How Fourth Revolution Disruption is Often Only About a New Intermediation

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.

UberMany 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.

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Why There is a Gap Between Technology and Organization Evolution

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.

martecs_lawI 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.

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Why the Historical Trend of Interest Rates Should Be to Get Lower

Interest Rates represent our preference between a dollar today and a dollar in some time in the future. In effect, they represent our preference between now and later.

Real interest rates getting lower over long times: an illusion or a reality?
Real interest rates getting lower over long times: an illusion or a reality?

Because of the increased life expectancy and hence, capability to make plans for the future, the availability of future money should be less discounted than when we had short life expectancy and had to enjoy more the moment! We should thus observe that over time, the interest rates should decrease.

Of course, it is difficult to observe this trend with the high variability of the interest rates (real interest rates, i.e. interest rates minus inflation, should be considered here). Lately since the 1960’s it has decreased; and it is quite lower than the 5% per year without inflation that was enjoyed in the 19th century. It can be expected to rise again in the next few years, but probably not to very high levels.

I believe that it is possible that in the Collaborative Age we live with generally lower interest rates than the historical averages. Value will be created otherwise through creativity, but because we can plan for decades ahead on average, there will be a less steep discount of the future.

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Why A Significant Change Will Happen Soon in Our Civilization

We are on the edge of change comparable to the rise of human life on Earth” — Vernor Vinge. Why? Read this excellent post on Artificial Intelligence – a crossing between our considerations on the fact we have no intuition for the exponential and our concern for the Singularity (why are we alone in space??).

In particular I can’t escape showing this great illustration – with all due attribution:PPTExponentialGrowthof_Computing

Oops! What’s going to happen soon? And the post argues with reason I believe that we might not see it coming until it is upon us, due to the fact that we do not have intuition for the exponential.

Are we ready for this? I think not.

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We Can’t Find Anybody Else In Space (and Why It Matters)

Although loosely related to the Fourth Revolution, I want to share the link to this very interesting summary of the issues around the search for extra-terrestrial intelligence, also called the Fermi Paradox – ‘Where is Everybody?’.

Where is everybody?
Where is everybody?

The issue is the following: we know there are zillions of other planets that should be able to support life out there (the low estimate in the article is 1 billion in our galaxy alone); that our own Earth is quite old by space standards, hence our technology probably not so advanced, so… why do we not see any sign of other life?

There comes the concept of the “Great Filter” – i.e. there would be some stage of technological advancement where civilizations get wiped out; a filter that almost no planet and species manages to overcome. Would we be the chosen ones (we would have overcome the filter in the past), or is that Great Filter somewhere in the future? Would there be a stage of civilization development where it inevitably destroys itself?

The question is not so innocuous as it seems. As we create highly connected technology, the chances of unexpected disruptions that could quickly spread to the entire system do increase. Would there be any chances we’d create such a situation in the Collaborative Age?

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Why the Fourth Revolution will Promote Meritocracy

I strongly encourage you to take a few minutes to go through this video/ transcript of a MIT research assistant about research on the impact of network connection on whether societies are meritocratic (people get rewarded in proportion of their contribution) or topocratic (intermediaries get rewarded, not the contributors). [The text on the page is the transcript of the video if you prefer reading].

A network model shows that as the number of connections increase, the system becomes increasingly meritocratic
A network model shows that as the number of connections increase, the system becomes increasingly meritocratic (click on the image for a large version)

Basically research shows that the more connected the network is, the more it becomes meritocratic. A very basic model suggests that if everybody is connected to 150 people on average (which is approximately the case on Facebook), the network is meritocratic only on a section of 22,000 people in your close network. The network is still topocratic (enhances the intermediaries’ value) at the size of a country. Now if your number of connections is larger, the size of the society subset which will be meritocratic will increase dramatically and you will receive increasingly more rewards from your contribution.

As the Fourth Revolution expands and the inter-connectivity of our world increases substantially, we can expect our societies to become more and more meritocratic even if it will still take time to avoid intermediaries at a country or at global level. What a better demonstration that the Fourth Revolution will bring tremendous changes to our benefit?

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How to Unleash the Power of Connectional Intelligence

In our new world of an embedded digital infrastructure that connects all of our lives, the power of connectional intelligence holds exponential, and previously untapped, potential for breakthroughs in ways we can barely begin to imagine” writes Saj-Nicole Joni in ‘Win Big by Unleashing Millennials’ Connective Intelligence‘.

Multicolored plugsShe continues “Connectional intelligence is your ability to make breakthroughs by connecting ideas, people, information, and resources. You use CxQ whenever you sift through multiple sources of information to put pieces of a puzzling problem together in new ways. It’s in your ability to build and realize value from networks of relationships, in your ability to convene communities, to marshal a various of resources to focus on a result, and to make diversity and differences productive.”. According to her, people with high connectional intelligence have always existed – but now it is much easier and much more widespread than ever before.

So, how much do you develop and exploit your connectional intelligence in your daily practice? If you do not – at least consciously – it looks like a good time to go at it – and enter the Fourth Revolution world in a more active way!

