Third Industrial Revolution_Teigland


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My updated presentation on networks, social media, virtual worlds and impact on value creation.

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  • Of original Forbes 100 in 191761 companies ceased to exist by 198718 of remaining 39 underperformed market by 20%Only 2 beat market index (GE & Eastman Kodak)Only 1 (1%) today!Of companies in original S&P 500 in 1957426 companies ceased to exist by 1997Only 12 (2.4%) outperformed S&P 500 index in 1997 Of top 100 companies in Korea in 1955Only 7 still on list in 20041997 crisis destroyed half of 30 largest conglomerates
  • I always like to put things into perspective. I think that what is interesting and relevant here is that several economic historians had actually predicted the crisis that we are experiencing now. I don’t have time to go into all the details, but what we are seeing is a pattern repeating itself. As in the late 18th and 19th Centuries there was a technological innovation that led to a period first of transformation as the innovation began to be diffused, then a period of rationalization leading to an imbalance, and then to a financial crisis coming around 40 years after the innovation. However, in the past, these financial crises have then led to periods of great economic development – industrial revolutions, in which industry profitability has been restored through a redistribution of the value-added between capital and labor. But more importantly, these crises filtered out those organizations that could not adapt and change to stay competitive in the new industrial environment. And one of the most important things that is of interest for today’s discussion is that in one of the factors facilitating these new phases of economic growth following the crisis has been that a generation of people that had never experienced life without the innovation starts to enter the workforce – thus they are not restricted by old ways of thinking.experiencing now some economic historians claim to be due to the innovation of the microprocessor and microelectronics in the 1970s. Similar to what we experienced with the innovation of the steam engine in the late 18th C and the internal combustion engine and electric motor in the late 19th C, there was a subsequent crisis about due to various forces converging. We saw that as these basic innovations were diffused, people stopped investing in the existing industrial structure and instead focused on investing in a new generation of competitive machinery, which then led to an industrial revolution in both cases as the innovations became embedded in society. At the same time, the crisis served to release the negative pressure that had been built up as well as to restore industry profitability through the redistribution of value-added between capital and labor. Other notesNotes from article - Schön, L, Economic Crises and Restructuring in HistoryA crisis is connected with changes in the long term or structural conditions built up during a rather long period of time and effects behavior for a long time to comeTransformation – changes in industrial structure – resources are reallocated between industries and diffusion of basic innovations with industry that provides new bases for such reallocationRationalization – concentration of resources to most productive units within the branches and measures to increase efficiency in different lines of productionShifts between transformation and rationalization have occurred with considerable regularity in structural cycle of 40 years – 25 years on transformation, and 15 years on rationalization. Crises been part of this cycle as wellInternational crisis in 1840s – How go from crisis to expansion quickly – went quite rapidly in 1930s for Sweden – but Sweden in opposite corner in 1970s1850s – upswing of industrial and infrastructural investments was linked to breakthrough of mechanized factories in Sweden, modernization of steel processes and construction of railways1930s and more marked after WWII late 1940s - expansion of electrification and diffusion of automobiles, processing of electrosteel to small motors in handicraft and household – combination with motorcar – new styles in living and consumptionWaves of investments around development of an infrastructure from basic innovation of preceding cycle mid 1970s – microprocessor – knowledge and information in production of goods and servicesIt is not the basic innovation itself – but the diffusion of the innovation that counts!When invented, then expensive to implement, have a narrow range of application – Following generalization – A structural crisis (that has been preceded by an early development of basic innovations) has put an end to old directions of investments mainly in rationalization of existing industrial structure and given rise to investments in ne and devt of new tech that after one decade (the length of the classical Juglar cycle of machinery investments) has created a new generation of economically competitive machineryReallocation of labor occurs approx 15-30 years after the structural crisisDevelopment of markets – distribution of value added between capital and labour is one mirror of these changesDiffusion of innovations leads to expansion of markets and arrival of new competitors – Structural crises – release negative pressure and restored profitability in industry – get rid of those who not competitive
  • as a Red Herring 100 winner is a mark of distinction and high honor. Only 200 companies are chosen as finalists out of a pool of thousands. Of those finalists Red Herring selected 100 companies as winners. To decide on these companies the Red Herring editorial team diligently surveys entrepreneurship around the globe. Technology industry executives, investors, and observers regard the Red Herring 100 lists as invaluable instruments to discover and advocate the promising startups that will lead the next wave of disruption and innovation. Past award winners include Google, Yahoo!, Skype, Netscape,, and YouTube.
