What have we lost?

At the risk of sounding like a bleeding heart, super touchy-feely hippie, I can't help but wonder what negative externalities or consequences this "Brave New World" or working smarter has in store for us (humanity in general). What do we risk losing as we move forward in our increasingly globally connected world. As we "win" by working more efficiently, using all of these Value 2.0 rules to get closer to customers, tap new markets, and become increasingly competitive, is there anything that we have lost? In this new environment do we run the risk of losing any kind of identity? Do we lose the human connection of business? Do we even know our neighbors anymore?

We say that the markets are supreme and Adam Smith's invisible hand should dictate our actions as well as dole out resources, yet in this era of expansion, are we all winning? Does working "smarter" simply mean cutting costs to gain greater profits? What role do or should ethics play in our decision-making? Whose role it is to enforce certain regulations and how do we effectively monitor this new generation of multinational corporations to ensure proper business practices are being followed?

Perhaps this drive for greater wealth accumulation isn't necessarily good for us as a whole. It wasn't that long ago, in 2005, that (now former) Chairman of the Federal Reserve Alan Greenspan is that the income gap between the rich and the rest of the American population has grown so wide and so fast that it "might eventually threated democratic capitalism itself" (http://www.csmonitor.com/2005/0614/p01s03-usec.html). As we look at these new ways to conduct business, we forget that much of this new infrastructure is private and contributes to someone's profits. While that is not necessarily bad, these new ways of working smarter, faster, and cleaner need to be publicly examined and perhaps regulated to ensure the protection of the common good.

Also, I ran across an interesting survey that compared business leaders' perceptions of creativity with those of school superintendents. This survey, taken from Daniel Pink's blog, shows how there is a striking difference in how school superintendents view creativity as compared to how business leaders view creativity. This disconnect in how business leaders and educators view creativity presents us with a problem. Are our schools preparing workers who will have the skills business leaders want? If not, how should we go about working across sectors to improve our children's education?

Just a few questions I've been thinking about.

Value 2.0

Although each of the ‘new rules’ of IBM’s Value 2.0 article has, does, and will make a difference not only in the way that we do business, but also in the way that we live. As American demographics shift, as foreign economies assume greater purchasing power (i.e. China, India, Brazil), and as global competition increases, it is increasingly important for businesses to get closer to their customers and make the personal connections that drive repeat business.
In the past we relied on veritable face-to-face social networks to grease the wheels of business. Local businesspeople made business contacts at their local Rotary, Kiwanis, and Lions Clubs, as well as perhaps in Sunday school or at the local Masonic lodge. Whereas these face-to-face social and professional networks have retained a certain level of social prestige in certain communities, they no longer drive business relationships and connect modern entrepreneurs in meaningful ways.
When asked about the value of online social networking in an interview with NBC, Noah Glass, the CEO of the audio-blogging service Listenlab said, “These services aren't magical dust that makes money appear — but they can facilitate valuable connections.” If small businesspeople harness the power of online social networking, all of a sudden they will be able to network and forge relationships with potential customers not only across the country but around the world. This new kind of thinking and this new kind of virtual extension of the rolodex or little black book of business contacts is the future of business. The connected future requires a level of networking and even a new business paradigm that thinks beyond Saint Paul…to Shanghai.

Carlota Perez and Kondratiev Waves

In last Tuesday's class we briefly discussed technological revolutions that each had profound effects on the world's standard of living. This idea of a technological revolution process or cycle is a theory that Carlota Perez, a Venezuelan scholar, has put forward. This theory originated in the idea of Kondratiev waves, which (according to wikipedia--I know, not the best of sources, but hey, this is a blog...) "are described as regular, sinusoidal cycles in the modern (capitalist) world economy. Averaging fifty and ranging from approximately forty to sixty years in length, the cycles consist of alternating periods between high sectoral growth and periods of slower growth."

This theory of Kondratiev waves or technological explosions has (at least retroactively) proven to follow specific patterns. This pattern of 48-60 year cycles would place the appropriate time for a recession now and expansion would soon follow.

According to information found on the New School Department of Economics' website (http://cepa.newschool.edu/het/essays/cycle/empirical.htm),

"The NBER does not record Kondratiev Cycles (or "long waves") - as they, along with many economists, do not believe these cycles exist. Nonetheless, the following four Kondratiev waves have been identified - going through four phases of boom-recession- depression-recovery (the dates and labels are from Kuznets, 1940):

(1) The Industrial Revolution (1787-1842) is the most famous Kondratiev wave: the boom began in about 1787 and turned into a recession at the beginning of the Napoleonic age in 1801 and, in 1814, deepened into a depression. The depression lasted until about 1827 after which there was a recovery until 1842. As is obvious, this Kondratiev rode on the development of textile, iron and other steam-powered industries.

(2) The Bourgeois Kondratiev (1843-1897): After 1842, the boom reemerged and a new Kondratiev wave began, this one as a result of the railroadization in Northern Europe and America and the accompanying expansion in the coal and iron industries. The boom ended approximately in 1857 when it turned into a recession. The recession turned into a depression into 1870, which lasted until about 1885. The recovery began after that and lasted until 1897.

(3) The Neo-Mercantilist Kondratiev (1898-1950?): The boom began about 1898 with the expansion of electric power and the automobile industry and lasted until about 1911. The recession which followed turned into depression in about 1925 which lasted until around 1935. We can assume, that this third wave entered into a recovery immediately afterwards the which one might suspect lasted until around 1950.

(4) The Fourth Kondratiev (1950?- 2010?). There has been much debate among believers on the dating the Fourth Wave - largely because of the confusions generated by the low fluctuation in price levels and the issue of Keynesian policies and hence this debate is yet to be resolved. Perhaps the most acceptable set of dates is that the boom began around 1950 and lasted until about 1974 wherein recession set in. When (and if) this recession fell into its depression phase may be more difficult to ascertain (c.1981?), but what has been more or less agreed upon is that 1992 (or thereabouts) the recovery began and has been projected to give way to a boom and thus a new Kondratiev wave around 2010 or so."

This is extremely interesting because if this theory holds water, that would place my generation of organizational leaders in a prime position to seize the reins. If our generation carefully studies strategies for managing innovation and change we will be able to harness the power of this technological boom and hopefully make the most out of it.

The more I think about the prospect of great changes in the future and impending technological boom, the more I think that a wave analogy is applicable. Technological innovation is can be thought of like waves. Although waves cannot be controlled, we can understand and study the tides--as well as learn how to surf. The more we practice and study ways to effectively manage innovation, the greater the benefits we reap from this boom will be.

Perhaps this is all hype...but maybe it's not.

Check out this video:

http://www.youtube.com/watch?v=pMcfrLYDm2U

...and (on a completely random and unrelated note)

if you search 'Carlota Perez' on youtube, this is what you get:

http://www.youtube.com/watch?v=2aeRdIB4Q-s

I must say the music makes me dream of warmer places.

First Entry

Well, looks like I'm going to start blogging. I'm currently enrolled in a technology management class here at the U of M and as part of the course we're keeping blogs to document the learning experience.

So, I will shortly be blogging about various things that come up in class and making the most out of it...so, Perez Hilton, hold onto your stilettos because I'm bringing it...or rather blogging it.