Weaving the magic carpet

One of KM’s earliest pioneers has always focused on the coming of a knowledge economy and now leads the transition. But to explain the dynamics of the current change, he reaches back for lessons learnt in the earlier transition and proposes threads of KM and more woven together to make a magic carpet on which to fly into the (ac)knowledging economy.

Major paradigm shifts are, at the same time, both painful and exciting. The pain comes because the old order is put into question. Excitement comes through the opening of new horizons of possibilities.
We’ve seen many of these paradigm shifts within our short period of human history – for example, our ever-expanding understanding of the universe: geocentric, heliocentric on into an expanding universe, thanks to the work of Edwin Hubble in 1929. Likewise, we’ve shifted our perception of the atom from a little ball as the Greeks thought to a mini-planetary system, thanks to Ernest Rutherford, and onto the ‘quantum mechanical’ view of an atom consisting of both particles and waves.
In each shift, we’ve given up our mental models and the words used to explain these mental models. Think for a moment of the shifts that took place when hunters and gatherers shifted into the agricultural model. Stories shifted, language shifted and expectations shifted. Now imagine Fredrick Winslow Taylor trying to explain to those living in the agricultural era of the Middle Ages how a factory operates. They’d simply look with blank stares, if they didn’t actually run him out of town.
Might we be in another in-between era? The shift from the agricultural to industrial eras has been well documented in poetry, literature and scholarly works. The industrial era ushered in a whole new set of assumptions about technical, social, political and economic life. Simply put, the industrial era rested on Smith’s twin notions of:

The division and sub-division of labour;
The invisible hand – where each, looking after his or her natural interests, benefits overall society.

During this major transition, beginning in the period of political turmoil of the French and American Revolutions, Adam Smith published his Wealth of Nations in 1776, the same year as James Watt’s steam engine. It’s not possible in this short article to go into all the ins and outs of the transition into the industrial era, so instead we’ll just mention some of the highlights as background in our discussion of the possible shift to the ‘(ac)knowledging economy’.
For clarity, that’s what I call it, the ‘acknowledging economy’. Typically we are beginning to speak of the transition to the knowledge economy as if it were a fashion change in our work wardrobe. My guess is it can only happen as we learn to actively acknowledge and value one another in new ways. Second, an economy is not just a model that is imposed. Instead it is a living process and ought therefore to be seen as a living verb rather than a weighty noun, hence the construct ‘(ac)knowledging economy’.

When the facts don’t fit
Most major paradigm shifts are ushered in because ‘the facts don’t fit.’ Once Galileo had the telescope, he could see our geocentric view was not viable, even if those around him didn’t want to accept the new facts.
In the same way we are beginning to face up to the fact that the current facts don’t fit the further economy. For the longest while, we ignored the environmental costs of loading our air, land and seas with waste. When our governments charter our corporations, they makes no provision that these externalities be taken into consideration – that is, until the facts have become so clear they cannot be ignored.
Certainly the recent Intergovernmental Panel on Climate Change (IPCC) has strung the real facts together in a most convincing manner. As Mark Lynas says in his insightful book Six Degrees, we are closer to a major environmental catastrophe than we want to admit. It is more than unlikely that we will be able to hold the increase in the average global temperature to two degrees celsius. Just recently the Carbon Disclosure Project (www.cdproject.net) representing $57tn in funds under management has sent out a tough environmental questionnaire to all major corporations.
When we look at the dynamics of population increase, the changing age demographics, the increase in diabetes and obesity and so much more, we see the facts don’t fit with our industrial model. Instead of the division and sub-division of work, we need collaboration and co-creation of work, and instead of self-interest, we need interest-in-other selves. These simple, but profound changes put in question the pin-making factory model of Adam Smith, the scientific management of Taylor and the 14 points of Henri Fayol (one-person, one boss, the chain of command, and so on).
The (ac)knowledging economy is a paradigm that fits thanks to

Karl-Erik Sveiby’s 1986 book, The Know-How Company;
Debra Amidon’s 1987 MIT conference on the knowledge economy;
Leif Edvinsson and Hubert Saint-Onge’s work on the dynamics of intellectual capital;
Ikujiro Nonaka and Hirotake Takeuchi’s book, The Knowledge Creating Company;
Günter R. Koch and Karl-Heinz Leitner’s work on the knowledge balance sheet in Austria;
Steven Denning convincing Jim Wolfenson at the World Bank that it ought to see itself as a ‘knowledge bank,’ which led to the work of Carl Dalhman and Jean-Eric Aubert on the Knowledge for Development (K4D) project in many different countries and so much more.

