Cultural evolution is inevitable. The world is experiencing unprecedented change in applications of knowledge, technology and know-how in every society. The demands and opportunities of our increasingly interdependent global economy have implications for private and public decision-making by enterprises and communities, whether local, national, regional or global. Cultures are changing, ours included. Most nations have launched major initiatives to harness their inherent capability within a transnational context. All has been done in the name of international competitiveness. Economies have been transformed, communities revitalized, emerging territories supported and industrialized nations repositioned. We have much to learn from one another.
Indeed, the foundation for a new economic world order has been laid – one based upon knowledge, innovation and international collaboration. This is a new landscape where managerial rules have significantly changed – but how, when and to what end?
The dawn of the new millennium has been met with great enthusiasm and an equivalent commitment to change – or as we prefer to call it – innovation (i.e., the capacity to preserve the best of the old and realign the rest to take advantage of future opportunity). Of course, knowledge has always been an essential element in the advancement of civilisation, but today’s emerging economy proposes that knowledge be managed explicitly.
We now live in an age of ‘kaleidoscopic change.’ It is not the speed of change of one variable, nor the speed of change of multiple variables. There is a compounding effect of the speed of change of multiple variables causing management landscape dramatically different from the one we know today. Complicate the effect with the notions of virtual enterprises and collaborative technology, and we have before us a real challenge to manage forward for sustainability, harmony and wealth-creation.
Certainly there are numerous facets to understand with this complex evolution; but there are three primary underlying themes are fundamental to the new infrastructure needed to create prosperity in this new economy:
- Knowledge is the new, expandable source of economic wealth. There is an emerging recognition that the inherent intellectual assets – effectively exploited through innovation – are the most valuable resource of any country.
- Innovation encompasses the full spectrum from creative idea generation through full profitable commercialization. Successful innovation depends on converting knowledge flows into marketable goods and services.
- Collaboration, replaces the competitive (win/lose) paradigm, which is prevalent in many businesses today, with win/win benefits based on pooling competencies - knowledge, know-how and skills.
Today, we know that the knowledge agenda is worldwide, pervades every function and every industry, and has implications for industrialized and developing nations alike. Although originally thought to refer to white-collar, high technology workers, there is no such thing as a non-knowledge worker. And - originally to have been the focus of the services sector, there such a thing as a non-knowledge-intensive industry. The knowledge of all individuals is important. Knowledge is what makes companies unique – even within the same industry. We have more to gain by building upon the competencies of one another as individuals and nations. Globalization of knowledge is a positive force.
Connection with History
We’ve been given a wonderful opportunity to reflect on the implications of the emerging economy through the documentation of Adam Hochschild in his book, King Leopold’s Ghost: A Story of Greed Terror and Heroism. One reads his account with sober reflection and even outright horror at the way that human beings were used as pawns in an international game of economic chess. On the other hand, we can also query – hindsight always being useful – whether that period of time was justified as pioneers struggled to take advantage of an expanded horizon. I used to think that war was the ultimate form of destructive competition. These imperialistic atrocities in the name of colonization – caused more damage.
The new frontier requires even the most competent decision and policy makers to maintain a steady course to create the human and humane practices that will provide a foundation for the kind of world we want our children’s children to inherit. Have we learned something from our past that gives us wisdom to manage our future better than the past? Is there something of value in the diversity of people, cultures or nations…or are they just empty words?
It may be wise to visit the differences between globalization and imperialism. Globalization implies an uncoerced willingness to adopt new knowledge. Examples abound of imperialism – not the least of which is Hochschild’s account of the Belgian Congo. Globalization, on the other hand, is more difficult to identify and the implications more difficult to discern. The flow of knowledge is not easily documented. We enter into the realm of measuring and managing what experts now call intangible, hidden value – of a person, company, or nation. With the Internet and the advancements in communications technology, we are bound to see an increase in the movement of ideas, language and even the distribution of goods and services.
