Personal Blog of Joe Brewer

Open Collaboration – The Next Economic Paradigm

In Collaboration, Economic Patterns, Wisdom of Crowds on April 28, 2011 at 10:25 pm

I’ve dedicated a lot of research over the last few years to understanding the deep trends that will define the next economy.  As I’ve written elsewhere, the global economy goes through a creative-destructive cycle every 50 years.  And now we’re in the midst of a collapsing paradigm that is soon to be replaced by something new.

In this article, I will explain what the new paradigm is and how it will impact every sector of society — including business, government, education, and basic research.  The old economic paradigm was a service economy built on the digital communications revolution that began in the early 1970’s.  It is winding down now as financial capital has decoupled from productive capital and the global speculative bubble has burst.  The financial meltdown of 2008 had many causes, but its most important result is that our major societal institutions have stalled out and the funding models that drove the whole system no longer work properly.

This systemic shutdown requires a new paradigm for economic production, one that has been incubating in the minds of lead innovators for several years now and is just beginning to get recognized as the next model for the burgeoning new economy.

The new model is the Open Collaboration Paradigm.  It goes by names like open source, crowdsourcing, open system design, collaborative production, open manufacturing, and open government.

This graphic provides a schematic representation to show how deeply the shift will go:

 

In a global economy based on open collaboration, we will see a radical departure from old institutional models.  Value will not be measured in pure monetary terms as social capital is increasingly recognized for the vital role it plays in generating wealth for society.  The ability to see and connect with people, resources, and institutional supports (also known as “social currency”) will shape where innovations occur and who benefits from the adoption of new technologies and ideas.

This will be a profoundly social economy, built on unprecedented capabilities to self-organize people and resources in the crowd.  Social media will connect ideas, people, and institutions across porous boundaries that blur the inside/outside distinctions of yesterday’s companies and government agencies.  Network connections will be the distribution channels across market sectors and radical transparency will be the new norm.

Another profound shift will occur in the realm of ownership.  No longer will it be a viable investment strategy to horde intellectual property.  Rapid innovation will happen in the crowd, outpacing the dense pools of talent in corporate research labs.  Collaborative consumption will arise as a more robust business paradigm, where risk is distributed across a sea of users to preserve high-quality and vital services that individuals will not have to bear on their own.

The implications for business will be clear.  Those who can leverage the wisdom of crowds for market research, product development, and efficient resource allocation will be more adept and agile in the face of rapid change.  Those who build walls around themselves will fail to tap into the flow of knowledge and resources running rampant in the crowd.

Similarly, governments will have to become more transparent and responsive to their citizens, especially as changing circumstances and environmental threats demand that citizens participate in the creative process for urban design, policy-making, and community development.  Alternative reality games (also known as “serious games”) will be utilized by municipalities to gather information and guidance from citizens with smart phones and portable computers.  We will increasingly see traffic data, public health statistics, road conditions, and more gathered by citizens in near-to-real time as information becomes more immersive and dynamic.

Research has already begun to use open collaboration that goes beyond the halls of academia.  NASA scientists have employed idle computing cycles to mine huge amounts of astronomical data in the search for extraterrestrial life for more than a decade.  And researchers studying bird migration patterns depend on amateur scouts to cover the terrain with watchful eyes.  Increasingly this collaborative approach to research will become the norm, as lay people attain higher levels of under-utilized knowledge in areas outside of their work and are able to shape research projects through their informal activities.

The era of “user generated content” and “prosumption” — where consumers of goods and services co-create what they will consume — is now a decade along in its evolution.  We will increasingly see collaborative design and production of consumables across society.

In the education arena, we will see more curricula as shareware and an increased emphasis on multi-perspective teamwork as the necessary skills for engaging in collaborative projects.  Expert/amateur boundaries have already blurred to the point where individuals can acquire graduate-level knowledge through self-directed learning on the internet.  (I often joke that I received an informal PH.D. from Joe University for all my advanced knowledge.)  The notion of distance learning will become quaint as in-person and virtual learning weave seamlessly together in open collaborative research endeavors.  Lifetime learning will be a necessity for adapting to turbulent changes in the workplace.  And active pedagogy — learning by doing with real-world applications — will become the standard teaching model, itself an incarnation of open collaborative design.

