DEAN of CBA, ZAGREB / Expert EU Commission INFOSO Brussels. 1 Belgrade, March 14, 2007 WHAT IS THIS NEW ECONOMY? WHAT DOES IT MEAN FOR SERBIA?

DEAN of CBA, ZAGREB / Expert EDEAN of CBA, ZAGREB / Expert EU Commission INFOSO Brussels.U Commission INFOSO Brussels.

11Belgrade, March 14, 2007Belgrade, March 14, 2007

WHAT IS THIS NEW WHAT IS THIS NEW ECONOMY? ECONOMY?

WHAT DOES IT MEAN FOR WHAT DOES IT MEAN FOR SERBIA? SERBIA?



CHAPTER 1:CHAPTER 1:

A SHARP A SHARP TRANSFORMATION…TRANSFORMATION…

(Peter DRUCKER)(Peter DRUCKER)

Belgrade, March 14, 2007Belgrade, March 14, 2007 DEAN of CBA, ZAGREB / Expert EDEAN of CBA, ZAGREB / Expert EU Commission INFOSO Brussels.U Commission INFOSO Brussels.

33

P. Drucker: TransformationP. Drucker: Transformation

Every few hundred years in Western History Every few hundred years in Western History there occurs a sharp transformation. there occurs a sharp transformation.

Within a few short decades, society rearranges Within a few short decades, society rearranges itself : its worldview (paradigm), its basic itself : its worldview (paradigm), its basic values, its social and political structures, its values, its social and political structures, its arts, its key institutions. arts, its key institutions.

Fifty years later there is a new world.”Fifty years later there is a new world.”

Peter DRUCKER: Peter DRUCKER: “Post Capitalist Society”.“Post Capitalist Society”. p.1. p.1.


44

Transmodern Business

Knowledge SocietyTRANSMODERN

Danger

Industrial leftovers who have not grasped the changeAgrarian

premodern

Agrarianleftovers

Culturalcreatives

IndustrialMODERN

Sept. 11, 2001?

New Women-Men Partnership Society

End ofPatriarchal Society

Transmodern Business

Knowledge SocietyTRANSMODERN

Danger

Industrial leftovers who have not grasped the changeAgrarian

premodern

Agrarianleftovers

Culturalcreatives

IndustrialMODERN

Sept. 11, 2001?

New Women-Men Partnership Society

End ofPatriarchal Society

Transition to Transmodern

Death ?


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One of the most fundamental One of the most fundamental shiftsshifts• ““We are living through one of the most We are living through one of the most

fundamental shifts in History: fundamental shifts in History: • a change in the actual belief structure of Western a change in the actual belief structure of Western

Society. Society. • No economics, political or military power can No economics, political or military power can

compare with the power of a change of mind. compare with the power of a change of mind. • By deliberately changing their images of reality, By deliberately changing their images of reality,

people are changing the world.” people are changing the world.” Willis HARMAN Willis HARMAN Stanford Research Institute, Founder of the Stanford Research Institute, Founder of the “World Business “World Business

Academy” (+1997)Academy” (+1997)


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FIVE LEVELS OF CHANGEFIVE LEVELS OF CHANGE

1.1. HumanityHumanity is in danger of collective is in danger of collective death death although we have money and technologyalthough we have money and technology

2.2. End of the Patriarchal values (Command, End of the Patriarchal values (Command, control)control)

3.3. End of “Modernity”. “Transmodernity” = End of “Modernity”. “Transmodernity” = the best of premodern and modern. post the best of premodern and modern. post secular, flat, tolerant, new level of resp. secular, flat, tolerant, new level of resp. & consciousness.& consciousness.

4.4. Knowledge society as a turbo of changeKnowledge society as a turbo of change5.5. Crisis of all institutions.Crisis of all institutions.



CHAPTER 2 :CHAPTER 2 :

WHAT IS KNOWLEDGE WHAT IS KNOWLEDGE ECONOMICS?ECONOMICS?

Level 4!Level 4!


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DEFINITIONSDEFINITIONS

• Data:Data: what is on the web, unorganised what is on the web, unorganised

• Information:Information: is already sorted by is already sorted by google. google. Overabundance.Overabundance.

