Homo economicus mortus est? (Who needs economists?)
by Eric Garland
Does anybody need economists?
This is the subject of a fascinating polemic raised by our colleague Gregor MacDonald. He notes, in an incredible understatement, “economists don’t ‘do’ energy.” They are content to set Keynes and Hayek in a never-ending cage match over monetarism versus free markets, while petroleum dwindles, Boomers retire, technology flattens work hierarchies – while real things are actually happening.
Some of the debate is set off by the paper embedded below by a Federal Reserve Bank economist. As the title indicates, he doesn’t think much of the input of non-specialists. We then have a similar question for his profession – how is it that we all participate in economic activity, and only you feel qualified to comment on it? And while we’re on the subject, why didn’t you predict an absurdly obvious bubble and subsequent crash?
Some things are too difficult for the laity to understand. Most of the hard sciences are really impossible to comprehend to outsiders, and news reports on their breakthroughs are often comically misunderstood. But is economics a hard science? Isn’t it a social science based around people trading things? Can we discuss our economy without the need for technocrats of this sort?
Gregor Macdonald on the future of energy, economics, and society
by Eric Garland
For those of you who know Gregor MacDonald, you know you’re in for a treat with this podcast- a full hour of some of Gregor’s latest forecasts on energy, economics and society, insights you simply won’t get anywhere else.
For those of you who haven’t discovered Gregor yet, he is one of the top energy analysts in the world, and in our minds, one of the top analysts of anything, period.
This podcast covers sweeping ground:
- Why we’re at peak automobiles
- The end of cheap oil
- Coal’s role in the development of the world economy
- The return to human capital and small towns
- Why waterways are the future
- Our current period of “late phase economic decadence
- Why PAKISTAN holds the key to the Copenhagen Protocol
Crazier still, we could have spend ANOTHER hour talking to him and still not exhausted him of insight.
Enjoy.
Post-modern management: Partnership more important than leadership in 2010
by Eric Garland
Professor Karl Moore from McGill, who did that interview with Michael Porter the other day on the future of business’ role in society, is back with a TED talk he gave on the future of post-modern management. He notes that as the internet creates a system of “algorithmic authority” and tears down the rigidity of authority, “leadership” and “management” will have less impact on team-building than partnership, especially for those under age thirty-five.
Given the role of larger and larger bureaucracies in many key industries, this reality will be quite disruptive.
Michael Porter: Business must recognize its interconnected role in society
This is a timely and very mature view on the changing role of business in society. Michael Porter, still the world’s leading authority on traditional business strategy, leaps out and asks some fascinating questions of private industry as a whole: does it realize the difference between its narrow self-interest and the broader society to which it is indelibly interconnected?
I particularly like how he distinguishes between multiple levels of not understanding social interconnection and responsibility. One end of the spectrum, you have the Madoffs and “banksters” of the world, pathologically removing value from society and giving absolutely nothing back. Toward the grey zone, you have businesses who may profit while destroying the social and economic fabric of the places around them, throwing on some charitable giving as a band-aid.
This talk is an important signal to private industry. Clearly, the lack of connection between business and society is so great that you not only have the occasional death threat on banking executives for taking bonuses straight from the US federal treasury, you have well-paid, world-famous consultants actually asking the question, “So why do we even have business, anyway?” Seriously, Michael Porter isn’t exactly a Trotskyite radical.
This isn’t connectivity for the sake of feeling good, it is a methodology that will lead you to provide value to your customers and withstand the forces of competition. Superconnection is the future.
Managing by a constant state of emergency
A thought drifts through my head as I consider the Dubai debacle and the high-traffic/low-sales results from the semi-sinisterly named Black Friday retail festival:
Seriously, wasn’t that just a few months ago that everything was green, since the price of oil was driven so high by speculation?
Then September of 2008 arrived and suddenly things were about ethical business. After all, it was that nasty greed that ruined everything – and a lack of transparency! That’s it, now all business needs to be ethical and transparent…and green, too, of course!
Yet today, we’re thinking about just how many world banks were up to their knees in can’t-miss Dubai real estate projects and hoping that the world’s currencies don’t catch fire.
This is why leadership needs to be about long-term structural trends. The media can’t hype up the Boomer retirement, it can’t negotiate with the oil present in Brazil, nor deny that most of the world’s young people live in Latin America, Africa, and Central Asia. When we build our plans around real trends rather than hype, we don’t have to re-write our strategies every few months. Real leaders will find that comforting.
