The subject of how technologies evolve over time have been receiving a lot of attention over the last 40 years. Actually, much of the research work done in the late 80s and 90s are still relevant today. With all the talk of the fourth industrial revolution, the attention has shifted towards innovations coming from elsewhere away from what do we have to do in our own organisation to improve our performance, offer our clients amazing value, and to create the future we want to be part of.
I am working with several think tanks, research organisations and policy advisors to help governments and key meso-organisations to become better at tracking technological change and potential disruptions. This work draws on my experience of supporting industry and innovation systems diagnostic processes as well as my experience in supporting organisation development and change.
To be better able to predict technological disruptions meso organisations and policymakers must become much better at anticipating future demands. That means they have to shift from being demand responsive (in other words waiting for the private sector to clearly articulate what they need) to anticipating what is needed. This requires a deep understanding of how user needs are changing (market knowledge), but also of how key technological capabilities in the industries they serve are changing (technological knowledge).
The challenge here in South Africa is that most of the organisations that are supporting innovation and technological change are focused on fixing the past. Due to our countries past, they are trying to get marginalised people (women, the youth, black entrepreneurs) into the mainstream economy. These disadvantaged groups need a lot of support because they are expected to compete against incumbents who have access to capital, suppliers and markets.
This research agenda has three pillars:
Figure out how well South Africa is doing in terms of technological change. Which sectors are changing faster, where is productivity and manufacturing value add improving, and where are we falling behind? This area of research is also about mobilising sector organisations, like industry associations or a whole range of meso organisations supporting the private sector to become better at tracking technological change.
Make the landscape of technological support organisations more visible. These organisations can assist both the private and the public sector to embrace, experiment with or adapt to technological change. A next step would be to make sure that these organisations are incentivised to disseminate technological knowledge and that they are not only measured on how they assist individual enterprises or technology transfer projects.
The third pillar is to improve the dynamism in how public sector organisations work together and collaborate with the private sector to promote industrialisation, upgrading and innovation. This is an essential ingredient to strengthen the countries technological capability, to reduce coordination costs and to foster healthy and pro-active public goods that encourage entrepreneurs to search and discover new economic opportunities.
The current research agenda is not yet comprehensive but for me the synergies between these three pillars are great. It is about technological change, about making sense, about promoting innovation within and between organisations and also about strengthening meso organisations.
It is interesting to reflect how over my career the organisations I work with have gone from trying to gather additional information from beyond the organisation to trying to make sense of all the information around them. Actually, some people I know are actively disengaging from reading newsletters, books, blog sites or other channels because they are feeling overwhelmed.
My career started in the ICT sector in the early days of connecting companies to the internet. In those days, people wanted to connect to the internet because they wanted to access some additional data, information and communications from far away. They sometimes wanted this internet connection, even if the real benefits of connectivity were fluffy and took years to realise. I shifted to the development sector in the 2000s. By then, many organisations had already started to benefit from this new connection to the information highway. The shift towards web sites, online databases, capturing learning and networks had already begun. In many of the projects I worked on, there were attempts to establish web-based knowledge portals, communities of practice, and online knowledge repositories around a vast assortment of topics. No longer was technical knowledge only available to geeks that could navigate obscure corners of bulletin boards.
Now it seems like organisations and individuals* are drowning in information. (I wonder if one could even argue that information is being reduced to data?). Folders are cluttered with documents – of which some are valuable and others not. Some documents are duplicated several times over on local hard drives, cloud drives and in inboxes. Decision-makers have more information at their disposal than they need, and they often have no idea how to figure out what is relevant or more valuable. Everything seems important, and too much content is collected and never used.
I often talk at events about how information and knowledge are critical for innovation. A culture must be fostered where what is known can be leveraged, thus supporting both continuous knowledge development and innovation. At these events, I am often told by participants that their organisations don’t have all the knowledge they need to innovate. What they need is not at their fingertips. Some express that it is crazy to propose that they start with becoming more sensitive about what they know and how they organise themselves around the knowledge they create and depend on daily. Some even claim they are not working in knowledge-intensive workplaces because people are not willing to write up what they are thinking or doing! I don’t think it is so much about documenting everything anymore. I still make for the exit when I am told that I must write up “best practices” or “lessons learnt”!
However, making better sense of what is known, and what is not understood, are critical — both for individuals and collectives. The search for complementary or necessary knowledge takes place both internally and externally. Internally, knowledge management is about continuously reflecting on what is already known by the organisation or team. It is about figuring out what to document, or what to keep in mind, or what to consider next time. Or it is about figuring out how to use what is already discovered to improve, products, services, processes and structures. Knowledge management is increasingly about being more sensitive to weak signals, responsive to new patterns and alert to odd findings. Over time, knowledge management is becoming a more distributed function as organisations become more knowledge-intensive. More and more people are somehow collecting, processing, adapting and synthesising knowledge.
The external focus of knowledge management is about tracking emerging knowledge or discovering new patterns or supplementary knowledge beyond the organisation or team. It is mainly about exploring what others already know and had the time and energy to document, or to track important developments in other domains and bringing the relevant ideas to the attention of the organisation.
To fill in the internal knowledge gaps from the outside, your team must become better at knowing what you know. This is of course only useful if you can turn what you know into value for others. If you are enabling knowledge development, you must be sensitive to what the organisation needs in the short and long term, so that information can be sourced timesously and over a time period. Teams must also understand how what they know is valuable and usable within the organisation and by its clients.
What is much harder is to get better at sensing where there are areas where more knowledge is needed, where things are not yet clearly understood or mastered. Many people I know spend a lot of time rediscovering what they already knew, or what their teams already sorted, stored or processed. This (re)discovery wastes a lot of valuable time and mental bandwidth. It often just adds more noise in the form of documents that are easily collected but rarely used or synthesised effectively.