• Knowledge:Knowledge: is digested by is digested by human brain. human brain.

• Human brain and networks are the Human brain and networks are the NEW TOOLS of PRODUCTIONNEW TOOLS of PRODUCTION

• WisdomWisdom, Knowledge are , Knowledge are rare. Not rare. Not enough. enough.


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A new world...A new world...

1.1. New tool of productionNew tool of production : : human brainhuman brain2.2. New CEONew CEO: Enabling creativity and sharing, Caring : Enabling creativity and sharing, Caring

for humans = new for humans = new human-centeredhuman-centered management management3.3. New value creation process : New value creation process : adding K to K.adding K to K.4.4. New TradeNew Trade: from : from Free TradeFree Trade to to Free SharingFree Sharing5.5. New measurementsNew measurements = = qualitative “qualitative “intangibles”intangibles” 6.6. New strategyNew strategy: beyond war: : beyond war: win-win win-win not win-loosenot win-loose7.7. New definition of ProgressNew definition of Progress = qualitative = qualitative8.8. Beyond patentingBeyond patenting towards towards “Open Source”“Open Source”9.9. Beyond pyramidsBeyond pyramids towards towards networksnetworks10.10.Capitalizing on Capitalizing on cultural cultural capital + capital + gendergender capital capital


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1. NEW TOOL OF 1. NEW TOOL OF PRODUCTION PRODUCTION The tool of production is not The tool of production is not

anymore machine + technol.+ €anymore machine + technol.+ € It is human brain = Networks sharing It is human brain = Networks sharing

knowledge in order to create new K. knowledge in order to create new K. This This new tool of productionnew tool of production is more is more

important than important than capitalcapital and and technoltechnol. . Hence Post capitalist society!Hence Post capitalist society!


1111

2 NEW CEO FUNCTION2 NEW CEO FUNCTION

• Old CEO: command, control, captureOld CEO: command, control, capture

• New CEO: New CEO: – enable the creativity of his “human enable the creativity of his “human

capital”= tool of Productioncapital”= tool of Production– Enabler and creator of networks around Enabler and creator of networks around

his team. Cannot control networks!his team. Cannot control networks!– Care for the intangible assets= brandCare for the intangible assets= brand


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2. CEO AND NEW 2. CEO AND NEW MANAGEMENTMANAGEMENT

• Human capital is central because it is Human capital is central because it is caring for the tool of production: caring for the tool of production: Please come back! Please come back!

• Thus Thus Management : shifts 180° Management : shifts 180° towards human centeredness = towards human centeredness = more creativity-centred, gender & more creativity-centred, gender & culture – centred.culture – centred.


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3. 3. NEW VALUE CREATION NEW VALUE CREATION PROCESPROCES

• INDUSTRIAL SOC.INDUSTRIAL SOC.

• Add value to objectAdd value to object

• From steel to car !From steel to car !

• Tool is MachineTool is Machine

• Humans are costHumans are cost

• Management is Management is machine-centeredmachine-centered

• Machine is centralMachine is central

• KNOWLEDGE SOC.KNOWLEDGE SOC.• Create new K Create new K • From data, info to KFrom data, info to K• Tool is Human brain Tool is Human brain

in Networksin Networks• Humans are capitalHumans are capital• Management is Management is

Human-centeredHuman-centered• Machine is at Machine is at

serviceservice


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4. 4. BEYOND TRADE (I)BEYOND TRADE (I)

• If I exchange an object against money, If I exchange an object against money, I loose the object. This is “trade”: I win I loose the object. This is “trade”: I win and I loose. “Win-Loose” logicand I loose. “Win-Loose” logic

• If I exchange knowledge, If I exchange knowledge, I do not loose I do not loose my knowledge. my knowledge. I win and you win. I am I win and you win. I am not trading anymore. I share. This is a not trading anymore. I share. This is a ““win-win logic” of sharing.win-win logic” of sharing.


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4. 4. BEYOND TRADE (II)BEYOND TRADE (II)

• ININDUSTRIALDUSTRIAL SOC. SOC.

• Free trade Free trade of objectsof objects

• Industrial structureIndustrial structure

• PyramidsPyramids

• UnemploymentUnemployment

• PollutionPollution

• Quantitative growthQuantitative growth

• KNOWLEDGE SOC.KNOWLEDGE SOC.

