Power Shift 6b2va
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POWERSHIFT
About the Author: Alvin & Heidi Toffler have written numerous books about the future, including Future Shock, The Third Wave, War & Anti War and many others.Their books have sold millions of copies in over 30 languages. They have affected corporate strategies & influenced politics in various countries.Alvin Toffler’s professional career began with a technical magazine. Later, he became a journalist and in time a White House & congressional correspondent for a Pennsylvania daily. The Tofflers also freelanced articles for many magazines. In 1959 he ed the staff of Fortune magazine for two years.Mr.Toffler has been a member of the faculty of the new school for social research, a visiting scholar at the new school for social research, a visiting scholar at the Russel sage foundation, and a visiting professor at the Cornell University. From the mid 1960’s the Toffler have been writing books that have brought them national fame. Heidi toffler is known around the world as an intellectual & futurist in her own right .in 1987,she was awarded the medal of the president of the Italian republic for her contributions to social thought. She is also an honorary co-chair of the board of U.S.Committee for UNIFEM (united nations development fund for women).
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THE THREE WAVES Toffler in his book the third wave has characterized civilization into three parts 1. The First wave 2. The Second wave 3. The Third wave First wave refers to the Agricultural phase, Second wave refers to the Industrial phase & the Third wave refers to the knowledge phase. The First wave change started ten thousand years ago by the invention of agriculture, Second wave started three hundred years ago by the coming in of the industrial revolution and now we are in the Third wave, which is supposed to last a few decades.
Accelerated rate of growth of Technology: New technology builds on already existing technology. This means that technology grows on technology. The First wave saw the steady increase of technology but this growth in technology took a long time because at that point of time there was very little technology existing in the world that is the reason why the agricultural revolution lasted for ten thousand years. Technology started progressing faster in the Second wave period. This is the reason that the industrial revolution lasted for only three hundred years .As more and more new and sophisticated technology came into the picture the time for the growth of new technology came into the picture the time for the growth of new technology was being reduced and now in the Third wave we have reached a situation where technology is growing so fast that the computer power is doubling every nine months.
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Power: In its most naked form, power involves the use of violence, wealth, and knowledge to make people perform in a given way. Toffler talks about three kinds of power – power of muscle, money and mind. In the first wave agriculture was the main occupation of the people and that is why they needed muscle to defend their land. Hence at that time muscle or violence or brute force was the power. With the coming in of the second wave, money or wealth became power. It was by contrast with brute force a much better tool of power. Now in the third wave we have knowledge as the power. Knowledge in broad implies efficiency - which is u the fewest power resources to achieve a goal. Knowledge can also be used to make the other party like your agenda.One very important thing here is that though violence was power in the first wave, wealth in the second and knowledge in the third wave. They are not strictly divided into watertight compartments. All the three forms of power existed in all the three waves. It is just that violence, wealth and knowledge were the dominant sources of power in the respective waves.
About the Book Power Shift is the third and the final volume of a trilogy that opened with Future Shock, continued with Third wave and is now complete .All the three books probe a single lifetime – the period beginning, say, in the mid 1950’s and ending approximately 75 years later in 2005.Powershift like it’s predecessors sets out a clean and comprehensive synthesis –giving the image of the new civilization now spreading across the planet. It focuses on the crucially changing role of knowledge in relationship to power. It presents a new theory of social power and explores the coming shifts in business, economy, politics and global affairs.
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Economy Twenty years ago Telco was regarded as India’s premier company, a gleaming model for the managers in India. Today they are fighting to survive. We may well see, in the years ahead the actual breakup of Telco. Twenty years ago Bajaj had the feeblest competition and Bajaj scooters sold more scooters than all the other scooter manufacturers in India combined, but today the share of Bajaj auto in the market is constantly on the decline. Power in the economy is changing at such an astonishing rate that businesses rather than being able to control change are being swept by it. Three hundred years ago, the industrial revolution brought with it a new system of wealth creation. Factories came up everywhere and they brought with them a new system of power. They shifted power from muscle to money. Now again a change is taking place and the businesses are in the midst of the knowledge economy where again the power has shifted from money to mind. The knowledge in the third wave economy has brought with it a new system of production From mass production – to increasing customization From mass marketing and distribution – to niche marketing and macro marketing From monolithic corporations – to new forms of organizations From operations at the nation state level – to operations which are both local as well as global. And beyond the proletariat to a new “cognitariat”. I believe that the third wave economy has rewarded well those who saw it coming .In the industrial era the list of top ten richest would have consisted of Birlas and Tatas but if we look at the latest list of the top ten richest Indians, these names include Azim Premji and Narayan Murthy who saw the coming in of the knowledge revolution and accordingly structured their businesses. 4
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Under this head the following points will be covered:
• Mergers & acquisitions • Role of violence in businesses • Knowledge as the new form of wealth • Information wars in business • Non-interchangeable employee
Mergers and acquisitions: Companies are frantically striving to cope up with an info tech revolution, a restructing of the markets and a lot of other changes taking place. This has led to a large number of mergers, takeovers and financial reshufflings.The collision between forces favoring this new system of wealth creation and defenders of the old smokestack system is the dominant economic conflict of our time, exceeding in historical importance the conflict between capitalism and communism or among the United States, Europe and Japan. Moving from an economy based on smokestacks to one based on computers requires massive transfers of power, and it largely explains the wave of financial and industrial restructing that has been ripping through the corporate world, throwing up new leaders, as companies desperately seek to adapt to fresh imperatives.Takeovers, raids, acquitions, leveraged buy – outs, corporate buybacks all made headlines throughout the 1980’s and involve not only U.S. firms but many foreign companies as well, despite legal and other restrictions that limit takeovers in countries like , Italy or Holland. The spasm of mergers, takeovers, divestitures and financial reshufflings is, however, only one aspect of the transition of the new economy. At the same time that they are trying to fend off raiders or to make acquitions, companies are also frantically striving to cope with an info – technological revolution, a restructuring of markets, and a host of other changes. It all adds up to the biggest shakeup the business world has known since the industrial revolution. 5
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Role of violence in businesses: We hardly stop to think about force as a factor in business. Millions of transactions that take place everyday are so peaceful on the surface that we seldom lift the lid to see what is going on beneath the surface.Those same three sources of power – muscle, money & mind that we find in government, family or for that matter in any other social institution, play a role in business as well. Though we might prefer to think otherwise violence has always played a role in business. Goon squads were regularly called in by ford motor company to-get the employees who asked for raises or threatened to organize strikes bashed up.Japanese employers in the 1970’s called on the mafia to intimidate union activities.In the U.S. force was used to shut the mouths of corporate whistles blowers – they are employees who call attention to the questionable practices of their bosses. In India also as we have seen in many Hindi movies, muscle was brought in to break strikes and deal with labour union leaders.But now in the knowledge economy, this violence has been transmuted to another form – the form of state violence. Businesses over the years instead of producing its own violence have brought the services of the government. The first thing any government tries to do, from the moment it is formed is to monopolize violence. Its soldiers and police are the only ones legally permitted to exert violence. Besides this violence has been modified into law, and behind every law good or bad, we find the barrel of the gun. Thus now in the case of disputes in companies or between two or more companies, cases are filed in courts - that is they take the help of law to sort out disputes. That is the reason, that corporate lawyers in the U.S. are called hired guns.