It is easy to test how knowledge-intensive a organisation is. Ask your team where they start when they need to gain access to information they know should be captured somewhere. Do they begin internally, or do they open their browsers and start externally?
In knowledge-intensive organisations, the knowledge search starts internally. That is due to knowledge synthesising taking place and adding value to everything the organisation does. The internal search could begin with looking at data already collected, or with information captured in reports, files, photos or physical documents. Or it can start in more informal spaces, like in Slack, MS Teams or even Whatsapp or asking around in the corridors.
In knowledge-starved environments, the search for new or supplementary knowledge almost always starts on the outside. It begins in a browser or at an online resource. In these organisations, the value of improving how information is collected, organised, synthesised, evaluated is low. The pressure to use what is known, or sensed in innovative ways is also low. Improving how information is organised is simply simply not worth it. Lazy or ill-disciplined team members can undermine knowledge-intensification, because organisations have to keep legacy systems running in parallel to newer systems. For instance, some organisations communicate internally via e-mail, slack and other messaging systems. Documents are both stored in shared systems and are emailed about. This is clumsy and it reduces to ability of teams to build a coherent picture of what is going on, what is important, what needs to be maintained, expanded or deleted.
While permanent connectivity makes it much easier to search externally quickly, the habit of failing to collect, synthesise and create a more customised combination of knowledge also comes with other risks. The person doing the searching is at the mercy of tags developed by others, search rankings influenced by advertising spend, and increasingly a lot of fake news, reports, statistics. We all know that what is captured in the form of explicit knowledge is almost always far behind the curve of context-specific tacit knowledge that is hard to capture. This strategy of external search could work if your clients are less informed than you are. Besides, using search engines to find knowledge is also an art. There is also a lot of luck involved.
However, if clients want synthesised knowledge that fits their context, then organisations have to become better at enabling their own knowledge culture. Is your organisation the go-to place for certain kinds of knowledge? In a knowledge culture, it is not just about the technicalities of the search internally and externally. It is also about evaluating, refining and maintaining what is retained (and how) and how what is kept is organised or retrieved. Making it clear why something is kept or how a module can be used in combination with others is also valuable. If along the way documents are found that are no longer relevant, they are marked as unimportant and moved aside or deleted/archived.
Organisations (and individuals) also need to find a balance between documenting what is known for sure and exploring what is tacit, but not yet ready to be captured in an explicit form. This is where applications like Slack and Microsoft Teams, Trello and others are really valuable.
A knowledge culture values collecting, combining and synthesising information. It thrives on sharing hunches, talking about fears and opportunities. It is not just about proven content and technicalities. It is about:
constantly reflecting on what information is valuable,
collectively or individually thinking about which ideas, concepts or knowledge modules are used often to support decisions,
It is about talking about which concepts are drawn on frequently, and;
Exploring where explicitly captured or better-organised knowledge could be valuable for the organisation to draw on in future.
From this base, it is then easy to combine internal knowledge with different external knowledge. For me, starting the search outside is like searching for second-hand knowledge, while the raw material of ideas and insights of the internal organisation are overlooked or undervalued.
When an organisation becomes conscious of the value of their collective wisdom, far more care is taken to identify frequently used materials, modules, processes, tools, patterns, labels, thoughts and proven concepts. It is not just about the habit of collecting, sorting, storing and retrieving. It is also about reflecting on what works, what can be used better, and what kind of conversation or effort is missing. Then it becomes straightforward to combine internal knowledge with external ideas to innovate. If organisations reflect more about what knowledge is valuable and how this knowledge can best be kept alive for future refinement or use, then they will already be on their way to becoming more knowledge-intensive cultures.
*For those that are interested to know more about personal knowledge mastery, I recommend you take a look at the PKM course offered by Harold Jarche.
For many years, my practice was mainly about process consulting, with some research on the side. Because I love reading and theorising, my work always combined operational with conceptual development. I think my most significant value add to my clients was in the informal coaching and decision support I gave them on the side.
Over the years, the commissions I received to mainly do research, conceptual development or decision support work steadily increased. Still, I wanted more, as my programme was still mainly organised around consulting assignments. Then last year it happened. For the first time, research, conceptual development and decision support was my primary source of income. These are longer commissions to figure something out, develop a framework, or synthesise a lot of literature and research.
I get these commissions because my clients are finding value in the topics I am researching, and they are interested in leveraging these insights in their work. So my consulting assignments now become the place of integration, while my self-funded and commissioned research becomes the source of inspiration, ideas and curated content.
At last, I am consulting on the side. Almost all my short term process consulting assignments are now about applying or leveraging my research. My consulting contracts are now about weaving together my research in a way that helps my clients make better decisions and lead healthier and more innovative organisations. What I find rewarding, is that research topics that I struggle to keep apart in my mind, all seem to flow together at my clients. The consulting work is still important, but now my world is increasingly organised around my research interests.
For instance, some of my current research themes are:
Strengthening meso organisations, and figuring out how societies create, modify and measure these organisations
Establishing technological intelligence in industries, regions and organisations to sense discontinuous technological change Enabling innovation cultures that leverage tacit knowledge Enabling teams to draw on complexity thinking to search and discover for opportunities for systemic change.
Developing our systemic insight methodology and tools that enable teams to search and discover for opportunities of systemic change in complex or ambiguous environments.
How do societies learn, adapt and develop appropriate physical and social technologies? How does this dissemination happen? Is there really a paradigm shift to a “fourth industrial revolution?” or is this just hype?
I have seven or eight of these themes, with some being more coherent while others are still more disordered.
Now at my clients, these themes weave together in amazing ways:
I am helping a ministry of trade and industry to establish a technological change observatory to better anticipate and respond to technological disruption. This assignment combines my exploration in meso organisations, but it also harnesses my work on technological change and measuring change.
In another country, I am assisting a newly established think tank in developing a strategy, and in promoting knowledge intensification in the broader economy. This project draws on my work on meso change, but it also draws on my earlier experience in helping teams to conduct and make sense of industrial analysis.
