TLDR;
- This post elaborates on some patterns and observations looking across several economic chapters.
- These are the principles that guide how the theory of economic chapters work in totality.
- New chapters are emerging at a faster pace.
- New chapters are additive to its predecessors and are not inherently destructive
- New chapters are complementary to its predecessors. This has led to increasing permutations of where value is created and applied.
PREMISE 2: Trends and patterns can be spotted across chapters.
Looking across the chapters, there are three notable patterns:
Firstly, new chapters - and hence, dominant economic activities - are emerging at an exponentially faster rate. Secondly, chapters and their respective dominant economic activities are not destroyed; rather, they are additive to all preceding. Third, each new chapter not only disrupts the preceding chapters but also unlocks new avenues for value creation. That is (in my parlance), they are complementary to all preceding chapters.
New Chapters are Emerging Faster and Faster
Between each chapter, the gap has drastically reduce from millenia (antiquity to bronze age), to mere decades between the digital and platform economies. I would have included a fancy curve-chart to illustrate this, but alas, There exists plenty of commentary on how the pace of innovation is quickening. Some attribute this phenomena to the rapid exchange of information, as enabled by digital means. In my view, this is also driven by a drastic increase in business competition across multiple arenas (global vs local, technological disruption), thus leading companies to always want to differentiate - a concept I have written at length in the prior post.
To me, this corroborates the rather accurate anecdote that the world is changing at a much quicker rate, fashionably described as “disruption”.
Chapters are Additive to one another, and do not replace its preceders
As portrayed in the previous post, none of the chapters are wholly independent (perhaps with the exception of the first chapter.) Resource development (chapter 2) builds on the consumption habits featured in its preceding era (chapter 1); just as manufacturing and craftsmanship is built developed resources (chapter 3). Global trade (Chapter 4) must have something to trade with (chapter 2,3); so on as so forth.
To illustrate this in lay terms in the most basic (and most necessary) industry of all (food).
- [Chapter 1 - Consumption]: Eat food
- [2 - Resource Development]: Farm Food
- [3 - Manufacturing]: Process food (like say, bread)
- [4 - Global Trade]; Export Food
- [5 - Modern Services]: Services to improve the quality of food - safety, for example.
- [6 - Digitalisation]: Improve food production efficiency via digital means
- [7 - Platforms]: Sell food on ecommerce markets.
Though we may live in an era where Chapter 7 (Platforms) is one of the most attractive economic activities, it does not take away from the necessity and existence of all prior chapters. We still consume, grow, process, export, and certify the food we eat.
To me, this corroborates the view that new chapters and disruption do not destroy preceding forms of economic activity. It has helped be believe in the broad principle of progress through disruption - and am a great disbeliever in Luddism.
It is this realisation that has provided me with a mental model and non-empirical rationalisation of how new jobs can be created even as old ones are made redundant. As for the quality of new jobs however…well that is a post for another time.
New Chapters are Complementary, and unlock new avenues on value creation and exchange.
But beyond just merely adding to the preceding chapter, I posit that each chapter unlocks new avenues of value and growth. I wish I could come up with another word aside from “unlock”….sound too much like a consultant…
To illustrate this, consider a firm’s perspective:
Back early in mankind’s history (Chapter 2 - resource development), there were several ways a firm (or individual) could differentiate themselves. Perhaps a focus on mining a certain metal; growing a certain type of crop; or rearing a certain type of animal. In this context, perhaps different individuals in a village played a different role - some may have simply been better at certain things than others.
Fast forward to now - you can find an explosion in permutations on how a firm could differentiate itself. Perhaps, it could be a consultancy firm advising (Chapter 6) companies on Supply Chains (Chapter 4), for a Mining (Chapter 2) Equipment Manufacturer (Chapter 3), by specialisng in Digital solutions (Chapter 5). It is not unthinkable that for every new chapter, there are plenty more niches to be found.
In my view, this has given rise to two consequences.
First, there are an increasing number of permutations to add value and differentiate oneself. While i see this as a good thing, is also a maddeningly wide array of “buzzwords”and catchy business phrases these days. There are difficult to discern and intepret as a futurist and strategist.
Secondly, this realisation has also made me intuitively believe in a shift towards generalists. These days, it is not enough to build a deep skill in one particular area, but to apply them widely to each chapter and form. The more chapters - the more unique and valuable your skillsets could be to society. There have been books written about this phenomena too. In the future, the hallmark of someone successful may very well be their ability to learn, absorb, and differentiate across multiple permutations, rather than be hyper focused in a single domain.
The first two posts of this series has discussed the general, emergent patterns to define each chapter as well as to find common trends between chapters at a high level of abstraction. The next post delves into the dynamic nature within each chapter.