It appears that the Soviet Union considered a full computer network to be deployed and even decided to go for it in 1970, a year later than the Arpanet. That’s what a new book ‘How not to network a nation‘ states (here is a link to excerpts).
“The Politburo convened that day to hear Glushkov’s proposal and decide whether to build a massive nationwide computer network for citizen use — or what Glushkov called the All-State Automated System (OGAS, obshche-gosudarstvennyi avtomatizirovannaya system), the most ambitious computer network project of its kind in the world at the time. OGAS was to connect tens of thousands of computer centers and to manage and optimize in real time the communications between hundreds of thousands of workers, factory managers, and regional and national administrators. The purpose of the OGAS Project was simple to state and grandiose to imagine: Glushkov sought to network and automatically manage the nation’s struggling command economy“.
And that’s was the end of it: conceived as a way for a central power to plan and decide on the fate of the country, it missed the factor that ultimately made the success of internet: allowing two-way communication and the flourishing of local initiative.
The failure at developing internet is not due to technology. It is due to the centralized, autocratic political system. Internet is the product of democracy, local initiative and free speech.
As many other professions, the legal profession is not immune to being transformed by the Fourth Revolution. There have been many examples lately where simple legal processes have been performed by programs or simple versions of Artificial Intelligence.
The general article from ParisTech review ‘Legal Tech and other smart contracts: what future for legal automation?‘ provides a more general overview. According to a 2015 study, “47% of lawyers interviewed considered that it would be possible within 10 to 15 years to replace their “paralegal” employees (the administration that works as subordinates to a lawyer, in the United States) by solutions of artificial intelligence. 35% think that junior lawyer positions could be fully eliminated over the same period“. The paper continues by explaining what the most important changes will be.
While experienced lawyers will remain required for complicated cases, the legal profession should brace for a structural change in the years to come.
Having travelled in the US on and off in the last 20 years, I had been struck that American people seemed to have increasingly grown roots. The “hometown” is now a well established concept, and I do not remember that was so much the case in the 1990s. At the same time in the world, nomadism increases dramatically.
This feeling is confirmed by the Atlantic article ‘How America Lost Its Mojo‘: “Between the 1970s and 2010, the rate of Americans moving between states fell by more than half—from 3.5 percent per year to 1.4 percent“. Nobody knows exactly why. The article proposes the expensive price of housing to be the main cause of this sudden sedentarism. This might come together with the fact that more young people are staying in their parent’s home.
As I write this article I am in Abu Dhabi. Here less than 10% of the population is local. The rest is constituted by immigrants – Indians, Pakistani, Omanis, Yemenites, Syrians… Walking in the streets at night, one feels in a melting pot. All those people who have migrated to find better conditions and contribute to the emergence of the local economy. Maybe not with the best working conditions, but they come and seek the means to provide for their families.
With the Fourth Revolution, the nomads are again in power. At the same time the US settles down. Is that a sign that in spite of being at the source of new technology, the social setup of America does not follow suit?
I am always amazed as how people in leadership positions try to avoid crisis and instead choose ways that lead to a slow downfall. I believe that comes from the need to have an impression of control about what is happening. I think this impression of control is actually an illusion.
Crisis are moments where the current balance is not any more sustainable. Crisis are great moments of opportunity (ref. our post ‘Why a Crisis is Always a Great Opportunity to Change for the Better‘). But of course, it is more difficult to keep control of what is happening, in particular for people in leadership positions pre-crisis.
Trying to avoid crisis requires addressing the imbalances and trying to transition out into another state. The thing is, because they won’t be forced to, the people and organizations that benefit from the current situation won’t easily let go. They will resist. The imbalance will increase, and it is not sure at all that a crisis won’t happen sooner or later. Going into a triggered crisis mode with a plan is probably safer on the long term – and it is possibly better for most stakeholders as well. Triggered crisis will also have less amplitude, be more predictable and will remain more contained. Such is the way, for example, that avalanches are controlled in ski resorts.