In yet another context, I am helping an industry body to make sense of an industry diagnosis that we conducted on their trade members to understand their reality and the dynamics in their industry. This was part of a larger assignment to help a skills development project figure out how it can better support dual vocational education and job creation.
I am enjoying this new balance. It is gratifying to synthesise many loose strands into simple organising frameworks. It draws on my strengths of reading broadly, tinkering with ideas, finding literature from wise scholars on these ideas, and finding ways to make these concepts useful to my clients.
I am excited that the Helvetas Eastern European team asked me to write a blog post for their Mosaic newsletter about the Fourth Industrial Revolution. The blog article and many others can be found here.
Regular readers will know that I am not so convinced of one big revolution; rather that there are many smaller disruptions. In this article, I argue that it is hard to imagine what a paradigm shift would look like. I make six arguments of why there are rather several smaller disruptions taking place. The credit for coming up with the image in the article goes to Zenebe Uraguchi from Helvetas. He is also the person that convinced me to write this article, and who guided me when I felt stuck. Thank you, Zenebe! Take a look at some of Zenebe’s posts on the Inclusive Systems blog of Helvetas.
The second half of the article I wrote is about figuring out which social technologies to develop that are needed to make certain technologies usable or beneficial to societies. Many of these social technologies are cultural or organisational, but there are also many public institutions and public goods that are lacking in developing countries.
To me, it feels that we are still just scratching the surface when it comes to helping the meso organisations of developing countries cope with technological change.
However, it is exciting that my research into discontinuous technological change and the necessary social and technological institutions that are required in developing countries is of interest to development organisations and governments.
I am looking forward to your comments, questions, contradictions and ideas!
Ten years ago on the 1st of May 2009, I called Jorg to tell him that I had just e-mailed my PhD thesis to the printers. The man who answered the call told me that Jorg had passed away. I can still remember my shock and confusion.
For many people, Jorg was a very clever but also strange person (we received hundreds of messages of condolence that expressed this). He became a close friend of mine. We trusted and admired each other. He probably thought that I was the weird one. He stretched my thinking. He challenged me to think things through, to use curiosity to explore ideas from many different angles. He sometimes used irony to challenge my thinking. Out of exasperation he occasionally embarrassed me, sometimes even in front of an audience. However, most of the time he was patiently coaching me, guiding me, asking questions, drawing pictures, dragging me along with him. We spent days together whenever we could and when apart we would Skype almost daily. I am still grateful that he bounced so many ideas off me. He encouraged me to trust my instinct and to use my interest in many different knowledge domains to enrich discussions and introduce different perspectives. He was a great role model.
I can remember how he would use my confused thinking to quickly write a working paper. More than once I thought my clumsiness was his gain, but then I also benefitted from his creations.
Once, we had a meeting with a high-ranking government official. This official asked lots of questions and explained to Jorg the many conundrums the government faced. After the meeting, I took Jorg to the airport, less than an hour away. On the way he asked some questions and asked me to explain some of the doubts expressed during the meeting. I dropped him off and returned to the office. About two hours later I received an email from Jorg with a whole article that he had written for the government official. In that article, he patiently unpacked many of the issues that he sensed we were struggling with.
This was not the only time that he would develop issues that we were discussing and creating amazing text from it. Jorg was a pioneer in many ways. I recall the day he told me that we were going to record a podcast. He invested in a proper recorder and nagged me for months that we record the first episode. I objected to being recorded, being mindful of my repetitive grammar mistakes and the difficulty I had with pronouncing “r’s”. But Jorg would have nothing of my futile attempts at avoiding this. In the end, we not only recorded one show but a whole series of more than 65 podcast episodes, called the LEDCast. Today, recording a podcast is easy. Editing is very easy. There are many publishers of audio shows. Listening to podcasts are also easy, with most smartphones offering clever apps to manage subscriptions. Back in 2007-2009, we had to use several different applications to level the sound, compress, add meta tags, edit, and convert the wave files to MP3. Then we had to get the files distributed. Nowadays, this is all done in one application.
The LEDCast was very popular, despite our doubts. Due to the high compression required to download a podcast over a dial-up or DSL line, the audio sounded very hollow and metallic. Yet some practitioners told us to our horror that they played the podcasts during training events or during town hall meetings! Once a stranger at a conference told me that I sounded much better in real life! Looking back I am grateful that Jorg did not give up on me.
Back in 2011, we had already had several hundred thousand downloads of our total 72 episodes. Every time I heard the jingle of the LEDCast I was filled with sadness and I stopped creating any further shows. To me, the LEDCast was a legacy of Jorg and I wanted to keep it together and whole. I must add that we still have between 100 to 2500 downloads every month of the LEDCast. Many of the episodes are still relevant. I also co-produced with Marcus Jenal a new series called Systemic Insight, available on Apple Store and Google Play.
Another memory that I have of Jorg was his curiosity about blogging. Although he registered a blog site, he never wrote a blog post on his own site. He foresaw that blogging would change the way knowledge is assimilated, processes and shared within communities. I remember that he thought I was crazy when I started blogging. I also recall how much he admired the early blogs by Dani Rodrick and some other early pioneers. Jorg was a prolific writer, I can only imagine what great content he would have created if only he had started.
The last ten years have been amazing for me. Jorg left me with many unfinished ideas, texts and a legacy of knowledge. By the time of his passing, I was already firmly part of the Mesopartner company. Most of the many ideas, plans, and concepts that we had started with or put on hold for after my PhD submission are still alive, or have been turned into content. Jorg and I had a folder structure called “seeds” wherein we had sub-folders for ideas for papers, tools, concepts and training formats. I still use this structure today. Many of the seeds have grown into successful products, concepts or publications. Many new seeds are under development, often in collaboration with others.