Today, much of globalization is driven by the logic that the production of any product will ultimately go the site of least cost/best quality. Although the mobile telephone was actually invented in Bell Labs in the 1940s, they were not manufactured until the 1980’s. Now their availability and use is global and changing cultures. Nokia – based in Finland – is clearly recognized as one of the world’s leading producers. Call Centers are based in Ireland, Canada, and India; US Medical transcription is in South Africa. Software development is found in India, China, and Russia. Hard goods in our stores manufactured in China and Nepal. Regardless, the influx of new work brings with it new thinking and new challenges. For example MIT was established to support the New England Textile Industry - not to develop Genetic technology or Physics and electronic theories and technologies. And the innovation from the university spawned new economic opportunities and challenges, which in turn created cultural changes. For instance, Biotechnology is taught in universities and trade schools - courses that didn’t exist 5 years ago.
Other globalization is driven by the extraction and payment for raw material like Middle East and Russian oil, or South Africa's diamonds or Australia's opals. But the willing recipient of the new technology, knowledge or market need drives the cultural changes that are inevitable with globalization. In other words, progress is more a function of free will; while imperialism is the result of the resistance of the recipient to have changes forced upon them. Because knowledge resides in the minds of people, the knowledge economy is something we will do – not something that will be done to us. Knowledge is the one asset we have that makes us unique. Others can replicate our products, replicate our services and even reverse- engineer our business strategies. No one can replicate the knowledge base – how it is developed and harnessed through effective and sustainable innovation.
Globalization in its purest sense is not a threat to local cultures; imperialism is. Globalization is the lubricant to change in local culture - change willingly and eagerly adopted by the citizenry. Cultures are not and have never have been static to positive change. Therefore by definition, the taker and the giver share the benefits of globalization. In the case for our discussion today about the impact of foreign investment, that would mean that both the global organizations and the local societies are the mutual beneficiaries.
Of course, we have not seen evidence of this – at least not what is reported in the daily journals or even the scholarly press. We hear documentation of the increased Digital – and even Social – Divide exacerbating the chasm between the haves and have-nots. We wonder about the 1/5 of the world living in ‘economic supremacy’ and the other 4/5 in ‘dependency’. We observe the activities of the Johannesburg World Summit and wonder how – even with the best intentions – can we really develop the master action plan to eradicate world poverty, minimize world hunger, preserve and protect our environment for generations to come.
Navigating our Collective Destiny
And so what have we learned in the process?
We knew that the current conditions – founded on models of financial capital – even linked with technology in the form of the dot.com – were built upon unstable (or perhaps incomplete) economic assumptions. The technology/productivity paradox must be resolved – and once and for all. The behavior implications of the new Knowledge Value Proposition are fundamental to that resolution. And we must plan for the world we want to innovate, not the one that exists today.
Tomorrow will not look like today; yet the future is not dissimilar from the unchartered waters sailed by the explorers during the Middle Ages. Today, there are better navigation devices, but there is little understanding about what might lie over the horizon. Ours is the challenge to innovate our future in ways that leverage the best of every human being, every enterprise and every nation.
Knowledge has emerged as the strategic focus for business and has been growing in importance over the last decade. Of course, Peter F. Drucker described the knowledge worker as long ago as 1963. Ever since the early descriptions, interest in knowledge as a lever of strategy and the number of organizations with formal knowledge programs has grown inexorably.
- We’ve learned that in the new domain of Knowledge Economics, what we count matters. As imprecise as it may seem, we need to calibrate is the intangible, hidden, intellectual wealth of an enterprise – how it is created and leveraged.
- We’ve learned that the Knowledge Structures operate as holonomies – nesting of networks - with both local and global scope. We need to understand how they operate as communities and spheres of influence.
- We’ve learned that Knowledge Workers – although originally described as high technology or white collar – includes everyone; we all have a role to play. We need to determine what motivates now constructive behaviors – new modes of interdependence and collaboration.
- We’ve learned that all Knowledge Processes can fit under a rubric of innovation - but innovation redefined according to the flow of knowledge. We need to make the process explicit and discover ways to measure performance – how knowledge is created, shared, and applied.
- We’ve learned the power of Knowledge Processing Technology – advancing in features and receptivity beyond our wildest dreams. We’ve learned that technology isn’t an end but a means for prosperous innovation. We need to find ways to take advantage of the advancements and uses it as an instrument in the new economy.
