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Last week I met with Caroline Hummels, director of the department of Industrial Design of the Technical University of Eindhoven. She gave me a copy of her inaugural lecture “Matter of Transformation, sculpting a valuable tomorrow” in which she refers to the transformative global development of economies. She had used the views of Brand and Rocchi, two senior management directors of Philips, who describe an organic move from industrial to transformative economies.
This linear transformation of economies would be motivated by various global issues. The industrial era has globalized and standardized massive manufacturing and logistical processes, creating a uniformity across the world of retail and consumption. It has been a strong growth arena for financial and business dinosaurs. Dinosaurs, not because of their long forgotten era but their oversized dimensions that will become extinct at the first hiccups in the global economies. In my own model of human complexities I refer to this as the area of “greed”. In the “secretes of life” it is the area of natural unlimited growth.
Growth is only unlimited until it meets competition. Global competition then started to place the focus on the consumer through marketing and positioning issues. Rather than massively producing products the turnaround was that they had to fulfill a need too, connecting to emotional values of a target group. The customers became important and sales got more complex than mere distribution. In my own model I refer here to chaos through competition where Darwin’s rules of the strongest, fastest, most aggressive, etc prosper.
The third phase is that competition hardly produces profitable scenarios anymore. Value has been eliminate through all kinds of techniques while focus had been placed on volume sales and growth. This is never unlimited so a new impulse was needed. Brand and Rocchi call this the “knowledge economy” which in fact we see occurring everywhere now. When competition does not work anymore one needs to become smart and adaptive. Smart means that one needs to seek for ways to be different. In my own model I refer to this as the phase of adjustment. It calls for inner reflection that reaches out to rational but also emotional awareness and applied wit. Business become greener (emotional awareness though applied ethics) and use design and local content (rational awareness though applied intelligence) to distinguish themselves. Local gets into the picture again as opposed the long period of globalization. Terms like glocalization, or my own Local 4 Local 4 Global, appear.
So far so good. In all these three natural steps of the evolution of economies we see one commonality. They all develop in a transactional world. The amount and quality of the transactions determine the success of the company and economy. On each transaction tax is raised on which the governments depend for financing their local issues around structuring infrastructures for maximization of transactions. Even though industries have been drawn (forced by public awareness and government regulations) to ethical values such as global warming, pollution, safeguarding natural resources, etc it are still the transactions that rule the game and give rise to manipulation, foul play and criminal practice.
The next step is that the transactional structure of the world economies break up and make way for the transformation economy. This economy is not transactional but based on the acceptance of key responsibilities. The increase of complex local issues of human drama, health problems, climate change, water and food shortages, natural and unnatural disasters with the related societal transformations, call for local attention and applied intelligence. All the technological and scientific knowledge is needed to create local ecological and social harmony when the risk of public unrest or disaster becomes big. I called this the era of search for harmony in carrying joint responsibilities through ethical values of responsibility. The motivation may well be less romantic in the cold calculating worlds of business and politics as they also agree that people without work, without perspective or health are poor consumers and unreliable voters. The institutional self preservation calls for taking responsibility even is this has been contrary to their original nature of institutional self interest.
Global issues need to be addressed locally developing local solutions through applied innovations that can find their way into the world as local dramas and needs elsewhere call out for them. This world is then not just transactional anymore. It is a world where ethical values call for responsibility, cooperation and solving existentialist issues locally first. Solutions that no one has created before and cannot be created by any of the fragmented specializations.
This type of economy is inherently different because it has no transactions to address or taxincome but a common purpose to deal with using the available specializations and authorities. You can’t buy a healthy or safe city, you have to co-create it. It is an investment in awareness, wit, vision on sustainable progress, innovation and togetherness.
When local solutions have been found then they can be globalized through the common practice of growth. Local for local adjustments may be required but the inspiration has been delivered as well as the way to address the commonality of the issues which has a global nature applied locally.
We are in the starting phase of the transformation from a transactional world to a transformative one where both are forced to coincide. The word “transformation” may then lead to confusion because the purpose that is being dealt with demands local transformative solutions that transform the local community itself not just products. But to make it happen also the economy itself needs to transform from transactional to collaborative. This affects the way local government, taxes, legal formats, etc work. It is hence much more complex than the previous fractional transitions and natural selections of companies that adjusted better or faster to the new era intelligently using instruments of growth, competition and adjustment. Now they are called to work together in a new format with new rules and manners. They do not interact anymore through the transfer of products, services, taxes, subsidies, policies. They need to interact together around a local purpose in a multidisciplinary way.
That is why I refer to the new type of this collaborative local for local for global society as a “Sustainocracy”. It allows participants to distinguish between the various simultaneous transformations, the societal, economical and the functional that they need to deal with. For a long time, maybe even for ever, the transactional and collaborative structures with co-exist. All participants need to get used to these worlds and the fascinating relationship between them that will cause yet another shake out among organizations and the appearance of new ones. The entire functioning of a society will transform including the way its economies work. A totally new field of organizational intelligence appears that introduces a totally new era referred to as the global shift, a mayor break through in human progress.
In Eindhoven we experiment with Sustainocracy in AiREAS (air pollution and human health) and other purpose driven cooperative ventures. I of course invited Caroline, her students and the University to participate. For them it will be challenging because not only products, industrial designs and infrastructures will transform with their insights. Also society, all institutions and the way labor is organized will undergo changes. Educating students that develop a transformative attitude through self reflection, awareness and professional specializations of change, will demand for other types of labor relationships than currently available in hierarchical structures of volume driven dinosaurs. These youngsters will be the new leaders of change in the setting of sustainocratic ventures that will spread across the world following the global issues for local solutions.