• Free sharing of knowl.Free sharing of knowl.

• PoPost-industrialst-industrial--capitalistcapitalist. .

• Network =value Network =value creationcreation

• SSelf-creation of elf-creation of my my jobjob

• Immetrialization of Immetrialization of prod.prod.

• Qualitaitve growthQualitaitve growth


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5. 1. 5. 1. AA NEW NEW SYSTEM OF SYSTEM OF MEASUREMENTSMEASUREMENTS

• « Intangible assets » is a new concept « Intangible assets » is a new concept invented by Karl Erik SVEIBY (Sweden)invented by Karl Erik SVEIBY (Sweden)

• They are becoming more and more They are becoming more and more important in the knowledge societyimportant in the knowledge society

• BecauseBecause the knowledge society is about the knowledge society is about knowledge which is knowledge which is immaterial, immaterial, intangible and qualitative.intangible and qualitative.


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5. 2. 5. 2. AA NEW NEW SYSTEM OF SYSTEM OF MEASUREMEASURE.. INTANGIINTANGIBLE BLE

ASSETSASSETS• Intangibles assets = Intangibles assets =

– Know how, Know how, – Reputation, Reputation, – Trust in the company, Trust in the company, – Structure of the company, Structure of the company, – Strategy (balanced scorecards)Strategy (balanced scorecards)– Relations with personnel, Relations with personnel, – Relations with clients,Relations with clients,


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5.3. 5.3. AA NEW NEW SYSTEM OF SYSTEM OF MEASUREMEASURE.. INTANGIINTANGIBLE BLE

ASSETS (II)ASSETS (II)• Relation with civil societyRelation with civil society

• Relation to environment Relation to environment

• Relation to our collective Future and Relation to our collective Future and sustainabilitysustainability

• But also But also quality of the Networksquality of the Networks


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5. 4.M5. 4.MEASURING EASURING INTANGIBLE ASSETS INTANGIBLE ASSETS ??

• Stock exchange measurements are still Stock exchange measurements are still looking at financial “tangible” assets looking at financial “tangible” assets (quantitative) but they increasingly look at (quantitative) but they increasingly look at “intangible” assets (qualitative). “intangible” assets (qualitative).

• Today a company is measured more and Today a company is measured more and more by its intangible assets. more by its intangible assets.

• Example: “Example: “Men’s WearMen’s Wear” USA. & “” USA. & “World World Business Academy”, “Spirit in Business”.Business Academy”, “Spirit in Business”.

• See also Neskey: See also Neskey: www.neskey.comwww.neskey.com

http://www.neskey.com/


2020

5. 5. Intangible indicators 5. 5. Intangible indicators growgrow

Tra

nsp

are

ncy

ICT Proliferation

Financial indicators remain important

Non-financia

l indica

tors

grow in im

portance

Potential for greaterparticipation and

wider accountability

1990 2006 2015


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5.6. 5.6. GROWING IMPORTANCE GROWING IMPORTANCE OF INTANGIBLE ASSETS (II)OF INTANGIBLE ASSETS (II)

0%

10%

20%

30%

40%

50%

60%

70%

80%

1980 2006 2010 2020

Tangible

Intangible


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6. NEW BUSINESS STRATEGY/ 6. NEW BUSINESS STRATEGY/ WIN-WINWIN-WIN

• Old business strategy is warlike. Old business strategy is warlike. Battlefield images are frequent. Battlefield images are frequent. Patriarchal values dominate: “win-Patriarchal values dominate: “win-loose”loose”

• New business strategy: much less New business strategy: much less violent, “competition through violent, “competition through collaboration” is the new motto.collaboration” is the new motto.

• Knowledge behaves like love!Knowledge behaves like love!


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7. NEW DEFINTION OF 7. NEW DEFINTION OF PROGRESSPROGRESS

• The industrial & modern defintion of The industrial & modern defintion of progress is quantitative. More is better.progress is quantitative. More is better.

• This defintion is UNSUSTAINABLEThis defintion is UNSUSTAINABLE

• The knowledge society implies a The knowledge society implies a qualitative qualitative defintion of progress.defintion of progress.

