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.