Business Will Change

Social Technologies and Collective Intelligence

Q "What do you think of TV?"

A "Well I think its important, but not necessary because you can do a lot of other stuff with your free time than watch programs"

Q "Which is more fun, TV or Internet?"

A "INTERNET!"

Q "Would you like to be the president of a TV network?"

A "That would be so stressful."  "NO because they are going to lose all of their money eventually"

-12 year olds being interviewed by Peter Hirshberg about how they use media

Our children are already aware of the new world that is forming. For them it is normal to have always-on Internet access, instant persistent connections with their friends, a wide variety of media to consume when they want to watch or listen. They will grow up intuitively understanding how to use what for us are new technologies. And as Don Tapscott points out in his book "Grown up Digital" they are becoming the teachers and we the students.

A symbiotic relationship exists between human beings and their tools.  We create tools in order to adapt to our environment, or adapt our environment to our needs.  But the creation and use of those tools also changes the environment, requiring new adaptations.  Roads allow automobiles to travel more quickly, but require us to learn how to make split second decisions while traveling at high speeds. Our technologies change us as much as they change our world.

Just as the steam engine presaged a series of inventions that additively lead to economic and organizational transformation, so too has the digital computer lead to a series of inventions which transform our environment, forcing adaptation to occur, and thereby bringing about tremendous changes in our society.

The transistor, programming languages, storage systems, networks, wireless digital communicators... all lead to a radically new set of conditions in our environment which lead to new behaviors and possibilities.

There is an iterative process in the creation of technology, our learning and adapting to its use, and then the creation of a new technology which further transforms our environment and ourselves.

Simple tabulating and calculating machines were created to aid in gathering and comprehending data from an ever larger population. Alfred Neumann, Alan Turing, and others observed that out of these simple machines we could develop more general devices, with programmable logic.  These initial general digital computers were improved rapidly through miniaturization, design innovations, and eventually through connecting them to each other.

At each stage of this process the capabilities of the computer became more thoroughly ingrained in our society, initially accelerating industrial trends already underway. Larger and more complex organizational structures were made possible. Greater amounts of capital moved at higher speeds. Companies could operate across broader geographical areas through enhanced distribution and coordination.

While all of these developments were essential to the new world we are entering now, an important shift occurred about 30 years ago with the introduction of the personal computer. Why was this different from the innovations which had come before?  Because at this point the computer became an extension of our own personal capabilities, not the capabilities of an institution.  It was at this point that the computer began to change us as individuals, to extend our capabilities in a new way. And when we as individuals change, our society will be changed as well.

The sword extended a warrior's arm, created a need for industry to produce metal and craftspeople to mold that metal into weapons, changed the way armies fought, and the balance of power between civilizations. Technologies ripple through human society changing us, changing our work, changing our institutions.

What are social technologies? How do the extend us as individuals? How will they ripple through our society and change our work and our institutions? This story is just being written and no one yet knows all of the changes that will occur.  But we can start to look at the outline that is emerging and make some guesses about the near term implications.

There is an interplay between the capabilities and constraints of technology and what we are capable of as individuals and as a society. There are three key technology trends which can help us understand where we are heading: the miniaturization and growing power of computing, ubiquitous high speed wireless data networks, and the increasing ease of developing software. Together these three trends lead to an extension of who project ourselves to be in the world. Increasingly we project a persistent online presence and participate in ever shifting networks of social connections. 

Computing:

Its hard to miss the past impact of Moore's law and yet we persistently ignore the implications for where this will lead. Moore's law, originally proposed by Intel founder Gordon Moore was based in an observation -- the number of transistors available at a given price were doubling roughly every 18 months.  A corollary effect was to place this increasing computational power into smaller and smaller packages.  What once filled a room now barely fills a pocket and continues to shrink. Where is this heading?

We can expect that computational power will continue to increase in power and decrease in size, making it possible to integrate computers into more and more of what we do, more and more of who we are.  Wearable, integrated, ubiquitous computers will change the way we perceive and interact with our physical environment and with each other.  Add this to the next trend and a change in who we are as people begins to emerge.

Networks:

Our planet is already covered in a mesh of electronic signals. Telecommunications technologies are increasing speed and ubiquity at an event faster rate than computing power is increasing.  Metcalfe's law, developed with a nod to Moore, states that networks increase in power by X

In the past twenty years these networks have grown to connect billions of people. Increasingly the connection is to communicate data, and the speed and ubiquity of these connections leads us to expect to be connected to family, friends, and colleagues at all times. It also leads us to expect that we will have instant access to vast libraries of information.