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Knowledge As A Symbol Of Wealth: Wealth, in the second wave economy was in the form of machines and materials used for industrial production. As service and information sectors grow in the advanced economies as manufacturing itself is computerized, the nature of wealth has changed. What counts today are not the companies buildings or machines, but the power of its marketing and sales force, the organizational capacity of its management and the ideas crackling inside the heads of its employees. Look at companies like Infosys, Wipro and Satyam.No one buys a share of Satyam or Infosys because of the firm’s material assets but because of the factors mentioned above. In the case of Indiaworld.com Mr. Rajesh Jain who sold it to satyam for Rs.499 crs. Had tangible assets worth only Rs.190 crs.In fact Mr. Narayan Murthy once said “The value of my company becomes zero when in the evening my employees go home”. I believe that the Balance Sheets of the companies in the future will have to for the knowledge component and the balance sheets may appear something like this. LIABILITIES
AMT (Rs.)
ASSETS INTANGIBLE ASSETS
AMT (Rs.)
KNOWLEDGE
Unlike land or machines, which can be used by only one person, or firm at a time, the same knowledge can be applied by many different s at the same time – and if used cleverly by them, it can generate even more knowledge.Capital has therefore gone from a tangible form to an intangible form in the form of ideas crackling inside the heads of its employees.
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Information Wars In Business: Retailers V/S Manufacturers:In the early days big manufacturers would send their sales force across the country to sell their products. Everday thousands of trades took place between manufacturers and retailers.The sales people here had the upper hand. This was because they carried with them the clout of their giant firms.From the 1950’s into the 1980’s, the balance of power, with the giant manufacturers at the top and retailers at the bottom remained essentially unchanged .one of the major reasons was that manufacturer controlled the information flows. Let us consider the case of Gillette. Gillette in the late 70’s sold 6 out of 10 razor blades in the U.S.. Gillette could often dictate to the store how many blades it would buy, what types, how they would be displayed, when they would be delivered and what the price would be.It was Gillette and not the retailer, who told the customers about the advantages of foamy shaving cream and razors on television. What the world knew about these products, it learnt from Gillette.Moreover, if Gillette controlled the information going to the customer, it also collected information from the customer. At every stage Gillette simply knew more than any of its retailers about how, when and to whom its products would sell.In short, Gillette stood between the retailers and the customer, feeding information under the exclusive control of both.This control played a crucial role in maintaining the traditional dominance of the manufacturer vis-a-vis the store. Now the supermarkets were facing two common problems 1. Long checkout lines 2. Errors in ing To overcome this problem, the industry came out with a universal product code or as we better know as bar code.Products were coded and the computer could read these codes. The bar codes did much more than reducing lines at the counter and reducing errors in
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POWERSHIFT ing. It transferred power.Power then shifted to the retailers, who could now keep track of all these items – along with their sales, profitability, timing of advertising, cost prices, discounts, locations, special promotions, traffic flows and so on.Instead of Gillette, telling the stores how much to buy and at what price Gillette was now pleading for shelf space.Having seized control of the main flow of information coming in from the customers, retailers are also beginning to influence the information going to the customer. To a large extent, they dictate what the customer is going to see.Today Ebony – which is a departmental store in Delhi, can dictate to big companies about how to their product based upon customer . So vital is this information that the manufacturers are now paying for it.
Non-Interchangeable Employee: One of the most important innovations of the industrial revolution was based on the idea of interchangeable parts. But workers too came to be regarded as interchangeable. Much of the powerlessness of the industrial class was because of this. So long as the jobs required little skills and workers could be trained in a short time to do some task, one worker was as good as another.But as the knowledge content of the work rises, jobs grow more individualized that is less and less replaceable. The same knowledge tools are used differently by different workers. One engineer uses the computer differently from the next, one market analyst analyzes things one way, the next is different.When the worker leaves, the company either has to find a new worker with the same skills or train a worker to equip him with the skills. Both these options are costly. Hence the costs of replacing any one individual grow and his or her bargaining power rises correspondingly.Besides this, because work is team based when an individual from the team leaves, the team becomes impaired.The net result of such changes is that companies tend to use fewer but better paid workers than in the past, and in the fast growing, leading edge industries – the old command structure is phasing out, replaced by a new, more egalitarian style of work.Seen in its historical context, this represents a significant shift of power in the workplace.New means of production are now not to be found in the artisan’s toolbox, or
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POWERSHIFT in the massive machinery of the industrial age. They instead ly in the brains of temployee – where society will find the single most important source of future wealth and power.
POWERSHIFT POLITICS: Power is shifting with information in every sphere of life, be it economics, business or politics.This information holds so much importance because it can be used in “N” number of ways by the person holding the information.Access to the correct information therefore is very important in the third wave. Under this head the following topics will be covered
Politics Invisible party Info tactics Market for spies
Politics: In any system there need as to be some congruence between the way a people make wealth and the way they govern themselves. If the political and economic systems are widely dissimilar, one will eventually destroy the other. Only twice before in history have we humans invented a wholly new system of creating wealth. Spread of agriculture in the first wave wiped out tribal groupings, hunting bands and other social and political arrangements and replaced them with dynastic kingdoms. The second wave or the industrial revolution wiped out many of these. With mass production, mass consumption and mass media, there arose in many countries a new system – mass democracy. Mass democracy implies existence of masses. It is based on mass movements, mass political parties and mass media. But now in the third wave, this mass society has begun to de-massify. Here movements parties and the media are all splintering.
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POWERSHIFT All these changes – whether rising localism, resistance to globalization or heightened ethnic and racial consciousness reflect the increased social diversity of advanced economies. They point to the end of the mass society.But with the de-massification, people’s needs and their political demands, diversify. Politicians are bombarded by more and more diverse demands from their constituencies.The result of the break up of the mass society is that the politics has become more complex. What is emerging is no longer a mass democracy but a highly charged, fast moving “mosaic democracy”. Take the case of Indian politics, for forty years in the country we had a single party but now over the last five years we have seen coalition governments in power. For example the Vajpayee government today has twenty three parties in the national democratic coalition (NDA) government.