• Good new this allows a reorientation of Good new this allows a reorientation of our societies towards sustainability!!our societies towards sustainability!!


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8. BEYOND PATENTING8. BEYOND PATENTING

• The whole of the industrial production The whole of the industrial production system is based on secrecy and patenting. system is based on secrecy and patenting. I have this technology and you have not. I have this technology and you have not. So I win!So I win!

• ““Information and knowledge always leak”Information and knowledge always leak”

• In the knowledge economy we will NOT be In the knowledge economy we will NOT be able to maintain secrecy, neither able to maintain secrecy, neither patenting. patenting.

• See generic medecines, I-Pod music etc,.See generic medecines, I-Pod music etc,.


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9. BEYOND PYRAMIDS TOWARDS 9. BEYOND PYRAMIDS TOWARDS NETWORKS NETWORKS

Pyramids are the « normal » Pyramids are the « normal » structure of all (industrial) structure of all (industrial) organizations.organizations.

But knowledge is created only in But knowledge is created only in networks. This is the form that networks. This is the form that could prevail in the XXIst century.could prevail in the XXIst century.

Pyramids are all in crisis Pyramids are all in crisis everywhere. In Govenrments, everywhere. In Govenrments, Military, Churches, NGO etc.Military, Churches, NGO etc.


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10. CAPITALIZING ON 10. CAPITALIZING ON CULTURAL AND GENDER CULTURAL AND GENDER

CAPITALCAPITAL• Paradoxically culture and gender Paradoxically culture and gender

diversity becomes important as they diversity becomes important as they feed creativityfeed creativity

• The knowledge management is thus The knowledge management is thus potentially socially inclusive and potentially socially inclusive and sustainablesustainable

• The Lisbon strategy wsa thus The Lisbon strategy wsa thus excellent and forward looking.excellent and forward looking.


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CONCLUSION CONCLUSION : : NEW NEW VALUES…VALUES…• Underlying values needed in the Underlying values needed in the

industrial capitalist society are industrial capitalist society are freedom, initiative, ceativity…freedom, initiative, ceativity…

• NEW Values are needed: NEW Values are needed: – Freedom (of sharing)Freedom (of sharing)– Solidarity, Caring, RespectSolidarity, Caring, Respect– TransparencyTransparency– Concern for the Common GoodConcern for the Common Good


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Consequences for the Business Consequences for the Business (II)(II)

• IN US, only the « Knowledge society IN US, only the « Knowledge society » business (10%) have survived the » business (10%) have survived the dot.com crashdot.com crash: Example: CISCO: Example: CISCO

• Because they have changed :Because they have changed :– The tools (ICT)The tools (ICT)– The structure of their enterpriseThe structure of their enterprise– The underlying vision of their scope and The underlying vision of their scope and

values values (Verna ALLEE)(Verna ALLEE)


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Consequences the Business Consequences the Business (III)(III)• In EU 10% of the companies have In EU 10% of the companies have

understood and have transformed their understood and have transformed their vision, their strategies and their vision, their strategies and their management. They are doing very Well!management. They are doing very Well!

• 60% just work on renewing technology. 60% just work on renewing technology. They have problems and are in dangerThey have problems and are in danger

• 30% are doing nothing: “business as 30% are doing nothing: “business as usual”. They are in danger to become usual”. They are in danger to become dinosaurs.dinosaurs.



CHAPTER 3: CHAPTER 3:

THE LISBON STRATEGIES THE LISBON STRATEGIES AND AND

THE FUTURE OF EUTHE FUTURE OF EU


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LISBON STRATEGYLISBON STRATEGY

• The European Council of Heads of The European Council of Heads of State decided in March 2000 in State decided in March 2000 in Lisbon that EU should become the Lisbon that EU should become the most competitive in the Knowledge most competitive in the Knowledge economy before 2010.economy before 2010.

• And this must happen And this must happen – in a in a socially inclusivesocially inclusive and and – In a In a sustainablesustainable way. way.


