Five Fundamental Change Drivers Over the Next 15 Years

Fifteen years can result in major global change. At the start of the 1990s, China was largely a planned economy, and the Soviet Union still existed. Few people had heard of the Internet and e-mail seemed closer to science fiction than reality. The next 15 years will bring further massive changes to the shape of the world economy, to the landscape of major industries and to the workings of the company. Key trends over the next 15 years can be summed up as follows:

Globalization . It’s too early to talk of Asia ’s century, but there will be a redistribution of economic power. Emerging markets, and China and India in particular, will take a greater slice of the world economy. Non-OECD markets will account for a higher share of revenue growth between now and 2020 than OECD economies. Labor-intensive production processes will continue to shift to lower-cost economies, which will still enjoy a massive wage advantage over developed markets. The pace of globalization will be arguably the critical determinant of the rate of world economic growth.

Demographics . Population shifts will have a significant impact on economies, companies and customers. The favorable demographic profile of the US will help to spur growth; aging populations in Europe will inhibit it. Industries will target more products and services at aging populations, from investment advice to low-cost, functional cars. Workforces in more mature markets will become older and more female.

Atomization . Globalization and networking technologies will enable firms to use the world as their supply base for talent and materials. Processes, firms, customers and supply chains will fragment as companies expand overseas, as work flows to where it is best done and as information digitizes. As a result, effective collaboration will become more important. The boundaries between different functions, organizations and even industries will blur. Data formats and technologies will standardize.

Personalization . Price and quality will matter as much as ever, but customers in developed and developing markets will place more emphasis on personalization. Products and services will be customizable, leading firms to design products in a modular fashion and, in the case of manufacturers, assemble them in response to specific customer orders. Customers and suppliers will be treated in different ways, depending on their personal preferences and their importance to the business.

Knowledge management . Running an efficient organization is no easy task but it is unlikely on its own to offer lasting competitive advantage. Products are too easily commoditized; automation of simple processes is increasingly widespread. Instead, the focus of management attention will be on the areas of the business, from innovation to customer service, where personal chemistry or creative insight matter more than rules and processes. Improving the productivity of knowledge workers through technology, training and organizational change will be the major boardroom challenge of the next 15 years.

Power Centric vs. Network Centric Institutions : Schools, the Workplace & the Revolution

Organizations are evolving from a power centric linear relationship wherein those with means and access direct the production of those without, to a network centric exchange that encompasses shared risks and rewards among participants. The access to technology and communication at very low costs is a primary driver of this shift. Many of our institutions fail to adopt the new methodology because they were founded in the power centric mode. Shifting to the new paradigm would essentially remove power from those who in the past benefited from the power centric base. This is the central reason behind our major institutions present failings and ultimate demise. Two institutions that are common to most people’s experiences in “Western” society are schools and the workplace. Few better examples exists of institutions that are failing because their mode of operation has not departed from past and ineffective practices. However, successful groups and associations who adopt the network centric approach have emerged.

Our learning institutions, among others, are for the most part steeped in past tensed power centric and linear designs. These broken systems do not allow our children to learn using the new tools of the revolution. Ironically chalk boards, text books and bells signaling the industrial revolutions methods of work process, are very much the norm. Ivan Illych, whose ideas have gained widespread acceptance beyond fierce libertarians, opines on “schooling,” “deschooling” and democracy, eloquently addresses the point about what old method schools truly represent :

“The pupil is thereby “schooled” to confuse teaching with learning, grade advancement with education, a diploma with competence, and fluency with the ability to say something new. His imagination is “schooled” to accept service in place of value. Medical treatment is mistaken for health care, social work for the improvement of community life, police protection for safety, military poise for national security, the rat race for productive work. Health, learning, dignity, independence, and creative endeavor are defined as little more than the performance of the institutions which claim to serve these ends, and their improvement is made to depend on allocating more resources to the management of hospitals, schools, and other agencies in question.”

In new age learning institutions, democratic school s , students choose what they want to study, when they want to study it and how (see http://www.sudval.org). The structure of the school exists to facilitate the child’s choices and support them; using the tools of the knowledge age. Self-directed learning, based on utilization of the latest technologies, and equal say in governance, regardless of age, or position of authority is at the core of the philosophy. The institution is establishing a true network reflective of the manner in which the revolution will evolve both in our society and in our lives.