Invisible Party: Bureaucrats, who are not democratically elected officials essentially run all the government functions on an everyday basis and make the overwhelming majority of decisions in their respective ministries. Thus they control the power to make and influence decisions.Bureaucracy is the most prevalent form of power in the industrial countries. Politicians regularly lament that they face major difficulties in getting the work done through the bureaucracy. To highlight the importance of bureaucracy’s power Toffler says “The fact is that, no matter how many parties run against one another in the elections and no matter who gets the most votes, a single party always wins. It is the invisible party of democracy”.The revolutionary new economy will transform not only business but bureaucracy as well. It will do this by alternating the basic relationship between politicians and bureaucrats and by restructing the bureaucracy. It is already causing power to shift among the various bureaucracies. Power will flow towards agencies that regulate information and communications. The growing importance of the I.T. ministry and the Telecom ministry in our own country is gaining importance because it is controlling information and knowledge flows. 11
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Info Tactics: Info tactics are ploys or strategies based on the manipulation of information. With knowledge in all its forms becoming more central to power, with data, knowledge and information piling up and pouring out of computers, info tactics will become even more significant in all spheres of life. Some of the info tactics that are most commonly used are: Secrecy tactics: This is the first and probably the oldest and the most pervasive info tactic. Secrecy is one of the familiar tools of repressive power and corruption. But it has its virtues as well. It is necessary to protect military security. Moreover secrecy makes it possible for officials to say things they would not dare utter in front of the camera. They can critise their bosses’ policies without embarrassing them publicily. Knowing how and when to use a secret is a cardinal skill of the politician and bureaucrat. Omission tactics: As the name suggests a part of the information is omitted so that the recipient does not get the true picture. The information is ripped off the relevant facts before it reaches the recipient, leading to wrong decisions being made.
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Timing tactics: Here the most common approach is to delay sending the message until it is too late for the receiver to do anything about it. Thick documents are dampened into the laps of ministers by the bureaucrats to which they have to respond in a very short period of time, in which period the receiver is not able to digest the full essence of the information.
Dribble tactics: Here data, information and knowledge are doled out in tiny takes at different times rather than compiled into a single document. In this way the pattern of events is broken up and the real issue is not made visible to the receiver. The tidal wave tactic: When someone complains about being kept uninformed, the shrewd player ships him or her so much information that the recipient is drowned in the froth and in the process losses the real essence of the information.
Market for Spies: As the entire society shifts towards a new system of wealth creation based on knowledge informational functions of the government mushroom and certain types of stolen and secret knowledge is worth a lot to those who need it.This in turn will challenge all conventional ideas about democracy and information. Even if we leave aside surveillance activities of spying and focus only on the pure work of the spy – that is the collection and
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POWERSHIFT interpretation of foreign intelligence – we find a system emerging that goes beyond anything that goes beyond anything we had previously known as espionage.
In the early 20th century, spying became more systematic – espionage schools were set up and spies began to be trained as professionals.But only a handful of even well trained spies could no longer satisfy the growing market for intelligence. Attempts were then made to mass manufacture intelligence.Remarkable breakthroughs were made in the field of intelligence gathering – from coding and deciphering equipment to spy aircrafts, listening stations, giant radars and other electronic devices dot the planet from Antarctica to Norway.Not surprisingly, now intelligence too finds itself at a crises point. The new collection techniques have been so effective, that they are giving in so much information that it can no longer be processed adequately. Now finding the right piece of information, analyszing it correctly and getting it to the right customer in time are turning out to be bigger problems than collection of data. Spying has become big business now the major players in this field being the central intelligence agency or the C.I.A of the U.S.A.; M.I.-13 of the United Kingdom and the K.G.B. of Russia. The other players in the field are Research and Analysis Wing (RAW) of India; the I.S.I of Pakistan and the MOSSAD of Israel. The importance of intelligence information can be gauged from the fact that though the United States has the muscle and money but because of lack of information about the whereabouts of Osama Bin Laden –the prime suspect in the W.T.C. bombing case they have not been able to nail him down.
PLANETARY POWERSHIFTS: Under this head the following areas will be covered
The Global k – Factor The fast and the slow Socialism’s collision with the future 14
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The power of balance Global gladiators
The Global K – Factor Few peacetime power shifts have been as dramatic as the following the swift disintegration of the once-monolithic soviet bloc. Suddenly immense power centralized in Moscow for nearly half a century shifted back to Warsaw, Prague, Budapest, Bucharest and Berlin. In a few spectacular months the east splintered.A second shift has accompanied the breakup of the so-called south. The LDC’S or the less developed countries (the term less developed is an arrogant misnomer since many LDC’S are highly developed culturally and in other ways. A more appropriate term would be less economically developed, which is the sense in which it will be used here) have never been able to form a truly united form vis-à-vis the international world, despite efforts beginning as long as the Bandung conference in Indonesia in 1995.The third immense shift of power has been the emergence of Japan and Europe into the rivals of the United States, leading to hyper-competition as each fights to dominate the 21st century. The socalled west too is now splitting apart.While politicians, diplomats and the press still treat these power shifts as a distinct phenomenon; there is a deep connection among all three. The global structure that reflected the dominance of the second wave industrial powers has been shattered like a crystal sphere under the blow of a sledgehammer.The future patterns of global powers can easily be glimpsed if, instead of looking at each major shift of power as an isolated event, we identify the common forces running through them. And in fact we find that all the three of these ecochal power shifts are closely linked to the decline of industrialism and the rise of the new knowledge-driven economy. In everything from organizational theory to music, from the study of ecosystems to our understanding of the brain, in linguistics and learning theory, in studies of non equlibrium, chaos and dissipative structures, the knowledge base is being revolutionized 15
POWERSHIFT and even as this occurs, competing researchers in fields like neural networks and artificial intelligence are providing new knowledge about knowledge itself.
These Tranformative advances, seemingly remote from the worlds of diplomacy and politics, are in fact inescapably linked to today’s geopolitical eruptions. Knowledge is the K-factor in the global power struggles.
The Fast and the Slow: Since the end of World War II the world has been split between capitalist and communist, north and south. Today as these old divisions fade into insignificance a new one arises. From now on the world will be split between the fast and the slow. Economies are either fast or slow. Primitive organizations have slow neural systems. The more evolved human neural systems processes signals faster. The same is true of primitive and advanced economies. Historically power has shifted from the slow to the fast-whether we speak of species or nations. In fast economies, advanced technology speeds production. But this is the least of it. Their pace is determined by the speed of transactions, the time needed to take decisions, the speed with which new ideas are created in laboratories, the rate at which it is brought to the market the velocity of capital flows and above all the speed with which data information and knowledge pulse through the economic system. Fast economies generate wealth and power faster than the slower ones.By contrast in peasant societies economics processes move at a glacial pace. Tradition, ritual and ignorance limit the socially acceptable choices. Communications are limited transportation restricted. Before the market system arose as an instrument for making investment choices, tradition governed technological decisions. tradition in turn relied on rules or taboos to preserve productive techniques that were proven workable over the slow course of biological and cultural evolution .The new system of making wealth consists of an expanding global network of
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POWERSHIFT markets, banks, production centers and the laboratories in instant communication with one another, constantly exchanging huge and ever increasing flows of information data and knowledge.This is the fast economy of tomorrow.