Before his illness, Jorg was seriously pondering how we (as Mesopartner) could move closer to academia and the research community. Our work in the field used many concepts and frameworks developed by scholars in a pragmatic way, and we wanted to create a feedback loop. After Jorg’s passing we established the Jorg Meyer-Stamer scholarship to actively promote collaboration between students and a network of academics that Jorg had close ties to. I became a member of the faculty at several universities, and so did Ulrich and Frank. We also took on more assignments that were of a more research nature, and several journal articles followed. The tone and style of our Annual Reflection has also changed to being more conceptual and rigorous. We have several concurrent research themes in Mesopartner where we are actively working with researchers, scholars and clients to develop new ideas, frameworks and instruments. Since Marcus Jenal joined Mesopartner we have also been working in a collaborative way on applying complexity and evolutionary thinking to economic development in a theme that we call Systemic Insight.
Some other habits and values of Jorg rubbed off on me. For instance, Jorg always stressed the importance of spending no more than 60% of my working time on paid work, with about 30% dedicated to research, development and concept refinement, leaving the remaining 10% for admin, networking and other interests. Jorg always emphasized that our value is not created only in how we execute the commissions we receive from clients (that 60% block), but that our highest value add comes from the 30% where we connect ideas, think of better ways of explaining concepts, where we give our creativity and curiosity some freedom. He also argued that the time spent on administration should be planned and taken seriously, as our clients not only learn from our content, papers and innovative training formats, but they also learn from how we organise our affairs and manage our business.
I have in the meantime been very fortunate to have clients pay me to do research and development, which means that in some weeks or months I get to spend almost 80% of my time on developing new concepts, text and little knowledge modules that can be used in many different ways. That is my lame excuse for not blogging more often….
I cannot help it, but I often think of Jorg. I miss him. But mostly I am inspired by him. I wish more of my friends and close collaborators could have known him. Perhaps they do know him indirectly because I still use so many of his ideas. Or I talk about him. I know that his legacy lives on as we innovate, solve problems, formulate new concepts. I believe that his legacy also demands from us to be critical of ourselves, our work, the development industry – and that we sometimes have to take on sacred cows and ideology that often creeps into development work.
Perhaps most importantly, Jorg was never afraid to put his ideas out there and to have them taken apart or rejected. He was not afraid of trying new ideas, of formulating a new concept, or challenging an established idea.
And that brings me to my final thought. How do I fare in sharing what I am learning with those close to me? How transparent am I with the ideas I am developing, the seeds I am nurturing? Not that I am comparing myself to the genius of Jorg, this man was like a living library and creator. Jorg was driven to develop his ideas and to find better ways to share them. I often get so busy with whatever is under my cursor that I forget to share.
I know I should write blog posts more often. I know that the true power of blogging is not in writing completed thoughts, but in sharing half-baked ideas and developing them further with friends, collaborators and the curious (this is the refrain of another person I admire, Harold Jarche). I cannot help buy feel overwhelmed with the amazing stuff that is generated by people that I admire. Do I add to the all the content that we are all drowning in already?
I can think of many areas where I can still make improvements. Perhaps it is time to record some new LEDCast episodes. Perhaps I can call it the 2019 series. Any ideas for a podcast, or any volunteers to be interviewed would be welcomed.
Maybe I should arrange more training events. Or try something new. Try something crazy, like the LEDCast idea was back in 2007. Like finish the handful of online training courses I have been working on.
Today, I feel inspired to try harder and more often to share and develop my ideas out in the open. When I look back, it is often the small naive ideas from more than ten years ago that laid strong foundations later. So I remind myself that excellence is not about getting the big things right, it is about the many small things we try to improve who we are, what we do, and how we serve those around us.
Please share some of your memories, insights or even photos of your encounters with Jorg. What of your learning inspired by Jorg have you applied in your work? Can you remember any great insights that you gained during a LED tour to Germany, a training event or during fieldwork?
Don’t be shy to make mistakes in a public forum! Send your half-baked ideas to me! If not via the comment section, then email it to me.
Globalisation-weary politicians and advocates of local capability developments and geeks or technology promoters have one theme in common: technologies developed in the First World not only disrupt domestic companies, but upset whole sociotechnical regimes in developing countries. While the benefits of digital technologies are not disputed, what is disputed is how to solve this problem. This is where the two groups of lobbyists part ways.
One argument is that if local companies had some protection, better incentives, more support and everything else on their wish lists, then local entrepreneurs would be able to come up with similar digital technologies. How long this is likely to take and whether it will succeed is usually not discussed to any real extent.
The other argument is that disruption is good, and that the services of, say, Uber or Amazon disrupt local monopolies and save consumers millions while allowing “new” entrants into the markets. What happens when these global companies lose interest and withdraw suddenly, or when all local capacity to compete has been eroded is also not discussed.
I will steer clear of these and other flashpoints. For me the key differentiator that counts in favour of global digital technologies is that they create MARKET platforms. By market, I don’t just mean a space where sellers and buyers can meet. These platform technologies invest heavily in overcoming many market and institutional failures. For instance:
Many digital marketplaces carefully create trust systems where buyers and sellers can check each other out.
Most digital marketplaces give you lots of technical information, reviews from other users, and links to comparable products in higher and lower price brackets.
Most digital marketplaces coordinate logistics, customs, invoicing, tracking and customer support.
They accept numerous currencies and numerous payment methods.
Users can switch seamlessly between different platforms (add something to the shopping basket on your phone, complete the order on your computer).
