash.”
A small minority realised the need to change structure (from pyramid to network) and to transform their world vision. Thus, they included in their intangible network their customers, their suppliers, the public, the environment, and their society. They transformed themselves fundamentally and survived the dot-com crash without problems. That is a cruel fact.
Her examples showed the danger of choosing the wrong kind of management.
Trade, as we know it, is a recent notion. It is a transaction where one exchanges goods for money, period. Once the exchange has taken place, the transaction is considered ended. No follow-up is anticipated, except perhaps for another similar transaction at a later date. This perception of trade seems to us also eternal—since it is the only one that we have known, it is part of the way we view the world. But in the Middle Ages, commercium was a very different relation, much more comprehensive and rich. It was based mainly on exchange and gifting46. For example, if a farmer needed seeds, and his neighbour had some to spare, the neighbour might give some to the farmer in exchange of an object or money… or nothing at all. The farmer would then consider himself to remain with a debt of honour. It was understood that he would render a service to the neighbour, if needed. And he would make another gift at the right time, in return.
Similarly, in the city market, some goods were exchanged for money, but there also was a lot of informal information and knowledge that was exchanged about things like family relations (sons and daughters to be wed), political news, and agricultural know-how. Thus, commercium comprised much more than merely money transactions. In fact, it is only when the industrial society appeared that concept of trade shrank to become “trade” as we know it now. And the notion of reciprocal debt also disappeared and, with it, an extraordinary type of social cement.
In the industrial society, trade has become solely monetary. One gives goods in exchange for money. And the popular wisdom tells that it is impossible “to have the butter and the money paid for the butter.”
In the knowledge society, on the other hand, if I give information to someone else, I do not lose it. My reward for doing so does not necessarily take the form of money, but the return of the information that comes back to me enriched with the creativity of the person to whom I gave it. It might well provide me with things that I did not know, thereby enriching me. That is why new businessmen insist so much on the sharing of network information.
Thus, in the knowledge society there is a radical departure regarding the basis itself of the modern concept of trade. It is no longer a situation where I cannot, by definition, ever “have the butter and its money” but only lose what I exchange. In adopting the new concept of trade, we are returning to a logic of debt, exchange, and gifting as in the Middle Ages. This cannot be without consequence on the role of money in the world, because in the knowledge society, money no longer occupies the centre of the transaction. Transactions can occur without money. Without any doubt, this will result in a new definition of the role of money in tomorrow’s society. Some alternative money systems, like www.favours.org, are built on the notion of exchange and gifting. But the more we progress in the description of the knowledge society, the more we shall see that it is built on exchange and gifting. Thus, it potentially is a more humane society.
Nevertheless, capitalist trade concepts are embedded in us at such depth that we are not conscious of them. Thus, we keep on trying with great efforts to adapt the exchange of knowledge to “our” commercial rules, which are too narrow, like Procuste’s bed.
Hundreds of researchers spend thousands of work hours trying to fuse the logic of knowledge with the modern capitalistic logic. Can their efforts carry the future? This is not at all evident.
Why, otherwise, have others become conscious at the same time of the existence of a different logic? Why have some Silicon Valley firms made it a rule, an obligation, to circulate information, in order to share it? If a staff member keeps for himself some important piece of information more than 24 hours, he is fired! These firms understand that the added value of knowledge is obtained when it circulates. The more one shares knowledge, the more valuable the knowledge becomes. On the other hand, if knowledge remains secret, it loses value and the group creativity diminishes quickly. And, yet, we keep on cultivating secrecy.
The exception, which confirms the rule, is paradoxically found in the field of defence. The Treaty on Conventional Forces in Europe is the first to have been based on a sharing of information. Each party has the right to send inspectors to the adversary who is obliged to accept them47. As such, it seems that it has tipped the global strategy in favour of the transmodern post-capitalistic logic. Yet, the Pentagon in Washington, D.C. is entrenched in the old model and cultivates new technologic secrets with the prospect (less hypothetical since the election of G.W. Bush) of a race on space strategic armaments. In 2007, the U.S. renounced this treaty altogether, and the Russians followed suit.
