A Bonfire of Conceits

September 29th, 2015

A Bonfire of Conceits I have a vivid memory of Stafford Beer telling an audience at King Alfred’s College, Winchester, that none of us could disprove the existence of fairies. It was a typically profound and weighted message; that our cognition is limited and bounded. What most disturbs us is that which arrives through the boundary, the unplanned and uninvited guest. It is the same message that Nicholas Taleb has popularised – also brilliantly – in The Black Swan. Every assumption is leaky. Every conceit is flammable. The economy and society of today are as vulnerable to change as they ever were. Did history present society with brutal challenges? Then the future will too.

Switch now to Alsace-°©‐Lorraine and the birth, in 1922, of Pierre Wack. Growing up through World War II on the French-German border, and then as a civil servant and entrepreneur, Wack learned to listen for uncertainty rather than to invest his faith in the apparent. As Head of Group Planning in Shell, he taught his team to focus on the “Tendances Lourdes.” They were to look for that which is happening now, for the consequences of the changes already underway. A few students of business still study Wack’s insights and methods, but he deserves still greater accolade. Much greater. His deeply unconventional thinking drew upon a greater variety of sources and experiences than those of his contemporaries in the corporate world. He had greater power.

The digital economy is happening now, it is the new force in play in society, a black swan that is unfolding her wings and a fairy that has alighted upon the party. I think the evidence is now gathering at such a rate that we are beyond cloud-spotting and into the early phases of a storm. When talking to a class of students, I find helpful to set the context by talking about the revenues of Apple, the recency of YouTube or Facebook, and the latest iconoclastic ideas of Google. Forget the Yellow Pages, the Newspaper Industry, Record Labels and the traditional British High Street; look at advertising, the contest for attention (Herbert Simon, 1971), the NSA, WikiLeaks, and the great networks of ERP underneath every corporation, every supply-chain. This is an extraordinary gathering and if we have Wack’s wit we will ask ‘what are the consequences of what is happening now?’

The American scholars Eric Brynjolfsson and Andrew McAfee have been prominent in gathering evidence of the consequences for employment and jobs. Al Gore has written on the topic too and here in the UK, Will Hutton has been writing of it in The Guardian. The BBC’s Peter Day says succinctly that :something is afoot.” It looks like algorithms are doing to the Middle Classes what automation did to the Working Class. If you are middle-class and comfortable then you are increasingly rare. Meanwhile, there are new forms of robot to further reduce the prospects of Blue Collar employment. It is not just the British or Americans who are suffering, there is evidence from China too. There’s no going back, of course, and little reason why we would want to go back the fossil- fuelled, chaotic economy and spluttering unmeritocracy of our recent past. But where do the consequences end? Where will all this go?

Back in the classroom, and I find it interesting to suddenly step outside of the digital economy that the class all recognise (Apple, Google, SAP etc), and to observe instead how it is taking over other sectors. I call it ‘species-hopping.’ The automotive industry always grabs the attention of the class when we start talking about the development of vehicles into the form of smartphones-with-wheels. The electric car is very interesting but it is when we come to the self-driving future that the students’ pallor changes. It is not just the technical audacity of self-driving cars that alerts the class, it is that the technology is here now. Then, as they follow through the consequences, they start to conclude that self-driving will further move the automotive industry from products to services. More will buy journeys rather than cars. The value will be in the information, and especially in the Cloud-based systems that guide cars efficiently through cities. The digital companies will win again and automotive manufacturers will be no more than component-manufacturers in a great hardware/software system.

Before they leave the classroom, then, I tell my students that in this bonfire of conceits it is hard to spot the far-boundary. For example, next week we will talk about the classroom, and the University, itself.

Peter Dudley