It is this accelerative, dynamic new wealth machine that is the source of economic advancement. As such it is the source of great power as well. To be de-coupled from it is to be excluded from the future.Yet that is the fate facing many of today’s L.D.Cs or the less developed countries. As the world’s main system of producing wealth revs up countries that wish to sell will have to operate at the pace of those in a position to buy. This means that the slow economies will have to speed up their neural responses or lose contracts and investments and drop out of the race completely.Looming on the horizon therefore is a dangerous de-coupling of the fast economies from the slow.An event that would spark enormous power shifts throughout the so-called south with big impacts on the planet as a whole. The wealth creation system holds the possibility of a far better future for vast populations of the planet who are poor. Unless the leaders of the L.D.C’s anticipate these changes they will condemn their people to perpetual misery and themselves to impotence.
Socialism’s Collision With The Future The dramatic death of state socialism in Eastern Europe and China did not happen by accident. Socialism collided with the future. With minor exceptions state socials had led not to equality and freedom but to one party political system …a massive bureaucracy… heavy handed police…government control of the media…secrecy…and the repression of intellectual and artistic freedom.Setting aside the oceans of spurting blood needed to prop it up a close look at the system reveals that everyone of this elements is not just a way of organizing people but also more profoundly a particular way of organizing, channeling and controlling knowledge.A one party political system is designed to control political communication. Since no other party exists it restricts the diversity of political information flowing through the society, blocking and thus binding those in 17
POWERSHIFT power to the full complexity of their problems. With very narrowly defined information flowing upward through the approved channels and command flowing downwards it becomes very difficult for the system to detect errors and correct them. In fact top down control in the socialist countries was based increasingly on lies and misinformation since reporting bad news up the line was often risky. The decision to run a one party system is a decision above all about knowledge.The secret police apparatus state control of the media the intimidation of the intellectuals and the repression of artistic freedom all represent further attempts to limit and control information flows.Second wave machines the kind that surrounded Marx in the 19th century for the most part operated without any . Plug in the power start the motor and it runs irrespective of what is happening in the outside environment.Third wave machines by contrast are intelligent. They have sensors that suck in information from the environment, detect changes and adapt the operation of the machine accordingly. They are self-regulating. The technological difference is revolutionary.From the beginning socialists traced poverty depressions unemployment and the other evils of private ownership of the means of production .the way to solve these ills was for the workers to own these factories through the state or through collectives.
The Power Of Balance: The Power Shift era has already begun and already it would appear the future is up for grabs. With the east in upheaval the south increasingly divided and the leading powers of the West-Europe, Japan and America – on a collision course, we face a frantic endless round of summits, conferences, treaties, and missions as diplomats meet to construct a new global order.No matter how much hammering sawing and wordsmithing they do, however the new architecture of world power will depend less on their words than on the quantity and the quality of power each brings to the table.Some speak of the world organized around Europe, Japan and the United States. Others see the world broken into
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POWERSHIFT six or eight regional blocks. Still others believe the bi-polar world is turning into a fivestar, with China at one end, India at another. Will new Europe stretch to the Atlantic to the Soviet border or beyond? No one can solve these puzzles with certainty. But the power shift principle can help. It reminds us that while many other factors – from political stability to population growth - all count but violence wealth and knowledge are the three main rivers from which all other power resources flow, and each is now in the process of being revolutionized.
The Global Gladiators: A new group of powers seekers are leaping onto the world stage and seizing sizable chunks of the colour controlled by nations alone. Some are good some decidedly evil. The question of whether some non-national gladiators ought to be represented in world bodies is closely related to the design of the new organization on the world scene. A key question facing the architects of the new global order is whether power should flow vertically or horizontally.A clear example of vertical organizations is the European community, which seeks to build in effect a supra government that would, according to its critics reduce the present countries of Europe to the status of provinces rather nations by imposing supra national controls over currency central banking educational standards environment, agriculture and even national budgets. This traditional vertical model seeks to solve problems by adding another echelon to the power hierarchy. It is high rise institutional architecture.The alternative model congruent with the emerging forms of organizations in the business world and the advanced economies flattens the hierarchy rather than extending it upwards. It will be based on networks of alliances consortia specialized regulatory agencies to accomplish ends too large for any single state. In this system there is no higher level of top down control and specialized agencies are not grouped hierarchically under a non-specialized central body. It is the equivalent of low-rise architecture. It parallels the flex firm.We are witnessing a significant shift of power from individual or groups of nation states to the global gladiators. This amounts to nothing less than the next global revolution in political forms. 19
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What is brilliantly clear, that as the new system of wealth creation moves across the planet it upsets all our ideas about economic development in the so called south, explodes socialism in the east throws allies into killer competition and calls into being a new dramatically different world order - diverse and risk filled at once hopeful and terrifying. New knowledge has overturned the world we knew and shaken the pillars of power that held it in place. Surveying the wreckage, ready once more to create a new civilization we stand together now at ground zero.
Other Areas: Now lets look at some of the other areas where shifts are taking place:
Social Structures: The third wave is breaking down all the traditional social structures that are existent in the society.t family system is increasingly shifting towards nuclear families. Besides this new forms of social relationships have come into the picture. These include – live in relationships, homosexual relationships, sexual relationships between the parents and children, four to five people married to one another and staying together as one family and contract marriages.Life styles are also changing. The work pressures are bringing about changes in the lifestyles. There is no fixed working hours of work and this is affecting relationships of people at home.
Education: Our education system today is based majorly on the requirements of the second wave economy. The second wave industries require mass labour with almost uniform skills.
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POWERSHIFT They were not to be thinkers but doers only. The requirement was such that a structured form of education could serve the purpose of the industry.
But now as the industry requirements are changing the education will also have to change to service the needs of the industries of the new economy. Education in the third wave economy will have to give a high choice to the students to customize their own course structures.Take the case of Symbiosis Institute Of International Business, which gives the students a choice of seven electives to be chosen from any field without actually going in for a specialization.Access to computers and advance ways of communications and information will have to be given in the education in the third wave.
Media: The basic direction of change in the media has been towards the breakup of mass audiences into segments and sub groups, each receiving a different configuration of programs and messages. This is the reason for the image explosion.The transition to a knowledge-based era sharply increases the demand for communications and swamps the old image delivery systems. Advanced economies require a work force, which can quickly adapt to and even anticipate repeated changes in the work methods, organizations and daily life. This work force needs instant and largely free access to all sorts of information.The best workers in the new wave will be the ones who are alert to new ideas, fashions, customer preferences, economic and social changes and competitive pressures.Information also comes in indirectly through entertainment programmes as well, which deliver information about new life styles, social issues and relationships. Today “kyuki saas bhi kabhi bahu thi” is giving us much more than entertainment. It is telling us about relationships, about people and social problems related to the family life. What is seen is then filed away in the mind, forming part of a person’s general bank of knowledge about the world. Thus it influences the bag of assumptions brought to the work place thus influencing his productivity at work. 21
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Few businesses, which I feel, will grow in the third wave economy. During the era of heavy machinery and industry the entry barriers for the new entrants were really high. These were either in the form of huge investments or as was the case in India – licenses.But now the entry barriers have come down. Money no longer is the first criteria for setting up a venture or business.
