216
10 The Economy 4.0
10.15 Emergence of a Participatory Market Society
While, in the past, most of us couldn’t participate in improving the man-made systems
around us (because the tools necessary to coordinate the knowledge and skills of many
people weren’t widely available), this is now changing. New information systems
and organizational principles will allow individuals to actively engage as citizens in
the public arena, as employees within firms, and as consumers and users within the
production process. Therefore, if set up well, involving users, customers, and citizens
will naturally lead to better services, better products, better businesses, better neighborhoods, smarter cities, and smarter societies. By building suitable platforms to
coordinate information and action, we can create more opportunities, enable people,
companies and institutions to make better decisions, and encourage people to act
responsibly.
So far, I have discussed the growth of short-term projects, co-creation, home
production, sharing, personalization, hyper-variety markets and the importance of
bottom-up participation. Another crucial trend is the increasing relevance of “networked thinking”. In this connection, studying the Silicon Valley provides some
interesting insights.
The Silicon Valley exhibits a surprisingly fluid exchange of people between
companies. If a company goes bankrupt, which is quite common, people usually
find a new job quickly. In a sense, it is not unreasonable to think of people as being
employed on a long-term basis by the Silicon Valley rather than being employed
on a short-term basis by its companies. In other words, the Silicon Valley is like
a “super-company”, in which there is an invisible flow of knowledge and people
that connects all of the companies located there. The companies themselves are the
niches, in which experimentation can take place and among which a lot of diversity
can exist. In effect, therefore, the Silicon Valley is nourished and sustained by the
co-evolution of the companies and ideas within it.
Furthermore, it is instructive to view the interaction of companies within
the Silicon Valley as forming a huge “information, innovation, production and
service ecosystem”, where the various economic stakeholders may be compared
to different biological species. For the economy to be in good shape, it is important
that all of the sectors, which consume and produce, do well. If a significant part of
the production ecosystem disappears, this is as if some species disappear, which can
disrupt the entire economic ecosystem and cause a recession. In fact, in an interesting
study, Cesar Hidalgo, Laszlo Barabasi, Ricardo Hausmann and others
38 showed that
economic development and prosperity largely depend on the economic diversity of
this “ecosystem”, which mirrors the concept of biodiversity in nature. Similarly to the
natural world, a greater diversity of economic production leads to more innovation
and economic prosperity.
However, an “information, innovation, production and service” ecosystem can
be organized in different ways. Fueled by almost unlimited amounts of venture
capital, many innovators in the Silicon Valley aspire to build global monopolies.
38 Hidalgo et al. [14].
10 The Economy 4.0
10.15 Emergence of a Participatory Market Society
While, in the past, most of us couldn’t participate in improving the man-made systems
around us (because the tools necessary to coordinate the knowledge and skills of many
people weren’t widely available), this is now changing. New information systems
and organizational principles will allow individuals to actively engage as citizens in
the public arena, as employees within firms, and as consumers and users within the
production process. Therefore, if set up well, involving users, customers, and citizens
will naturally lead to better services, better products, better businesses, better neighborhoods, smarter cities, and smarter societies. By building suitable platforms to
coordinate information and action, we can create more opportunities, enable people,
companies and institutions to make better decisions, and encourage people to act
responsibly.
So far, I have discussed the growth of short-term projects, co-creation, home
production, sharing, personalization, hyper-variety markets and the importance of
bottom-up participation. Another crucial trend is the increasing relevance of “networked thinking”. In this connection, studying the Silicon Valley provides some
interesting insights.
The Silicon Valley exhibits a surprisingly fluid exchange of people between
companies. If a company goes bankrupt, which is quite common, people usually
find a new job quickly. In a sense, it is not unreasonable to think of people as being
employed on a long-term basis by the Silicon Valley rather than being employed
on a short-term basis by its companies. In other words, the Silicon Valley is like
a “super-company”, in which there is an invisible flow of knowledge and people
that connects all of the companies located there. The companies themselves are the
niches, in which experimentation can take place and among which a lot of diversity
can exist. In effect, therefore, the Silicon Valley is nourished and sustained by the
co-evolution of the companies and ideas within it.
Furthermore, it is instructive to view the interaction of companies within
the Silicon Valley as forming a huge “information, innovation, production and
service ecosystem”, where the various economic stakeholders may be compared
to different biological species. For the economy to be in good shape, it is important
that all of the sectors, which consume and produce, do well. If a significant part of
the production ecosystem disappears, this is as if some species disappear, which can
disrupt the entire economic ecosystem and cause a recession. In fact, in an interesting
study, Cesar Hidalgo, Laszlo Barabasi, Ricardo Hausmann and others
38 showed that
economic development and prosperity largely depend on the economic diversity of
this “ecosystem”, which mirrors the concept of biodiversity in nature. Similarly to the
natural world, a greater diversity of economic production leads to more innovation
and economic prosperity.
However, an “information, innovation, production and service” ecosystem can
be organized in different ways. Fueled by almost unlimited amounts of venture
capital, many innovators in the Silicon Valley aspire to build global monopolies.
38 Hidalgo et al. [14].