“Centralized” versus “Decentralized” Thinking About Technology Bob Dylan mural in Minneapolis (21 April 2018) Digital technologies are hot these days. Everybody is talking about them. My colleagues and students are all intrigued by artificial intelligence, robots and blockchain. You’re not up to speed if you don’t incorporate “tech” into whatever it is that you are doing. What worries me, however, is that a lot of the “tech talk” I hear lately focuses on automating and streamlining existing procedures, processes and practices. The focus is on integrating technology into the old, centralized world of hierarchies and compliance. I really believe this is a mistake. Instead, what we should be focusing on is how digital technologies can create a new more open, inclusive and “decentralized” world in which everyone has the opportunity to be more creative and entrepreneurial. And here I don’t mean the creativity that comes from simply using new technological tools, such as 3D printing or digital content creation. I am referring to the potential of digital technologies to transform our society. That is why we need to have a much clearer understanding of how decentralization can help spur creativity, entrepreneurship and innovation. The Centralized Approach But not everyone thinks of new technology in this way. For many, new technologies are seen as a means to build even stronger hierarchies and reinforce traditional ways of doing things. Here, the idea is that digital technologies can strengthen centralized systems. Many of my colleagues see technology as a means to ensure and monitor compliance, thereby “robotizing” society (in the sense that AI is going to help business owners and business leaders decide what is “good” or “bad” behavior, who should be hired, promoted or let go). They believe that technology can help solve the typical problems (mainly information and participation problems) with hierarchies. What I have noticed recently, however, is that people who think of technology this way are quick to abandon it when things go wrong. Or, when things get really disruptive, the technological developments are viewed as a bubble, a myth or empty science fiction. One can see this skepticism recently in discussions of autonomous cars, super-intelligent AI or the wide-scale adoption/acceptance of crypto-currencies or blockchain applications. The Decentralized Approach We need to be much smarter about new and disruptive technologies. Instead of reinforcing “centralized and traditional” systems and pre-defined structures, we must understand and appreciate that technology has the ability to “decentralize” society and create more level playing fields (creating more opportunities to people who operate outside the established practices and reputations). This in turn will spur entrepreneurship, facilitate sharing and encourage collaborative creative activities. Entrepreneurship In a decentralized and “tech-centered” society, individuals no longer have to be satisfied with the prospect of becoming anonymous cogs in a larger organization or corporate machine. Instead, technology has the capacity to transfer control from organizations and institutions back to individuals. Individuals have the ability to maximize their personal potential by building a lifestyle and a sense of identity that revolves around doing something that they care passionately about. And technology makes this possible. The digital transformation ushered in by the gradual expansion of this type of opportunity has created an unprecedented degree of choice as individuals seek to express themselves in whatever way they believe best suits their own unique interests and talents. Think YouTube, Medium, Instagram. New platforms for personal expression are everywhere. For some, this may involve becoming a developer, for others, a designer, and — of course — for some, it involves setting up a business and becoming a serial entrepreneur. There are endless possibilities. It doesn’t matter what people aspire to be, the key point is that digital technologies afford a greater range of opportunities than ever before to engage in a meaningful life project through “work”. This is the “age of opportunities”. Sharing Technologies also allows for the sharing of ideas in a “decentralized” way with less barriers (and first needing to be accepted by incumbents or other traditional “authorities”). But it is not only about sharing information (the one-way dissemination of information from one party to another). Sharing is about building an on-going and constructive dialogue with other individuals that can then have a significant impact on the future opportunities. We need to recognize the material benefits that accrue from sharing. By sharing, more inclusive and meaningful relationships with others can be forged. Sharing fosters a sense of belonging and expands the pool and diversity of potential collaborators. Collaboration Technology also facilitates “collaboration”. By “collaboration”, I mean any project that involves building something together through a process of co-creation. And digital technologies play a crucial role in facilitating this kind of meaningful collaborative activity. What I love about the digital age is the possibility to interact with people that I don’t know and, probably, never will really know. This creates multiple opportunities for collaborative “co-creation” that I’ve never experienced before. And There is One More Thing I spoke at a conference in Minneapolis last week where it became clear that it is important to acknowledge that these decentralized opportunities offered by digital technologies are not open to all and that new forms of social exclusion are created. Discussions focused on the need of a “basic income” were introduced. Nevertheless, we shouldn’t be overly dismissive or cynical about the extent and importance of the social change initiated by digital technologies. But, nor should we be complacent and assume that technologies will deliver a better world. We need to develop strategies to ensure that technologies deliver on their promise. For instance, the most innovative companies today understand that the delivery of innovative products and services over the long term will require a greater degree of cooperation between multiple actors and stakeholders. Product development requires gathering together disparate elements (hardware and software) and integrating them into a coherent product that delivers a value proposition that has relevancy for consumers. This task of gathering — identifying, coordinating and then combining — diverse elements into a coherent package will require unprecedented levels of cooperation both within the firm (i.e., between different “divisions” of the firm), but also with “external” partners, such as developers, creators, universities, startups. A firm’s capacity to build and maintain inclusive relationships in which all partners work collaboratively together will only become more crucial in the future. According to this approach, the existence of hierarchies or “silos” are counter-productive, and those firms that fail to embrace a more decentralized and open form of organization will struggle to innovate (and eventually survive). What is interesting is that an important part of decentralization involves “giving back” to society or the local community in order to improve that community. The more “open” companies understand the importance of embedding themselves in a local community as a means of facilitating (directly indirectly) collaboration. This may mean the corporation supporting “local” startups that operate in diverse sectors of the economy, possibly unrelated to the corporation’s main business. and At least, this interest in community-building is found amongst the most innovative corporations. For instance, during the conference, the example of Under Armour’s founder-CEO Kevin Plank was used. Kevin Plank has built a reputation for investing (through his fund Sagamore Ventures) in a number of startups and projects in the Baltimore area. Some of the companies that have received such support — for example, a flower delivery company — are not necessarily in fields that Under Armour will ever be able to exploit commercially. By encouraging such firms to re-locate to Baltimore, Kevin Plank correctly recognizes the potential value for his company in community-building and creating a business and social environment that makes a particular region more attractive to the best talent. Presentation at the University of Minnesota (20 April 2018) 👏 Thank you for reading! Please click the below, or leave a comment. There is a new story every week. So if you follow me you won’t miss my latest insights about how the digital age is changing the way we live and work.