What a pity. The treaty had represented a huge step forward in non-violence between States.
Obviously, we are still living in the transition period between the two logics—the two societies—so that money today seems to keep an excessive importance. Nevertheless, this new subjacent logic is rising and grows quickly in some spheres. Quietly, it controls the economic power and marginalises, slowly but surely, the “industrial” trade. However, we do not yet have a theory on this “sharing economy.” Much sharing of knowledge occurs, but there is no real economic theory to show the way. We still are in the era of empirical attempts.
In the realm of trade and competition, one measures the change to the knowledge society even better. If one must put his staff in a network configuration to increase its capacity of knowledge creation, it is obvious that his relationship with his competitors is altered. A new rhetoric appears, no longer based on the military rhetoric of the battlefield, where one must kill the other to catch his parts of the market. More and more, a new logic appears which is less violent or non-violent. Patriarchal values and their jargon are left in the dust.
In 1996 some authors began to speak of “coopetition”48, which combines “cooperation” and “competition.” But authors like Elisabeth Sathouris, in a more recent publication called Earthdance49, compares businesses with living organisms. And she observes that these organisms take an enormous leap in evolution when they move from competition to collaboration. In a mature living system, each party, entity or individual pursues its own interest in a manner that does not compromise the health of the group. Thus, there is collaboration that hurts neither the individual’s personal interests nor the network’s interest.
Verna Allee50, in her excellent book explains how this collaboration functions in the midst of a value network.
“The first principle of a healthy network is that individual participants pursue negotiated self-interest with consideration of the health of the other levels of the system. The value network perspective and approach suggested in this book supports and encourages negotiated self-interest between all the participants, with careful consideration for the next level of holarchy—that of the value network itself. People will want others to succeed when they appreciate that their individual success is directly linked to the health and vitality of the entire network. In a successful network, everybody supports the success of others as well as themselves.”
And she continues, regarding the absolute necessity of fairness in the network.
“Every participant in a value network needs to contribute and receive tangible and intangible value in a way that sustains both their own success and that of the value network as a whole…. When people feel they are being fairly rewarded for the value they contribute, they become willing to offer even more value… It is essential that everyone in the network operate with an ethic of giving and receiving value in a way that build good relationship and trust.” (p. 238.)
Thus, we are entering a new logic which is no longer warlike or violent, but whose outlines are still unknown. We shall consider them later.
The heart of the economic engine of a society is the way it creates value. We have seen that this engine in the agrarian society is the production of wheat or fruits, which issue from nature. Man must farm but he cannot make grow. He can only ask Divinity for a favourable climate and wait.
In the industrial society, man does not need Nature. He builds objects in the factory from raw materials. From a block of steel, he builds an automobile. Value production consists in adding value to the object, or in other words producing “added value.”
The great political debates of the 20th century were about deciding who the added value belonged to. The left held that it belonged to the worker who, otherwise, “would become estranged of the fruit of his work,” whereas the right asserted that this added value should go to the entrepreneur.
In the knowledge society, one produces value by applying knowledge to knowledge. And the value produced is knowledge, no longer value added to an object. It is, therefore, “added, co-created value.” And it is not possible to alienate workers from the fruit of their work, since knowledge remains in the brains and in the mind of the creators of this same knowledge. Indeed, the human brain becomes the new tool of production.
Moreover, knowledge becomes the resource, so that it allows the worker to acquire all the goods that he or she needs.
We find ourselves immediately in an incredible situation—the stock exchange is modifying in depth how it quotes businesses. Before, brokers were taking into account what is called in jargon “business tangible assets”—their bank holdings, their debts, their stock value, their real estate interests. In brief, businesses were measured on their financial vested interests, and it gave a past-oriented image, because it was like scanning the past and the present of the enterprise.