This means that these global platforms overcome many of the market, coordination and government failures that keep developing country entrepreneurs so busy. Even though I have shifted my understanding of how economies evolve beyond market failures, I still see them everywhere. Maybe they are not as quantifiable as many economic theorists would make them sound, but their archetypes and characteristics still show up. I have made a note to explore these market failure archetypes in a next post. (other posts on 3D printing, IoT; tech push fallacy article over here)
The most disruptive digital technologies can be described as platform technologies, which means that they create marketplaces with their own institutions, rules, laws, recourse systems, fair play policies and competition between providers. These platforms crowd in both sellers and buyers. That is what makes them so easy to use, for both buyers and sellers. They personalise the options for market players. They integrate service providers and even regulatory requirements. So even if a better local digital technology may be available, consumers will go where there are more products, and sellers will go where there are more buyers. These platforms often displace or disrupt previous widespread platforms. The mobile phone has in many cases displaced several platforms, including newspapers.
The only way developing countries can respond is to make sure that they create the right market-supporting institutions. The challenge is that while global platforms often start in one or two markets and then scale up, developing country governments have whole economies that are in need of interconnected and interdependent platforms. The challenge is to figure out which platforms would be the best learning places for rapid learning, adaptation and dissemination.
If you would like to keep informed of my progress on this topic, you can sign up in the box on the left of this post (or here) to receive a personal newsletter from me. I promise not to clog your inbox with junk mail. The sign-up form will help me to figure out what topics you are more interested in.
Yes, I know it is already February. It took me a month to settle in and get my focus right. Happy (new) year of the Pig to my clients and friends in the East!
This year started differently from previous years. I usually conclude most of my contracts by early December, and in January I often search for, select and initiate new contracts and research themes.
This year was different in several ways. Firstly, I have three research contracts that already started in November and December of last year (2018). I will describe these research projects in more detail in a next post.
Secondly, instead of hosting my business partners in South Africa for our annual meeting, I had to travel (with Annelien) to Argentina early in January. It took me a few days to settle in on our return.
A third reason why I am writing this first blog post of the year so late is because I had to decide how narrow I want my focus to be for the year ahead. I had to evaluate the risks of continuing on the path that I set out on last year. The rest of this post will be about this reason.
The first theme I dived into last year was about technological change and how developing countries (like South Africa) can prepare for technological change, disruption and perhaps even the mythical Fourth Industrial Revolution. I worked with the Trade and Industry Policy Strategies (TIPS) research organisation in Pretoria to advise a newly established Chief Directorate on how to assist the manufacturing sector to prepare for technological convergence and disruption. Once the papers are available for public comment I will post them on this website. (click here if you would like to receive a draft in the meantime and the final version when it is approved for distribution).
Under this theme I could work in several countries on technological change, disruption and knowledge for innovation.
The second theme was about how organisations that are meant to support structural economic change or address market failures adapt, change, evolve and come into being. I was able to finalise a third version of the meso organisation adaptation framework, and had several opportunities to test elements of the diagnostic instrument in South Africa and elsewhere. I could use elements of this research also in Kosovo, Germany and at some of my longstanding clients in South Africa.
These two themes come together in the field of sociotechnical change and evolutionary thinking. It combines knowledge domains such as innovation systems, evolutionary economics, new institutional economics, innovation, organisational development and learning and knowledge management. I see myself more and more as a researcher and facilitator of search and discovery processes, and less and less as an expert and consultant.
I decided to continue down this path for 2019. I want to immerse myself in the meso level where leadership of meso organisations has to anticipate sociotechnical shifts, and where managers have to manage competing objectives for scarce resources. I would like to work with business leaders who have to figure out not only how to catch up with better-resourced, powerful global competitors, but where the private sector must often make up for incomplete economic policies, supporting institutions and other structural failures. I would like to partner with research organisations and various other researchers and expand the research theme on the mesopartner.com website.
So here I am in 2019. If you would like to keep informed of my progress, you can sign up in the box on the left of this post (or here) to receive a personal newsletter from me. I promise not to clog your inbox with junk mail.
Photo credit: Goran Jankovic of the EDA in Banja Luka (BiH). Picture taken during a session with industry leaders on innovation, competitiveness and leveraging knowledge for innovation during September 2018.
There are two terms that many of my clients use interchangeably, which really bothers me. The first is the term “the Fourth Industrial Revolution”, and the other is “Industrie 4.0”. What bothers me is that these two labels represent two concepts that only partially overlap. Sometimes they are conjoined with an “and” in a sweeping statement to emphasise just how pervasive and disruptive a specific technology is, and how utterly unprepared everybody is.
The Fourth Industrial Revolution is a concept that was popularised by Klaus Schwab and the World Economic Forum (although the name goes back almost 50 years). Many international consultancies have also developed instruments and advisory services around this theme (I admire their animations and graphics). The Fourth Industrial Revolution is a banner over many new technologies. Most of the technologies that are highlighted by the WEF are not new, e.g. 3D printing, sensors and artificial intelligence, whereas the narrative of the Fourth Industrial Revolution highlights the effects of the convergence of several scientific and technological domains (take a look at this link to read more about some of the technologies). Due to the reach of digital technologies, smartphones and global software platforms, new applications of technology are spreading very fast. It almost seems as though the rapidity of technological development is increasing, and that the depth and breadth of convergence and its impact on industries, firms, governments and whole societies is potentially disruptive. Hence the “revolution” part.
I must add that not everybody is convinced of this revolution. Some argue that we are still in the third revolution, albeit in a second or third extension. Others argue that we are already undergoing the fifth or sixth revolution. Then one might also argue that revolutions are usually not predictable, or that revolutions go hand-in-hand with massive social, political and institutional upheavals, which we have not yet really seen. Others, like Carlota Perez argue that these revolutions are unavoidable, and that governments have a key role to play in preparing for societies to cope with these wave of change. In fact, we have not seen massive employment displacement in Europe attributed to massive technological disruption, despite all the machines, robots and drones. I for one am also not convinced that the technologies and their convergence are revolutionary. What I find really eyebrow-raising is the immense interest of capital and political elites in technology, and all the hype around these technologies. I must also confess that I am impressed by how well the applications, use cases and adaptation paths of many of these technologies are described on the web. For instance, take a look at the Blockchain use cases on the WEF site here.