I deeply believe that sometimes it is better to go into the crisis mode than try to maintain an illusory situation with the underlying structural imbalance increasing. I think that is exactly what is happening in China right now: out of a need to keep control, the government is trying to avoid a crisis by all means, and that will most probably turn out ugly at some stage, because the structural imbalances are deepening and an economic transition is needed. And in the meantime the entire global economy suffers for a long time.
Sometimes, triggering a crisis is better than trying to maintain the status-quo against all odds.
Churchill is famous for his quote “Never let a good crisis got to waste“. A crisis is a great opportunity to change things for the better. In some instance it is even the only opportunity to change things for the better.
While every crisis is destructive for part of what was (including the lifestyle of some people), it is a great opportunity to create a new order. The thing is, it is better to have an idea about the new order should look like before getting into the crisis, but this comfort is not always available. A crisis is also a great pivot point where the future can go one way or the other.
The important observation is that every crisis, even if not wanted or unexpected, should be considered as an opportunity for change into something better.
Don’t waste the next personal or professional crisis. Take it as an opportunity to change for the better.
Narcissism – the pursuit of gratification from vanity or egotistic admiration of one’s own attributes, is on the rise, and it has been for some time.
And that’s not just an observation of the rate of selfies and Facebook posts about the great things happening to us. It is a serious observation from the average score of people taking the Narcissistic Personality Inventory (NPI) test.
It is an interesting test to take, for example on this NPI link, at a personal level.
An interesting statistics is shared by the test group, which is the average narcissism score. It increases regularly such as in this study of US undergraduates.
As we can see, this observation of an increase in narcissism goes back to at least the 1990s. While the series stops in 2005, practical observation would suggest this has continued until now.
I believe this is quite an important observation as it reveals quite an important feature of our societies which has probably been accelerated by the availability of social networks and the possibility to filter out one’s life to keep only the exciting part.
Mobile is eating the world, and the proof is in a quite famous presentation by Benedict Evans from the Venture Capital firm Andreessen Horowitz which has been updated in 2016.
I share here some highlights which have particularly struck me.
First, mobile will represent a roughly 5-10x increase in the number of users and devices compared to the previous ecosystems, and is quite comparable to the move to personal PCs, as shown in the figure on the right. And this means everyone has a super computer in his/her pocket. The presentation goes on to argue that this will also lead to a significant increase of productivity. That might be true in theory, but I think this can be controversial as mobile devices are also a great source of lost time! (ref our post on How Mobile Phones Distract Us – A Real Life Example).
Mobile is an ecosystem and actually most people use apps to access the data of the internet. What happens is that actually, people don’t use a lot of apps on their mobile devices, hence there are much less valuable online properties, but they are quite more valuable. Actually one third of the users access the internet through Facebook!!
Finally, we are just at the beginning of the disruption brought by mobile devices in the business models that pervaded the world before, so hold on!
One of the most visible effects of the Fourth Revolution is the shift of value from tangible to intangible. It can be measured, and it is tremendous. Organization’s value today is 80% intangible, while before 1970 it was the reverse.
In the Industrial Age the value of organizations was machines, and other tangible assets. It is actually what is measured by traditional accounting in balance sheets. Nowadays, most of the value is intangible assets – people, knowledge, brands, ways of working. The shift has been measured and this revolution is quite impressive. It is a real indicator of the Fourth Revolution in action.
The fact that traditional accounting has not adapted to this shift (people are still a cost and not an asset..) is a major issue that will necessarily lead to problems of valuation very soon. Accounting maintains an illusion that can’t reflect the actual value of an organization. The market does somehow, but does not account for intangible benefits either (such as, allowing connections between people in the world).
The shift from tangible to intangible is a tremendous change and its aftershocks will still be felt for the decades to come in many areas.
In this interesting paper ‘Uberization: will the empire strike back?‘ the authors analyze the fear of getting disrupted (also know as getting ‘uberized’) that stress many traditional actors. They show however that it is generally a trend in a new type of intermediation (brokering), and not the disappearance of intermediation per se: “The market – like the nature of yore – abhors a vacuum. Very often, de-intermediation is just a phase of re-intermediation.”