We are beginning to question the simplicity of the industrial model with its focus on land, labour and capital.

From routine to innovation and on to improvisation
There is a fourth element that needs to enter the equation – knowledge. In so many companies there is a marked shift from mastering routine to fostering innovation. Is this not a shift in accent in our global corporate world?
Yet knowledge is not a new human theme. Think back four to five thousand years, along the course of the Saraswati River in India where the Harappan civilisation developed. Here we find in the now-ruined cities (due to a river change resulting from geological activities between 2000 and 1700 BC), the earliest examples of Indian thought. Saraswati, in Hindu religion, came to be known at the goddess of knowledge.
First as a river, then also as a goddess, Saraswati represented the ‘flow’ of knowledge. It’s not surprising that Mihály Csikszentmihályi would write about flow in his book Flow: The Psychology of Optimal Experience. Gradually we are recognising a jazz jam session is coming to represent the new paradigm of corporate meetings, as each player deeply listens to one another and taps his or her tacit knowledge to better understand the dynamics of the market. This is more than innovation – it’s workplace improvisation at its best.
What happens when the glaciers of the Himalayan mountains dry up and there is little flow in the rivers in India? What happens when the rain forests of Brazil are cut down or dried out; will there be a flow of new air from the world’s lungs? What happens when the permafrost along the northern shores of Russia warms, releasing massive amounts of methane? And the list can easily be extended. In short, the business-as-usual industrial model, with its insatiable need for ever-more consumer products, is not sustainable.
A shift to the next economic era is not only desirable, it is absolutely essential if we are to survive on this planet for the next 800 million to billion years. For most, either tomorrow, next week or next year is the distant future. Our companies think quarter-to-quarter. Most of us don’t realise life will be possible on our planet for the next 800 million to billion years. What if we decided to build an economy that could last not for the next quarter, but the next quarter of a billion years? Would we so quickly deplete our easily accessible fossil fuels? Would we turn our minerals – from iron to copper – into waste so quickly? In short, a paradigm shift is not only nice to have, it is life-essential.
Moreover, sustainability is not just the issue; it is enhanceablity. How can we enhance life’s opportunity for all, all six plus billion, soon going to nine billion and beyond? Instead of turbo-charging our industrial economy with this knowledge stuff, might we have to re-dig the foundation and build on a significantly different set of assumptions?

