The Coming Knowledge-Based Economy

The Consequence of Convergence

For more than a century, America has thrived in an industry-based economy. An industrial-centric economy is giving way to a knowledge-based economy.

There is a significant change on the horizon.

As a result, those who have held the keys to the gateway of supply and demand, the masters of the supply chain of products and services, have occupied the seats of power.

The Information Age has grown out of it’s infancy and into adolescence, the natural outgrowth of which is moving us into a knowledge-based economy. This fact is striking fear in the hearts of those currently occupying the seats of power because they rightly recognize this as an existential threat. A knowledge-based economy (KBE) intrinsically values an entirely different skill-set than any that came before. The underlying reason for their fear is two-fold:

  1. The product (students) of the manufacturing facilities they’ve set up to populate the market (public education system) are not only woefully unqualified for the coming change, they’ve actually bred out of them the very qualities necessary to be successful.
  2. Their inability to adapt to the coming change.

The threat of the loss of power as a result of this lack of adaptability has them so desparate to maintain power that they are attempting to keep control of it the old fashioned way: by stealing it (why do you think the NSA is recording everything we speak and type or why the government is trying so hard to pass legislation like SOPA).

To better explain, I need to clarify the point that the knowledge-based economy is not REPLACING the industry-based economy, it will reside on top of it. Industry will remain and continue to do what they have always done; the difference being that their intentions and movements will be under the direction and control of what the knowledge-based economy demands. Better said, the values of industry must necessarily become the values of those who possess the knowledge that is informing the industry.

Knowledge = The product of interpreting a contextual understanding and the proper application of information.

It is the professional synonym to the word “wisdom”; applying critical-thinking to a dataset in the context of a given circumstance against the backdrop of previous or similar experiences. Knowledge is the opposite of analysis. Analysis is backwards-looking: this is what we did, this is what the result was. Knowledge is taking a set of current variables and being able to accurately forecast the outcome.

If information is “left” and “right”, then knowledge is “port” and “starboard”; only one set of terms is accurate in a dynamic environment.

The ability to obtain knowledge, which, as I have previously mentioned, is an altogether different thing than information retention, requires a free, open, critical mind unconstrained by traditional approaches or established rules, viz: a visual-spatial mind. Notice I said “unconstrained by” traditional approaches, not “to the exclusion of” traditional approaches.

In other words, it requires someone who is innovative; free-thinking; creative; and possibly most importantly, disciplined; someone who excels at pattern recognition and possesses the ability to see relationships between items in an unconventional way when convention fails to deliver a solution.

We are all born equal parts scientist and artist. Those who end up all scientist either end up that way due in small part as a result of genetic predisposition, but in large part as a result of the “manufacturing process” to which we are all subjected. As Sir Ken Robinson has said many times, the public education system has been intentionally designed to kill creativity.

Admittedly, some education industry leaders are finally beginning to wake up. But with so many interest groups profiting from the problem, change in this area is going to be slow, the resulting solution is going to be adulterated, and will still fail to solve the problem. For the forseeable future, it is a factory production line; a place where any student with ‘custom’ parts is punished and has every non-normative attribute removed. Worse still, if and when that process fails, they are discarded into the ‘rejected’ bin.

These are the sad options for the current students who simply think about the presented ideas differently. Imagine how hostile it becomes if you not only see things from a different perspective, but also actually think for yourself.

A happy little factory pumping out happy little robots with a reject bin filling up in the back lot. I suppose that model has worked well enough for quite some time. To get hired for a decent job, you would present yourself to an inspector (recruiter/applicant interviewer) whose job it is to make sure you checked all the requisite boxes.

  • √ Graduated high school (beginning preparation for the system)
  • √ Graduated college (advanced preparation for the system)
  • √ Was a good/compliant little boy or girl at his or her previous place of employment (works well inside the system)
  • √ Never proposed improvement or change to the system (works well inside the system)
Check all the boxes and… you’re hired!

It’s like a human quality check by organizational leadership:

  • Was he rejected on the factory line? REJECT
  • Did he have custom parts? REJECT
  • Does he think for himself? REJECT
  • Will he threaten to change the organizational convention? REJECT
  • Will he ask questions or make assertions that I can’t answer? REJECT

The sad fact is that the root of all of this is a lack of confidence in the organizational leadership. Think about it for a second. If you are the leader of an organization who is offered an idea for a possibility of improving one thing or another (a.k.a innovation), what is it that would cause you to not only categorically reject the idea (not having anything to do with its merits), but to go even further and deny the very opportunity to hear it. As if that’s not head-in-the-sand enough, some of you go further and make organizational moves which silence the very person who is trying to improve your organization?!

If you are the leader of an organization, that implies a few things:

  • You are an expert (or close) in your field.
  • You have intimate knowledge of your market, products, and customers.
  • You are intelligent enough to semi-accurately forecast the outcome of a given implementation.

If you immediately dismiss the creatives and innovators in your organization because you ‘just know’ that everyone is power hungry or has dumb ideas (or at least not as good as your own), then obviously the fault is yours. That is your cue to step down and go find a mentor because you ought to have enough experience and intelligence to discriminate between trolls and talent.

My question is: why wouldn’t you want to hear the talent out, especially if it improved your organization? If you did, there are only two outcomes of that scenario:

  1. The idea failed on it’s merits. Move on.
  2. The idea succeeded on it’s merits and your customers benefit from the improvement. The value and relevance of your organization increases thereby making you out to be a genius for hiring talented people.

Sadly, the real reason why leaders don’t value innovators, makers, and creatives is because they fear losing control due to insecurity in either themselves as leaders or as an organization in their market.

In a supply/demand-based economy, where the gates to those kingdoms are easily and tightly regulated, there wasn’t a whole lot for the creatives of the world to do except get high and wait for the world to change. To dream of a time where they would be valued for not necessarily who they were, but HOW they were. As time has gone by, the education system has been filling up industry with box-checkers and rubber-stampers all the while further disparaging the non-normatives and innovators.

For those of us who have been on the outside looking in, it’s been difficult to not wish that we couldn’t be like everyone else. Sometimes, it’s been incredibly difficult to believe that we have real and contributable value in the face of a ‘system’ that is always telling us otherwise. But now, as economic tectonic plates are moving, it’s funny for us on the outside looking in because we can see what you can’t.

The status quo industry is overpopulated, you just don’t know it yet because the boundaries have yet to change. A dramatic change is afoot; the scope of which is impossible to overstate; the speed of which will be dizzying.

The shift to a Knowledge-Based Economy will happen.

It is happening.

It is inevitable.

In order to grow and sustain a Knowledge-Based Economy, innovation is the only currency that spends. All of the standard corporate-types have surrounded themselves, to the point of drowning, with people who have a lot of currency; just none that will spend in this new economy. These are the ones who will suffer the most as a result. The consequence will be grave and long-lasting.

The convergence of the knowledge-based economy with a market filled with non-innovators is going to create an unprecedented demand for creatives. The creatives, makers, and innovators will flood the vacancies at the top effortlessly. The result will be one of the largest and fastest transfers of power and wealth the world has ever seen.

Transfers of power of this scope and size historically take 100 years or more, but this one will be in our rear-view mirror in less than 20 years.

Just watch.