{"id":475,"date":"2015-02-09T11:59:12","date_gmt":"2015-02-09T11:59:12","guid":{"rendered":"http:\/\/adriangrigoras.com\/blog\/?p=475"},"modified":"2015-02-09T11:59:12","modified_gmt":"2015-02-09T11:59:12","slug":"manifesto-industrial-revolution","status":"publish","type":"post","link":"https:\/\/adriangrigoras.com\/blog\/manifesto-industrial-revolution\/","title":{"rendered":"A Manifesto for the Next Industrial Revolution"},"content":{"rendered":"

21st century capitalism needs a revolution.<\/strong> How does growth happen \u2013 from a strategic point of view? The great Joseph Schumpeter argued that growth happens through a process of creative destruction. There\u2019s a simpler word for that: turbulence.<\/p>\n

I think there\u2019s a problem with this thesis. In an interconnected world, there are more and more players creating and destroying \u2013 as a simple example, the pool of workers in export-oriented industries has tripled, from 300 million to about 900, over the last 20 years. And so, today, turbulence is intensifying.<\/p>\n

Creative destruction has two sides \u2013 the costs of destruction as well as the benefits of creation. And as creative destruction intensifies, the costs of this great tradeoff are going to sharpen. The price of growth, it seems, is a world that\u2019s always riskier, more uncertain, and more brutal at the margin.<\/p>\n

I think that accepting this tradeoff, perhaps, is the single most toxic orthodoxy that holds boardrooms back today. Why? The problem is that value creation isn\u2019t just about productivity gains: it\u2019s also about human welfare.<\/p>\n

Consider this. When the last bubble was in internet technology, welfare was minimally affected \u2013 jobs were lost. When it shifted to housing and credit, welfare was affected more \u2013 houses and saving were lost.<\/p>\n

Today, it\u2019s shifting in large part to energy and food. What happens when hypercapitalism causes a food bubble? What happens when the masters of the universe in Greenwich bid up the price of food for India, China, and Africa\u2019s huddled masses?<\/p>\n

Here\u2019s the answer: marginal starvation. Lives are lost.<\/p>\n

That\u2019s the very real toll that creative destruction extracts. It\u2019s the price that a better food industry tomorrow demands of us today.<\/p>\n

If that\u2019s 21st century capitalism \u2013 maybe it\u2019s time for a revolution. One where the price of a dynamic economy isn\u2019t relentless damage to everything and everyone else.<\/p>\n

<\/div>\n

The invisible hand is crippled.<\/strong> What\u2019s going on here? Wasn\u2019t the invisible hand supposed to raise everyone into prosperity and well-being?<\/p>\n

Yes \u2013 but it\u2019s not. The world is getting phenomenally richer \u2013 but the costs of that wealth seem to be endemic poverty for vast swathes of the world\u2019s population, the poisoning of the water we drink, the pollution of the air we breathe, and the fraying of the social and cultural fabric that binds us together.<\/p>\n

We\u2019re richer, but that wealth doesn\u2019t reflect durable, authentic economic value \u2013 which is hitting fast diminishing returns. The growth that we\u2019re pursuing is neither sustainable \u2013 nor is it, in many ways, real growth at all. Boardrooms from finance to autos to energy to pharma to fashion have learned that the hard way.<\/p>\n

Growth is in the DNA. <\/strong>So how do we begin rethinking economic growth? With the understanding that technology alone isn\u2019t enough \u2013 and in fact, it\u2019s not the harder part of sustainable growth.<\/p>\n

Even if we invent a magic energy or food source tomorrow, it does the world little good if it\u2019s in the hands of a Bill Gates 2.0 \u2013 the amount of new value that\u2019s created is minimized. Conversely, it also does us little good if it\u2019s in the hands of a Ford 2.0, who\u2019ll just push-market next-generation gas guzzlers that put us squarely back into an energy trap.<\/p>\n

The real problem is that the industrial economy is riddled with incentives to rip your head off, sell you lemons, maximize so-called \u201cprofit\u201d at all costs, and exert power against you \u2013 not for you. That\u2019s why it seems that pain, suffering, and value destruction are deeply embedded in the very DNA of our rusting, industrial-era economic system itself.<\/p>\n