Communications, coordination, collaboration, community

Adapting to Change We are evolving into a new species.

"You hear that this is the era of environment or biology or information technology, well its the era of a lot of different things that are 'in' right now.  But one thing for sure is that it is the era of change. There is more change going on then has ever occurred in the history of human life on earth. And you all sort of know it but its hard to get to understand it."

"Over billions of years, on a unique sphere, chance has painted a thin covering of life -- complex, improbable, wonderful and fragile.

Suddenly we humans, (a recently arrived species no longer subject to the checks and balances inherent in nature), have grown in population, technology, and intelligence to a position of terrible power: we now wield the paintbrush."

-- Paul MacCready

The engineer, designer, and environmentalist Paul MacCready eloquently observes what we all intuitively know has been happening on a global basis -- over the past century human beings and our activities have grown in scale and complexity at an incredible pace.  One example - in just the 50 years from 1935 to 1985 humans and our domesticated species went from (25%?) to (97%) of the total non-insect animal life on the planet.  Whatever your environmental position, one must acknowledge the fact that, to use MacCready's words, man now wields the paintbrush.

Throughout history there have been dramatic changes in the technologies, political systems, and social organizations to which we have, as a species, had to adapt. When the pace of change is generations, this adaptation can occur gradually as children grow up in changed circumstances. So the species evolves over time, and our tool use accelerates what would otherwise be a much longer biological adaptation - homo sapiens is the sum of our physical capabilities and the tools we use to extend those capabilities -- sword, plow, book, iPhone.

For our generation, a combination of longer life spans and more rapid change is forcing us to be adaptable as individual members of the species, to choose to change ourselves by embracing tools which extend our capabilities in new and surprising ways. Cars, computers, cell phones, the Internet -- each of these technologies changes and extends some physical capability. The cumulative effect of the adoption of any of these tools is social in the sense that they change aspects of how our society is ordered.

In order to understand the change that is coming, it is helpful to have some perspective on the changes which have already occurred. Over the past century human beings have had to adapt more rapidly than ever before to a changing political, social, and economic environment. We have expectations about every aspect of our lives that would be incomprehensible to people at the beginning of the industrial revolution.

There are still a small number of people alive who were born at the end of the 19th century, a time when the world sill looked very much like the one that their parents and their grandparents had known. Most of the planet's (then much smaller) population lived an agrarian lifestyle in which the quality and quantity of the land they lived on determined their health, wealth, and comfort. Their lifestyles had been little affected by the industrial revolution already well underway. But the world was being transformed by factories and industrial production. Already political systems were changing, the traditions of guilds and trained craftspeople were collapsing, and the seeds of the modern corporation had been sown. The driver of this change was then, as it is now, technology. First with steam engines, then with gasoline and electrical power, and more recently with the semiconductor and microprocessor.

Take a step back and look at how far we have come in a remarkably short time.  Look at the world through Edna Parker's eyes, who turned 115 in 2008. In 1893, the year she was born, the Great Northern Railway had just connected Seattle with the East Coast.  The first movies were being made in a studio that Thomas Edison had opened in Orange NJ. The first Ferris Wheel premiered at Chicago's Columbian Exposition. France issued the first driving licenses and Henry Ford completed his first useful gas motor. New Zealand became the first country to allow women to vote.  Hermann Goering and Mao Tse-Tung were both born that year as were Jimmy Durante and Mae West.

During Edna's lifetime, a period which encompasses the lifetimes of every person alive today, we have experienced incredible political, economic, and technological transformation.  Though the "industrial revolution" was already 50 years old when Edna was born, the real implications of this revolution were felt by her children and her grandchildren.

Over this time people changed their lives to adapt to new technology and inventions which transformed every aspect of their world.  Internal combustion engines, radio, the motion picture and even the vacuum cleaner were all invented between Edna's birth and the beginning of the twentieth century. The first decade of that new century brought air conditioning, airplanes, the theory of relativity, and the Model T. 

From 1893 to 2008 the human population has grown from about 1.5 billion to over 6 billion and in 2008 for the first time more people live in cities than in the country. Edna's rural and agrarian society -- the world that human beings had known for thousands of years of civilization -- is gone forever.  But somehow through all of these tremendous changes, human beings have shown resilience and adaptability.