For the last few years, however, stock brokers have started to scrutinise the “intangible assets” of a business. Why? Because they are more and more conscious that we are shifting to the knowledge society. And since today it is estimated that at least 45% of the European economy is already non-materialised (made intangible), they realise that intangible assets have to be counted for 45% at a minimum. This concerns not only the new knowledge businesses; it affects all businesses.
In brief, the stock market is becoming more and more a strong vector of change. It seems to be pushing more and more businesses toward the new logic and the knowledge society. How does this all function? The new measuring tools are still at their outset and, thus, many brokers confess that they use their intuition to measure the intangible assets. But what are these intangible assets? A partial list is as follows.
Assets linked to the internal structure of the business:
Research and development
Internal structures of the business
The strategic plan of the business
The internal communication inside the company
The relationship with the staff and the response of the latter
How the business manages conflicts
The software of internal management, etc.
The know-how of the business and its implicit knowledge
The structure of the business, pyramid or network
The balance of its strategy (“balanced scorecards”, for instance)
Assets linked to individual competencies:
Diplomas, education, experience of the staff
The implicit know-how of each staff member and worker
How the business capitalises on the implicit knowledge of its members (see Nonaka51)
Assets linked to the business external structure:
The reputation, the public trust in the business
The trust in the product (Iliouchine or Airbus?)
The brand (for example, Coca Cola)
Relationship with suppliers and consumers
Relationship with consumers
Relationship with the civil society
Relationship with the environment
Relationship with our collective future
The quality of the “network values” to which the business participates
As a matter of fact, the last five items (in italics) are becoming increasingly important year after year. They could become dominant in a few years.
A recent series of minor crises for the Coca-Cola Company illustrates this matter. The crises occurred most notably in Belgium, where a few children became sick after drinking cans of Coca-Cola. Coca-Cola managed this crisis as if it were a crisis of a product. They did not realise that Coca-cola is only 10% of brown water with sugar and 90% intangible assets. So they recalled millions of cans from the Belgian market only to turn around and send them to the African market, where they produced no harm.
When the transfer was discovered by the newspapers, it produced a scandal, naturally.
Materially, this might be considered good “management” because it spared much money and did not appear to have caused any problem in Africa. But, an intangible image is not managed as a material product, and the CEO did not understand this.
For many, the Coca-Cola brand represents a way to participate for a few moments in the “American dream”—a worldwide symbol of liberty, equality of opportunities, ability to become prosperous no matter one’s race, sex, culture, or religion. It is a very strong and mobilizing dream, which still fascinates millions of people. But those who buy the American dream of equality and justice cannot accept a cynical behaviour that gives the impression of scoffing at the dignity of another race on earth, even if it were not the case.
To manage an intangible image, one must take into account a content, a meaning. For example, Coca-Cola could have invested in a free aid to poor schools in Belgium and, thus, give back to the business a positive image tied to the values of the brand—social promotion, equality of cultures, equality of chances.
This example shows us that, even in businesses that a priori appear distant from knowledge production, intangible assets are increasingly important. The consequence was that Coca-Cola stock lost 40% of its value on the world market, and forced its CEO to resign. Thereafter, when a new CEO was chosen, the stock bounced back. The sanctions against the top management have been terrible.
Ten years ago, the outcome might have been different.
“Economy,” in its present form, was invented to establish management standards for the new power emerging form the industrial society—capital and private property. What exactly was the economic system in the Middle Ages? One does not precisely know with which economic system the cathedrals were built. Our current economic system, therefore, is rather recent. It is certainly not “eternal.”
In the new knowledge society, the power is displaced, and trade is redefined in an exchange system, which works in a different way. Thus, we likely are moving toward a new approach to economics, which will be transdisciplinary, more open to qualitative analysis and to constant dialogue with the civil society. This new economic logic might be inclusive and might have to respect the environment absolutely.