Similarly, the traditional workplace remains wrought with challenges. Some companies are beginning to understand the implications of the revolution on its people. Semco is a Brazilian company that was floundering 25 years ago with annual sales of $4 million U.S. Through his revolutionary approach; using methods where employees choose their own days of work, and set their own salaries. Semco now enjoys annual sales of $212 million and is growing at a rate of 20 to 30 percent a year.

Semler, who taught at MIT and Harvard Business School said: “If you wake up in a bad mood on Monday morning, you don’t have to come to work. We don’t even want you to come because you simply don’t feel like it and will therefore not make a contribution. We want employees who are ready and willing to work. If that means they only come twice a week, that’s okay. It’s about results.”

Shared risks and shared rewards; the basis of the new productive paradigm of network relationships. Failing to adopt networked approaches will result in failed organizational efforts.

Intellectual Property - The Global Battle Between Old and New

There is a sea of change occurring with respect to intellectual property rights as reflected in continued modifications of international and domestic law. These changes result from an attempt to reconcile the methods and manner of doing business in a new digital age; the “Business Revolution”. In many respects, the essence behind the legal evolutions, as more fully described herein, is a battle between intellectual property owners of the past, involving outmoded paradigms, and the new “Business Revolution”  players. On this stage, the complexity of the matter and the attempts to manipulate the law, represent one of many struggles pitting the old against the new. As with the prior historical economic and social shifts, the agrarian to the industrial, and the industrial to the information age, the struggle is over before it started. While there will be pauses along the way, as those vested in the past attempt to impede the advance of a new order, the past paradigms will fade as a result of unstoppable economic and global change. Nevertheless, the topic and the associated dynamics are worth thoughtful exploration and illustrate the motivation and dynamics behind the evolution of this important topic; a cornerstone to the new order of creation, ownership and knowledge.

"One of the biggest mistakes one can make when considering the globalization of intellectual property law is to assume away the increasingly contentious politics of the phenomenon. This is not to say that the emerging politics of international intellectual property law are simple, easy to understand, or unchanging - quite the contrary is true. However, we should resist the understandable tendency to reach for a quick, technocratic set of Procrustean tools that assume away the 'messiness of the world' and make it seem that concepts such as 'sovereignty' and 'property' should be, are, or always have been, particularly stable constructs" (Aoki, 1998b).

Analyzing the globalization of information and its impact on international and domestic intellectual property rights and legal regimes is a complex undertaking. A good starting point is to define the components of the issue: i) globalization, ii) information, and iii) intellectual property. A review of available literature shows this to be complex: Numerous academics and legal experts bring varying ideologies and different views on these components.

Some view globalization as a means toward strong national and international economies; others think globalization represents the increasing influence of developed nations and multinational entities. A major challenge in assessing globalization is the impact on the sovereignty of nation states. How can the independence of nations be navigated in light of an ever evolving and interrelated world? Globalization, at its core, is really the undoing of old paradigms in a new world driven by a more empowered citizenry that will ultimately render the political structures of the past irrelevant. In fact, this recap of relevant intellectual property rules and controls confirm this point.

With respect to information, a common view is that the Internet and the digital environment promote productivity by freeing information; others object that information is being commoditized as a result of its digital form and the ease of its flow across sovereign borders. Many view intellectual property rights as a natural aspect of individual creative products; others believe intellectual property rights have developed into a tool to serve the large economic and monopolistic interests of information-rich states; many others view them as an irrelevant concept having no meaning in a new digital age.

Regardless of philosophical tenants, the topic of international intellectual property law is complex. The matter includes numerous domestic legal systems, regional and international regimes and multilateral and bilateral treaties and agreements. As international or regional treaties or agreements are adopted, responsive or agreed changes to domestic law take place. Such domestic changes further drive changes to international or regional systems and, in turn, to domestic laws of other nations, as nations attempt to keep pace with each other. It is a complicated web, but one that was and is being created by existing structures designed to serve past constructs being used to address a new order. Hence the battle that ensues.