The industrial revolution created the possibility of mass scale in every aspect of our civilization and transformed our governments, the way we live, the way products are manufactured and distributed, even the nature of work. Every aspect came to be defined by hierarchical organization and the coordination of aggregated capital, labor, and other resources through standardization and centralization.

This process resulted in a significant amount of displacement.  Land was consolidated, forcing small farmers to leave for jobs in the cities. Control of raw materials allowed some to amass enormous wealth.  The standardization of work eliminated the need for trained craftspeople and also led to the rise of labor unions, socialism, and communism. 

The pressing question of the twentieth century has been about who should control the raw materials and means of production and who should benefit from industrialized production.  The political and economic systems that emerged to cope with this change in production varied in their answer to this question but were unified in recognizing and adapting to this change.  Whether in America, Europe, or the Soviet Union (or later in Asia), every part of the world participated in the reorganization of society to optimize industrial production.

Adaptability is the human characteristic that sets our species apart from the rest of the animal kingdom.  The steam engine and the technological innovations that followed changed the environment we lived in and as individuals and as a species we adapted to take advantage of these changes.  Due to differences in opportunity and ability, not every individual was equally successful at adapting and thus disparities and inequalities emerged. But overall, in a fraction of the time that it took for agrarian civilizations to develop, we created an entirely new world. 

The next transformation is already underway.  Another new world is about to come into being and it will happen even more quickly than the last. Politics, society, and our economy will all take a new form. The decision that now faces each of us is whether we will choose to be an active part of the next transformation, or whether we will be dragged along as the environment changes again and brings about a new wave of adaptation and reorganization of our society.

Business, the bedrock of our industrial society, is about to change.

How collective intelligence will change the way we do business

I wrote this book for every business person struggling to make sense of the changes that are sweeping through our world today.  Business is changing.  An unstoppable transformation is underway. Everything about how we work -- how products are developed, marketed, sold, and supported -- will change. How companies are financed, organized and managed will change. You can choose to ignore these changes or you can embrace them. I believe that the success of your company and how you personally will thrive depends entirely upon understanding and adapting to these changes.

Here is a key idea for you to embrace: adaptability. The biggest difference I see between people and organizations that are doing well and those that are struggling is in their willingness to adapt. In my work with companies I often focus on this aspect and challenge people to think -- why do we do things a certain way? Why can't it be done another way? Often they already know a better way to do their work, but they don't feel empowered (or emboldened) to change.

Collectively and individually we all need to start asking, "is this working? Or should we change? And if we change, how will we do this differently?"  And then we need to take action! Our success as individuals and as organization depend upon the way in which we adapt and continue adapting to our environment.

As with previous periods of change in human society, this one is being driven by the power of human invention. In this case the inventions moving our society are digital computing and communication networks and a set of facilitating applications which I refer to in this book as social technologies -- a combination of software applications, web sites, and mobile applications that are fostering the global development of cooperative communications.

Even before technology played a role, sociologists had developed an understanding of the resulting collective intelligence which emerges from certain kinds of organized group communications. But the cheap (in some cases virtually free) computing and communications which has become available over the past decade has brought organizational change, knowledge creation, decision making, and idea development to anyone with a computer or phone connected to the Internet.

Collective intelligence has now been thoroughly democratized and anyone can tap into its power. Organizations and individuals can really begin doing things differently as a result.

The possibility of doing something new has taken a long time to reach us, though not as long as it took for industrial technologies to transform our society. It has been 60 years since the invention of the digital computer and we are just now beginning to understand how work will be changed by that invention. For the first few decades the computer was an aid to tabulation and arithmetic operations, but we hardly understood how those simple capabilities would come to affect every aspect of how goods are produced or services provided.

In 1980 futurist Alvin Toffler published "The Third Wave" seeking to understand and explain this strange new phenomena -- how a small company called Microsoft was doing something novel in the history of business. With only the intellectual capabilities of its employees, Microsoft was creating products of enormous value and distributing them with a minimal physical medium.  In order to explain what he saw happening, Toffler developed an idea about three phases of human history and announced that we had entered the third, the information age.