Electronics & communications This industry has reshaped businesses across the board. The advances made in the industry have helped the world economy as a whole to grow as a whole to grow at a faster pace. Now you can sit and shop from your living room through the Internet. This industry I believe will & still grow further in the third wave.
Space industry No body would have thought of landing on the first wave. But now space industry is emerging as one of the most important ones. Satellites have made communication much easier and faster. It has increased production by predicting the weather conditions of a particular area and the farmers can grow the crops which are most suitable for the climate over there. Some nations are planning to create colonies at other planets and commercial space travel will soon become a reality.
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Biotech industry Biotech is the industry of the future. It can be used for better agricultural yields. Besides this, with the genome project running successfully we may be able to find cures to diseases to which the cures are not known today.
CRITICAL ANALYSIS: •
Alvin Toffler's understanding of power as three aspects 1) Wealth 2) Authority 3)Knowledge. This can become a useful model for application within organisations. Too often people associate "power" with "authority" only e.g. CEO with institutionalised authority has "power to change things, to make things happen", ignoring other more enduring power :"Knowledge". This leads to conclusion and slogan in management literature that "CEO must be committed (implying he has the power, which is actually the authority, to implement change). Much opportunities are lost in the pursuit of organisation excellence, generating stress and frustration, when little attention is made on "Knowledge" as an enduring source of Power. "Knowledge" needs not necessary reside in those with institutionalised authority. Illustration of "Knowledge" power on a societal scale that causes power-shift by Alvin Toffler's certainly gives us the right focus in our quest for excellence or quality life the organisation that we live in.
•
Toffler says that companies are merging because of a lot of changes taking place in the market and the info tech revolution. This is true to a certain extent but I believe that the companies are merging not just because there has been a shakeup but also because their synergies match. Take the case of the merger of AOL and TIME WARNER. They decided to merge because they had matching synergies and not wholly because of any kind of shake ups in the business world. 23
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•
The author mentions the point about businesses not producing their own violence but buying the services of the government. I do not agree to that point because, if as he says that government makes a law than that law is applicable across the board and even workers can, after acquiring the right kind of knowledge use this tool that is law against the management.
•
In the shift of power between the manufacturers and retailers Toffler says that the power shifted because of the bar code. I don’t think this is true .the Power Shift did take place but I believe that it could have been because of rising consumerism and competition in the markets.
•
As far as education is concerned, the author talks about online schooling and college education but I feel that though online education may pick up but it will only be an additional tool. Online education will not be able to replace the teacher from the class completely. At best it will supplement the classroom learning.
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I donot agree with the author when he says that monetary policy will no longer be an effective instrument in curbing unemployment.
Positives •
The book was written in the early 90’s and whatever the author has written is coming true. He gives a lot of real life examples to supplement whatever he is saying. This helps us in understanding the change that is taking place around us, so that we are better prepared to face that change.
•
The book augments our vocabulary with phrases that prove useful in identifying modern day occurrences.
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like
“info-warrior”,”eco-spasm”,”fam-firm”,”smokestack”,”super-
symbolic economy” , and now “powershift” help us better understand the changes sweeping every facet of society.
Negatives •
The book is not at all structured. I had to read the book four times over to make a structure out of it. To cite an example at one point of time he is talking about politics and then he suddenly jumps on to ecology. There are many instances in the book where you have to read the same thing four to five times over to make some sense of what he is saying.
•
The book is repetitive at times. He talks about the same thing so many times that at times the book becomes a real drag.
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This book is a mere completion of the trilogy and only explains the issues raised by “toffler” in “Third Wave”.
Bibliography: Books: Alvin Toffler future shock Alvin Toffler the third wave Alvin Toffler power shift
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Websites: www.amazon.com www.barnes&nobles.com www.xibo.com/books. www.google.com www.msn.com www.altavista.com
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About the Author: Alvin & Heidi Toffler have written numerous books about the future, including Future Shock, The Third Wave, War & Anti War and many others.Their books have sold millions of copies in over 30 languages. They have affected corporate strategies & influenced politics in various countries.Alvin Toffler’s professional career began with a technical magazine. Later, he became a journalist and in time a White House & congressional correspondent for a Pennsylvania daily. The Tofflers also freelanced articles for many magazines. In 1959 he ed the staff of Fortune magazine for two years.Mr.Toffler has been a member of the faculty of the new school for social research, a visiting scholar at the new school for social research, a visiting scholar at the Russel sage foundation, and a visiting professor at the Cornell University. From the mid 1960’s the Toffler have been writing books that have brought them national fame. Heidi toffler is known around the world as an intellectual & futurist in her own right .in 1987,she was awarded the medal of the president of the Italian republic for her contributions to social thought. She is also an honorary co-chair of the board of U.S.Committee for UNIFEM (united nations development fund for women).
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THE THREE WAVES Toffler in his book the third wave has characterized civilization into three parts 1. The First wave 2. The Second wave 3. The Third wave First wave refers to the Agricultural phase, Second wave refers to the Industrial phase & the Third wave refers to the knowledge phase. The First wave change started ten thousand years ago by the invention of agriculture, Second wave started three hundred years ago by the coming in of the industrial revolution and now we are in the Third wave, which is supposed to last a few decades.
Accelerated rate of growth of Technology: New technology builds on already existing technology. This means that technology grows on technology. The First wave saw the steady increase of technology but this growth in technology took a long time because at that point of time there was very little technology existing in the world that is the reason why the agricultural revolution lasted for ten thousand years. Technology started progressing faster in the Second wave period. This is the reason that the industrial revolution lasted for only three hundred years .As more and more new and sophisticated technology came into the picture the time for the growth of new technology came into the picture the time for the growth of new technology was being reduced and now in the Third wave we have reached a situation where technology is growing so fast that the computer power is doubling every nine months.
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Power: In its most naked form, power involves the use of violence, wealth, and knowledge to make people perform in a given way. Toffler talks about three kinds of power – power of muscle, money and mind. In the first wave agriculture was the main occupation of the people and that is why they needed muscle to defend their land. Hence at that time muscle or violence or brute force was the power. With the coming in of the second wave, money or wealth became power. It was by contrast with brute force a much better tool of power. Now in the third wave we have knowledge as the power. Knowledge in broad implies efficiency - which is u the fewest power resources to achieve a goal. Knowledge can also be used to make the other party like your agenda.One very important thing here is that though violence was power in the first wave, wealth in the second and knowledge in the third wave. They are not strictly divided into watertight compartments. All the three forms of power existed in all the three waves. It is just that violence, wealth and knowledge were the dominant sources of power in the respective waves.