  • 120,000 tshirts sold each monthThreadless:What came first – the community or the company?RT: presents Threadless,,530,000 followers on TwitterThe whole business model for Threadless is based on an implicit understanding of how the social web works and gives a great demonstration of how communities can be built and harnessed across an organisation. Identifying online enthusiasts and passion groups and then using social platforms to bring them into the core of a business would appear to be a more powerful way of utilising social opportunities than just running ads on Facebook - but it requires a good deal more commitment. The media aspect of social offers some exciting opportunities for brands, but the potential of the social web can be significantly greater if the power of community is fully realised. In summary, there has to be purpose behind why you use social media. Largest challenge is about changing the mindset though – where create value? Use of social media considerably larger in smaller companies: Inc 100 vs Fortune 100. In these smaller companies, social media being used as a leadership tool as well.
  • The Forge “The world’s first open-source community of car designers and fabricators.” Crowdsourced design and selection process; option to help build your own car.
  • Kay, J. (1993) Foundations of Corporate Success, Oxford, Oxford University Press.
  • (1) Enabling people to do things we already know how to do and (2)creating collaborative environments that allow people to develop new ideasand concepts to address unanticipated opportunities or challenges.Productive learning focuses mostly on the individual and on helpingthat individual to adopt a pattern of behavior that improves productivity.Generative learning, by contrast, is a collaborative endeavor. Shared meaningand insights are developed at the group level, and these insights driveenterprise transformation to ensure growth and sustainability. Today, thelearning function is focused primarily on productive learning. As a result,it appears that trainers are more likely to want to maintain the status quo,rather than challenge it.Learning is a far more complicated phenomenon than can ever be limitedto the classroom context. If we convey knowledge about tasks we alreadyknow how to do, we call it productive learning . If we share knowledge abouttasks that are new and different, we call it generative learning . Productivelearning serves largely to maintain the status quo within an enterprise byconveying what is already known, while generative learning involves notonly absorbing existing information but also creating new solutions to unanticipatedproblems. Information age learning requires that individuals andorganizations change the way they think about and act on what is knownand what needs to be known in order to innovate, change, and win.
  • Liam Dippenaar couldn't catch a ball with both hands. Holding two objects at once was a feat and, though right-handed, the 5-year-old used his left. Born with Ambiotic Band Syndrome, Liam lacks the instrument critical for most tasks: fingers. Thanks to two strangers halfway around the world and the magic of 3D printing, Liam is now able to color and write to his heart's content. Ivan Owen and Richard Van As created Robohand, an open-sourced device built with customized prosthetic fingers. Owen, of Washington state, and Van As, of South Africa, collaborated via the Internet to create the prosthetic. The duo decided to make the design in the public domain to help others who can benefit from the technology.Their journey started in 2011, when Van As came across a video of Owen's costume piece, a robotic hand built for amusement. Van As lost most of the fingers on his right hand in a woodworking accident and cast a net out for those willing to help build a prosthetic. Owen was the only one who agreed. "I had started with the first prototype prior to meeting Ivan. But yes, there were so many obstacles and one of the main ones was contacting people and them just saying, 'No, it can’t be done,'" Van As tells Mashable. Long nights on Skype and a 10-hour time difference took some getting used to, but the two kept the project going through email and file sharing. Owen and Van As initially used a milling machine and spent hours engineering parts until MakerBot donated two Replicator2 Desktop 3D Printers. The donation exponentially cut production time for prototypes. What used to take up to three days to complete can now be done in only 20 minutes. Using OpenSCAD, a free software application, Owen and Van As can exchange files and make changes in minutes. Jenifer Howard, MakerBot's PR director, says the cross-continent collaboration fits perfectly with the company's mission. "We love to see our printers being used for amazing life-changing and life-validating projects like this," Howard says. The two men document their progress on a blog called "Coming up Short Handed." Liam's mother, Yolandi, saw the site and reached out to Van As for help. Liam, who has no fingers on his right hand, received his own Robohand at no cost after several trials and prototypes. "At first it was quite amazing to see the smile on his face when they made the first prototype and he put it on his hand," Yolandi says. "His expression was, 'Oh wow, it’s copying me.'