In agrarian societies, Toffler observed, the organized production of goods depended upon control of the land on which crops were grown or livestock grazed. Starting in the 18th century the industrial revolution brought about a radical shift in the components of production. The forces unleashed by the steam engine destroyed the agrarian world, eliminated entire classes of work, denigrated the role of professional craftspeople, and doomed the aristocracy. It also brought about the greatest period of innovation, increase in longevity and broad spread of prosperity in history.

The information age will bring sweeping changes as well.  A powerful idea has been given form in social technologies and we will see institutions, professions, and entire social, economic, and political systems swept aside. But while parts of the world we know are being destroyed, many new and wonderful things will also emerge. Just as the steam engine changed how we live and work, so too will new collaborative online communities create new jobs, new ways of working, and new ideas about what is possible. This book is about understanding why and how these change are happening and what you should be doing to benefit from these changes. 

The first two chapters will provide some background for understanding how change happens and what this shift is all about. Starting with chapter three I provide some concrete ideas about what you should be doing in your own life and career to embrace the shift that is underway. Finally in the later chapters I explore the impact on various specific parts of business -- product development, marketing, sales, etc.

I am also regularly asked for a reading list of other resources, so in the appendix I have listed books, articles, blogs, and other resources for learning more about social technologies and how they will change business. For an ever updating conversation on these topics, please join me on my blog dedicated to this book:  http://www.businesswillchange.com

How collective intelligence will change the way we do business

I wrote this book for every business person struggling to make sense of the changes that are sweeping through our world today.  Business is changing.  An unstoppable transformation is underway. Everything about how we work -- how products are developed, marketed, sold, and supported -- will change. How companies are financed, organized and managed will change. You can choose to ignore these changes or you can embrace them. I believe that the success of your company and how you personally will thrive depends entirely upon understanding and adapting to these changes.

Adaptability is becoming ever more important. The biggest difference I see between people and organizations that are doing well and those that are struggling is in how adaptable they are able to be. In my work with organizations I often focus on this aspect and challenge people to think -- why do we do things a certain way? Why can't it be done another way? Often they already know a better way to do their work, but they aren't empowered (or emboldened) to change.

Collectively and individually we all need to start asking, "is this working? Or should we change? And if we change, how will we do this differently?"  And then we need to make the change. Our success as individuals and as organization depend upon the way in which we change.

As with previous eras of change in human society, this one is being driven by the power of human invention. In this case the inventions is the rapidly evolving digital computing and communication networks and a set of facilitating applications which I refer to in this book as social technologies -- a combination of software applications, web sites, and mobile applications that are fostering the global development of cooperative communications.

Even before technology played a role, sociologists had developed an understanding of the resulting collective intelligence which emerges from certain kinds of organized group communications. But the cheap (in some cases virtually free) computing and communications which has become available over the past decade has brought organizational change, knowledge creation, decision making, and idea development to anyone with a computer or phone connected to the Internet.

Collective intelligence has now been thoroughly democratized and anyone can tap into its power. Organizations and individuals can really begin doing things differently as a result.

The possibility of doing something new has taken a long time to reach us, though not as long as it took for industrial technologies to transform our society. It has been 60 years since the invention of the digital computer and we are just now beginning to understand how work will be changed by that invention. For the first few decades the computer was an aid to tabulation and arithmetic operations, but we hardly understood how those simple capabilities would come to change every aspect of how goods are produced or services provided.

In 1980 futurist Alvin Toffler published "The Third Wave" seeking to understand and explain this strange new phenomena -- how a small company called Microsoft was doing something novel in the history of business. With only the intellectual capabilities of its employees, Microsoft was creating products of enormous value and distributing them with a minimal physical medium.  In order to explain what he saw happening, Toffler developed an idea about three phases of human history and announced that we had entered the third, the information age.

In agrarian societies, Toffler observed, the organized production of goods depended upon control of the land on which crops were grown or livestock grazed. Starting in the 18th century the industrial revolution brought about a radical change in the components of production. The forces unleashed by the steam engine destroyed the agrarian world, eliminated entire classes of work, denigrated the role of professional craftspeople, and doomed the aristocracy. It also brought about the greatest period of innovation, increase in longevity and broad spread of prosperity in history.

The information age will bring sweeping changes as well.  A powerful idea has been given form in social technologies and we will see institutions, professions, and entire social, economic, and political systems swept aside. But while parts of the world we know are being destroyed, many new and wonderful things will also emerge. Just as the steam engine changed how we live and work, so too will new collaborative online communities create new jobs, new ways of working, and new ideas about what is possible. This book is about understanding why and how these change are happening and what you should be doing to benefit from these changes.

