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January 18, 2006
Changing economics of knowledge - a top 10 trend
The consulting firm McKinsey & Company has just released its Ten trends to watch in 2006. The trends are a thoughtful look at macro and micro changes occurring in the economic environment:
1. Centers of economic activity will shift profoundly, not just globally, but also regionally. The story is not simply the march to Asia. Shifts within regions are as significant as those occurring across regions.
2. Public-sector activities will balloon, making productivity gains essential.
3. The consumer landscape will change and expand significantly with almost a billion new consumers entering the global marketplace
4. Technological connectivity will transform the way people live and interact. More transformational than technology itself is the shift in behavior that it enables. We work not just globally but also instantaneously. We are forming communities and relationships in new ways.
5. The battlefield for talent will shift, with a focus toward importance and scarcity of well-trained talent.
6. The role and behavior of big business will come under increasingly sharp scrutiny.
7. Demand for natural resources will grow, as will the strain on the environment.
8. New global industry structures are emerging with nontraditional business models flourishing. In many industries, a barbell-like structure is appearing, with a few giants on top, a narrow middle, and then a flourish of smaller, fast-moving players on the bottom. Similarly, corporate borders are becoming blurrier as interlinked "ecosystems" of suppliers, producers, and customers emerge.
9. Management will go from art to science.
10. Ubiquitous access to information is changing the economics of knowledge.
While all of these are of significance, I found the last especially interesting:
Access to knowledge has become almost universal. Yet the transformation is much more profound than simply broad access. New models of knowledge production, access, distribution, and ownership are emerging. We are seeing the rise of open-source approaches to knowledge development as communities, not individuals, become responsible for innovations. Knowledge production itself is growing: worldwide patent applications, for example, rose from 1990 to 2004 at a rate of 20 percent annually. Companies will need to learn how to leverage this new knowledge universe -- or risk drowning in a flood of too much information.
Many of these trends are part and parcel of our shift into the I-Cubed (Information, Innovation, Intangibles) Economy: technological connectivity, the role of talent and the new industry structures. However, learning how to manage information and knowledge is the underpinning of the entire transformation. It is not just the danger of drowning in information, it is also the problem of not being able to utilize the key information and intangibles. The easiest way to prevent drowning is to stay away from the water. Unfortunately, that may be the reaction of many -- to shut out the flood and fall back on the old ways (and the old industrial age paradigms). That will be the road to disaster for some.
The other reaction to managing information will be to filter based on narrow criteria. However, narrowing the information flow is a sure-fire way of stifling innovation. A rich flow of diverse information is needed for the creative process. The old saying of separating the wheat from the chaff is only partly applicable. What is need are ways to think creatively about what to do with both the wheat and the chaff.
Key is the word "leveraging" -- the ability to leverage knowledge will determine the success stories of the I-Cubed Economy. What that means, however, is yet to be completely revealed. We are still in the transformation -- with most of us trying our best not to drown. As we learn to swim in -- and then sail over -- this sea of information, creativity, innovation and productive economic growth will flourish.
Posted by Ken Jarboe at January 18, 2006 12:48 PM
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