So get ready for the new economic paradigm.  It is going to be profoundly disruptive to the status quo and will increasingly dominate market economies around the world.  I have studied these trends for several years now and mastered the skills necessary to engage crowds in open collaborative design.  This was my modus operandi through two successful crowdfunding campaigns (a Progressive Strategy Handbook and a Crowdfunding Manual for Social Movements) and the groundbreaking activities facilitated through my leadership with Seattle Innovators in late 2009 and 2010.

Please let me know if you’d like help opening up your design/production process with principles of collaborative design.  I look forward to assisting you in the birth of new waves of market creation in the years to come.

  1. This is the beauty of predicting the future, once it happens not many people go back to these predictions and see if they were accurate. I share some of your thoughts in regards that a paradigm change is necessary, but not imminent. All these changes you are mentioning are accelerating mostly in the western hemisphere, but the east which represents 3/5th of the world populations are light years away from this open collaboration idea. They are just starting to taste the sweetness of capitalism, and are driven by simple desire to own things that for us are a given (a car, a house, electricity, a tv, a computer, a blender, a washing machine, etc.) so their economies of scale will follow the current paradigm for quite some time.

    I really hope that your vision does come true, but to me it’s a bit too utopian, I hope I’m 100% wrong.

    Great post!
    Cheers
    Carlos

    • Hi Carlos,

      Just to clarify, economic paradigms do not occur simultaneously in all parts of the global economy. Nor do the ever have equal distribution of salience in every geographic region. What I am describing is the primary mode of production for the burgeoning economic order, which will in all likelihood be more developed in the West (where institutions are well established to adapt to it) and will have an unequal power distribution that perpetuates existing North-South and East-West inequities.

      In Carlota Perez’ book Technological Revolutions and Financial Capital, the case is made that each economic paradigm arises with these nuanced complexities. I wouldn’t presume anything else to be the case.

      And for the record, I am not being Utopian. This is a common straw man argument for dismissing the new paradigm as it arises. There will be plenty of inequalities, injustices, and systemic harms in an Open Collaboration Paradigm. This is typical for capitalist market systems and will continue for all global economic systems so far envisioned and built by human beings.

      Best,

      Joe

  2. Hello Joe, Greetings from India, the land of pluralistic open collaboration that makes it the leading democracy on the Globe with diversity and inequalities co existing with the tradition and modernity of a compelling future. Your article makes immense sense for people from all walks and disciplines of life to build their socieites and nations for a sustainable future using the New Economic Paradigm. Would love to keep myself connected and participate in your search to refine and popularise your Models.

    • Hello Vasudevan,

      I resonate very well with your description of the immense pluralism that is commonplace in India. I visited several cities in Northern India a few years ago and was quite impressed by the cultural diversity that persists throughout the land.

      Please do keep in touch. I would love to see greater collaboration across the globe arise as the new economic paradigm takes hold.

      Best,

      Joe

  3. [...] Chaotic Ripple.  I have researched the deep trends in our global economy to reveal the emerging Open Collaboration Paradigm for economic production.  And I have facilitated two successful crowdfunding campaigns to identify [...]

  4. joe,
    I greatly enjoyed and admired your post and I entirely agree that we are in a major transition. However I am not so convinced it is a non-capitalist [ I recognise you may not intend this meaning] dynamic that is playing on the horizon. I see you describing a growing socialisation that integrates us all as producers of data and as consumers with shared consciousness. These are truly powerful innovations that will alter the structure and dynamics of wealth creation and distribution. Is this not in your view the next phase or even a final phase of the universalisation of capitalism, a phase that sees all people integrated geographically and the totality of our individual lives integrated into the capitlaist dynamic. I wondered if you had thoughts around this question of the end of capitalism or simply the end of this phase of capitalism. Is it not more likely that Vasudevan’s observations highlight that the new BRIC economic engine will seed a new capitalism based on a more integrated world as their success will be shaped by their relations with the ‘old world’ as much as by their own productive resources. I do not share the view that they have many stages to go through but rather they can leap over us into the fully integrated world that we must incrementally crawl towards. Integration and socialisation are the key words for me here.