About the Book Power Shift is the third and the final volume of a trilogy that opened with Future Shock, continued with Third wave and is now complete .All the three books probe a single lifetime – the period beginning, say, in the mid 1950’s and ending approximately 75 years later in 2005.Powershift like it’s predecessors sets out a clean and comprehensive synthesis –giving the image of the new civilization now spreading across the planet. It focuses on the crucially changing role of knowledge in relationship to power. It presents a new theory of social power and explores the coming shifts in business, economy, politics and global affairs.
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Economy Twenty years ago Telco was regarded as India’s premier company, a gleaming model for the managers in India. Today they are fighting to survive. We may well see, in the years ahead the actual breakup of Telco. Twenty years ago Bajaj had the feeblest competition and Bajaj scooters sold more scooters than all the other scooter manufacturers in India combined, but today the share of Bajaj auto in the market is constantly on the decline. Power in the economy is changing at such an astonishing rate that businesses rather than being able to control change are being swept by it. Three hundred years ago, the industrial revolution brought with it a new system of wealth creation. Factories came up everywhere and they brought with them a new system of power. They shifted power from muscle to money. Now again a change is taking place and the businesses are in the midst of the knowledge economy where again the power has shifted from money to mind. The knowledge in the third wave economy has brought with it a new system of production From mass production – to increasing customization From mass marketing and distribution – to niche marketing and macro marketing From monolithic corporations – to new forms of organizations From operations at the nation state level – to operations which are both local as well as global. And beyond the proletariat to a new “cognitariat”. I believe that the third wave economy has rewarded well those who saw it coming .In the industrial era the list of top ten richest would have consisted of Birlas and Tatas but if we look at the latest list of the top ten richest Indians, these names include Azim Premji and Narayan Murthy who saw the coming in of the knowledge revolution and accordingly structured their businesses. 4
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Under this head the following points will be covered:
• Mergers & acquisitions • Role of violence in businesses • Knowledge as the new form of wealth • Information wars in business • Non-interchangeable employee
Mergers and acquisitions: Companies are frantically striving to cope up with an info tech revolution, a restructing of the markets and a lot of other changes taking place. This has led to a large number of mergers, takeovers and financial reshufflings.The collision between forces favoring this new system of wealth creation and defenders of the old smokestack system is the dominant economic conflict of our time, exceeding in historical importance the conflict between capitalism and communism or among the United States, Europe and Japan. Moving from an economy based on smokestacks to one based on computers requires massive transfers of power, and it largely explains the wave of financial and industrial restructing that has been ripping through the corporate world, throwing up new leaders, as companies desperately seek to adapt to fresh imperatives.Takeovers, raids, acquitions, leveraged buy – outs, corporate buybacks all made headlines throughout the 1980’s and involve not only U.S. firms but many foreign companies as well, despite legal and other restrictions that limit takeovers in countries like , Italy or Holland. The spasm of mergers, takeovers, divestitures and financial reshufflings is, however, only one aspect of the transition of the new economy. At the same time that they are trying to fend off raiders or to make acquitions, companies are also frantically striving to cope with an info – technological revolution, a restructuring of markets, and a host of other changes. It all adds up to the biggest shakeup the business world has known since the industrial revolution. 5
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Role of violence in businesses: We hardly stop to think about force as a factor in business. Millions of transactions that take place everyday are so peaceful on the surface that we seldom lift the lid to see what is going on beneath the surface.Those same three sources of power – muscle, money & mind that we find in government, family or for that matter in any other social institution, play a role in business as well. Though we might prefer to think otherwise violence has always played a role in business. Goon squads were regularly called in by ford motor company to-get the employees who asked for raises or threatened to organize strikes bashed up.Japanese employers in the 1970’s called on the mafia to intimidate union activities.In the U.S. force was used to shut the mouths of corporate whistles blowers – they are employees who call attention to the questionable practices of their bosses. In India also as we have seen in many Hindi movies, muscle was brought in to break strikes and deal with labour union leaders.But now in the knowledge economy, this violence has been transmuted to another form – the form of state violence. Businesses over the years instead of producing its own violence have brought the services of the government. The first thing any government tries to do, from the moment it is formed is to monopolize violence. Its soldiers and police are the only ones legally permitted to exert violence. Besides this violence has been modified into law, and behind every law good or bad, we find the barrel of the gun. Thus now in the case of disputes in companies or between two or more companies, cases are filed in courts - that is they take the help of law to sort out disputes. That is the reason, that corporate lawyers in the U.S. are called hired guns.
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Knowledge As A Symbol Of Wealth: Wealth, in the second wave economy was in the form of machines and materials used for industrial production. As service and information sectors grow in the advanced economies as manufacturing itself is computerized, the nature of wealth has changed. What counts today are not the companies buildings or machines, but the power of its marketing and sales force, the organizational capacity of its management and the ideas crackling inside the heads of its employees. Look at companies like Infosys, Wipro and Satyam.No one buys a share of Satyam or Infosys because of the firm’s material assets but because of the factors mentioned above. In the case of Indiaworld.com Mr. Rajesh Jain who sold it to satyam for Rs.499 crs. Had tangible assets worth only Rs.190 crs.In fact Mr. Narayan Murthy once said “The value of my company becomes zero when in the evening my employees go home”. I believe that the Balance Sheets of the companies in the future will have to for the knowledge component and the balance sheets may appear something like this. LIABILITIES
AMT (Rs.)
ASSETS INTANGIBLE ASSETS
AMT (Rs.)
KNOWLEDGE
Unlike land or machines, which can be used by only one person, or firm at a time, the same knowledge can be applied by many different s at the same time – and if used cleverly by them, it can generate even more knowledge.Capital has therefore gone from a tangible form to an intangible form in the form of ideas crackling inside the heads of its employees.
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Information Wars In Business: Retailers V/S Manufacturers:In the early days big manufacturers would send their sales force across the country to sell their products. Everday thousands of trades took place between manufacturers and retailers.The sales people here had the upper hand. This was because they carried with them the clout of their giant firms.From the 1950’s into the 1980’s, the balance of power, with the giant manufacturers at the top and retailers at the bottom remained essentially unchanged .one of the major reasons was that manufacturer controlled the information flows. Let us consider the case of Gillette. Gillette in the late 70’s sold 6 out of 10 razor blades in the U.S.. Gillette could often dictate to the store how many blades it would buy, what types, how they would be displayed, when they would be delivered and what the price would be.It was Gillette and not the retailer, who told the customers about the advantages of foamy shaving cream and razors on television. What the world knew about these products, it learnt from Gillette.Moreover, if Gillette controlled the information going to the customer, it also collected information from the customer. At every stage Gillette simply knew more than any of its retailers about how, when and to whom its products would sell.In short, Gillette stood between the retailers and the customer, feeding information under the exclusive control of both.This control played a crucial role in maintaining the traditional dominance of the manufacturer vis-a-vis the store. Now the supermarkets were facing two common problems 1. Long checkout lines 2. Errors in ing To overcome this problem, the industry came out with a universal product code or as we better know as bar code.Products were coded and the computer could read these codes. The bar codes did much more than reducing lines at the counter and reducing errors in
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POWERSHIFT ing. It transferred power.Power then shifted to the retailers, who could now keep track of all these items – along with their sales, profitability, timing of advertising, cost prices, discounts, locations, special promotions, traffic flows and so on.Instead of Gillette, telling the stores how much to buy and at what price Gillette was now pleading for shelf space.Having seized control of the main flow of information coming in from the customers, retailers are also beginning to influence the information going to the customer. To a large extent, they dictate what the customer is going to see.Today Ebony – which is a departmental store in Delhi, can dictate to big companies about how to their product based upon customer . So vital is this information that the manufacturers are now paying for it.
