The Next Society The new economy may or
may not materialize, but there is no doubt that the next society will be with us
shortly. In the developed world, and probably in the emerging countries as well,
this new society will be a good deal more important than the new economy (if
any). It will be quite different from the society of the late 20th century, and
also different from what most people expect. Much of it will be unprecedented.
And most of it is already here, or is rapidly emerging. In
the developed countries, the dominant factor in the next society will be
something to which most people are only just beginning to pay attention: the
rapid growth in the older population and the rapid shrinking of the younger
generation. Politicians everywhere still promise to save the existing pension
system, but they--and their constituents--know perfectly well that in another 25
years people will have to keep working until their mid-70s, health
permitting. What has not yet sunk in is that a growing number of
older people--say those over 50--will not keep on working as traditional full
time nine-to-five employees, but will participate in the labor force in many new
and different ways: as temporaries, as part-timers, as consultants on special
assignments, and so on. What used to be personnel and are now known as human
resources departments still assume that those who work for an organization are
full-time employees. Employment laws and regulations are based on the same
assumption. Within 20 or 25 years, however, perhaps as many as half the people
who work for an organization will not be employed by it, certainly not on a
full-time basis. This will be especially true for older people. New ways of
working with people at arm’s length will increasingly become the central
managerial issue of employing organizations, and not just of
businesses. The shrinking of the younger population will cause
an even greater upheaval, if only because nothing like this has happened since
the dying centuries of the Roman Empire. In every single developed country, but
also in China and Brazil, the birth rate is now well below the replacement rate
of 2.2 live births per woman of reproductive age. Politically, this means that
immigration will become an important and highly divisive issue in all rich
countries. It will cut across all traditional political alignments.
Economically, the decline in the young population will change markets in
fundamental ways. Growth in family formation has been the driving force of all
domestic markets in the developed world, but the rate of family formation is
certain to fall steadily unless bolstered by large-scale immigration of younger
people. The homogeneous mass market that emerged in all rich countries after the
Second World War has been youth-determined from the start. It will now become
middle-age-determined, or perhaps more likely it will split into two: a
middle-age-determined mass market and a much smaller youth-determined one. And
because the supply of young people will shrink, creating new employment patterns
to attract and hold the growing number of older people (especially older
educated people) will become increasingly important. Knowledge is
all The next society will be a knowledge society. Knowledge
will be its key resource, and knowledge workers will be the dominant group in
its workforce. Its three main characteristics will be: ·
Borderlessness, because knowledge travels even more effortlessly than
money. · Upward mobility, available to everyone through easily
acquired formal education. · The potential for failure as well
as success. Anyone can acquire the "means of production", i. e,
the knowledge required for the job, but not everyone can win.
Together, those three characteristics will make the knowledge society a
highly competitive one, for organizations and individuals alike. Information
technology, although only one of many new features of the next society, is
already having one hugely important effect: it is allowing knowledge to spread
near-instantly, and making it accessible to everyone. Given the ease and speed
at which information travels, every institution in the knowledge society--not
only businesses, but also schools, universities, hospitals and increasingly
government agencies too-- has to be globally competitive, even though most
organizations will continue to be local in their activities and in their
markets. This is because the Internet will keep customers everywhere informed on
what is available anywhere in the world, and at what price. This
new knowledge economy will rely heavily on knowledge workers. At present, this
term is widely used to describe people with considerable theoretical knowledge
and learning: doctors, lawyers, teachers, accountants, chemical engineers. But
the most striking growth will be in "knowledge technologists" ~ computer
technicians, software designers, analysts in clinical labs, manufacturing
technologists, paralegals. These people are as much manual workers as they are
knowledge workers; in fact, they usually spend far more time working with their
hands than with their brains. But their manual work is based on a
substantial amount of theoretical knowledge which can be acquired only through
formal education, not through an apprenticeship. They are not, as a rule, much
better paid than traditional skilled workers, but they see themselves as
"professionals" . Just as unskilled manual workers in manufacturing were the
dominant social and political force in the 20th century, knowledge technologists
are likely to become the dominant social--and perhaps also political--force over
the next decades. The new protectionism Structurally,
too, the next society is already diverging from the society almost all of us
still live in. The 20th century saw the rapid decline ’of the sector that had
dominated society for 10,000 years: agriculture. In volume terms, farm
production now is at least four or five times what it was before the First World
War. But in 1913 farm products accounted for 70% of world trade, whereas now
their share is at most 17%. In the early years of the 20th century,
agriculture in most developed countries was the largest single contributor to
GDP; now in rich countries its contribution has dwindled to the point of
becoming marginal. And the farm population is down to a tiny proportion of
the total. Manufacturing has traveled a long way down the same
road. Since the Second World War, manufacturing output in the developed world
has probably tripled in volume, but inflation adjusted manufacturing prices have
fallen steadily, whereas the cost of prime knowledge products-health care and
education-has tripled, again adjusted for inflation. The relative
purchasing power of manufactured goods against knowledge products is now only
one-fifth or one-sixth of what it was 50 years ago. Manufacturing employment in
America has fallen from 35% of the workforce in the 1950s to less than half that
now, without causing much social disruption. But it may be too much to hope for
an equally easy transition in countries such as Japan or Germany, where
blue-collar manufacturing workers still make up 25--30% of the labor
force. The decline of farming as a producer of wealth and of
livelihoods has allowed farm protectionism to spread to a degree that would have
been unthinkable before the Second World War. In the same way, the decline of
manufacturing will trigger an explosion of manufacturing protectionism-even as
lip service continues to be paid to free trade. This protectionism may not
necessarily take the form of traditional tariffs, but of subsidies, quotas and
regulations of all kinds. Even more likely, regional blocks will emerge that
trade freely internally but are highly protectionist externally. The
European Union, NAFFA and Mercosur already point in that direction. The
future of the corporation Statistically, multinational
companies play much the same part in the world economy as they did in 1913. But
they have become very different animals. Multinationals in 1913 were domestic
firms with subsidiaries abroad, each of them self-contained, in charge of a
politically defined territory, and highly autonomous. Multinationals now
tend to be organized globally along product or service lines. But like the
multinationals of 1913, they are held together and controlled by ownership. By
contrast, the multinationals of 2025 are likely to be held together and
controlled by strategy. There will still be ownership, of course. But alliances,
joint ventures, minority stakes, know-how agreements contracts will increasingly
be the building blocks of a confederation. This kind of organization will need a
new kind of top management. In most countries, and even in a
good many large and complex companies, top management is still seen as an
extension of operating management. Tomorrow’s top management, however, is likely
to be a distinct and separate organ: it will stand for the company. One of the
most important jobs ahead for the top management of {he big company of tomorrow,
and especially of the multinational, will be to balance the conflicting demands
on business being made by the need for both short-term and long-term results,
and by the corporation’s various constituencies: customers, shareholders,
knowledge employees and communities. Top management in the Next society will be a ______ organ.