Assuming a satisfactory understanding of the central components of the issue, further complexity is encountered in an analysis of the issue itself. Assessment of the implications of globalization and digitalization of information on intellectual property systems is also a value-laden exercise, partly driven by ideology. Some cite the promise, economically, of new international or multilateral intellectual property agreements and philosophies prompted by a global and digital era. Others see, among the consequence of globalization and digitalization of information, the offer of reward only to certain players, namely developed nations and multinational corporations, and/or the information-rich

Globalization is being accompanied by more intellectual property protection, internationally and on many domestic fronts. In his review of Boyle's book, Shamans, Software and Spleens: Law and the Construction of the Information Society, Leith (1997) cites, increasing intellectual property rights and the increasing power associated therewith: "It seems to be difficult to push back the hegemony of increasing intellectual property rights. Everyone is currently claiming “a slice of the pie” and legal minds are setting out ways that more slices can be taken from a bigger pie." Leith suggests more is coming within the reach of intellectual property laws "because people have stopped asking what intellectual property is for and whether it is doing any good."

Considering international intellectual property law changes from the U.S. perspective, Crews (1998) sums up the changes, "The economic pressures and the growing international significance of copyright have led to new law. That new law is overwhelmingly in furtherance of expanding protection, easier protection, and longer protection. Moral rights, database protection, technological controls, extended copyrights, eliminated formalities, and even restored copyrights that were long in the public domain are symptoms of a legal regime of extraordinary and rapid growth." The reason for the growth is the obvious growth of the “Business Revolution”. The rate of change is being driven by players who own intellectual property assets more valuable in the past paradigm. Time is running out and these players know it.

Crews notes that the proponents of this expansion of intellectual property protection in the U.S., is similar with changes made in Europe, and cites domestic economic justifications:

"…the extended term of protection may generate twenty more years of commercial revenue for many economically viable works. Much of that revenue may come from foreign countries where many novels, motion pictures, and other U.S. works from the early twentieth century continue to find a market. The economic argument translates not only into greater revenues for U.S. copyright holders, but also into the subsequent tax revenues, employment prospects, and shareholder profits that accompany expanded business. Moreover, if those revenues are derived from foreign markets, the strengthened protection and longer term of protection for copyrights may also help shift the balance of international trade in favor of the United States."

In other words, the old players are looking to hold onto and maximize the value of their property before it becomes invaluable as the result of the “Business Revolution” and the new order of conducting business that is replete with new open, shared and collaborative methods of adopting and creating. These methods will rock the present approach to and contemplation of the very nature of what intellectual property is.

In comparison to domestic, pragmatic and economic arguments, Crews views strengthened intellectual property rights which do not include a corresponding balance of the public interest. Recognizing that copyright law was intended to achieve a balance between preserving a public domain or commons of ideas and providing incentive for creative under takings, he suggests public domain is neglected in the trend toward the maximizing approach to intellectual property rights. Increased protection of necessity, for example, is accompanied by limitations on the scope of the public domain and a reduction in affordable resources available for new creators, whether individuals or business entities. Crews points to limitations on the application of the U.S. fair use doctrine as a consequence of a focus on greater intellectual property protection. Other consequences he suggests are potential limitations on technological advancement resulting from restrictions on use, and loss of learning opportunities resulting from restrictions on dissemination or public performance of works.

There are different ways of understanding the issue of the implications of globalization of information on intellectual property laws, and these derive from different ways of understanding the basic concepts. The writings of recent years are packed with discussion of globalization and the growth of digital information, and the influence these developments are having on domestic and international intellectual property regimes.

A clear effect of globalization of information is a trend toward a standardization of intellectual property laws, in order to provide greater protections. While this trend appears to relate to positive economic outcomes, the prose of recent years suggests that these effects may be positive primarily for intellectual property producing nations and transnational corporations. It may also be diminishing the sovereignty of states in favor of the strength and power of private entities. It is possible that the prevalence of such writings in the literature is a response to the movement toward harmonization and stronger intellectual property protections - an attempt to ensure some of the less heard voices are expressed. In the end, the pressures that result from the sea of change and the irrelevance of past constructs will render the attempts to protect and control intellectual property for the benefit of a few ineffective.