Thus, one should not oppose industrial economics, but rather one should urgently start writing new chapters on the knowledge economy, and on intangibles.
Ever since President Nixon cut the tie between paper money and gold, the definition of money has become more and more floating. It now depends on the value judgment that the “market” bears on a country. The symbolic dimension becomes preponderant.
Thus, we have left a period of stability and entered a period of great instability, which might lead us to important transformations of our money. This trend might even be enhanced by the appearance of electronic monies, themselves more and more virtual. What are the rules and standards of this new logic? What are the dangers? We don’t know.
At the same time, a rash of so-called ”alternative“ monies with a different logic marks the period. Are they not better adapted to the society of tomorrow? For example, let us consider the mileage points that the airlines give to customers for flying on the airlines and for some other activities. With those points, the companies create money, giving it to travellers who, in turn, can exchange it for products or for travel. This is “alternative money” since it is, no longer, created by the banks. We no longer are in the bank money system, which is the dominant system. We are in a no-man’s land, an undefined grey zone. In Belgium, an alternative money system for small and medium enterprises has existed for years and functions very well. It is called RES52 and continues to develop rather rapidly.
Thus, it is possible that the knowledge society endows itself progressively with a different monetary system. There is some evidence in support of this idea. Indeed, the knowledge society is rediscovering the social benefits of exchanges and gifts, because this is the way to increase knowledge. It is quite possible that money follows the same path, and becomes also centred on those traditional values that were the thread of exchanges for thousands of years.
The alternative money systems move precisely in that direction, because my account is stocked when I render services. The more services I render, or interactions I have, the more alternative euros I accumulate in my account. Thus, this money measures my capacity of exchange, of gift and of network interaction. Isn’t this the money that is needed in the knowledge society?
The concept of “work” in effect today was entirely made up by the industrial society. Not that one did not work before, but the industrial society assembled, in a unique concept of “salaried work,” values as diverse as personal growth, social insertion, family economic well being, pension, social status, etc. So that, if someone loses his work in the industrial society, he loses all those values at once and, thereby, suffers an enormous amount of damage, possibly even incommensurable. In the future, it is entirely possible that these values will be again distributed according to different concepts and functions, and that the concept of “salaried work” will be considerably transformed.
Actually, the younger generation is more and more in need “to invent its work—to create it” in the knowledge economy. It often is not a classic salaried work anymore. Because the industrial structures very rarely offer new work positions. Rather, they try to thin the work force more and more and replace it by robots.
Thus, it is probable that the knowledge society will invent a new concept of work.
One of the major characteristics of knowledge production is that it enriches itself through information sharing. Knowledge works like human love. The more one gives, the more one receives. And what is given is not lost. The more that knowledge includes different people in the sharing, the more the network becomes diverse and inclusive, and the more it enriches itself. Consequently, we really find ourselves in front of an inclusive logic. Nevertheless, we are still so strongly impregnated by our dominant industrial creed of exclusive economy that we have great difficulty to see the new inclusive logic appear.
Fortunately, I have excellent news on this front—it is possible to orient this new knowledge society toward an inclusive logic. One may consider that tomorrow’s business leader might want to hire non-qualified individuals on his staff in order to increase the potential for creativity and for implicit knowledge in his business.
In a meeting of the Club of Rome in Brussels sometime back, Mr. Rinaldo Brutoco, president of the World Business Academy, told the story of an important U.S. men’s suit factory called Men’s Wearhouse, of which he is member of the board.
The philosophy of this factory is rather exceptional and ahead of its time. It values human resources, creativity, and staff responsibility at the maximum, and gives maximum employment stability, which results in a lowering of capital revenues to a stable level of 3%. After all, this is an intelligent choice because the reason for me to choose between two men stores will be how I am greeted and helped in my selection of clothes.
