Society will always try to organize itself in the most efficient manner relative to their corresponding communication technology. The history of this is consistent – so much so, that the future is relatively easy to predict.
Early tribes were connected within shouting distance to warn each other of perils. Later, cities expanded radially around a central market. The invention of the printing press, telegraph, radio, and television was marked by corresponding advances in governance models from feudalism to capitalism. Waves of innovation followed. Up until the change of the century, society was largely organized in hierarchies. From government, corporations, and military, hierarchies were the most efficient way of allocating information and other resources across the largest possible area.
Reification is the process by which social organization emulates technological organization. Society is said to be “reified” by technology. From the beginning of the computer age through the arrival of the Internet, society started reorganizing itself in a manner similar to computer networks. Not surprisingly, we are now comprised of networks of interconnected people. As the Internet reaches full saturation, networked organizations are beginning to compete with hierarchies and even dominate value creation machinery of our society. The top 4 most valuable brands are technology companies – Apple, Google, Microsoft, and Facebook.
The process is gradual, and not without some conflict between the two forms of human organization. But given the past, it should be fairly easy to predict the future. The transition from hierarchy to networks organization is inevitable barring some external effort to curtail it. If left unchecked, value networks will likely progress as follows:
Verna Allee defines value networks as any web of relationships that generates both tangible and intangible value through complex dynamic exchanges between two or more individuals, groups or organizations. Any organization or group of organizations engaged in both tangible and intangible exchanges can be viewed as a value network, whether private industry, government or public sector
The first generation of value networks arose from the ecommerce revolution where a production hierarchy could access a decentralized network of consumers through the Internet. Complex dynamic exchanges were carried out over the internet and transmitted internally through early CRM systems.
The second generation of value networks arose with when both the production and the consumers were decentralized and an Internet Platform existed to match the supply and demand. Companies such as Facebook, Uber, and AirBnB characterized by the interaction between two decentralized networks of producers and one of consumers. A centralized Internet application, called a “platform”, matched the two.
The third generation, is happening today with the emergence of Blockchain Technology. This new form of communication management completes the transition to fully networked organization by replacing the Internet Platform with an autonomous software that allows for supply and demand of resources to find each other without a third party intermediary.
This is a natural progression and nothing to be frightened of, rather, it is inevitable. In the same way as every other technological advance, there will be periods of instability laden with skepticism, false starts, scams, breakdowns and eventually profound success. Like other technologies, Blockchain is attracting millions of people engaged in entrepreneurial experimentation hoping to find the breakthroughs. Again, this is just human nature. It’s been happening since the Iron Age. We have three choices, ignore it, fight it, or join it.
While many others are applying Blockchain because it seems like the most obvious place to innovate – after all, everyone spends money. Another group is taking aim at the insurance industry – after all, to manage risk is to manage money. Unlike the others, the Integrated Engineering Blockchain Consortium believes that the place to start is in the engineering industries – where actual, physical, and the most consequential innovation occurs.