The revolution of algorithmic authority
by Eric Garland
Clay Shirky recently began exploring a significantly important idea in Intelligence 2.0, that of algorithmic authority, a new form of trust that befits the complex informational environment of the 21st century. For those of us who assemble large amounts of data for decision makers, authority is critical, and it is under major stress due to the Internet. Until recently, you could help leaders make the most informed decisions by assembling the most authoritative sources, interpret the implications of that data, and go forth understanding several potential courses of action. Today, we must also add a new dimension – evaluating the validity of the information as the barriers to entry fall in the world of printing and distribution. Shirky’s theory helps us in this regard:
Algorithmic authority is the decision to regard as authoritative an unmanaged process of extracting value from diverse, untrustworthy sources, without any human standing beside the result saying “Trust this because you trust me.” This model of authority differs from personal or institutional authority, and has, I think, three critical characteristics.
First, it takes in material from multiple sources, which sources themselves are not universally vetted for their trustworthiness, and it combines those sources in a way that doesn’t rely on any human manager to sign off on the results before they are published. This is how Google’s PageRank algorithm works, it’s how Twitscoop’s zeitgeist measurement works, it’s how Wikipedia’s post hoc peer review works. At this point, its just an information tool.
Second, it produces good results, and as a consequence people come to trust it. At this point, it’s become a valuable information tool, but not yet anything more.
The third characteristic is when people become aware not just of their own trust but of the trust of others: “I use Wikipedia all the time, and other members of my group do as well.” Once everyone in the group has this realization, checking Wikipedia is tantamount to answering the kinds of questions Wikipedia purports to answer, for that group. This is the transition to algorithmic authority.
Arik Johnson on the organizations of the future
by Eric Garland
The most important implications of any strategic trend is usually not that your organization must do something drastic, it is that your organization is obsolete and can’t respond effectively at all.
Case in point: newspapers and the Internet. It’s not so much that newspapers could have done something to maintain their business model of classified advertising, it’s that they need a brand new business model and structure to survive. If that is the major implication of the trends we track as strategic analysts, then we almost must develop skills to help organizations change quickly and painlessly.
On that note, check out this talk from Aurora WDC’s Arik Johnson on the future of organizations, recorded at last month’s Intelligence Collaborative meeting in Washington.
Nokia on our digital lives in 2015
by Eric Garland
Nokia is the poster child for futures thinking at the corporate level. They pulled off the amazing feat of transitioning their company from logging supplies, rubber boots and toilet paper over to cell phones, spurred by the transformative event of the bankruptcy of the Soviet Union. (How did they pull this off? I detail it in my book “Future Inc.”)
Finland in general, due to their somewhat obscure position in Europe and the humility of being regularly invaded by Swedes and Russians alike for centuries, has become REALLY good at foresight. Thus, it’s no surprise to see Nokia’s vision for our digital lives in 2015 laid out in beautiful graphical scenarios as in the video below.
An introduction to the Intelligence Collaborative
by Eric Garland
I’m very excited for our upcoming inaugural meeting, this Thursday of our new, increasingly global, professional society, The Intelligence Collaborative.
The following video explains what intelligence is, why we need to collaborate, and why now is the perfect moment.
Have a look at the video, and if you’re anywhere in the MidAtlantic region, consider a trip to our nation’s capital this Thursday. Tickets are free – just bring your interest in how social media will change the practice of intelligence.
Interview with Arik Johnson on the future of competitive intelligence
by Eric Garland
It is more than enough work thinking about how the world is changing. Exceedingly few people think about how people think 
about the changing world. I’m proud to say I know some great folks who are on the cutting edge of understanding intelligence and decision making. Here, we’ve got a copy of the latest Competitive Intelligence Podcast, the brainchild of August Jackson. This time, he’s interviewing our friend and colleague Arik Johnson of the intelligence consulting firm Aurora WDC, on his view of the present and future of intelligence and its effect on leadership. The interview is broad ranging
- A new paradigm of intelligence: scarcity of analysis instead of scarcity of information
- The “perpetual beta” mindset, one of rapidly-changing technology and reduced barriers to entry
- The next decade of competitive intelligence: CI 2020
- CI’s evolving role as a mechanism and process to correct for cognitive bias
- The importance of a customer-centric model in delivering intelligence
It’s a great year to revisit our assumptions on how decisions are made. This is a great discussion to get you kicked off.
About Eric Garland
Eric is one of the world's pre-eminent thoughtleaders in forecasting and strategy. He helps leaders of business and government make critical decisions about their futures.About Dan Vecchi
Dan Vecchi is the director of economic risk analysis for Competitive Futures. He helps leaders examine their investments in countries around the world, exploring future options and ensuring profitability in the years to come. He speaks natively fluent English, Spanish, Italian and works regularly in South America as well as Europe.New project: Manufacturing 2020!
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