The second label is Industrie 4.0. It is usually spelled this way because the concept originated in Germany as the rallying cry of their new “High-Tech Strategy” which has emerged over the last ten years. The German high-tech strategy has a dual focus. The first and often overlooked emphasis is on continuing the incremental and export-oriented technological development that German manufacturers are known for. It builds on Germany’s current excellence and ability to innovate, especially at the level of product and process technologies.
The second and more frequently discussed drive of the German Industrie 4.0 strategy is all about digitalisation, knowledge intensification, trust building, dialogue and networking (some topical areas are described here). Digitalisation is not only about connecting things to the internet, but also about manufacturers being smart about integrating their suppliers, clients and internal processes. Improving the competitiveness of German manufacturing and making the society, workplaces and communities healthier and happier in the future are recurring themes. So are the environment, the circular economy and the importance of investing in longer-term technological platform and capability development. What only a few people in Germany would acknowledge is that this high-tech strategy was a response to the realisation that Germany was not as digitally savvy as one would have expected (to see the Tuft Universities renowned digital performance assessment of countries head over here). The Industrie 4.0 strategy in Germany (and now also in many other countries) is already quite mature, decentralised and, dare I say, pervasive. Also, Germany is very critical of its own performance. For instance, the Federal Ministry for Economic Affairs and Energy (BMWi), publishes an annual assessment (only in Germany) of the digital performance of Germany on their website at www.bmwi.de).
In Germany, and increasingly in other EU countries, it seems that every university, technology centre, industry association and consultancy is involved in cluster activities, Industrie 4.0 readiness assessments, technology demonstration, research and so on (look here to see a list of “testbeds” in Germany). The snowball is gaining momentum. Different ministries and spheres of government are coordinating around clearly described projects that are managed transparently and concurrently (look at the Platform Industrie 4.0 website to see the number and composition of initiatives). Many initiatives, such as industry mobilisation, making constructive policy inputs, developing standards for data integration, compatibility, etc. are being driven by private sector organisations, private sector representatives, science and engineering bodies or associations (Here is a link to the National Academy of Science and Engineering website). Manufacturers in Germany are at this moment spoiled for choice when it comes to choosing which technology service provider to use to solve a problem or test a new solution (link to use cases, link to tech support centres). Both public and private service providers are striving to be relevant, at the cutting edge and valuable to the private sector.
Now this second label, Industrie 4.0, is something that the developing world should take note of. This industrial strategy is about much more than adding digital capability to existing products and processes. It is about a modern digital business model which is smart, has strong feedback loops within the organisation and beyond, and reaches out to suppliers, supporting institutions, clients and devices ( go here to assess your readiness and to see how wide this assessment is). It is not only a public strategy, but has now become a private sector strategy too. It is about deep integration, collaboration on long-term technology and capability development, co-funding, skills development and standards, and is globally focused.
I believe that this second label has the potential to disrupt the developing world far more than the Fourth Industrial Revolution notion can. If we do not respond, our developing country manufacturers may be left behind.
This is not about tweaking existing products, adding sensors or tracking data. It is about improving the ability of organisations to make sense of change, future possibilities and their performance within this fluid context. It means that those local companies that could be globally competitive would be under pressure if they were not able to tap into or track this gaining momentum in Europe and elsewhere.
Decision makers in business and government in developing countries often underestimate the funding and effort that go into building trust, collaboration and joint problem solving or policy making in Europe and beyond. Both Industrie 4.0 and the Fourth Industrial Revolution are not about products or process technologies, they are about new business models and new ways of collaborating, with the long-term intent of laying new foundations for the future.
If you are a supplier to European manufacturers, be alert, be proactive! Get involved.
If you are competing with European products and businesses, be awake!
This is not a project for your design team, your IT department or functional managers. This is a strategic re-think of your whole organisation and how it develops new capabilities, how it measures and interprets data and how it works with other organisations. This is not a quick fix, this requires a longer-term holistic re-think of your technological capability, of the new applications that may be possible and of new forms of collaboration, co-competition and integration all enabled by digital technologies.
So why do I argue we need to understand these terms? I see the Industrie 4.0 movement as a strategic and intentional approach to shaping the future. While the Fourth Industrial Revolution narrative of the WEF and others helps us to understand what has already changed. It helps us to respond better, while the other urges us to actively get involved in shaping the future. I know this difference is subtle, and I know that the WEF is also trying to shape the future, but the popular narrative about the revolution is unfortunately often about technologies and how we respond to them.
I have not posted anything for the last 3 months. I have been on an amazing adventure which is so similar to Alice in Wonderland that I might be asleep and still dreaming.
It started with a long-pursued opportunity to help a unit in the South African government prepare and think through the consequences of the “fourth industrial revolution” and the fuzzy collection of Industry 4.0 gadgetry that will soon overthrow our lives. By all popular accounts, this revolution will smack us hard, because the narrative in South Africa is that we are behind and falling further behind. The prophets blame all our usual reasons for this impending doom: our poor education system, our unskilled workforce, an unemployable youth, labour unions, capitalist greed, our government policies, inequality, high costs of everything, low public investment, corruption and the easter bunny. (OK, I made up the last one.)
Now don’t get me wrong. I know we are drifting sideways in many respects, maybe even regressing in some areas. For example, our economic complexity is in decline. Our technological capability is dropping. Many of our traditional sectors are uncompetitive. I have been working in the high-tech sectors and I know how hard it is to get to any kind of scale. Our institutions struggle to adapt, are underfunded, and our business people face high uncertainty, as much uncertainty as our public officials.
It is clear to me that the pace and convergence of change is increasing. The amount of information is increasing. We all are drowning in documents, reports, blog posts, emails, journals and correspondence. The demands both on specialists and generalists are increasing. So there is definitely something cooking.