Understanding of these complex facets – and the interdependencies thereof - provide a solid foundation for what was originally envisioned in 1982. The prosperity of individuals, enterprises and nations relies upon knowledge as the resource and innovation as the process.
The United Nations was created to maintain political stability around the world. The World Bank and the IMF were created after World War II to ensure the movement of financial capital. Today we need a similar infrastructure for the worldwide flow of intellectual capital. If knowledge is the modern asset – the most precious resource - of the 21st Century, we have a premise behind the need to create The Innovation SuperHighway for the World Trade of Ideas.
It was Dr. Tom Malone, formerly with Formerly at MIT and now a Distinguished Scholar Emeritus with North Carolina State University, who introduced many of us to the real opportunity at hand with his comments on Global Learn Day:
“The path to a prosperous, sustainable, and equitable society is long, winding, and difficult, but a start can now be made with a knowledge-based and human-centered strategy. This strategy empowers individuals to renew rather than degrade the physical and biological environment, aid to enrich rather than impoverish the social and cultural environment. Entry into this knowledge society will require new patterns of collaboration among the scholarly disciplines. New modes of partnership must also be established among all levels of government, academia, business and industry, and local community organizations."
Using the foundation for sustainability outlined in The Earth Charter, Dr. Malone and others who I consider the community of knowledge leaders is developing a common language, principles for an innovation culture and a shared vision of where we are headed. These values are echoed in the far corners of the world.
- In Malaysia, 93 countries came together in Kuala Lumpur to create ‘action plans’ to build knowledge societies.
- Poland’s executive leadership – having previously developed a study mission for all the Ministers – is launching its new initiatives as the country heads toward European Union affiliation.
- When I visited Beijing in 1997, there were already several study commissions on the implications of the Knowledge Economy for China.
- The Prime Minister of Singapore has declared his intent for the country to become the ‘Innovation Nation’; and already according to some calculations, they are rated the #2 economy of the world.
- Executives and now with the new presidential leadership in Colombia are working to convert Manizales – the previous coffee-plantation in the world into a knowledge city with unprecedented alignment of government, industry and academic resources and with the help of the United Nations Development Program.
- As part of Outback 2002, the westerners and indigenous community of Australia – representing 70% of the country’s land mass – have designed, implemented and now incorporated an initiative called Desert Knowledge Australia that seeks to connect now with other international authorities given that 1/3 of the world lives in this arid land.
The information superhighway – or so it was taglined by the press – is known to be an initiative about computers, technology and communication via the Internet. In reality, however, the platform for the original Global Information Infrastructure (GII) was actually about meaningful information (i.e., knowledge) and the networks – both technical and social – that can move knowledge from wherever it is created to the point of need or the point of opportunity. The infrastructure, then, is really about people and more about innovation or putting knowledge to work (i.e., the blending of face-to-face and electronic communications).
The rules have changed – or as Tony Blair suggested after the events of 9/11:"The kaleidoscope has been shaken. The pieces are in flux; soon they will settle again. Before they do, let us reorder the world around us."
As have many Americans – and citizens of the world for that matter, these events have given us great pause for reflection. Now, it is time to construct a platform for action that provides a foundation for protection of our future. Indeed, this crisis affords us an opportunity – and a global one at that – to architect a commonality of purpose that transcends any particular culture or spiritual orientation. This is a chance to value the diversity of perspectives; and come to a common language and shared vision of what might be possible. Together, we could crystallize a compelling message for leaders of this new world that is ‘innovating’ before our eyes.
Principle 1: The best defense is an OFFENSE.
When people are wounded – either physically or emotionally – the tendency is to withdraw. This is essential to deal with immediate injuries and to develop some strategies to prevent further injury. However, depending upon the magnitude of the infliction, the results can lead to panic and paralysis. These conditions lead to increased fear, additional downsizing and protectionist actions that exacerbate the problem. Bad economic conditions produce bad economy...produce low morale...produce no risk-taking...produces bad economic conditions...etc. It is a death spiral without a forward agenda to motivate, inspire action. All the innovation (i.e., responsible risk-taking) gets squeezed out of the system...at precisely the same time it is needed.