Many consider the emergence of services like Uber as a kind of de-intermediation between consumers and providers. But in reality, it is about providing a new, upgraded intermediation capability that creates much value – it will include powerful algorithms and sometimes Artifical Intelligence to best suit our needs to what can be provided. Already Amazon is a model of an upgraded intermediation with its recommendations. Uber creates a new intermediation capability in the field of personal mobility. In both cases it gives a way for certain marginal providers to make their product available to a wider public, while under the previous infrastructure they were not sufficiently interesting to be considered by the intermediation system.
Nothing new under the sun then – the Fourth Revolution just gives us a new distributed power and communication system that allows a much more powerful intermediation to be implemented between consumers and promoters. It does disrupt traditional actors, only if they do not recognize that monopolies are here to be broken.
The big talk at Davos this year was about the Fourth Industrial Revolution. It is best explained in Klaus Schwab‘s post ‘The Fourth Industrial Revolution: what it means, how to respond‘. This Fourth Industrial Revolution is in fact quite close to our Fourth Revolution in its premises, although of course the perspective is slightly different. Still it brings some interesting thoughts about the transformation of the world.
In particular, Klaus Schwab states that “An underlying theme in my conversations with global CEOs and senior business executives is that the acceleration of innovation and the velocity of disruption are hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed.” Even the best informed at Davos are struggling to anticipate what will happen.
Klaus Schwab goes on to describe the social tensions that are arising, in particular in the field of inequality: “in the future, talent, more than capital, will represent the critical factor of production. This will give rise to a job market increasingly segregated into “low-skill/low-pay” and “high-skill/high-pay” segments, which in turn will lead to an increase in social tensions.” Governments struggle to adjust and respond, and there seem to be a number of different path humankind could take in the near future – some acceptable, others not.
Finally he concludes that it comes to us to define what is acceptable or not, based on humanistic values.
How much can we influence collectively the path that the Fourth Revolution is taking? Reactions from governments are always too slow compared to the evolution of services, and it will come down to all of us to find the right governance to make the Collaborative Age an Age where most of humankind can see progress and contentment. Yet it will be tough and there will be crisis. The best solutions remains to be found.
There is a gap between technology development and the way organization change. And this is at the root of the Fourth Revolution: if the gap gets large enough, only a revolution can make organizations evolve to fit with technology. And it is what is happening right now.
I find the illustration by Scott Brinker the best – he call it the Martec’s law: “Technology changes exponentially; organizations change logarithmically“. He applies it to the current digital disruption, but of course it was always the case – the industrial revolution was also created by a progressive mismatch between technology and the institutions and organizations of the previous Age. Organizations can only change at a certain pace, and the larger they are, the slower they can evolve; they generally can’t cope with the increasing rate of technology evolution without undergoing a substantial change.
According to this law, a revolution is inevitable that will rebaseline the organizational setup to the current state of technology development. And this will be highly disruptive to existing organizations – unless they find a way to overcome the curse of only being able to evolve slowly.
Paul Graham in his (controversial but thought provoking) post ‘Refragmentation‘ gives an interesting overall view of how the Industrial Age may have just been a short parenthesis in the history of humankind when it comes to lesser individualism and more even spread of wealth.
He states: “The late 19th and early 20th centuries had been a time of consolidation, led especially by J. P. Morgan. Thousands of companies run by their founders were merged into a couple hundred giant ones run by professional managers. Economies of scale ruled the day. It seemed to people at the time that this was the final state of things. John D. Rockefeller said in 1880: “The day of combination is here to stay. Individualism has gone, never to return“. He turned out to be mistaken, but he seemed right for the next hundred years.”
With the Fourth Revolution, large companies are not any more the most effective way of creating value. Individualism is enhanced by our capability to broadcast to the world, and the contribution of everyone is enhanced.
In many ways the Industrial Age was an exception to the way the world had been moving along, and it may have been a short exception in many ways regarding individual life, employment and our social contract.