  • Global collaboratorsPlatforms like ThingiverseInterest-specific groups on, for example, Google +Open Software and Hardware movements – use of SourceForge and GitHubMailing lists – partners not just local
  • The World Bank's NESAP-ICT program has been trying to help countries with such challenges. The New Economy Skills for Africa Program - ICT was launched in 2008 to support countries in Sub-Sahara Africa (SSA) in building skills for the knowledge economy. It has focused initially on supporting the development of globally benchmarked, employable skills for the Information Technology (IT) and IT Enabled Services (ITES) industry -- sectors that can create thousands of new jobs and catalyze economic and social transformation. (Here's a related World Bank publication on The Global Opportunity in IT-Based Services: Assessing and Enhancing Country Competitiveness[pdf]).In Tanzania, NESAP-ICT is helping to support the development of what are known as SMART Knowledge Hubs, which are hoped to help form a 'backbone' of sorts the development of education in IT and a broader set of 'new economy skills' in the country. The SMART Skills (Software, Mobile Applications, Research and Technology) project began by asking about the type of IT-related skills are being sought by the local IT sector, and about the demands from students to acquire such skills that aren't being met by existing course offerings from Tanzanian institutions. The first related pilot effort is supporting the creation of a 'knowledge hub' in Dar Es Salaam, directed and coordinated by COSTECH, the Tanzania Commission for Science and Technology. It is hoped that this initial SMART Knowledge Hub will serve as a model for how to do similar things in other parts of the country.The project in Tanzania is, together with Coursera, identifying a MOOC IT curriculum aligned with the needs of Tanzanian private sector employment tracks. The first stage of this process includes the design and development of the overall curriculum, informed by input from lecturers in IT and business in Dar Es Salaam, as well as from entrepreneurs and local businesses. The idea is to support students in various ways as they participate in MOOCs as part of their studies, in advance of the traditional recruiting season that kicks off at the start of the summer.[-] How can students identify MOOCs that are relevant complements to their current areas of study -- and improve their future employment opportunities?[-] How might MOOCs be formally incorporated into such formal study, with official credit given for the successful completion of a MOOC?[-] More broadly, how can a higher education system align itself to help meet some of the immediate hiring needs of local industry, especially where local institutions may not currently have the capacity to develop and offer courses that help sufficient numbers of students develop the types of skills demanded by the labor market?
  • Snabbutveckling, 600% på 3 årMassolution: Four established types of crowdfunding exist: donation-based, reward-based, equity-based, and lending or debt-based. In May 2013, there were around 800 crowdfunding platforms worldwide, and crowdfunding initiatives raised an estimated 2.6 billion USD in 2012, including about 945 million USD in Europe through 470 000 campaigns. Furthermore, Massolution predicts that in 2013 crowdfunding will reach volumes of 5.1 billion USD worldwide, with about 1.3 billion USD in European markets. To date, business and entrepreneurial activity comprises 16.9% of all crowdfunding activity while Information and Communication Technology projects comprise a mere 4.8% of activity. According to 2010 market data, Sweden’s venture capital firms made the highest value of investments relative to GDP in Europe and had the sixth highest investment value in the world (EVCA, 2012).There are no public statistics for crowdfunding for Sweden as a whole but, as of May 2013, and based on the publicly available numbers, we have estimated the amount raised in Sweden to be around USD 4 million, with 1 million of this through reward-based crowdfunding and 3 million through equity-based crowdfunding. The primary platform that deals with entrepreneurs, FundedByMe, raised around USD 3.8 million of that across 744 successful projects. Excluding FundedByMe itself, 25 of these successes were Technology or Internet related (by the platform’s definition), but only three have been entrepreneurial ICT projects as opposed to the more common social projects. Two raised USD 38 000 through reward-based crowdfunding while the third raised USD 150 000 through equity crowdfunding.
  • Entrepreneurs need funding – we give them the chance to test, iterate and grow. Fast.Everyone wants to be part of the next big thing in business – without having to spend millions. Ownership is the best form of participation. Millions of ordinary citizens are a massive force.
  • From CrowdCubeEquity < 10% of total crowdfunding Politicians generally positive -> entrepreneurs + job creationBut regulation is lagging in most countriesUSA passed JOBS Acts ”Jumpstart Our Business Startup Act”Title II for accredited investors this fallTitle III for non-accredited investors later in fall9 mln accredited investors in USA3% invested USD 23 bln in 2012 in startups and growth companies8.8 times more than total global crowdfunding marketNon-accredited investors even larger group
  • Bitcoin holds huge potential here, but must also look at existing methods of payment. Many Kenyans, for example, do not have bank accounts – but they do have cellphones. Cellphone company Safaricom is behind the world-famous m-pesa mobile money, which has been replicated in several countries, including South Africa and Zimbabwe.
  • Jon Matonis, Forbes, Rhetorically, I posed the question: “In fifty years, would you rather own 100 euros, 100 Amazon Coins, or 100 bitcoins?”