But is it an industrial revolution?
Are revolutions not full of social unrest, upheaval of institutions, overthrowing of government structures?
That is the big question that I started with. I must admit the empirical and academic evidence is thin on this topic. The only people excited are geeks and suppliers of gadgets. This really bothered me, so I tried to figure out what all the things are that I would have to understand to sense, monitor, track and possibly predict where technologies are changing, how these shifts could affect our institutional structures, industries and jobs.
So I went on the most amazing reading journey. Down the rabbit hole I went.
I started by exploring the literature on how technological change happens, how technology cycles unfold. I could get lost in little forests of papers, books and articles by many of my favorite scholars. I followed ideas down paths (to the 1980’s) and came back again to 2018. Actually, not much has changed since the early writings of Nelson, Pavitt, Lall, Freeman, Edquist, Perez and many others. I admire these scholars because they really grasped the principles at such a fundamental level that not even the arrival of the internet really nullified any of their theories. I then investigated technological evolution and was again inspired by the clear writing of Arthur, Hidalgo, Hausmann and Rodrik (on structural change and industrialisation).
Then I stood back and wondered about all the innovation, tinkering, risk taking and failing that had to happen to lead to the patterns that I found in the chapter on technology. Again, I went into a forest, this time looking at innovation, how it happened, did not happen and why. I was inspired by the work of Dosi, Fagerberg, Malerba, Dodgson, Teece, Utterback, Clark, Henderson and Christensen.
For a week I felt paralysed by these two forests. Are they really two different domains deserving separate chapters, or should they be integrated into one? In the past I have treated them as separate. So, I procrastinated and forged into one of my favorite topics, that of innovation systems and how they change.
It was always my intention to hold back on this walk into the innovation system forest, as I wanted to look at everything here with new eyes. I plunged into my favourite authors, Nelson, Dosi, Freeman, Fagerberg, Srholec, Lundvall, and some more Nelson, and many other authors I admire. I was again struck by the importance of building technological capability, increasing absorption capacity and the importance of social, technical and other meso organisations in all of this.
Towards the end of the innovation system week I ventured into the work of Johan Schot and Frank Geels, Andy Sterling and Ed Steinmuller (the SPRU network), and got lost in the world of socio-technical transformation. I could look at the literature on institutional change and discovered the work of Thelen. I spent a whole day just reading up on Carlota Perez, and the next day I went back to the earlier works of Christopher Freeman (which then lead me down the archives of the SPRU). Perez is one of the few scholars who even mention the word “revolution” and she argues that developing countries must embrace rapid technological change to achieve structural change.
I came out of this forest dazed, confused and inspired. All at the same time. I decided I had to integrate my innovation chapter into the technology chapter. It took me three days to integrate them. I also tried to integrate the socio-technical transformation section into innovation systems.
Then I went away on a weekend in the Bushveld in the Limpopo province in South Africa. Somewhere while breathing fresh air in the country-side I realised that technology and innovation had to be separated, largely because there is a tendency in South Africa to focus on linear innovation (science=>technology application => innovation). I recalled something that my late business partner and friend Jorg Meyer-Stamer repeatedly said.
“Technology is about action, about harnessing natural phenomena to achieve something. Innovation is about a difference, it is about doing something differently”.
For my client to measure and track technological change would not be too difficult. Measuring innovation will be much harder, as a lot of the innovation caused by the “revolution” are about changes in social technologies, organisational culture and strategy.
Four weeks into my study and I was left with one messy section. It involved reconciling my views on innovation systems with the socio-technical transformation and multiple pathways literature. It felt like I was stuck in mud. The common factor between these fields is the importance of adaptive meso institutions, tied with a balanced supply side and demand side interventions. Context matters in both these fields, far more than firm level technological use and innovation practices. What I like about the social technical transformation literature is their focus on developing “niches” based on unique contextual opportunities or challenges, and their recognition of how change unfolds and spills over in time. Too often innovation systems treats the system like a static network of publicly funded organisations.
So that is where I am now. My first draft literature study is complete. I’ve had so much fun during this journey. You would notice that I did not mention economic complexity much. The days that I somehow cannot account for was spent on that, but I really tried not to get sucked in too deep. In the end I decided not to include this in this study.
Stay tuned for a future update about what I discovered.
I receive questions daily about the Internet of Things, Industry 4.0, 3D printing and many other technologies and whether and how I think these technologies will disrupt manufacturing and education in particular and the world in general. These questions are not only from government officials, but also from businesspeople, friends and fellow geeks.
Let me briefly state that I don’t believe it is possible to spot a paradigm shift in the future or in the present. So I would be hesitant to predict whether or when all these big changes will happen. However, when we look back we can spot shifts. Technological change typically takes places slowly but surely, and then at a certain point there is a massive shift. The point I would like to make is that even the futurists have great problems predicting the direction of that sudden shift. We must also consider that technological paradigm shifts almost invariably do not work out the way they are predicted to do before they occur.
For the last few decades many major technological advancements have been heralded as game changers. The advances are often generalised as sweeping statements about large-scale change. However, in most cases, new advances take a long time penetrating our daily lives, if they ever get that far.
So let me rephrase the original question a little. Perhaps the question is more about figuring out which technologies are diffused quicker than others, and why. This is something that we can calculate to some degree using a short history and the current status quo of assessments of technologies that are being touted as near-term game changers.
Dissemination of technology or knowledge always consists of at least three elements. I will for now ignore the process of diffusion for the sake of brevity. There is a supply side, a demand side and some kind of institutional or social construct that enables and even multiplies the diffusion.
