Revolutionary Wealth

1. Revolutionary wealth is reshaping our relationship with time, space, and knowledge

We are revolutionizing humanity's links to one of the deep fundamentals of wealth. That alone will transform our lives and those of our children.

Time compression is evident in the accelerating pace of life, business, and technological change. This acceleration affects everything from product lifecycles to personal relationships. Spatial transformation is seen in the global redistribution of wealth creation, the rise of cross-border economic regions, and the emergence of new high-value-added locations. Knowledge revolution is manifested in the exponential growth of data, information, and knowledge, fundamentally altering how we create and distribute wealth.

• Time effects:
  • Increased multitasking and simultaneous processing
  • Shift from sequential to real-time operations
  • De-synchronization between different sectors and institutions
• Space effects:
  • Globalization and re-globalization of economies
  • Rise of region-states and cross-border economic zones
  • Shift in criteria for valuable locations (e.g., from natural resources to knowledge infrastructure)
• Knowledge effects:
  • Rapid obsolescence of existing knowledge (obsoledge)
  • Growing importance of intangible assets
  • Challenges to traditional notions of truth and expertise

2. The hidden prosumer economy is vital to the visible money economy

Prosumer output is the subsidy on which the entire money system depends. Producing and prosuming are inseparable.

Prosumers create value outside the traditional money economy through activities such as parenting, volunteering, and self-service. This hidden economy is essential for the functioning of the visible money economy. Producivity, the contribution to productivity made by prosumers, is becoming increasingly important as technology enables more people to create value outside traditional economic structures.

• Examples of prosumer activities:
  • Parenting and child-rearing
  • Volunteer work and community service
  • Do-it-yourself projects and home improvement
  • Open-source software development
  • User-generated content creation
• Benefits of the prosumer economy:
  • Reduces costs for businesses (e.g., self-service technologies)
  • Drives innovation and product improvement
  • Creates social cohesion and community resilience

3. Institutional breakdown signals the need for radical transformation

What is happening, therefore, inside the United States is a systemic breakdown of its vital institutional infrastructure at the very time when many believe its power in the world is diminishing.

Widespread institutional failure is evident across various sectors, including education, healthcare, finance, and government. This breakdown is not limited to the United States but is occurring globally. The root cause is the mismatch between industrial-era institutions and the demands of a knowledge-based economy.

• Signs of institutional breakdown:
  • Failing education systems unprepared for 21st-century needs
  • Unsustainable healthcare and pension systems
  • Corporate scandals and financial instability
  • Ineffective government bureaucracies
  • Erosion of trust in media and traditional sources of authority
• Needs for transformation:
  • Redesign of institutions to match the speed and complexity of the new economy
  • Integration of new technologies and knowledge management systems
  • Creation of more flexible, adaptive organizational structures

4. Decadence and innovation coexist in times of great change

The stench in the air is the smell of decadence. But there is also a faint scent of renewal.

Societal upheaval during periods of rapid change often leads to a simultaneous breakdown of old values and norms alongside the emergence of new, innovative solutions. This dual process of decay and renewal is evident in various aspects of contemporary culture, from entertainment to social institutions.

• Signs of decadence:
  • Extreme behavior and cultural products
  • Breakdown of traditional social norms
  • Short-term thinking and instant gratification
• Signs of renewal:
  • Rise of social entrepreneurship
  • Innovative educational models
  • New forms of community and social connection
  • Technological solutions to societal problems

5. The intangible nature of new wealth challenges traditional capitalism

As the entire property base grows more intangible, hence more inexhaustible, a bigger and bigger part of it also becomes non-rival.

Intangible assets are becoming increasingly important in the new economy, challenging traditional notions of property, capital, and value creation. This shift towards intangibility has profound implications for capitalism, potentially requiring a fundamental rethinking of economic systems.

• Characteristics of intangible wealth:
  • Non-rival (can be used by multiple parties simultaneously)
  • Potentially inexhaustible
  • Often difficult to measure and protect
• Challenges to traditional capitalism:
  • Intellectual property rights and enforcement
  • Valuation of intangible assets
  • Allocation of capital in an intangible-dominated economy

6. Social entrepreneurs are creating innovative solutions to societal problems

Social entrepreneurs are rapidly multiplying. Today, more than thirty U.S. business schools, including Stanford, Harvard, Yale, Columbia and Duke, offer courses in pro-social entrepreneurship.

Social innovation is emerging as a powerful force for addressing complex societal challenges. Social entrepreneurs are developing new models that blend business principles with social impact, often leveraging technology and cross-sector collaboration to achieve their goals.

• Examples of social entrepreneurship:
  • Microfinance institutions
  • Sustainable energy solutions
  • Innovative educational models
  • Healthcare access initiatives
• Impact of social entrepreneurship:
  • Addressing market failures and social inequities
  • Driving systemic change in traditional sectors
  • Creating new models for value creation and distribution

7. The democratization of capital is transforming economic participation

Today, writes veteran business analyst James Flanigan, the owners of America are the "more than 100,000,000 Americans who hold more than $5 trillion worth of company stock through their pension funds, retirement plans and individual retirement accounts."

Broader access to capital markets is changing the nature of economic participation and ownership. This democratization of capital has significant implications for wealth distribution, corporate governance, and economic decision-making.

• Forms of democratized capital:
  • Widespread stock ownership through retirement accounts
  • Crowdfunding and peer-to-peer lending platforms
  • Cryptocurrency and blockchain-based financial systems
• Effects of capital democratization:
  • Increased individual stake in economic performance
  • Potential for more distributed economic power
  • New challenges in financial literacy and risk management

8. Technology is accelerating change and complexity across all sectors

Bill Gates, who ought to know, speaks of "astronomically rising complexity."

Technological advancement is driving unprecedented rates of change and increasing complexity in all areas of life and business. This acceleration is both creating new opportunities and posing significant challenges for individuals, organizations, and societies.

• Areas affected by technological acceleration:
  • Business models and operations
  • Communication and information flow
  • Product development and innovation cycles
  • Social interactions and relationships
• Challenges of increasing complexity:
  • Information overload and decision-making difficulties
  • Need for continuous learning and adaptation
  • Ethical and regulatory challenges in emerging technologies

9. Global economic power is shifting towards Asia

What we have been witnessing, therefore, has been a monumental transfer of wealth and wealth creation across the world map.

Economic rebalancing is occurring as Asian countries, particularly China and India, become increasingly important players in the global economy. This shift has profound implications for international relations, global governance, and economic strategies.

• Factors driving Asian economic growth:
  • Large and growing consumer markets
  • Investments in education and technology
  • Strategic industrial policies
  • Integration into global supply chains
• Implications of the Asian century:
  • Changing patterns of global trade and investment
  • Shifts in geopolitical influence
  • New models of economic development and governance

10. The future demands new institutional models and social inventions

If just a tiny fraction of the sums spent on scientific and technological research and innovation were devoted to labs for designing and testing new organizational and institutional structures, we might have a much broader range of options to head off the looming implosion.

Social innovation is crucial for addressing the complex challenges of the 21st century. New institutional models and social inventions are needed to bridge the gap between rapidly evolving technologies and societal needs.

• Areas requiring social innovation:
  • Education systems adapted to lifelong learning
  • Healthcare models for aging populations
  • Governance structures for global challenges
  • Economic systems that balance growth with sustainability
• Approaches to fostering social innovation:
  • Cross-sector collaboration and partnerships
  • Experimentation with new organizational forms
  • Investment in social R&D and innovation labs
  • Scaling successful local solutions to global levels

Last updated: November 22, 2024