How collective intelligence will change the way we do business

I wrote this book for every business person struggling to make sense of the changes that are sweeping through our world today.  Business is changing.  An unstoppable transformation is underway. Everything about how we work -- how products are developed, marketed, sold, and supported -- will change. How companies are financed, organized and managed will change. You can choose to ignore these changes or you can embrace them. I believe that the success of your company and how you personally will thrive depends entirely upon understanding and adapting to these changes.

Driving this change is the rapid evolution of digital computing and communication networks and a set of facilitating applications which I refer to in this book as social technologies -- a combination of software applications, web sites, and mobile applications that are fostering the global development of cooperative communications.

Even before technology played a role, sociologists had developed an understanding of the resulting collective intelligence which emerges from certain kinds of organized group communications. But the cheap (in some cases virtually free) computing and communications which has become available over the past decade has brought organizational change, knowledge creation, decision making, and idea development to anyone with a computer or phone connected to the Internet. Collective intelligence has now been thoroughly democratized and anyone can tap into its power.

It has taken 60 years since the invention of the digital computer for us to begin to understand the magnitude of the transformation now taking place. For the first few decades the computer was an aid to tabulation and arithmetic operations, but we hardly understood how those simple capabilities would come to change every aspect of how we work to produce goods and provide services.

In 1980 futurist Alvin Toffler published "The Third Wave" seeking to understand and explain this strange new phenomena -- how a small company called Microsoft was doing something novel in the history of business. With only the intellectual capabilities of its employees, Microsoft was creating products of enormous value and distributing them with a minimal physical medium.  In order to explain what he saw happening, Toffler developed an idea about three phases of human history and announced that we had entered the third, the information age.

In agrarian societies, Toffler observed, the organized production of goods depended upon control of the land on which crops were grown or livestock grazed. Starting in the 18th century the industrial revolution brought about a radical change in the components of production. The forces unleashed by the steam engine destroyed the agrarian world, eliminated entire classes of work, denigrated the role of professional craftspeople, and doomed the aristocracy. It also brought about the greatest period of innovation, increase in longevity and broad spread of prosperity in history.

The information age will bring sweeping changes as well.  A powerful idea has been given form in social technologies and we will see institutions, professions, and entire social, economic, and political systems swept aside. But while parts of the world we know are being destroyed, many new and wonderful things will also emerge. Just as the steam engine changed how we live and work, so too will new collaborative online communities create new jobs, new ways of working, and new ideas about what is possible. This book is about understanding why and how these change are happening and what you should be doing to benefit from these changes.

How to use this blog

Thank you for arriving here at this blog experiment.  I would love to hear how you got to my work in progress (leave a comment!).  The purpose of this exercise is to write a book in public -- that is, publish each successive draft of each chapter of the book here on the blog, entirely open to your comments.  In this way I hope to have written a much better book as the result of the collective intelligence of all of the readers who visit.

And collective intelligence is what this is really all about -- as I say in my opening "introduction" -- collective intelligence will change the way we do business.  I think it will even change the way that books get written...

On the right hand side you will see a list of chapter links -- this will allow you to read the book sequentially, if you should choose to be so linear.  Each link gives you the history of drafts of each chapter, so you can even see over time how I am improving the book (or you may tell me I have left something out!!)

To start with I have posted just three pieces:

Introduction -- How Collective Intelligence Will Change The Way We Do Business

Chapter One -- Adapting to Change: How We are evolving into a new species

Chapter Two -- The Precursors of Change

In a week or so I will load a few more chapters on and so on, hopefully settling into a regularly weekly update cycle.  I hope you will join me on an ongoing basis for this adventure!

Ted

The Precursors For Change

Q "What do you think of TV?"

A "Well I think its important, but not necessary because you can do a lot of other stuff with your free time than watch programs"

Q "Which is more fun, TV or Internet?"

A "INTERNET!"

Q "Would you like to be the president of a TV network?"

A "That would be so stressful."  "NO because they are going to lose all of their money eventually"

-12 year olds being interviewed about how they use media by TCG Partner Peter Hirshberg

Our children are already aware of the new world that is forming. For them it is normal to have always-on Internet access, instant connections with their friends, a wide variety of media to consume when they want to watch or listen. They will grow up intuitively understanding how to use what for us are new technologies. And as Don Tapscott points out in his book "Grown up Digital" they will become the teachers and we the students.