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Why our World’s Unpredictability Ever Increases

Robert Branche in his excellent new book, “les Radeaux de Feu” (in French) makes an extremely interesting point about the fact that entropy – the natural evolution of the universe – is not about increasing disorder, but is all about increasing unpredictability.

random unpredictable dicesHis thesis is then that all of nature’s invention – life, first cells, then plants, then animals and ultimately humans – is all about increasing dramatically unpredictability of the world. And it is true that at each step, the number of possible future states increases dramatically. Today humans have transformed the world at a much higher and unpredictable pace than plants have ever done, or than the mineral world has ever achieved.

What lesson does it bear for us? It is clear that unpredictability of our life, of our world will ever increase at an accelerated pace – that is a physical law. And the Fourth Revolution, this inter-connection of humans, will accelerate that transformation even more. We should not be looking for any stability soon. So instead of complaining, let’s rather enjoy the transformation!

Visit Robert Branche’s blog (in French) for more about the author and his latest book.

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So Many Interactions Happen During One Second on the Internet!

Have a look at the great infographics by Designly on what happens in one second on the internet (please scroll down to feel the real size of the interaction!).

60-second-on-internet
Follow the link in the post the infographics is much, much better!

As the site reminds us:

  • 10 years ago Skype, Facebook, YouTube, Reddit, Twitter, Tumblr, Dropbox, and Instagram didn’t exist.
  • 20 years ago there were only 130 websites total, Google wasn’t even around yet, and you had to pay for an email account through an ISP.
  • 30 years ago there was no internet.

WOW. Worth a reminder. Still awesome.

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A generation-driven Revolution is in the making!

In the same Facebook paper that describes how our world is much smaller than we thought, and is shrinking, there is another very interesting curve.

facebook age of friends curve
the age of your friends on facebook, depending on your own age

The comment in the paper is mostly on the fact that we tend to connect with people of our age – there is a sharp spike, even at age 60.

Still this curve carries a lot of other very interesting information. The most obvious is that we tend to connect with younger people, not at all with people older than ourselves. And as a consequence, the generation in their 20’s appears to be very disconnected from the older generations.

What is the consequence? The generation in their 20’s, for which Facebook and other social networks is a normal part of the world, evolves rather independently. This is a sure source of Revolutions.

Brace! Driven by the generation born in the 1990’s, the Revolution is coming.

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The world is small… even smaller than you thought, and shrinking!

If you follow the news, you might have heard about this groundbreaking study by Facebook about how people are connected.

For a long time, there was the 6 degree of separation theory: anybody could be connected to anybody else through 5 other people who know each other. Interestingly, because testing this hypothesis was cumbersome in the pre-internet world, only one study was done, on a limited sample, in the 1960’s, which grossly confirmed the theory. (Upon closer study, this experiment also showed that some rare people have a much more far-reaching network than others and that they played a critical role in establishing the connection).

Today, as a large proportion of Humankind is on Facebook, our connectivity can be measured on the internet. The result is given in this Facebook report. The following curve is extracted from the report.

the degrees of separation on Facebook
degrees of separation on Facebook

It shows that for the entire Facebook there are only roughly on average 4 intermediate people between any 2 individuals on Earth. The friend of your friend knows the friend of the friend of anyone else! Even more shocking, when looking at a particular country like the USA, only 3 intermediaries are necessary.

In addition these curves show that with an increased connectivity in the virtual world, with more and more people on social networks, we grow to be closer and closer to each other; each year we need less and less intermediaries to connect to anybody else. The world is shrinking in front of our eyes!

Let’s not forget that probably the same phenomenon is at work that was observed in earlier experiments: some particularly well connected individuals, few in numbers, are probably those through which most connections could be established. Still, right now, we just discovered that the world is much smaller than we thought.

As I start to be well connected on social networks I discover how I reconnect to people I lost track of, and how I manage to connect to really great, interesting people.

The world is shrinking rapidly. Don’t waste the opportunity! Join the Fourth Revolution!

 

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The Fourth Revolution in 10 bullet points

I have had some requests for a quick digest of the Fourth Revolution book.

So, here is ‘The Fourth Revolution’ in 10 points:

  1. the Fourth Revolution changes the world as we know it fundamentally: our society, our institutions, the way we live… as much as society was transformed between the Agricultural and the Industrial Age;
  2. The Fourth Revolution root cause is cheap long distance interactive communication capabilities; that’s new and unprecedented;
  3. the Fourth Revolution will take a few decades to spread completely, yet it changes our world quickly already, and we need to change ourselves now to thrive through it;
  4. The Fourth Revolution development will be difficult and possibly painful at times. Yet overall, the development of humankind will allow more people to contribute to our collective cognitive capability, changing the world ultimately for the better;
  5. The value creation capability of the Collaborative Age is orders of magnitude higher than Manufacturing or Agriculture, the latter activities will become subsidized;
  6. The organization will become open and fluid – open to the influence of the outside, to a network of followers, a turbulent succession of temporary projects;
  7. The prevailing leadership style will be ‘mutual learning’ leadership. The leader is not any more the person who knows the way, he is the one who catalyzes the group;
  8. The leaders of the Collaborative Age will be the nomad K.E.E.Ns (Knowledge Exchanging Enhancing Networkers). They will drive their own career, and are fully nomadic;
  9. It is possible to be happy being a farmer or working in a factory. It is a choice. The worst is not to make any choice. Choose now whether to lean or not into the Fourth Revolution;
  10. On an unprecedented scale, each of us can change the world. The world can shaped the way we want, let’s do it now!

Of course each of these bullet points warrants a full development, which is exactly the purpose of the book…

Would you have additional bullet points to add?

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