The supply side is often most optimistic about how their ideas are going to change the game. The demand side is often naive about how useful a new technology is in real terms. Many potential users simply wait and see. Then there are the institutional mechanisms that operate at local, national, regional and international levels. There are lots of tensions at this institutional level, because this is where a whole range of social technologies, formal and informal, have to emerge or change. Just think of how US-based software companies are constantly coming up against data privacy groups in Europe. I am sometimes grateful that the institutional level takes time to change. Changing institutions to enable knowledge dissemination often requires multiple knowledge domains, different management levels and social play-offs. Often changing institutional support to improve diffusion must also cater for integrating and synchronising many other simultaneous change processes that are not only technological. They could be about regulations, rights and creating new forms of organisation. Furthermore, physical technology does not always change things the way we expect. After all, innovation is a process of combination and recombination, both at the level of physical technologies and also at the level of social technologies.
There are typically a few constraints that frustrate the diffusion of new technologies broadly speaking. The first is the fixed costs of the technology itself. Fixed costs slow down supply (otherwise we would already have electric vehicle charging points throughout the country), and also slow down demand (I cannot afford a Tesla yet).
Suppliers like to think that their solutions will fix social mechanisms, but this is often the area where change is the slowest. Social technologies often take the longest time to evolve (for instance in developing standards and regulations for electric vehicles, charging points and recycling of batteries). By evolving, the technology itself often changes with respect to its use, meaning and value – often beyond what the originators had in mind. Thus while individual users can quickly adopt a new technology or idea, formal institutions, regulations and supporting infrastructure often take longer to adapt to new ideas. This means that the supporting ecosystem that enables new ideas to be quickly diffused perhaps adds additional costs (perhaps massive infrastructure investment or learning is needed), or fails to reduce costs in the diffusion of ideas. This is where the second constraint comes in. It depends on how complex are the required social changes. I mentioned earlier that institutional diffusion must also integrate different complementary technologies. For instance, using a smartphone to make phone calls is easy (single technological paradigm). Using a smartphone to manage or monitor a part of a production line requires many complementary and concurrent capabilities and technologies. It may even require completely rethinking organisational structures, production lines and supplier networks. Simply put, if the new idea is very complicated to use (due to the many concurrent investments and capabilities that are needed), then the costs goes up in terms of education, regulation, infrastructure, coordination, specialisation, management and so on. Just think of what it would take for South Africa to adopt driverless electric vehicles …
Perhaps this also explains why individual companies (think hierarchies) tend to absorb technologies easier than societies or economic sectors. Inside a company management can overcome coordination failures much easier than within a sector or broader society. Meso institutions such as universities and technology transfer organisations are very important for overcoming these coordination costs, but they tend to change slower.
The complexity of technology and its demands on the meso organisation is important in my work. I help these organisations figure out how to navigate the complexity of new technology adaptation and diffusion. It requires an understanding of users, some understanding of technologies, but a lot of understanding of the process of change and organisation. I don’t think I would be able to do my work without my understanding of market failures, especially with regard to failures in the capturing, dissemination, absorption or valuing of knowledge.
There are lots of amazing technological ideas out there that have been tried, tested and measured and found to be effective. Many companies here in South Africa are already using these technologies. So supply and demand exists, and in many cases there are transactions. Yet many of our industries, enterprises, universities and policy makers don’t know how these technologies can save costs, improve efficiency or strengthen resilience. Nor do they know which ideas will stick or have the most impact. So there is a missing institutional capability that reduces the complexity of the technology. What is often missing are institutions that make the dissemination of new ideas easier and cheaper. It is often more the case that the users (and possibly suppliers) don’t know how much the full implementation or use of these ideas would cost, or what skills, complementarities or networks are needed to master new ideas. Many market-supporting social technologies (in the form of institutions and networks) are lacking. Somebody must reduce the search, evaluation and coordination costs. This is where the complexity lies. And neither do we want our institutions to try and implement every new technology – this is where social balance and a longer-term vision are required.
So now I can get back to trends such as the Internet of Things or digitisation of the manufacturing environment. Many manufacturers know about Computer Aided Design (CAD) simulation or even rapid prototyping. But how can we reduce their risk of trying 3D printing, or how can they add more sensors to their production facilities so that they can improve measurement and control? It is not just about the cost of using the technology once or twice. There are issues that are holding entrepreneurs back from simply rushing to an online store and hitting “buy now”. Where would they get the trained staff from? How would they train existing staff? How would they manage a new competency? What would it cost to certify or maintain? Where would they find new customers or suppliers, and what would it cost them to develop the complementary capability and optimally use the new technology? And most importantly, how do we reduce their risks of trying something in different combinations? These are the issues that a network of institutions must consider as they craft their technology extension and demonstration strategies.
For me there is a strong role for technology intermediaries to play in demonstrating, perhaps on a small scale, how new technologies can be integrated into existing workplaces. This means that technology intermediaries must be funded to host (and master) a wide range of complementary technologies, so that entrepreneurs can combine what they have in place with the capabilities of these technology intermediaries. Or that new entrepreneurs not burdened by sunk investments can use their agility to gain access to complementary technologies in order to create new markets. These institutions should not be measured by how many companies fully absorb new technologies (this could lead to perverse incentives), but perhaps by how many companies have tried, engaged with and been exposed to new ideas.
At the same time, policy makers should look at ways to introduce new technologies into developing countries beyond demonstration or technology extension. Some countries such as Germany or Singapore have also been purposefully supporting disruptive incumbent enterprises by supporting the uptake of new technologies. Sometimes you can demonstrate until you are blue in the face, but incumbents won’t change if they don’t have to, and small enterprises sometimes simply cannot build up the momentum to challenge the status quo.
I would like to end this blog by briefly summarising what I’ve been discussing. For me the question of how new technologies may affect our lives is too focused on the hardware and the geeks who love it. Even though I admire the suppliers and developers of new technologies, and I really admire the sophisticated users who are constantly inducing the emergence of newer and greater technologies, I believe that the real change we need is in getting better at creating responsive institutions that lower the costs for suppliers and buyers to try new things. This is where we can overcome many of the costs that slow down the absorption or dissemination of new technologies.