Non-Interchangeable Employee: One of the most important innovations of the industrial revolution was based on the idea of interchangeable parts. But workers too came to be regarded as interchangeable. Much of the powerlessness of the industrial class was because of this. So long as the jobs required little skills and workers could be trained in a short time to do some task, one worker was as good as another.But as the knowledge content of the work rises, jobs grow more individualized that is less and less replaceable. The same knowledge tools are used differently by different workers. One engineer uses the computer differently from the next, one market analyst analyzes things one way, the next is different.When the worker leaves, the company either has to find a new worker with the same skills or train a worker to equip him with the skills. Both these options are costly. Hence the costs of replacing any one individual grow and his or her bargaining power rises correspondingly.Besides this, because work is team based when an individual from the team leaves, the team becomes impaired.The net result of such changes is that companies tend to use fewer but better paid workers than in the past, and in the fast growing, leading edge industries – the old command structure is phasing out, replaced by a new, more egalitarian style of work.Seen in its historical context, this represents a significant shift of power in the workplace.New means of production are now not to be found in the artisan’s toolbox, or
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POWERSHIFT in the massive machinery of the industrial age. They instead ly in the brains of temployee – where society will find the single most important source of future wealth and power.
POWERSHIFT POLITICS: Power is shifting with information in every sphere of life, be it economics, business or politics.This information holds so much importance because it can be used in “N” number of ways by the person holding the information.Access to the correct information therefore is very important in the third wave. Under this head the following topics will be covered
Politics Invisible party Info tactics Market for spies
Politics: In any system there need as to be some congruence between the way a people make wealth and the way they govern themselves. If the political and economic systems are widely dissimilar, one will eventually destroy the other. Only twice before in history have we humans invented a wholly new system of creating wealth. Spread of agriculture in the first wave wiped out tribal groupings, hunting bands and other social and political arrangements and replaced them with dynastic kingdoms. The second wave or the industrial revolution wiped out many of these. With mass production, mass consumption and mass media, there arose in many countries a new system – mass democracy. Mass democracy implies existence of masses. It is based on mass movements, mass political parties and mass media. But now in the third wave, this mass society has begun to de-massify. Here movements parties and the media are all splintering.
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POWERSHIFT All these changes – whether rising localism, resistance to globalization or heightened ethnic and racial consciousness reflect the increased social diversity of advanced economies. They point to the end of the mass society.But with the de-massification, people’s needs and their political demands, diversify. Politicians are bombarded by more and more diverse demands from their constituencies.The result of the break up of the mass society is that the politics has become more complex. What is emerging is no longer a mass democracy but a highly charged, fast moving “mosaic democracy”. Take the case of Indian politics, for forty years in the country we had a single party but now over the last five years we have seen coalition governments in power. For example the Vajpayee government today has twenty three parties in the national democratic coalition (NDA) government.
Invisible Party: Bureaucrats, who are not democratically elected officials essentially run all the government functions on an everyday basis and make the overwhelming majority of decisions in their respective ministries. Thus they control the power to make and influence decisions.Bureaucracy is the most prevalent form of power in the industrial countries. Politicians regularly lament that they face major difficulties in getting the work done through the bureaucracy. To highlight the importance of bureaucracy’s power Toffler says “The fact is that, no matter how many parties run against one another in the elections and no matter who gets the most votes, a single party always wins. It is the invisible party of democracy”.The revolutionary new economy will transform not only business but bureaucracy as well. It will do this by alternating the basic relationship between politicians and bureaucrats and by restructing the bureaucracy. It is already causing power to shift among the various bureaucracies. Power will flow towards agencies that regulate information and communications. The growing importance of the I.T. ministry and the Telecom ministry in our own country is gaining importance because it is controlling information and knowledge flows. 11
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Info Tactics: Info tactics are ploys or strategies based on the manipulation of information. With knowledge in all its forms becoming more central to power, with data, knowledge and information piling up and pouring out of computers, info tactics will become even more significant in all spheres of life. Some of the info tactics that are most commonly used are: Secrecy tactics: This is the first and probably the oldest and the most pervasive info tactic. Secrecy is one of the familiar tools of repressive power and corruption. But it has its virtues as well. It is necessary to protect military security. Moreover secrecy makes it possible for officials to say things they would not dare utter in front of the camera. They can critise their bosses’ policies without embarrassing them publicily. Knowing how and when to use a secret is a cardinal skill of the politician and bureaucrat. Omission tactics: As the name suggests a part of the information is omitted so that the recipient does not get the true picture. The information is ripped off the relevant facts before it reaches the recipient, leading to wrong decisions being made.
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Timing tactics: Here the most common approach is to delay sending the message until it is too late for the receiver to do anything about it. Thick documents are dampened into the laps of ministers by the bureaucrats to which they have to respond in a very short period of time, in which period the receiver is not able to digest the full essence of the information.
Dribble tactics: Here data, information and knowledge are doled out in tiny takes at different times rather than compiled into a single document. In this way the pattern of events is broken up and the real issue is not made visible to the receiver. The tidal wave tactic: When someone complains about being kept uninformed, the shrewd player ships him or her so much information that the recipient is drowned in the froth and in the process losses the real essence of the information.
Market for Spies: As the entire society shifts towards a new system of wealth creation based on knowledge informational functions of the government mushroom and certain types of stolen and secret knowledge is worth a lot to those who need it.This in turn will challenge all conventional ideas about democracy and information. Even if we leave aside surveillance activities of spying and focus only on the pure work of the spy – that is the collection and
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POWERSHIFT interpretation of foreign intelligence – we find a system emerging that goes beyond anything that goes beyond anything we had previously known as espionage.