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LISBON STRATEGIESLISBON STRATEGIES

• LISBON I 2000-05LISBON I 2000-05

• FREE SHAREFREE SHARE

• Post industrialPost industrial

• Post capitalistPost capitalist

• NOT EXPLAINEDNOT EXPLAINED

• ……FAILUREFAILURE

• LISBON II 2005-10LISBON II 2005-10

• FREE TRADEFREE TRADE

• Old IndustrialOld Industrial

• CapitalistCapitalist

• Business as usualBusiness as usual

• EasierEasier


3333

LISBON STRATEGIESLISBON STRATEGIES

• CONCLUSION:CONCLUSION:– Lisbon strategy (I) had thus done the right Lisbon strategy (I) had thus done the right

choices: KS+ sustainability + inclusion!choices: KS+ sustainability + inclusion!

• BUT it failed to explain the new vision BUT it failed to explain the new vision and the new economic frame: FREE and the new economic frame: FREE SHARESHARE

• Lisbon (II) strategy weakens EU’s Lisbon (II) strategy weakens EU’s competitive position in the long term.competitive position in the long term.

• BUT it is easier to apply in short term.BUT it is easier to apply in short term.



CHAPTER 4:CHAPTER 4:

SERBIA 2010SERBIA 2010IN THE KNWOLEDGE IN THE KNWOLEDGE

ECONOMYECONOMY

Towards a win win strategy?Towards a win win strategy?


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SERBIA 2010: SERBIA 2010:

• When society changes, the new When society changes, the new winners are rarely the same. winners are rarely the same. Innovation comes from the Innovation comes from the periphery, or from new actors.periphery, or from new actors.

• SERBIA is a new actor, perhaps more SERBIA is a new actor, perhaps more able to LEAPFROG towards the able to LEAPFROG towards the knowledge society than France and knowledge society than France and Germany?Germany?


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SERBIA 2010:SERBIA 2010:

• Will SERBIA understand the change Will SERBIA understand the change of economy BEFORE others?of economy BEFORE others?

• Will SERBIA become a Will SERBIA become a leader in this leader in this Free ShareFree Share, post-industrial approach? , post-industrial approach?

• Will SERBIA become a Will SERBIA become a hub of societal hub of societal innovationinnovation towards this new towards this new economy?economy?


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SERBIA 2010:SERBIA 2010:

• If SERBIA is leapfrogging towards the If SERBIA is leapfrogging towards the “knowledge econmy”“knowledge econmy”

• SERBIA could become a competitive SERBIA could become a competitive advantage for the EU !advantage for the EU !

• This could be a win-win for the whole This could be a win-win for the whole of the EU.of the EU.


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Some good Books…Some good Books…

• Peter DRUCKER: “Peter DRUCKER: “Post capitalist societyPost capitalist society”, ”, Harper Business, New York, 1993.Harper Business, New York, 1993.

• Verna ALLEE: “Verna ALLEE: “The future of knowledge” The future of knowledge” Elsevier Science, 2003, USA.Elsevier Science, 2003, USA.

• Rob CROSS: Rob CROSS: “Networks in the Knowledge “Networks in the Knowledge economy” economy” 2003.2003.

• LEIBOLD and al. : LEIBOLD and al. : “Strategic Management “Strategic Management in the Knwoledge economy” in the Knwoledge economy” 2002.2002.

• David ROONEY (Australia): David ROONEY (Australia): “Handbook on “Handbook on the Knowledge economy”the Knowledge economy” 2005. 2005.


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BOOKS IIBOOKS II

• Jeremy RIFKIN: “Jeremy RIFKIN: “The European Dream: The European Dream: when Europe’s vision of the future is when Europe’s vision of the future is silently eclipsing the American dream” silently eclipsing the American dream” Penguin 2004.Penguin 2004.

• Ray ANDERSON: “Ray ANDERSON: “Mid Course correctionMid Course correction” ” 1998. 1998. www.www.chelseagreenchelseagreen.com.com (Interface) (Interface)

• World Business Academy: World Business Academy: www.www.worldbusinessworldbusiness.org.org

• ““Neskey” on intangible measurements : Neskey” on intangible measurements : www.www.neskeyneskey.com.com

http://www.chelseagreen.com/



http://www.worldbusiness.org/






Documents

DEAN of CBA, ZAGREB / Expert EU Commission INFOSO Brussels. 1 Belgrade, March 14, 2007 WHAT IS THIS NEW ECONOMY? WHAT DOES IT MEAN FOR SERBIA?