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Wealth Systems
1. Wealth is anything that fulfills needs or wants
2. A wealth system is the way wealth is created
3. True wealth occurs when man is able to create an economic surplus
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Three Wealth Systems
1. Agriculturea. Ten millennia ago, a woman planted the first seed
in what is now known as Turkeyb. Instead of waiting for nature to provide, man could
make nature do what he wishedc. Agriculture allowed man to settle into communities d. Agriculture created trade, barter, buying and selling e. In some years, there was an excess of foodf. War lords, nobles and kings were able to become
rich by stealing the excess wealth created by agriculture
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2. Industrialisma. This second wave of wealth creation brought mass
production, mass education, mass media and mass culture
3. Knowledgea. This third wave substitutes knowledge for the
traditional factors of industrial production – land, labor and capital
b. This third wave de-massifies production, markets and society
Three Wealth Systems
* The first wave was based on growing things, the second was based on making things and the third is based on serving, thinking, knowing and experiencing
*
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Changes in Deep Fundamentals
1. Worka. Until field labor was replaced by factory work, few
people ever held a jobb. A “job” in today’s sense of formally committed work
in return for pay is a recent innovationc. For centuries, most labor was forced labor
(slavery for example)d. Work has moved from outdoors to indoorse. More people will work in the future but there will be
fewer jobs
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2. Time
a. Never have the pressures been greater for organizations to speed up their operations
Quality
CostTime
Changes in Deep Fundamentals
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2. Timeb. Relative speed of current organizations
100 mph – American business90 mph – Non-governmental organizations (NGOs)60 mph – American family -- Fewer than 25% of
American families have a working father, stay-at-home mom and two children under the age of eighteen
30 mph – Labor unions25 mph – Government bureaucracies10 mph – American school system5 mph – Intergovernmental organizations (IGOs)
such as the United Nations, IMF and WTO3 mph – US Congress and White House 1 mph – The Law
Changes in Deep Fundamentals
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2. Time
a. Never have the pressures been greater for organizations to speed up their operations
Quality
CostTime
Changes in Deep Fundamentals
Ideas?
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3. Placea. Wealth creation in the world continues to
move westb. Detroit & Cleveland, both second wave
cities, are listed as the poorest large cities in the US*
* per US Census Bureau, 2008
Changes in Deep Fundamentals
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Unique Characteristics of Knowledge
1. Knowledge is inherently non-rivala. Millions of people can use the same chunk
of knowledge without diminishing itb. The more knowledge is used, the more
knowledge is created. This is not true of food or “things”
2. Knowledge is intangiblea. We can’t touch, fondle or slap it, but we
can (and do) manipulate it
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Unique Characteristics of Knowledge
3. Knowledge is non-lineara. Tiny insights can yield huge outputsb. Yahoo was started when two college students
simply categorized their three favorite websites
4. Knowledge is relationala. Any individual piece of knowledge attains
meaning only when juxtaposed with other pieces that provide its context
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Unique Characteristics of Knowledge
5. Knowledge mates with other knowledgea. The more there is, the more promiscuous and the
more numerous and varied the possible useful combinations
b. Giving rise to “Meta-solutions”
6. Knowledge is more portable than any other producta. It can be distributed for a very small price
7. Knowledge can be compressed into symbols and abstractionsa. Try compressing a toaster
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Unique Characteristics of Knowledge
8. Knowledge can be stored in smaller and smaller spaces
9. Knowledge can be explicit or implicit, expressed or not expressed, shared or tacit
10. Knowledge is hard to contain -- it wants to be free of boundaries
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The Information/Knowledge System is Unique
1. The information/knowledge wealth system is the first system to be driven by an inexhaustible and unlimited resourcea. All other wealth systems were based on scarce
resources such as food and raw materials
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Services Become Products
c. In the United States, bank customers in 2002 executed nearly 14 billion ATM transactions(1) Assume that, on average, a simple face-to-face
transaction at the bank might have taken two minutes
(2) That means customers performed 28 billion minutes of unpaid work that would otherwise have required banks to hire more than 200,000 additional full-time tellers
(3) Banks frequently charge customers an extra fee for the privilege of doing the extra unpaid work
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Observations• Businesses confined to “tangible” products
are limited by scarcity of people, property and capital
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Observations• Businesses confined to “tangible” products
are limited by scarcity of people, property and capital
• Knowledge-based businesses are built on an inexhaustible and unlimited resource
• Which are likely to grow faster?
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Questions• What are the “knowledge” components of
my business vs. the “tangible” components?• What can I do to move my business to a
“richer mix” of knowledge vs. tangible?• How can I protect and leverage my
company’s knowledge base? • What can I do to reduce cycle times of both
“learning” and “doing” in my company?
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