  • many definitions of VWs, these are the characteristics that I find relevant to the study of virtual entrepreneurship. Persistent, computer-simulated, immersive environments ranging from 2D "cartoon" imagery to more immersive 3D environmentworld exists regardless of whether users logged inUsers can manipulate and/or alter existing content or even create customized content Shared space or co-presencenumerous users, or ‘avatars’, simultaneously participate, interact, and share experiences through gestures, text chat, and voiceSocialization/community formation of in-world social groups such as teams, guilds, clubs, cliques, housemates, neighborhoods, etc the world allowed and encouraged
  • RT: traditional leadership further challenged as we move to a world of web 3.0 or the immersive internet…
  • I can’t find the source for this, it would be great if someone could point this out to me.
  • Third Industrial Revolution_Teigland

    1. 1. November 2013
    2. 2. Who am I? (LinkedIn Inmaps) Research McKinsey SSE Stanford Wharton SSE MBA Industry IFL
    3. 3. "...when the rate of change outside an organization is greater than the rate of change inside, the end is near...." Jack Welch…
    4. 4. Increasing pace of change  From 1920s to 2010s − Average lifespan of S&P 500 company fell from 67 years to 15 years  From 2000 to 2010 − 40% of companies on Fortune 500 list replaced  Predictions − In next few years, 70% of Fortune 1000 companies replaced − By 2020, >75% of S&P 500 companies we do not know today − By 2025, >45% of Fortune 500 from emerging markets Fast Company, McKinsey & Inc
    5. 5. Did You Know: Shift Happens 1. What trends do you recognize? 2. How are these trends affecting you and your organization? 3. What does this have to do with networks?
    6. 6. Convergence of….. People • “Net generation” • 24x7 “mobile” workforce • Social entrepreneurship Open Source • Software • Hardware • Physibles Technology • • • • • Broadband access Mobile hardware ICTs 3D printing Robotics Finance • Microlending/microfinance • Crowdfunding/equity • Digital, non-fiat currencies
    7. 7. Human capacity cannot keep up… Growth Information and knowledge Human absorptive capacity Time Adapted from Cohen & Levinthal 1989
    8. 8. ”No one knows everything, everyone knows something, all knowledge resides in networks humanity.” Six degrees of separation - Milgram, 1967 Image: Krebs, Adapted from Lévy 1997
    9. 9. Creation > curation
    10. 10. Leveraging external resources to find solutions and solve unsolved problems From problem solvers to solution finders
    11. 11. The wisdom of the crowd Closed Expensive Complex Accurate Hinton 2007 Open Inexpensive Simple Close enough Accurate Up-to-date
    12. 12. History tends to repeat itself…. Innovation, financial crisis, industrial revolution, … Steam engine Internal combustion engine Microelectronics Third industrial revolution? Late 18th C Schön 2008 Late 19th C Late 20th C
    13. 13. 350+ 105 emp Partners 15,000+ Customers in 130 countries 43,900+ Community members • Content management software, #1 in media industry • 250,000 sites in 170 countries • Customers: UN, FT, WSJ, Vogue, Hitachi, 3M, BMW • 105 employees in 9 countries (US, Europe & Asia)
    14. 14. Threadless A platform for global community collaboration Est. $30 mln sales 30% profit margin in commodity business 20 employees but a 24x7 global “workforce” of 2.4 million No internal R&D or sales & marketing
    15. 15. From clothing to home products….
    16. 16. Open innovation in automotive design/production “Local Motors is the place for people to create influential vehicles together.”
    17. 17. Where have the traditional sources of sustainable competitive advantage been? Networks of relationships Innovation FIRM #1 Brand & Reputation Kaye 1993
    18. 18. T Where are the sources today of sustainable competitive advantage? Networks of relationships FIRM #1 Brand & Reputation Teigland 2010 Innovation
    19. 19. We are stuck in our old ways …
    20. 20. Exploitation Exploration Improving existing value creation activities Developing new value creation activities Adapted from March 1991
    21. 21. What’s around the corner? 24x7 Global Internet Collaboration + Open Source + 3D Printing $60,000 $150 Available for free download on Where is the firm?