A symbiotic relationship exists between human beings and their tools.  We create tools in order to adapt to our environment, or adapt our environment to our needs.  But the creation and use of those tools also changes the environment, requiring new adaptations.  Roads allow automobiles to travel more quickly, but require us to learn how to make split second decisions while traveling at high speeds. Our technologies often change us even more than they change our world.

Just as the steam engine presaged a series of inventions that additively lead to economic and organizational transformation, so too has the digital computer lead to a series of inventions which transform our environment, forcing adaptation to occur, and thereby bringing about tremendous changes in our society.

The transistor, programming languages, storage systems, networks, wireless digital communicators... all lead to a radically new set of conditions in our environment which lead to new behaviors and possibilities.

There is an iterative process in the creation of technology, our learning and adapting to its use, and then the creation of a new technology which further transforms our environment and ourselves.

Simple tabulating and calculating machines were created to aid in gathering and comprehending data from an ever larger population. Alfred Neumann, Alan Turing, and others observed that out of these simple machines we could develop more general devices, with programmable logic.  The initial general digital computers were improved rapidly through miniaturization, design innovations, and eventually through connecting them to each other.

At each stage of this process the capabilities of the computer became more thoroughly ingrained in our society, initially accelerating industrial trends already underway. Larger and more complex organizational structures were made possible. Greater amounts of capital moved at higher speeds. Companies could operate across broader geographical areas through enhanced distribution and coordination.

While all of these developments were essential to the new world we are entering now, an important shift occurred about 30 years ago with the introduction of the personal computer. Why was this different from the innovations which had come before?  Because at this point the computer became an extension of our own personal capabilities, not the capabilities of an institution.  It was at this point that the computer began to change us, to extend our capabilities in a new way.

The sword extended a warrior's arm, writing changed what we could remember and communicate, the telephone allowed us to talk over great distances -- each of these examples was a technology which brought about changes in human society far beyond the behaviors and possibilities that it enabled for a single individual using that technology.

The social extension that computing enabled began with email, expanded with the web, and is now accelerating with social technologies which facilitate group acts of cognition, cooperation, and coordination.

Adapting to Change We are evolving into a new species.

"You hear that this is the era of environment or biology or information technology, well its the era of a lot of different things that are in right now.  But one thing for sure is that it is the era of change. There is more change going on then has ever occurred in the history of human life on earth. And you all sort of know it but its hard to get to understand it."

"Over billions of years, on a unique sphere, chance has painted a thin covering of life -- complex, improbable, wonderful and fragile.

Suddenly we humans, (a recently arrived species no longer subject to the checks and balances inherent in nature), have grown in population, technology, and intelligence to a position of terrible power: we now wield the paintbrush."

-- Paul MacCready

In order to understand the change that is coming, it is helpful to have some perspective on the changes which have already occurred. Over the past century human beings have had to adapt more rapidly than ever before to a changing political, social, and economic environment. We have expectations about every aspect of our lives that would be incomprehensible to people at the beginning of the industrial revolution.

There are still a small number of people alive who were born at the end of the 19th century, a time when the world looked very much like the one that their parents and their grandparents had known. Most of the planet's (then much smaller) population lived an agrarian lifestyle in which the quality and quantity of the land they lived on determined their health, wealth, and comfort. Their lifestyles had been little changed by the industrial revolution already well underway. But the world was being transformed by factories and industrial production. Already political systems were changing, the traditions of guilds and trained craftspeople were collapsing, and the seeds of the modern corporation had been sown. The driver of this change was, is, and will be technology. First with steam engines, then with gasoline and electrical power, and more recently with the semiconductor and microprocessor.

Edna Parker turned 115 in 2008. In 1893, the year she was born, the Great Northern Railway had just connected Seattle with the East Coast.  The first movies were being made in a studio that Thomas Edison had opened in Orange NJ. The first Ferris Wheel premiered at Chicago's Columbian Exposition. France issued the first driving licenses and Henry Ford completed his first useful gas motor. New Zealand became the first country to allow women to vote.  Hermann Goering and Mao Tse-Tung were both born that year as were Jimmy Durante and Mae West.