The New York Stock Exchange initially was cool toward the stock as if it were without value. Its yield (3%) was considered unacceptable. But after a few years, it became obvious that it was one of the only viable businesses in the sector which, moreover, produced a stable income—whereas, most other stores were going through a serious crisis or going bankrupt, at great loss for the shareholders. The retirement funds were the first to discover the stock, and heavily invested in it. The stock speculators followed them.
Within a few years, this new “social” concept of business was accepted at the New York Stock Exchange. This new vision was not only profitable, but one of the only exits out of the full blown credibility and identity crisis which causes havoc among American businesses53.
Similarly, in the 1950s, the whole of the Colgate board was in deep reflection because they had problems with a pink soap they were selling as toothpaste. And after many hours of discussion, they were going nowhere, unable to decide what to do? Suddenly, the Spanish-speaking cleaning lady, who was finishing cleaning the meeting room, asked if she could say a word. The board chairman gave her the floor for one minute, which she took to ask, ”Why are you not putting the soap in a tube, people will prefer this.” Doing so became the path to world success for Colgate.
People with Ph.D.s are not always very creative. Sometimes they need other people with a lot of implicit knowledge that they can use and spread in the network.
In the industrial society, the creativity of children has been diminished in order to “adapt” them and insert them in the logic of a society dominated by the machine. According to some studies, in our present system, the creative potential of a child is reduced by a factor of 20 during the first years of school.
In the knowledge society, on the other hand, one must favour to the maximum human creativity since it is the central resource. This implies a re-invention of education. This will be an exciting endeavour, but it will require an excellent analysis of ongoing changes, which is rarely done.
In his masterpiece, The Post-capitalist Society, Peter Drucker explains that future education will again form humanists—but humanists who are not solely fascinated by the past, but open to the present and the future challenges. Thus, we are on the brink of a complete revolution in education, equivalent to the one done by Comenius at the end of the Middle Ages, when he created the “modern” school. Drucker also outlines some characteristics of tomorrow’s school54 (p.198):
“It must provide universal literacy of a high order—well beyond what literacy means today.
It must imbue students on all levels and of all ages with the discipline to continue learning.
It must be open system, accessible both to highly educated people and to people who for whatever reason did not gain access to advanced education in their early years.
It has to impart knowledge both as substance and as process—what the Germans differentiate as Wissen and Können.
Schooling can no longer be a monopoly of the schools. Education in the post-capitalist society must permeate the entire society. Employing organizations of all kinds—business, government agencies, non-profits—must become institutions of learning and teaching as well. Schools increasingly must work in partnership with employers and employing organizations.”
Once again, Drucker is ahead of us all in this visionary text. We are going slowly, very slowly in the direction he is indicating.
In the present society, culture is, unfortunately, often considered by political groups like the “cherry on the cake,” a luxury rather than a central value. In the future, this central place might be offered to culture in a society dedicated to favour creativity at all costs. Why? Because, if you cut people off from their culture, you eventually kill the roots of their creativity, and the creativity will slowly wilt in conformity. This would negate the benefits of the knowledge society.
Thus, we are also possibly on the verge of a repositioning of culture as it comes back to the heart of the knowledge society. In this new vision, culture becomes one of the main ingredients of the production tool. Once again, this is difficult to believe, as it is so different from the actual marginalisation of culture, and its submission to strictly commercial criteria.
In the knowledge society, progress is no longer measured as a quantity, because of an almost infinite quantity of information. There is too much information and not enough knowledge and wisdom. Thus, in the knowledge society, the concept of progress becomes qualitative. The access to quality knowledge needed in business or elsewhere measures progress.
Thus, we might be tilting from a quantitative concept, which has ruled our civilization for several centuries, toward a totally new concept of progress centred on quality.
The excellent news is that this basic concept of our new world knowledge society is totally compatible with genuine sustainability. Indeed, the problem with the quantitative concept of progress is that it was unwittingly inciting all of us to produce more objects, to pollute ever more without ever stopping. A qualitative concept, on the contrary, pushes us toward quality, and no longer toward quantity. Thus, the fundamental goals of our world society are changing. Tomorrow’s progress will be measured by the quality of knowledge, but also by the quality of life, and that of our children.
