Structural Change: Decentralization

I had the pleasure of joining The Digital World with Game Changers radio program for the second time this year. Joining me as panelists were Futurist Gray Scott and SAP Innovation Evangelist Timo Elliott. First, kudos to program host Bonnie D. Graham for doing a wonderful job keeping the discussion energized and interesting. The title of the session was Eating Disruption for Lunch: Digesting Decentralization. Now there’s a term not heard much outside of futurist circles. Decentralization is one of those structural changes that make what lies ahead so impactful. According to Wikipedia, decentralization is the process of redistributing or dispersing functions, powers, people, or things away from a central location or authority.

Centralization has long been a part of us. The Industrial Age brought with it a need for vertical orientation, command and control structure, and a central authority. The capital intensive nature of that era made it the most effective way to organize. But we don’t live in that era anymore, and our technology enabled connectedness forms the foundation for decentralization on multiple fronts. This same connectedness that launched consumerization and shifted the power to the individual, will now drive a massive structural change. Here are some examples of how it is likely to play out:

3D Printing – this innovation is currently in the deceptive phase. But make no mistake, it is poised to disrupt and decentralize numerous industries. As Gray Scott said during the program: “What happens when 3D Printers print 3D Printers?” The shift from consumers to prosumers plays out here and in other disruptive scenarios.

Renewable Energy – and speaking of prosumers, what happens when everyone is not only a consumer of energy, but a producer as well? We are likely to see a continual shift away from a central electrical grid

Education – this quote from the article says it best “The trend of the decentralization of education empowers those who wish to learn but don’t desire an Everest of debt. It’s easy to imagine a point in the not-too-distant future when free or vastly-reduced-cost online education is recognized as a viable alternative to a degree with six-figure price tag, forcing traditional institutions to crumble or re-imagine themselves”

Sharing Economy – according to Fred Wilson, the founder of New York City venture capital firm Union Square Ventures, nearly all business will be conducted on a radically decentralized peer-to-peer level. Wilson believes the peer-to-peer economy will thrive without the need for a centralized authority. Could the future of the sharing economy be a world built like Bitcoin?

These are but a few examples. Even the Internet, as distributed as it is, could be heading towards a decentralized future. Imagine a world where our ISP or Facebook is not the central authority to our connectedness. Well, blockchain technology could enable that future, and IBM and Samsung are already exploring how it can be used to make washing machines autonomous, reordering detergent as needed and negotiating the best deals on our behalf as part of an optimal ‘Economy of Things’.

What does all this mean? Could the world be heading towards Decentralized Autonomous Organizations? Do we bid farewell to Corporate Power? Our Futurist Gray Scott was one of the authors of a book on The Future of Business due to launch on June 11th. The book contains over 50 chapters written by 60 exceptional future thinkers from around the world. The Future of Business explores the visions, trends, forces, developments and ideas shaping the next two decades and their implications for business leaders and entrepreneurs. I’m looking forward to exploring these issues upon its release. Be sure to listen to the radio program and the various thoughts on the future shared by our panelists.

Disruptive Power Lies at the Intersections

When I first started using the term “Combinatorial”, people thought I was making words up. Although I’d like to take credit for the word, I first came across it when reading The Second Machine Age, a fascinating book by Andrew McAfee and Eric Brynjolfsson. I remember thinking that it was a perfect word to capture the amplification of both innovation and its disruptive power. By now, readers of this Blog have seen the foundational Visual that describes the digital foundation, innovation accelerators, and disruptive scenarios. What the visual does not convey without the associated narrative is the power of combinatorial.

If we build on top of the visual, we begin to see the complexity at the intersections, the amplification of disruptive power, and the broad implications for the future.

Combinatorial Innovation

The best way to describe this phenomenon is through examples, so let’s look at six combinatorial scenarios as an overlay. The visual is a bit overwhelming, so a better way to follow the various paths is via this PDF. Here is a description of each scenario. The numbers in the visual above map to the scenarios below, and the colors show the combinations: 

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Is Any Industry Safe From disruption?

I recently dipped my toe into the Metals and Mining waters and walked away with the reinforcement that every industry is susceptible to disruption. There has long been a feeling that non-digital industries are safe from the power of disruption. In a recent piece on a New Economic Paradigm, this topic is explored in greater depth, questioning the long term viability of not just current industry structures – but the economic paradigm itself. 

Disruptive scenario analysis should be a critical focus for every business across every industry. In addition, as these scenarios converge, the implications of this convergence to a given industry or industries must be understood. The anchor visual below identifies a number of scenarios to consider. Let’s take a look at disruption in the context of the Metals and Mining industry, as well as some possible industry responses.

Disruptive Scenarios

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Exponential and Combinatorial

Futurist Gerd Leonhard continues to talk about exponential progression and its impact on the world. In this recent short video, Gerd uses the Exponential and Combinatorial slide that anchors the organization evolution story. Listen to Gerd’s perspective on this emerging paradigm shift.

Exponential Organizations

Starting in 2011, I focused on the notion of a digital enterprise – a metaphor for the type of organization that is required to survive the massive paradigm shift that lies ahead. In 2013, the focus expanded to analyze disruptive scenarios and the emerging ecosystems and platforms that would give life to those scenarios. There remains a single constant through this work and the many leadership discussions that ensued: it will take a different type of organization – different than the ones most of us grew up with – to survive the shift. We as humans – and the organizations that we created – think and act linearly. The world and technology however is moving exponentially. How then do people and organizations move from linear thinking to exponential thinking? Continue reading

The Disruptive Role of Near Field Communications

Over the last several years, the big four technologies of the third platform (Social, Mobile, Big Data, and Cloud) have received the lion share of attention, and an emerging class of innovation accelerators like The Internet of Things will capture attention in the coming years. But there are also a number of supporting technologies that serve as enabling components of multiple disruptive scenarios. In some recent presentation preparation work, I focused on technologies like Near Field Communications (NFC) and iBeacon. It was fascinating to find broad applicability across many of the disruptive scenarios on the visual I have used to describe the coming paradigm shift.

Disruptive Scenarios

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Anticipating 2025 – Part Four: Redesigning Society

Part four of Anticipating 2025 summarizes the fourth section of the book, focusing on redesigning society. Once again, we see how innovation, business, Government, and society converge over the next 20 years. There is an interesting historical pattern emerging that helps explain this phenomenon, while providing a mechanism to predict the future with a higher degree of certainty (more on that in a future post). As you read this, look at how innovation that we normally view through a business lens, is playing out at the societal level. Let’s take a look at each of the topics within this section. Continue reading


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