Principle 2: The battle is an ECONOMIC one, not necessarily military.
Although the attacks on the World Trade Center and subsequent apparent biological warfare, we must not forget that the military response is only part of the solution. The heart of was the invasion is on the financial capital of the world and the supporting infrastructure. The damage to human life is evident; the real damage to the quality of life is incalculable: the numbers unemployed, the stagnation of investment, the damage to small, medium and large-scale enterprises across every industry, and the loss of world trade – all have implications far beyond the boundaries of the United States.
Principle 3: KNOWLEDGE (not technology) is the engine of economic prosperity.
We now know that knowledge – in the form of ‘intellectual capital’ – is the most precious resource to be managed; and unlike land, labor and financial capital, it is an asset that multiplies. It is the one resource – in coordination with environmental conditions – that leads to the prosperity of a company or a country. The Knowledge Economy – as opposed to a digital or information economy – affords us a human and humane agenda within which the potential of every person is valued. It is the agenda that had leveled the playing field and enabled all nations – developing and industrialized – to envision modern management policies and practices. Knowledge – in the form of imagination coupled with action – is what enables us to envision a world that doesn’t yet exist.
Principle 4: INNOVATION is the process by which knowledge is created and harnessed.
If knowledge – embedded in the learning capacities of people - is the resource to be managed, then innovation is the process whereby visions are realized. According to Peter F. Drucker, it is the one competence for the future. Therefore, innovation strategy – developing the capability to create, share and apply knowledge - is a process that should not be left to serendipity. Innovation operates on all three economic levels: the profitability or prosperity of an enterprise (micro-economic), the vitality of a nation’s economy (meso-economic) and the advancement of society (macro-economic). It is the one process around which can be created a common language and a shared vision.
Principle 5: Any national strategy must be international and COLLABORATIVE in scope.
Although there are definite implementation boundaries, no strategy – even one for National Defense – can be developed as an ‘island’ in this global economy. We have too much to learn from one another as a way of dealing with the inevitable complexities and uncertainties. The days of developing competitive advantage may finally be dead. Instead, nations will discover ways to leverage the uniqueness of their heritage and culture with strategies to develop new, better standards of excellence. With 9/11, we have an opportunity to shape the vision: "We are building a new economic world order based upon knowledge, innovation, stakeholder success and international collaboration; and this is the platform for world peace, nothing less."
We can look at the Chinese symbol for crisis that has two characters – one for danger or threat (and these are real); and one for opportunity. Of course, we must learn from the errors of the past such as we discover in Hochschild’s book and learn from the aboriginal cultures of the world – in Australia, the US, Canada and beyond. We have far more to gain, however, by keeping our vision on the future and the potential opportunities afforded a knowledge economy. As Henry Thurow suggested, “If you have built castles in the air; that’s where they belong. Now, build the foundations under them!”
In 15 short years, an agenda that was in the minds and hearts of a few has become the dominant theme of deliberations for the new Millennium. Knowledge – often defined in terms of Intellectual Capital – is clearly the source of new economic wealth. Innovation is the process by which that wealth is converted into action – products, services or initiatives. Although activities can be based at the level of the group, function, enterprise, or nation, ultimately real value is in what flows between the borders – creating collaborative advantage. Culture will change and be changed by the inclusion and diffusion of knowledge in our everyday activities.
The variables for sustainability – economics, education, environment and more - are interdependent. Similarly, we are members of a nation treasured for diversity. True value is in the collective – what we have to offer one another. All innovation begins with the individuals within whom lie intuition, intellect and imagination. Innovation is a call to action, for only when knowledge is acted upon is there a benefit to society. The dramatic effects of the acceleration of technology – its receptivity and promise – are providing an infrastructure within which our knowledge can be created, shared and applied…and ‘real-time.’
The Global Information Infrastructure - The Information SuperHighway – captured the imagination of professionals in every corner of the globe. Now, we can step back and see that the network – both technical and human – was never intended to be about information per se. It was the design in practice of The Innovation SuperHighway that has spread in versatility and with global reach unimagined only a decade ago. We’ve all become actors in the exploration of the new innovation frontier. Let us continue to learn together.
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