And that means that though technology is necessary, it\u2019s not sufficient. What\u2019s harder \u2013 and what truly unlocks new value \u2013 is new DNA. The fundamental question new DNA must answer is this: how do we organize and manage resources so they\u2019re not depleted, crushed, strip-mined, and slashed-and-burned?<\/p>\n

It is players who can answer that question \u2013 players who can renew yesterday\u2019s rusting DNA \u2013 who will be able redraw the boundaries of value creation in the 21st century.<\/p>\n

Organize something.<\/strong> Why does Google insist that it\u2019s goal is to \u201corganize the world\u2019s information\u201d? Because it\u2019s figured out one of the deepest secrets hidden at the heart of 21st century economics: markets, networks, and communities can organize economic activities radically more efficiently than firms.<\/p>\n

How do we begin reorganizing the industrial economy? By using markets, networks, and communities to alter the way resources are managed: to weave a fabric of incentives for sustainable growth and authentic value creation into the economy \u2013 a new economic fabric that\u2019s meaningful to people.<\/p>\n

Google utilized a market \u2013 AdWords \u2013 to utterly eviscerate a stale, broken media value chain. Here\u2019s a more visceral example. Muhammad Yunus<\/a> revolutionized finance \u2013 not by collecting more money to lend, but by using communities to fundamentally alter the value equation of lending to the poor. The result was industry transformation.<\/p>\n

See the similarity? Two vastly different industries \u2013 finance and media \u2013 were both revolutionized by new DNA. It was new ways to organize and manage that exploded the boundaries of value creation.<\/p>\n

The revolution needs revolutionaries.<\/strong> Today\u2019s investors, boardrooms and entrepreneurs are looking for value in all the wrong places. Facebook\u2019s game of musical chairs won\u2019t solve big economic problems \u2013 and neither will making token investments in greentech.<\/p>\n

<\/div>\n

Where is the next industrial revolution crying out for revolutionaries? Simple: in industries dominated by clear, durable, structural barriers to efficiency and productivity.<\/p>\n

The next industrial revolution begins here.<\/strong> What happens when we think of using new DNA to reorganize structurally inefficient industries? A blueprint for the next industrial revolution emerges. Here\u2019s what it looks like.
\n
\nOrganize the world\u2019s hunger.
\nOrganize the world\u2019s energy.
\nOrganize the world\u2019s thirst.
\nOrganize the world\u2019s health.
\nOrganize the world\u2019s freedom.
\nOrganize the world\u2019s finance.
\nOrganize the world\u2019s education.
\n<\/em><\/p>\n

That\u2019s not an exhaustive list \u2013 it\u2019s just a beginning. In fact, let\u2019s open source it: please add to it (\u201corganize the world\u2019s xyz\u201d<\/a>), and we\u2019ll keep an index here or elsewhere.<\/p>\n

What\u2019s important is the logic behind the list. Let\u2019s make that as razor-sharp as possible.<\/p>\n

Organize: to transform DNA, not lower-value technology. The world\u2019s: to have a global impact; to be able to scale to global levels. Hunger, health: some measure of economic well-being: to radically change the world for the better.<\/p>\n

If you\u2019re a startup, and your elevator pitch isn\u2019t shaped by this blueprint; if you\u2019re an investor, and your portfolio isn\u2019t full of companies like this; if you\u2019re a corporate boardroom, and you\u2019re not refocusing and restructuring to meet these new challenges \u2013 here\u2019s the bottom line: the next industrial revolution has your name written all over it.<\/p>\n

source: HBR.org<\/p>\n","protected":false},"excerpt":{"rendered":"

21st century capitalism needs a revolution. How does growth happen \u2013 from a strategic point of view? The great Joseph Schumpeter argued that growth happens through a process of creative destruction. There\u2019s a simpler word for that: turbulence. I think there\u2019s a problem with this thesis. In an interconnected world, there are more and more\u2026 Read More »<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[],"class_list":["post-475","post","type-post","status-publish","format-standard","hentry","category-leadership"],"_links":{"self":[{"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/posts\/475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/comments?post=475"}],"version-history":[{"count":1,"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/posts\/475\/revisions"}],"predecessor-version":[{"id":476,"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/posts\/475\/revisions\/476"}],"wp:attachment":[{"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/media?parent=475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/categories?post=475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adriangrigoras.com\/blog\/wp-json\/wp\/v2\/tags?post=475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}