Friedman's 3rd Globalization: Complexity is Opportunity!

Posted by: Ash Khanna

For a successful knowledge worker ‘complexity’ is an opportunity!

In the knowledge economy, business is a ‘servant’ (i.e. to provide a ‘service’) of complexity. Success implies fuelling the complexity of the competitive environment, - which is on an exponential growth curve because of rampant ‘innovations’ in physical technologies, social technologies and successful businesses, not despite them.

Innovation is nothing new. We are simply more aware of it. Similar to the affects of shipping routes, and the road networks; the emerging, pervasively networked (i.e. ‘conversation’-dense) environment is bringing people together. In effect we are irrigating ideas and creatively farming triggers at rates unprecedented in human history.

Innovation, the ‘hunt’ for value, is the engine for ‘growth’ (as in creating NOT as in grabbing 1% more of)! Let me elucidate.

What is called ‘financial innovation’ today has its roots in the 1970s – 1980s [i.e. the 1st mortgage security department on Wall Street at Salomon Brothers; and the high-yield (junk) bonds of Derxel Burnham (aka Michael Milken)]. The current ‘avatars’ are (the infamous) structured finance products like CDOs, CMOs, etc. – “the credit crisis”. The products may be in trouble but the ‘phenomena’ is sound. They were ‘democratising capital’!

‘Peer-production’, mediated by the ‘Internet’ and other ‘Interactive Digital Media (um)’ are being more audacious. The phenomena being invoked: “democratising innovation” (von Hipple) or unleashing the “wealth of networks” (Benkler)! And it’s here to stay.

The ‘opportunity’ is that potentially good ideas come the way of and are experimented on by motivated individuals or small groups (within or external to the firm) at a far greater pace than the typical (industrial mode of production informed) institutions and organizations can infer the opportunities let alone act on appropriating from them. Further, the socio-business environment is extra-ordinarily (and for some uncomfortably) optimistic. Because of the emergence at this level of granularity, competition is ferocious!

This necessitates a radically enhanced capacity to include complexity in the ‘art of organising’. The source of this complexity is the quest to achieve effectiveness in intellectual activity based transactions - a difficult (i.e. “complexity catastrophe”) and expensive [i.e. dead weight losses like lawyer costs and other market distortions, caused due to the non-rival nature of the primary input and output (i.e. information)] task for older, scaled ‘structures’ to appropriate value from.

This is not a result of the failures of business leaders but a result of their successes, which has facilitated the inclusion of over a billion more people into the global economic system - that they have till now so well ‘commandeered’.

But guess what? ‘War’ is dead! - (Another “success disaster!”)

The shift from martial, command and control, towards the opportunistic, self-organizing of collaborate and coordinate, is not an instance but an inevitable evolutionary trajectory. The sobering message is that innovation is and has always been about the creativity, talent and the resourcefulness of people!