And this new concept of progress is working underground in our societies so that progress today means that there is no progress anymore if humankind is not moving toward a sustainable future. In a few years, we have already moved away from “the bigger the better” approach, which underlie the ideology of the quantitative growth economy. We already are beyond the quantitative concept of progress, which has been a huge block preventing humankind’s move toward a sustainable future.
As seen in the Coca-Cola example described above, as well as other examples, an important evolution is taking place… and very quickly. More and more, intangible assets are becoming important. More and more, the responsibility of businesses toward the environment and the social inclusion is being talked about publicly. The relative importance of the environmental and social sustainability increases enormously among the intangible assets—so much so, in fact, that we are moving toward a situation where each business, municipality, region, and country will, more and more, be required to convincingly show the public that it contributes to the solution of the social and environmental problems, unlike those who only exacerbate them. This evolution perhaps is on the way to transform the world economy more rapidly than all the great international conferences, which are very useful in other respect.
A few years ago, I had the opportunity and the pleasure to meet Ray C. Anderson, Chairman and CEO of Interface, a carpet factory in the U.S. He told me the following story at a meeting at the Esalen Institute in California.
One day, a customer abruptly addressed him, as director, and accused him of being a polluter and accelerating the climatic change on earth. Ray started to think. This customer was right, and it was inexcusable that the hundreds factories of his company were dumping tons of toxic products in nature (rivers and atmosphere). In fact, carpet manufacturing uses a great deal of acids and other chemicals to treat tropical fibres, their raw material.
He decided to completely change the entire production method of his carpets in all the factories of the group. It represented a huge investment and the business went into debt. Thankfully, the board of directors supported his audacious strategic choice, without too many problems. Within a few years, even though the financial situation of the group was still fragile, it became number one in its industry, and its stock rose to an historical high. Why? How? Because it was the first carpet on the market the production of which was designed to both respect the environment and sell at a competitive price. Thus, buyers would choose Interface, since it was the same price as other carpets the production of which polluted the environment.
The analysis of his situation, according to the knowledge economy, is simple. Interface’s tangible assets were still very weak because its debt. But suddenly the value of its intangible assets increased so much that its shares became star on the New York Stock Exchange. Thus, this was the very interesting case of an “industrial” business, which becomes the king of the market even though it is deeply in debt. We are no longer in the industrial logic. Due to their intangible value, the shares increased enormously, even though the tangible assets were still weak or even negative. The “intangible assets” made the whole difference. As seen, the intangible value is tied to the respect of the environment. The environmental dimension really becomes a preponderant intangible value. Ray Anderson’s55 book gives more information on this story.
As seen above, this underground transformation of the concept of progress is already changing the goals of our world society. Indeed, it might be possible to fundamentally redefine the goals of our society. Society, then, could forgo its purely materialistic goal of producing more cheap objects, and decide to promote the development of human potential in the largest possible sense, in harmony with the cosmos and including the spiritual dimension. A vast program!
The conflict between the industrial and knowledge scenarios will essentially be a conflict of visions, a conflict with the goals of tomorrow’s society, and I will address this in the next following chapter.
In this chapter, I have outlined a global vision of all the elements constituting this new knowledge society. It is not easy to analyse the important changes listed here, because we are hypnotised by the industrial mentality, which is like a set of blinders forcing us to look only one way. It might be frightening to abandon the familiar concepts of the industrial society, and we ask might ourselves whether there really is a way out of the industrial vision of the market. It can seem difficult to believe.
Nevertheless, more and more indices are telling us without ambiguity that we are there already. It is as if we were all asleep, unwilling or incapable of waking up.
Ces messieurs ont appelé dame Bess, dit-il; mais dame Bess n’est pas au cottage