    • Hi Gerry,

      Excellent comment! My view (as you’ve probably already guessed) is a nuanced one. I see this new paradigm as being another incarnation of capitalism. Some geographic regions will leap frog into the new mode of production through pathways like bypassing land lines and connecting to the web on low-cost smart phones. Others will continue to languish in abject poverty.

      I do see this new stage as being similar to the prior paradigm periods in that economic value will be tightly coupled with production for several decades and then begin to decouple as financial tools use money to create money, resulting in another speculative bubble. That seems to be a dynamic cycle that is a fundamental part of capitalist systems in every variety I’ve seen so far.

      That said, there must be an alteration in the global experiment of market capitalism if we are to adequately address the ecological crisis and stave off global civilization collapse. Earlier this week I met with Bob Bishop, founder of the International Centre for Earth Simulation, and he spoke of the risk multipliers of multiple synchronous collapse (MSC). MSC is the cascade of risk across tightly coupled systems. The example he gave was the earthquake off the coast of Japan creating a tsumani 5 meters higher than the protective walls they had built, flooding areas with buildings made of wooden structures (to protect against earthquakes, not tsunamis), breaching the nuclear energy facilities, causing a meltdown, and spreading radiation poisoning around the world.

      We must re-vision our capitalist systems to acknowledge such systemic threats if we are to survive as a civilization in the coming decade. And this will require some deep thinking about how capitalism will need to be updated. I’ve yet to see sufficient thought given to this problem yet, although a number of futures analysts are well aware of it.

      Best,

      Joe

      • Hi Joe,

        I love the article and it is completely in line with my view on where our society is heading to. I notice a large under stream of collaboration happening all over the world and it is a force the old industries will have to reckon with.

        There are still a lot of people afraid of the idea though (I regularly hear people speak their fear of having other people run off with their ideas when I paint a future like you do here). I do believe it will happen though as I see more and more reports on open collaboration successes (recently even in the medical world). One of the huge advantages I also see is that, when research results are shared, duplicated research by competing organizations are no longer necessary since they can all build on each other’s results and make use of each other’s facilities instead of all needing to invest in the same expensive research facilities. It will propel the speed of discoveries forward since less resources are wasted on doing work that has already been done somewhere else behind closed doors.

        As for the economic model, I think we need to go a couple of steps further in radical change. These ideas are based both on an idea of a political party here in Belgium in the 90’s and on the upcoming complementary currencies all over the world.

        For one, right now we have an economic system that heavily taxes work and makes it hard for people to earn money doing a large amount of small and divers jobs, something that will also emerge form an open collaborative system. On the other hand consumption of goods is taxed very low and even creates the paradoxical situation (real situation here in Belgium) where the cost of recovering perfectly good roof tiles in the process of insulating a roof becomes less expensive than throwing them away and replacing them with new ones because of the cost of the labor. And this is a situation that is recreated over and over again. In a world where reuse and ecological behavior becomes paramount these are situations that should be eliminated. Reuse should be cheaper than wasting perfectly useable resources.

        Therefore, a hard but in my opinion positive change would be to shift all taxes to consumption and eliminate taxes on labor. Apart from promoting reuse there are a couple of other advantages to this, namely that the very rich who also consume a lot will finally pay their taxes. I guess different tax rates need to be installed for products necessary for survival in comparison to pure luxury products. Also, products that are based on recycling should be taxed less than products that are manufactured with resources that need to be extracted from the planet, thereby fueling a more ecological economy.

        This will also eliminate ‘black work’ (labor on which no taxes are paid) since there are no more taxes to be payed. It will also make hiring painters, cleaning personal, … way cheaper.