    22. 22. Open Source values of sharing
    23. 23. OpenSimulator: A value-creation ecosystem USD 5.5mln in development costs Academic Entrepreneur Hobbyist Large Firm Non-profit Local Public Federal Public Research Inst SME Employee Periphery Teigland, Di Gangi, & Yetis 2012
    24. 24. Enabling knowledge through MOOCs (massively open online courses) SMART (Software, Mobil Apps, Research & Technology) Knowledge Hubs in Tanzania New Economy Skills for Africa Program- ICT (Tanzania) + Coursera
    25. 25. Access to 24x7 global workforce Matchmakers: USD 1bln industry
    26. 26. Financing through crowdfunding 2012 Worldwide 2.7 bln for 470k projects via 800+ platforms Sweden SEK 37 mln (Oct 2013) Massolution 2013
    27. 27. What is Crowdfunding? Accumulation of small investments in individual projects by large number of individuals (the “crowd”) via or with help of Internet and social networks (De Buysere et al., 2012) Picture: FundedByMe
    28. 28. Four forms of crowdfunding Toto 2013
    29. 29. Swedes going global
    30. 30. “It’s not just about the money.” 685 people talking about product on social media Australia’s “Major Disaster Department” World’s largest telecom
    31. 31. From crowdfunding to crowd equity Billions of dollars $5.1bln • Equity < 10% of total crowdfunding • Politicians generally positive -> entrepreneurs + job creation • US, Italy, Denmark changing regulations enabling equity Massolution 2013
    32. 32. Increasing focus on Crowd Equity in Sweden Started in Sweden 2011 Started in UK 2010 Started in Finland 2011 Equity: 27,8 mln SEK To Sweden 2013 To Sweden 2013 Reward: 6,8 mln SEK Equity only Equity only
    33. 33. International expansion
    34. 34. “Made in Africa” 3D printer (Togo) crowdfunded through Ulele Winner of International Space Apps Challenge
    35. 35. Venture capitalists are the travel agents of yesterday – here today, gone tomorrow. Venture capitalist in Silicon Valley – June 2013
    36. 36.
    37. 37. New means of payment…
    38. 38. 3D printing becoming more commonplace…
    39. 39. Endless possibilities for developing countries
    40. 40. The maker movement in Africa iHub – Kenya House4Hack – RSA Woelab – Togo
    41. 41. Here comes the Immersive Internet…. O’Driscoll 2009
    42. 42. What are Virtual Worlds? Platforms for unleashing creativity and revolutionizing value creation
    43. 43. Healthcare training • Browser-based, multiuser, voice-enabled simulated medical spaces • Medical interactive narrative requires learner action • Learn through practice and debrief: fail early and learn through failure
    44. 44. City planning in Uppsala and Stockholm
    45. 45. Global collaboration Protonsphere by Protonmedia integrated with MS Office
    46. 46.  Overview − − − − EU funded, 3 year multilateral and transversal network (LLP EACEA, KA3 (ICT)) December 2011 – December 2014 Project Leader: University of Hull (Darren Mundy, Luisa Panichi) 19 partners from Austria, Cyprus, France, Germany, Israel, Italy, Netherlands, Norway, Portugal, Sweden, UK  Network Aims −Collect good practice examples in teaching and learning in virtual worlds from different subjects and national and local contexts − Facilitate transfer of core knowledge to new contexts − Provide framework for creation of pan-European virtual-world university  Expected Outcomes − Increased number of experts in virtual world education − Policy for long-term sustainability of network and its outcomes − Model for knowledge transfer − Range of dissemination events More information:
    47. 47. “Clearly, if social activity migrates to synthetic worlds, economic activity will go there as well.” Castronova, 2006
    48. 48. DJs Event builders MODELLING SCHOOLS MODELLING AGENCIES Photo studio makers Photographers Modelling furniture Poses and animations Top models Virtual fashion ecosystem Clothes/ shoes Accessories Furniture Shop builders Hair MAGAZINES Skins Body shapes Viachka, Giovacchini, Teigland, Lindqvist 2011
    49. 49. Charities bridging RL/VW boundary Members Core team Meetings $$ Teigland, JVWR, 2010
    50. 50. ≈1.4 bln VW accounts under age 16 290 mln 220 mln >200 mln 42 mln (and 12 mln bought) 290 mln
    51. 51. Developing international entrepreneurs?
    52. 52. Exploring the link between VWs and 3D printing
    53. 53. From the mobility of goods to the mobility of financial capital to … ...the “mobility” of labor? Teigland, JVWR, 2010
    54. 54. Just published – by Palgrave Macmillan
    55. 55. Models of Knowledge Creation E.g., Microsoft ~ Built by employees within organizational boundaries The Firm vs The Collective E.g., OpenSimulator ~ Built by users and distributed freely regardless of affiliation Teigland, Di Gangi, & Yetis 2012
    56. 56. Some things do not change Innovation Exchange Exchange Trust Trust Relationships Relationships Interaction
    57. 57. If you love knowledge, set it free… Karinda Rhode aka Robin Teigland @RobinTeigland Photo: Lindholm, Metro Photo: Nordenskiöld Photo: Lindqvist