During Edna's lifetime, a period which encompasses the lifetimes of every person alive today, we have experienced incredible political, economic, and technological transformation.  Though the "industrial revolution" was already 50 years old when Edna was born, the real implications of this revolution were felt by her children and her grandchildren.

Over this time people changed their lives to adapt to new technology and inventions which transformed every aspect of their world.  Internal combustion engines, radio, the motion picture and even the vacuum cleaner were all invented between Edna's birth and the beginning of the twentieth century. The first decade of that new century brought air conditioning, airplanes, the theory of relativity, and the Model T. 

From 1893 to 2008 the human population has grown from about 1.5 billion to over 6 billion and in 2008 for the first time more people live in cities than in the country. Edna's rural and agrarian society -- the world that human beings had known for thousands of years of civilization -- is gone forever.  But somehow through all of these tremendous changes, human beings have shown resilience and adaptability.

The industrial revolution created the possibility of mass scale in every aspect of our civilization and transformed our governments, the way we live, the way products are manufactured and distributed, even the nature of work. Every aspect came to be defined by hierarchical organization and the coordination of aggregated capital, labor, and other resources through standardization and centralization.

This process resulted in a significant amount of displacement.  Land was consolidated, forcing small farmers to leave for jobs in the cities. Control of raw materials allowed some to amass enormous wealth.  The standardization of work eliminated the need for trained craftspeople and also led to the rise of labor unions, socialism, and communism. 

The pressing question of the twentieth century has been about who should control the raw materials and means of production and who should benefit from industrialized production.  The political and economic systems that emerged to cope with this change in production varied in their answer to this question but were unified in recognizing and adapting to this change.  Whether in America, Europe, or the Soviet Union (or later in Asia), every part of the world participated in the reorganization of society to optimize industrial production.

Adaptability is the human characteristic that sets our species apart from the rest of the animal kingdom.  The steam engine and the technological innovations that followed changed the environment we lived in and as a species we adapted to take advantage of these changes.  Due to differences in opportunity and ability, not every individual was equally successful at adapting and thus disparities and inequalities emerged. But overall, in a fraction of the time that it took for agrarian civilizations to develop, we created an entirely new world. 

The next transformation is already underway.  Another new world is about to come into being and it will happen even more quickly than the last. Politics, society, and our economy will all take a new form. The decision that now faces each of us is whether we will choose to be an active part of the next transformation, or whether we will be dragged along as the environment changes again and brings about a new wave of adaptation and reorganization of our society.

Business, the bedrock of our industrial society, is about to change.

How collective intelligence will change the way we do business

I wrote this book for every business person struggling to make sense of the changes that are sweeping through our world today.  Business is changing.  An unstoppable transformation is underway. Everything about how we work -- how products are developed, marketed, sold, and supported -- will change. How companies are financed, organized and managed will change. You can chose to ignore these changes or you can embrace them. I believe that the success of your company and how you personally will thrive depends entirely upon understanding and adapting to these changes.

It has taken 60 years since the invention of the digital computer for us to begin to understand the magnitude of the transformation now taking place. For the first few decades the computer was an aid to tabulation and arithmetic operations, but we hardly understood how those simple capabilities would come to change every aspect of how we work to produce goods and provide services.

In 1980 futurist Alvin Toffler published "The Third Wave" seeking to understand and explain this strange new phenomena -- how this small company called Microsoft was doing something novel in the history of business. With only the intellectual capabilities of its employees, Microsoft was creating products of enormous value and distributing them with a minimal physical medium.  In order to explain what he saw happening, Toffler developed an idea about three phases of human history and announced that we had entered the third.

In agrarian societies, Toffler observed, the organized production of goods depended upon control of the land on which crops were grown or livestock grazed. Starting in the 18th century the industrial revolution brought about a radical change in the components of production. The forces unleashed by the steam engine destroyed the agrarian world, eliminated entire classes of work, denigrated the role of professional craftspeople, and doomed the aristocracy. It also brought about the greatest period of innovation, increases in longevity and broad spread prosperity in history.

The information age will bring sweeping changes as well.  A powerful idea has been given form in social technologies and we will see institutions, professions, and entire social, economic, and political systems swept aside. But while parts of the world we know are being destroyed, many new and wonderful things will also emerge. Just as the steam engine changed how we live and work, so too will new collaborative online communities create new jobs, new ways of working, and new ideas about what is possible. This book is about understanding why and how these change are happening and what you should be doing to benefit from these changes.