        Another idea this party had, and something I support, was to give everyone a base income on which you can survive, from birth. Thereby eliminating complex systems for unemployment money, money you get for having children, … It also eliminates the stress on people that they need to struggle to survive through crappy jobs that they don’t like doing. It gives freedom to people to start doing what energizes them, thereby enabling them to add there full potential value to society. It also eliminates scenarios where people who are living from unemployment refuse to start working because they only earn marginally more (real situation in Europe) because everything they do will earn them extra income to provide for an easier life style … or not, their choice.

        Another radical idea is the elimination of interest on money sitting in the bank. Interest creates a natural flow of money from the rich to the poor. If you don’t have any you need to get a loan to buy some things like a house or a car and you have to pay back more than you got. On the other hand, when you have a lot of money you can just put on an account and let it sit and you will end up with more money. Elimination of interest also eliminates money idling at the bank,transactions are encouraged and it’s a boon for the economy. In 1934 an area in Austria even printed money with a negative interest. If you had 100 shilling at the beginning of the month and you still had those shillings at the beginning of the next then those 100 shilling were only worth 99 shilling. Before there were issued there wasn’t money to do anything Through the introduction of this system the economy boomed and roads were repaired, schools were build, … A huge amount of transactions was started. This was I think the first (or one of the first) organized complementary monetary system.

        Now I know these are huge changes and they will not happen overnight. Also, they are very hard or maybe even impossible to implement on a local level (except for complementary money systems which are popping up all over the world). That doesn’t mean it’s impossible though and through spreading the idea and combining it with open collaboration we could start moving to a completely new sort of economy which is more eco friendly and based on added value instead of making a maximum of profit.

        Stef

  5. I like your Macro-economic view point of collaboration in business and society. Have you looked into the Micro view of collaboration in business systems? I’ve been seeing the same “prosumption” within organizations and tactical systems. It can be a huge change just within a very small scale environment.

    Thanks for the article, great food for thought!

    • Hi Kyle,

      As a matter of fact, I’ve been focused at the micro-level for years and am quite familiar with the “prosumption” paradigm shift. Organizational change requires new models for business, community, governance, and more. It is here that the rubber meets the road and the changes actually get implemented.

      Best,

      Joe

  6. [...] argued elsewhere that open collaboration will be a central component of all emerging business sectors and technology [...]

  7. Ref – “And now we’re in the midst of a collapsing paradigm that is soon to be replaced by something new.

    In this article, I will explain what the new paradigm is and how it will impact every sector of society — including business, government, education, and basic research.”

    I think I agree with everything you say. I cannot be certain because in this rapidly changing world (and with people coming together from different backgrounds and frames of reference) it is possible to get the wrong idea of what people are actually trying to convey.

    Certainly the words you use fit the ideas of “how things really are” that I carry around in my head – and it is very freeing to see them written so clearly.

    I’m glad you mention education and basic research as well as economics. (I’ve explained my interest in the relationship between those elsewhere – http://dadamac.posterous.com/response-to-shared-intent-purpose-for-action )

  8. [...] Open Collaboration – The Next Economic Paradigm Via Scoop.it – collaborIn this article, I will explain what the new paradigm is and how it will impact every sector of society — including business, government, education, and basic research Show original [...]

  9. This general topic has interested me for a long time, especially since beginning a relevant project over 2 years ago.

    I agree that human behavior/nature will largely determine the effectiveness of any such systems regardless of their logical potential.

    I also agree that capitalism and profit making will not be made redundant by such systems, (at least not in the foreseeable future); in fact many businesses will use them very effectively.

    However, I do think that open collaborative systems will dramatically increase the viability of alternatives to profit driven organizations. This will hopefully lessen the dominance of corporations. While all of this won’t necessarily bring about wide spread equality it will help. By removing barriers to access and participation people of unfortunate circumstance will have clearer options and better opportunities. Learning and self-development will become more organic and less structured. Following One’s passions and interests online may be all that is required for many to begin a new career path. Rather than competing for a limited number of university course positions, hoping for selection, paying huge sums for the privilege and questioning the relevance and value of the whole experience… People will follow their nose, take small steps instead of big ones, learn more on a need to know basis as they work, as they explore and as they develop. The current educational model of pre-learning everything, separates learning from work. Not only is this out of character with how humans have learned throughout history, of learning by imitation and the master and apprentice. It also faces future challenges because of how fast the latest information changes. It doesn’t make much sense to pre-learn something 4 years in advance of when you hope to apply it because everything could have changed by then.

