Revolutionarywealth

If one looks at the Newspaper / Magazine / Journal etc, it looks like there are umpteen random events that are happening in the world. Some look familiar, some look weird, some appear very tragic, etc. What if you were given a looking glass which could trace back the random events to some deep fundamental drivers? Wow! That would be great, wouldn’t it? That’s what Alvin Toffler does through his book Revolutionary Wealth.

There are three fundamental drivers to the whole range of events that are happening and that are going to happen, they being Time, Space and Knowledge. These three drivers would define the way in which the events would proceed in the times to come.

Fragmentation Wave

Fragmentation of Mass Markets
There is fragmentation of the markets, production and media that is happening in various parts of the world. Fragmentation of mass markets involves each customer wanting a personalized product, with the numerous ways to reach to products exploding (internet / mobile etc.), the markets are going to be fragmented further. Chris Anderson in Long tail explains that the future lies in the million micro markets and million micro customers for the same. Days of Blockbusters are gone

Fragmentation of Mass Media
Influence of Media is no longer restricted to only Gigantic Media corporations which churn out highly branded newspapers, journals, TV Shows. The media has seen the rise of blogs, personal websites, citizen journalism etc that it seems that media content is no longer in the hands of few. Sites like Digg, Twitter, Slashdot , Niche audience based sites is seeing the media break up in to umpteen channels. One of the main reason for the fragmentation is because of a good monetization mechanisms that have sprung up like google adsense programs, other advertising platforms which fetch you money for the content being published. Fark.com , single user generated site makes about 60-80k usd per year. An Indian student from Pune makes about 3500 USD from blogging. Also momentary fame driven sites like youtube, metacafe, delicious, clippers etc are also increasing the user generated content. Content aggregators, Content providers and Content hosts are driving the fragmentation of media content. 

Fragmentation of Mass Production
Outsourcing is one single phenomenon of production being changed from the space dimension. Various activities of the business creation are being structured to work in a loosely coupled way.
If one looks closely at a various activities of a business ranging from product, design, manufacturing, customer service, product implementation, branding, etc, the geographical boundaries are rapidly decreasing. World has really become flat.  This race to find the best place is based on the cost, skill set required, and a host of other factors.

Till date cost has been the major driver but other factors will start having an effect on fragmentation of the mass production. Time and Knowledge drivers will have a major impact on the way the fragmentation of mass production will pan out in the future. Infosys, Wipros of the world would certainly reposition, rebrand themselves to cater to this changing market requirements.

Power Shift
We are witnessing a Power shift in three broad categories – Property, Capital and Market.

Property 
The rise of intangibles and the importance attributed to the intangibles is increasing day by day. Be it the brand value in the balance sheet or the installation of knowledge management system, one can see the importance of intangible value and decreasing power of tangibles. Yes, there is no doubt that land, physical assets do play an important role, but they no longer yield a power like they did in the past. Windows software , Patented Search algorithms, Brand strength, Logo , User experience on the website, Simplicity, Storytelling skills, Design, are playing a larger role in the success of a firm and nation.

Capital 
Increasingly money is being seen as more fungible item. Fragmentation of Capital is clearly seen in the following trends
• Fall of $
• Para money
• Plastic Money
• Anti Obesity Cards
• Intra Company $ – Sony has an intra company currency to avoid the painful conversions of its various business units
Identity, Wireless and Miniaturization of Capital are changing the traditional role of Capital

Time – With instantaneous real time news about various events, capital is being invested, reinvested, moving at a breathtaking pace. This pace is only going to increase

Space – In a flat world, there is very little time between the repercussions of the money movement, economic events and catastrophes. Peer to Peer lending, trust based lending and borrowing is making the traditional sense of back ground verification process of banks less relevant. Also micro requirements and micro payments are changing the capital accumulation and dissemination process.

Knowledge – People have started realizing that money is more a concept. Several types of Capital are increasingly being adopted, like flyer miles, Linden Dollars (Second Life).  The rise of financial advisers in the service industry, rise of financial products is something which would bring in to light different business structures and entities.

Prosuming Economy
Prosuming economy is referred to one where producers and consumers of the products / services/ content are the same. This is one economy where there is a lot on unpaid work that goes on. Unpaid means unaccounted for in the traditional sense of the economical world. Some of the examples could be bogging, writing open source software, submitting articles on digg, DIY kits for various activities. 