Chapter One - first draft

The oldest people alive today were born at the end of the 19th century, born into a world that looked very much like the one that their parents were born into. 

Our children are not born into a world that looks anything like the one we were born into and the same can be said for our parents.

There were, however, a few indications that change was on the horizon at the end of the 19th century. On April 20th of 2008 the oldest living human, Edna Parker, turned 115 (Happy Birthday Edna). In 1893 when Edna was born, the Great Northern Railway had just connected Seattle with the East Coast.  The first movies were being made in a studio that Edison opened up on Orange NJ. The first Ferris Wheel premiered at Chicago's Columbian Exposition. France issued the first driving licenses and Henry Ford completed his first useful gas motor. New Zealand became the first country to allow women to vote.  Hermann Goering and Mao Tse-Tung were both born that year as were Jimmy Durante and Mae West. 

Thus, in the century that encompasses the lifetimes of every living person, we have experienced an incredible political, economic, and technological transformation unike anything that came before Edna.  Though the "industrial revolution" was already 50 years old, for most people in Edna's childhood life was the same as it had been for their parents and grandparents. 

During Edna's life however, an every quickening pace of inventions has transformed the way we live.  Internal combustion engines, radio, the motion picture and even the vacuum cleaner were all invented between her birth and the turn of the century. The next decade brought air conditioning, airplanes, the theory of relativity, and the Model T.  Before the invention of the first electronic digital computer in 1942, one could reasonably argue that these were the most important technologies to form what we now think of as the modern world.

In the past 100 years human population has grown from about 1.5 billion to over 6 billion and in 2008 for the first time more people live in cities than in rural areas. Edna's world, and the world that human beings have known for thousands of years of civilization is gone forever - and the changes are only just beginning.

In 1980, Alvin Toffler published "The Third Wave" in which he described three types of society.  His "First Wave" was the agrarian civilization that began when the first hunter-gatherer cultures were replaced.  This is the world that Edna was born into.  While change was already beginning, the second wave had not entirely transformed the way most people lived. This "Second Wave" was the result of the industrial revolution.  During Edna's life the economics of mass scale transformed every aspect of society -- our governments, the way we live, the way products are manufactured and distributed, the nature of work -- every aspect was defined by hierarchical organization and coordination of aggregated capital, labor, and other resources through standardization.

Toffler's "Third Wave" which he attempted to describe back in 1980 -- before the personal computer had been popularized, before the Internet was more than an esoteric research tool -- was his attempt to capture a deep underlying shift that was already moving human civilization beyond the industrial revolution.

The core argument of the three waves is economic -- that land formed the basis of wealth in agrarian societies, in the industrial era it was a combination of land, labor and capital, and that in the third wave it would be "knowledge" that became the basis for wealth.  But while Toffler was clearly glimpsing an important aspect of the future that was beginning to emerge, if you stop to consider his analysis it is deeply rooted in the industrial world thinking that he (and his readers) understood.

If, for example, you were to ask an agrarian society "futurist" in 1780 to imagine the impact of the industrial revolution, would he have cast the difference in economic terms? Would "wealth" be the measurement by which he would contrast the difference between his agrarian society and the coming changes to come from steam engines and the rest? 

Adam Smith, surely his generation's Toffler, is widely credited as the "father of economics" but held the Chair of Moral Philosophy. It was not economics which provided the core explanation of the difference between agrarian and the emergent industrial world, but rather politics and morality. Smth's "Wealth of Nations" was surely the kind of disruptive thought for his society as Toffler's "Third Wave" was two hundred years later.  But "wealth" is not the measuring stick for comparing agrarian and industrial society. 

Land was controlled through military might which was organized by political systems. For the observer in 1780, announcing that the second wave of human society was beginning, the description might have been that the broader distribution of control over labor and capital was shifting political control away from the aristocracy and into the hands of common people.

It is hard for us to imagine how different the world was in 1780 from the world of 1980 when Toffler published his book.  But even more difficult for us to imagine how different it will be when this third wave fully manifests as the next stage of human society.  Where Toffler makes the argument that knowledge becomes the basis of wealth, someone looking back on our times will likely think that our ideas of wealth are quaint.  Knowledge doesn't just become the basis for wealth, it radically changes what wealth means.