    I also think the changes we foresee here will facilitate the spread of equality just as the current system gave rise to the vast middle class we have today. Nothing is perfect and we can rely on human nature to produce individuals whose focus is solely of self interest with no regard to the greater good. However, the greater good is potentially acquiring some powerful tools and for many people this may be the tipping point that causes them to believe in the viability and practicality of the greater good rather than thinking of it as nice by unrealistic dream.

    I believe that while nothing is for certain, nothing is impossible.

    So I am generally very optimistic about the future while realizing that things don’t always work out for the best. My only significant concern is regarding the environment. The environment is not something we can negotiate with, intimidate or bribe to buy time. It is what it is and it’s doing what it does. We either live in sync with the environment or we suffer the consequences.

    Alan Whittington.

  10. [...] Open Collaboration – The Next Economic Paradigm In this article, I will explain what the new paradigm is and how it will impact every sector of society — including business, government, education, and basic research (RT @SeattleInnovate: Open Collaboration – The Next Economic Paradigm Source: http://www.chaoticripple.com [...]

  11. Joe- I came to and read your “Open Collaboration” following links to articles about what OWS is about. Unable to fully grasp your meaning until I’ve learned your specialized language, I read on, into these comments, which -tegether with our responses- have helped.

    I was disappointed, though, that you did not reply to Stef Kuypers. May I acknowledge just one of his important contributions to this discussion, the idea of acknowledging and institutionalizing some provision for every human’s birthright/entitlement to the economic means necessary to go on living?

    My own perspective is that of a fully Occupied-and-Occupying female human intellectual, born into the struggling, union-loyal American factory-working class. After 67 years of experience under what I call “the yoke of existential guilt,” I am fed up with the 1%’s assertion that mankind (including man’s economic functioning) should be defined in terms of his/her servicability to an elite, especially with an almighty, preeminent God above all and with both church and state acting as restrictive overseeers/flunkies.

    Convinced that human beings can BE and accomplish more spiritually (perhaps even evolve/blend into a universal conscousness, transcendant of physical limitations!) in the absence of our current obsession with possession, and determined to preserve every person’s individual autonomy, (which I see as essential for ethical behavior and meaning) I have come to loathe my own and other human beings’ bondage under classic and “classist” capitalism (which will always enrich those few at the top of its pyramid-shaped paradigm, or frame, at the expense of all those below.)

    Obvious to me, that stifling “pyramid paradigm” (depicted on U.S. money) has been perpetuated/ensured by the still-present fact that too many of us (because inadequate birth control has us starting out as helpless, unplanned burdens upon our parents and society) are dogged throughout our lives by a crippling “sense of sin, or indebtedness,” which causes us to accept and focus upon (alternately giving and taking) atonement/servitude, rather than progressing toward establishing a “kingdom of Heaven,” or some such utopia where love and justice rule, by removing the estrangement/alienation between us.

    Getting back (down) to economics (defined best, I think, as “the attempt to be certain of one’s dinner”) and to Stef’s input, I’d like to –if you will permit me to– share my concise solutionary poem of enthusiastic agreement with him (becaause dinner will not matter if our “spaceship” is frapped!):

    “Put an end to polluting-for-PAY!”

    Mother Earth is in trouble!
    We must find a way
    to stop man from destroying
    the planet for pay!

    Robin Hood had the answer
    and so did J.C.:
    What we need is a Basic
    Income Guarantee!
    (Think B.I.G.!)

    Will you respond to me and my views? Thank you for encouraging this discussion.

  12. [...] For a pattern emphasized view of the collaborative economy read Joe Brewer’s article ‘Open Collaboration – The Next Economic Paradigm’. [...]

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>