Poverty
There is a whole section on the way poverty issue needs to be dealt with. Obviously the three drivers figure in all the solutions suggested. May be I need to read up “Fortune at the Bottom of Pyramid” and see how the drivers mentioned by CK Prahalad’s match up to Alvin Toffler’s

Tectonic Shifts

China
It is fast becoming the biggest trading nation after US, Europe. It also holds the highest treasury dollars than any other country. China is a trisected economy where some people living in the first wave, majority in the second wave and some in the third knowledge wave. There is going to be a lot of conflicts between the values, mindsets, attitudes of the different wave people. But if one sees the rise of China, the very fact that there is a factory in every 25 minutes speaks a lot about the current second wave in the country.

Massive rise of capitalism against the background of communism is often attributed to the rise of china. However, one needs to look at fundamental drivers to understand the reasons for China’s rise. From a time dimension, it has obviously shown that one can employ time as a competitive weapon. In a span of 10 years, it has built the most advanced telecommunication network in the world.

It has also done its part in improving its spatial skills, be it understanding the space technology / missile technology or playing a role in creating an oil import route. China is trying to establish its supremacy not only in Asia but through out the world

From a knowledge driver perspective, the usage of R&D, more Chinese graduates coming back after the graduation, etc are clear signs that China wants to play a formidable role in the knowledge economy of the future.

But clearly there is a lot many things that need to be happen before we see china as a developed superpower. The other day I was reading about the way in which said small children were kidnapped and employed in the sweatshops, and made to work at meager salary levels. Yes China does appear to be in Chains, but it will soon be able to break free from these chains to become a superpower. In fact the sooner it does, the better it is for Asia as it will make Asia not just a cheap labor saving destination for the developed countries, but as a premier destination for business and investment.

Japan – Next Bamboo Ring
Author draws an analogy between Bamboo tree and Japan. A bamboo tree appears like a long stretch of shoots interrupted by ring like structures. It is said that tree grows in spurts, and each spurt is marked by a bamboo ring on its shoot. Japan, too has grown that way. Way back in 91, it was slated to become the next superpower. However, it has faltered somewhere down the way. A nation which was moved from seller of cheap electronic toys to ultimately becoming the nation which produces high quality goods has somehow faltered in its way. According to the author, the biggest reason is because of wave conflict, second and third wave conflict. Japan is also widely known for the country with the largest proportion of old people. Even though it has established in the manufacturing sector, there is not a single non-manufacturing domain that is worth mentioning from Japan. This clearly shows that as a country it has been completely focusing on the second wave.  Second wave principles of standardization, Concentration, Maximization of scale, Centralization are making the transition to third wave rather difficult. Also the very fact that as a nation, there are very less number of working women goes to say that Japan is not using the other brain.

Europe Lost Cause
Europe has been focusing all its efforts on the second wave after the Second World War impact.
Even though there have been breakthroughs in some of the scientific fields, Europe is plagued with ONE big problem, and which is second wave thinking. Most of the organizations, private and govt. owned run on second wave principles and hence it is becoming rather difficult to transition to the third wave economics.

Inside America

Transportation, Education and Energy are the three sectors in US which are struck in the second wave. Education sector which includes universities are still operating in the factory mode, where the old rules of syllabus are not preparing the students for the future jobs. Infact some people accuse universities for stealing jobs as they are not preparing the students for the right kind of jobs. Infact the success of YCombinator, startups by young people who drop out of school suggest that education system in US is broken.

Design of the Massive Transportation systems in US was based on the factory system where there was a need for effectively transporting physical goods from the cost effective locations and ship them to the commercial centers of the world. With higher proportion of people ageing, workers are trying to avoid the commute and also most of the manufacturing is being outsourced to China, the need for the massive transportation systems is no longer there.

Even energy sector needs to be revamped keeping in mind third wave fundas. Energy system policy is definitely lagging behind the demand requirements and would

Outside America
A lot of people are returning after having their education in US. There are a lot of countries which are going on dual strategy, first-wave + third-wave / second-wave +third-wave and are going to face a lot of wave conflicts in the times to come. Agility + Strategy is going to be the key for the success of the countries which are going ahead with this strategy. Also with the localization and flattening of the world, knowledge dissemination, knowledge customization is growing at a staggering pace and in the times to come China, India, and other countries are going to grow, though not with out wave conflicts. MTV is in every developing country and American culture is being exported and customized to suit the local flavor.

By the end of the book, one can pretty much come to a firm conclusion that – Time, Space and Knowledge are going to drive so many events in the times to come.

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