Social technology are fueling a shift in how people, organizations and society thinks. The shift is enabled by the knowledge of what drives the social dynamics of today’s economy. It is a philosophical rather than technological shift.
W. Brian Arthur writes in The Second Economy: In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.
Deep changes like this are not unusual. Every so often—every 60 years or so—a body of technology comes along and over several decades, quietly, almost unnoticeably, transforms the economy: it brings new social classes to the fore and creates a different world for business. Can such a transformation—deep and slow and silent—be happening today?
Digitization is creating a second economy that’s vast, automatic, and invisible—thereby bringing the biggest change since the Industrial Revolution.
Business processes that once took place among human beings are now being executed electronically. They are taking place in an unseen domain that is strictly digital. On the surface, this shift doesn’t seem particularly consequential—it’s almost something we take for granted. It is causing a revolution no less important and dramatic than that of the railroads. It is quietly creating a second economy, a digital one.
Old Thinking Is The Constraint
Yesterday’s business solutions are being turned upside down and inside out. For those who are currently using pre-social media management methodologies, in order to adapt and flourish in the new paradigm they must understand the dynamics, the tools, and the methods of the second economy. Otherwise, any attempts to leverage the new paradigm by forcing it to fit into old methods will create social rejections and the old problems will remain. Further, the results will be worse than previously experienced because the rippling effects of thinking about the wrong things and thus doing the wrong things are larger than ever before.
The digital economy is more about a philosophical shift than it is about process change. New solutions will be found by those who understand the new economy and it is the new solutions that will create the second economy. You can’t see the solutions unless you change how to think about solutions.