An Economic Evolution: 0.0 – 4.0 and Beyond

by Jay Deragon on 07/23/2013

disruptionDuring the 20th century we witnessed countries and corporations driven by self preservation. This thinking lead to the building of systems designed to preserve our smaller worlds rather than improving a bigger world. Subsequently leaders took on an attitude of “win at all cost” and wars were fought between countries and corporations and the cost (ecological, human and spiritual) far outweighed the gains.

The global wars of the 20th century fought for power, capital and possessions which created an attitude of consumption at all cost. This era could be called the “ego era” where selfishness fueled the hunger for more by the few while the many paid the price for less. As a society we simply let our minds over ride our hearts and we used land, labor and capital as the sources to build self serving silos to preserve our economic engines that the few thought would run for a lifetime. We were blind to the consequences until we the people began to connect to a bigger world.

As the 21st century dawns we are entering an Age of Disruption. The 20th century mindset of disconnected thinking, maximizing material consumption, disregard for human capital, politics as usual and results that nobody finds meaningful to the many is rapidly dying.

Technology is creating disruptive awareness of old mental models that fueled an ego-system, caring only about oneself, and shifting attention to the need for eco-system thinking, awareness of the needs of the whole. This shift is only possible because technology tears down all previous walls of control of information needed to control awareness of issues important to all the people not just the few.

This shift has significant economic implications. The prefix eco- is taken from the Greek word oikos and means “whole house”. The word economy can be traced back to the same root and technology is being used to describe new eco-systems. Put the two together and you’ll get a new picture of an emerging future.

An Evolutionary or Revolutionary Shift?

From the book “Leading from the Emerging Future: From Ego-System to Eco-System Economies” Scharmer & Kaufer write : The Matrix of Economic Evolution maps both the journey of our economic development and the possible development space going forward. In the 0.0 stage, “Mother Nature” is shaded, indicating that nature is the critical factor for the production function. Then, at stage 1.0, dependent labor (serfdom and slavery) became the critical developmental factor. The production function changes from one factor (nature) to two (nature, labor). In stage 2.0, when economies move from state-centered societies to market economies, industrial capital becomes the critical developmental factor. Capital allows the new players in the market economy to be productive, and as a result the production function of the economic system now has three factors (nature, labor, capital).

The Matrix of Economix Evolution

In stage 3.0, technology emerges as a critical factor, and with that the factors of production evolve to four (nature, labor, capital, technology). And finally, in the currently emerging stage 4.0, all of the factors may turn out to be bottlenecks, or critical factors, in the economy.

 The difference between an evolution and a revolution is in the strength of resistant to change. The ego-system players still have the controls to prevent natural evolution from happening. If they do then we are likely to see a disruptive revolution. Afterall, we are living in the Age of Disruption!

{ 1 comment }

Robin Williams July 26, 2013 at 2:35 am

Quiet an interesting article! Technology has totally changed today’s world scenario. Man has become more dependent on technology. It has undoubtedly played a major role in transforming the world economy.

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