Weaving the knowledge threads
If the ‘gear’ were to represent the industrial era, might the energy releasing and co-creative ‘flow’ represent the next era, the (ac)knowledging economy? Those who have experienced a jazz jam session know what it is to be in the flow or in the groove. People listen to one another through ‘deep hearing’; they respond to one another by tapping the wealth of their own knowledge, experience and feelings. They are no longer cogs in a wheel, but creative people in community with one another. They are living their knowledge co-creatively.
Over the last few years we’ve been developing important threads: knowledge management, intellectual capital, knowledge balance sheet, intellectual property, and so many more. In the early part of 2008, the Arabian Knowledge and Economy Association (among the first, if not the first, such association in the world) held its first conference in Jeddah. There were wonderful presentations from many parts of the world, and the vagueness of the outlines of what might constitute a knowledge economy became a little clearer thanks to wide variety of speakers, including Debra Amidon, Leif Edvinsson, Abdullah Al Subyani, Pat Sullivan, Ahmed Bounfour, Salim Al-Hassani and others.
Some countries, like New Zealand, Singapore, Holland, South Korea, Finland and even Rwanda, are making a commitment to the knowledge era. There have even been false starts. For example, in March, 2000 the European Union announced the Lisbon Agenda, designed to turn Europe into the most competitive knowledge-based economy by 2010. Alas, over the next two or three years the vagueness dragged the initiative down and now the EU is talking instead about jobs and growth. The boldness is unfortunately gone. For a listing of other related knowledge initiatives, please see Debra Amidon and Bryan Davis’ Knowledge Innovation Zone (KIZ) listing at www.inthekzone.com.
What if we were to weave these threads together (i.e., KM, IC, KIZ, etc.) as in a jazz jam session, into a magic carpet that would fly us to the (ac)knowledging economy? It’s been relatively easy to weave together Boeing’s Dreamline, the new 787, through a network of CAD systems with their suppliers. But weaving a carpet that might fly into the next economic era, that’s a challenge of another order, is it not?
Remember how the French Encyclopedists’ Diderot, Voltaire, Rousseau, Montesquieu and Jaucourt, fueled by the Enlightenment, helped awaken the forces that lead to the French Revolution by articulating a new taxonomy of human knowledge, inspired by Francis Bacon’s Advancement of Learning. Again, notice it was the reframing of human knowledge that led, among others, to the conditions that made the Industrial Revolution possible. We see that such a weaving of ideas and visions together is possible, so where do we go next? The New Club of Paris (www.the-new-club-of-paris.org) has taken up this challenge.
To break out of our present paradigm prison, that is, the words and concepts that have made the industrial era possible but which keep us captive to a way of thinking that we need to transcend, what do we do?
Interestingly enough, the same Adam Smith who gave us the division and subdivision of labour (such as, the job and departments) and the invisible hand (egotistical self-interest) also provides us with a powerful critique of this model in the Wealth of Nations. Most read the first few pages, but don’t really venture forward in this book to Book V, Chapter 1 (p.178-179).1
Here Smith writes: “The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Without realising it, might we have built into our industrial companies this ‘stupidity and ignorance’ through the ways we’ve created our narrowly defined jobs? Is it not time to build into our economy the smarts and the awareness of the dynamics of our planet so that we can recast our economic life in a dynamic and yet low-carbon model?”

Breaking out of paradigm prison
If we can weave together our magic carpet within a co-creative and collaborative community, we may already find we are flying in the right direction. We will likely have six key challenges in getting up momentum:

Co-create a low-carbon economy capable of enduring for the next quarter of a billion years. This means we may well need to bring our business-as-usual economy to a screeching halt while we rebuild the basics;
Fuel the (Ac)Knowledging Economy with the energy within each of us. In other words, our curiosity and excitement for the opportunity of life shape our thoughts and activities, more than just acquiring luxury and power;
Learn from our past. The Australian Aborigines lived very successfully for 40,000 years. The North American Indians made decisions in council from the perspective as to how they would impact the seventh generation. And the Harappan civilisation in India knew things about knowledge we have not even thought of;
Re-charter corporations from the perspective of the triple bottom line as suggested by John Elkington in 1994. Instead of just focusing upon profit alone, we will need to add a deep sense of excitement to the developing of people and the planet in very responsible ways;
Unlearning is difficult but necessary. Until we started to create corporations as competitive associations, people generally lived in collaborative communities. Our educational model has adapted the competitive associations of individual students. It too might well become a collaborative learning community where students learn as much from one another as the teacher or professor. It’s certainly hard, very hard, to unlearn these competitive traits. The best competition, if we so wish, is with the inner development within ourselves;
A shift in focus from space and place to meaning time. Remember how Galileo used the telescope to see our universe clearly. We may well need a timescope to see and learn from the past and to envision the possibilities out the next several hundred million years. Through Newton we saw space and time as both separate and absolute. Einstein put them together and showed they are relative. Nevertheless, space is so much easier to see and understand than time, and yet it is within meaningful time that the music comes alive. We never hear one note at a time, but each note has meaning because of what came before and what we anticipate will come in the future. So too, our interaction in work is dynamic, and if we acknowledge and value one another, we grow while increasing the profit and enhancing the environment.

In summary, we have the raw threads of the knowledge economy. It is up to our imagination as to how we rebuild our economy to run on the fuel of the energy within, so we can indeed live lightly and lively. It is a timely, challenging and wonderful undertaking, but we don’t have a minute to lose. If you interested in helping in this process, please let us hear from you via e-mail. ?

Dr. Charles Savage is president and mentor, Knowledge Era Enterprises International, Munich, Germany. Contact: charles.savage@online.de

1. Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations. Methuen and Co., Ltd. 1904. Ed. Edwin Cannan. Library of Economics and Liberty. 4 March 2008. <http://www.econlib.org/library/Smith/smWN1.html>.