The Global City, Cultural Assimilation and Sassen

Travel to any major international city and you will see an increasing commonality. The world is truly becoming global. Cultures are assimilating and evidence of tremedous change is becoming more obvious each day. This is but an initial phase of a rapidly expanding process whereby our globe is becoming one world without borders and one culture without limits.

Saskia Sassen, the noted Ralph Lewis Professor of Sociology at the University of Chicago, and Centennial Visiting Professor of Political Economy in the Department of Sociology at the London School of Economics, has written extensively on globalization and international human migration ( http://en.wikipedia.org/wiki/Saskia_Sassen ). In her paper, Global City: The Strategic Site/New Frontier, Sassen makes a number of important observations that relate to Globalization. One of her most notable is the definition of “Global Cities”. It is in this writing that Sassen defines the cities of the business and global revolution and why place and centrality are still a necessity to its end. Sassen also reflects on the dichotomy that is represented by these global cities, centers for the elite who benefit from readily available global capital while relying on the necessary services and inexpensive undervalued labor resources constituted by an underclass that migrates reterritorializes and assimilates. While her precepts are undeniable and intriguing, Sassen in later research will likely address and embrace both the necessity of the conditions she describes and the idea that place and centrality represents organizations clinging to old methods that ultimately will secede from the practice of the adoption of the new paradigm. As with past historical shifts in economics and society, we do not reach the idyllic without a transformation that entails some pain and therefore while describing the present state of the world becoming global, we should keep in mind the opportunity this future represents.

Sassen opines that globalization requires centers or places, leading into her definition of global cities, “A focus on practices draws the categories of place and production process into the analysis of economic globalization. These are two categories easily overlooked in accounts centered on the hyper mobility of capital and the power of transnationals. Developing categories such as place and production process does not negate the centrality of hyper mobility and power. Rather, it foregrounds the fact that many of the resources necessary for global economic activities are not hyper mobile and are, indeed, deeply embedded in place, notably places such as global cities and export processing zones.”

Sassen defines global cities as, “new geographies of centrality at the global level that binds the major international financial and business centers: New York, London, Tokyo, Paris, Frankfurt, Zurich, Amsterdam, Los Angeles, Sydney, Hong Kong, among others. But this geography now also includes cities such as Bangkok, Taipei, Sao Paulo and Mexico City (Sassen 2000b)”.

Of great interest is Sassen’s reference to the commonality of numerous aspects of the new geographies cultures. She refers to reterritorialized; “The large western city of today concentrates diversity. Its spaces are inscribed with the dominant corporate culture but also with a multiplicity of other cultures and identities. The slippage is evident: the dominant culture can encompass only part of the city. While corporate power inscribes these cultures and identities with ‘otherness’ thereby devaluing them, they are present everywhere. For instance, through immigration a proliferation of originally highly localized cultures now have become presences in many large cities, cities whose elites think of themselves as cosmopolitan, that is transcending any locality. An immense array of cultures from around the world, each rooted in a particular country or village, now are reterritorialized in a few single places, places such as New York, Los Angeles, Paris, London, and most recently Tokyo.” Here Sassen expresses the essence of a new global world in the global city. The assimilation of cultures is occurring each day as the result of the business revolution. However, ultimately this assimilation and the forms that they are taking at present will not be limited by space. They will each every place and touch every facet of each community on the planet.

Sassen further addresses the issue of assimilation of cultures as a result of globalization when she writes, “Immigration and ethnicity are too often constituted as ‘otherness’. Understanding them as a set of processes whereby global elements are localized, international labor markets are constituted, and cultures from all over the world are deterritorialized, puts them right there at the centre of the stage along with the internationalization of capital as a fundamental aspect of globalization today.”

The shift in population and cultural assimilations, according to Sassen, will not likely be met with resistance that will end the process; “The linkage of people to territory as constituted in global cities is far less likely to be intermediated by the national state or ‘national culture’. We are seeing a loosening of identities from what have been traditional sources of identity, such as the nation or the village (Yaeger 1996). This unmooring in the process of identity formation engenders new notions of community of membership and of entitlement.”