In the early 20th century, spying became more systematic – espionage schools were set up and spies began to be trained as professionals.But only a handful of even well trained spies could no longer satisfy the growing market for intelligence. Attempts were then made to mass manufacture intelligence.Remarkable breakthroughs were made in the field of intelligence gathering – from coding and deciphering equipment to spy aircrafts, listening stations, giant radars and other electronic devices dot the planet from Antarctica to Norway.Not surprisingly, now intelligence too finds itself at a crises point. The new collection techniques have been so effective, that they are giving in so much information that it can no longer be processed adequately. Now finding the right piece of information, analyszing it correctly and getting it to the right customer in time are turning out to be bigger problems than collection of data. Spying has become big business now the major players in this field being the central intelligence agency or the C.I.A of the U.S.A.; M.I.-13 of the United Kingdom and the K.G.B. of Russia. The other players in the field are Research and Analysis Wing (RAW) of India; the I.S.I of Pakistan and the MOSSAD of Israel. The importance of intelligence information can be gauged from the fact that though the United States has the muscle and money but because of lack of information about the whereabouts of Osama Bin Laden –the prime suspect in the W.T.C. bombing case they have not been able to nail him down.
PLANETARY POWERSHIFTS: Under this head the following areas will be covered
The Global k – Factor The fast and the slow Socialism’s collision with the future 14
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The power of balance Global gladiators
The Global K – Factor Few peacetime power shifts have been as dramatic as the following the swift disintegration of the once-monolithic soviet bloc. Suddenly immense power centralized in Moscow for nearly half a century shifted back to Warsaw, Prague, Budapest, Bucharest and Berlin. In a few spectacular months the east splintered.A second shift has accompanied the breakup of the so-called south. The LDC’S or the less developed countries (the term less developed is an arrogant misnomer since many LDC’S are highly developed culturally and in other ways. A more appropriate term would be less economically developed, which is the sense in which it will be used here) have never been able to form a truly united form vis-à-vis the international world, despite efforts beginning as long as the Bandung conference in Indonesia in 1995.The third immense shift of power has been the emergence of Japan and Europe into the rivals of the United States, leading to hyper-competition as each fights to dominate the 21st century. The socalled west too is now splitting apart.While politicians, diplomats and the press still treat these power shifts as a distinct phenomenon; there is a deep connection among all three. The global structure that reflected the dominance of the second wave industrial powers has been shattered like a crystal sphere under the blow of a sledgehammer.The future patterns of global powers can easily be glimpsed if, instead of looking at each major shift of power as an isolated event, we identify the common forces running through them. And in fact we find that all the three of these ecochal power shifts are closely linked to the decline of industrialism and the rise of the new knowledge-driven economy. In everything from organizational theory to music, from the study of ecosystems to our understanding of the brain, in linguistics and learning theory, in studies of non equlibrium, chaos and dissipative structures, the knowledge base is being revolutionized 15
POWERSHIFT and even as this occurs, competing researchers in fields like neural networks and artificial intelligence are providing new knowledge about knowledge itself.
These Tranformative advances, seemingly remote from the worlds of diplomacy and politics, are in fact inescapably linked to today’s geopolitical eruptions. Knowledge is the K-factor in the global power struggles.
The Fast and the Slow: Since the end of World War II the world has been split between capitalist and communist, north and south. Today as these old divisions fade into insignificance a new one arises. From now on the world will be split between the fast and the slow. Economies are either fast or slow. Primitive organizations have slow neural systems. The more evolved human neural systems processes signals faster. The same is true of primitive and advanced economies. Historically power has shifted from the slow to the fast-whether we speak of species or nations. In fast economies, advanced technology speeds production. But this is the least of it. Their pace is determined by the speed of transactions, the time needed to take decisions, the speed with which new ideas are created in laboratories, the rate at which it is brought to the market the velocity of capital flows and above all the speed with which data information and knowledge pulse through the economic system. Fast economies generate wealth and power faster than the slower ones.By contrast in peasant societies economics processes move at a glacial pace. Tradition, ritual and ignorance limit the socially acceptable choices. Communications are limited transportation restricted. Before the market system arose as an instrument for making investment choices, tradition governed technological decisions. tradition in turn relied on rules or taboos to preserve productive techniques that were proven workable over the slow course of biological and cultural evolution .The new system of making wealth consists of an expanding global network of
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POWERSHIFT markets, banks, production centers and the laboratories in instant communication with one another, constantly exchanging huge and ever increasing flows of information data and knowledge.This is the fast economy of tomorrow.
It is this accelerative, dynamic new wealth machine that is the source of economic advancement. As such it is the source of great power as well. To be de-coupled from it is to be excluded from the future.Yet that is the fate facing many of today’s L.D.Cs or the less developed countries. As the world’s main system of producing wealth revs up countries that wish to sell will have to operate at the pace of those in a position to buy. This means that the slow economies will have to speed up their neural responses or lose contracts and investments and drop out of the race completely.Looming on the horizon therefore is a dangerous de-coupling of the fast economies from the slow.An event that would spark enormous power shifts throughout the so-called south with big impacts on the planet as a whole. The wealth creation system holds the possibility of a far better future for vast populations of the planet who are poor. Unless the leaders of the L.D.C’s anticipate these changes they will condemn their people to perpetual misery and themselves to impotence.
Socialism’s Collision With The Future The dramatic death of state socialism in Eastern Europe and China did not happen by accident. Socialism collided with the future. With minor exceptions state socials had led not to equality and freedom but to one party political system …a massive bureaucracy… heavy handed police…government control of the media…secrecy…and the repression of intellectual and artistic freedom.Setting aside the oceans of spurting blood needed to prop it up a close look at the system reveals that everyone of this elements is not just a way of organizing people but also more profoundly a particular way of organizing, channeling and controlling knowledge.A one party political system is designed to control political communication. Since no other party exists it restricts the diversity of political information flowing through the society, blocking and thus binding those in 17
POWERSHIFT power to the full complexity of their problems. With very narrowly defined information flowing upward through the approved channels and command flowing downwards it becomes very difficult for the system to detect errors and correct them. In fact top down control in the socialist countries was based increasingly on lies and misinformation since reporting bad news up the line was often risky. The decision to run a one party system is a decision above all about knowledge.The secret police apparatus state control of the media the intimidation of the intellectuals and the repression of artistic freedom all represent further attempts to limit and control information flows.Second wave machines the kind that surrounded Marx in the 19th century for the most part operated without any . Plug in the power start the motor and it runs irrespective of what is happening in the outside environment.Third wave machines by contrast are intelligent. They have sensors that suck in information from the environment, detect changes and adapt the operation of the machine accordingly. They are self-regulating. The technological difference is revolutionary.From the beginning socialists traced poverty depressions unemployment and the other evils of private ownership of the means of production .the way to solve these ills was for the workers to own these factories through the state or through collectives.
The Power Of Balance: The Power Shift era has already begun and already it would appear the future is up for grabs. With the east in upheaval the south increasingly divided and the leading powers of the West-Europe, Japan and America – on a collision course, we face a frantic endless round of summits, conferences, treaties, and missions as diplomats meet to construct a new global order.No matter how much hammering sawing and wordsmithing they do, however the new architecture of world power will depend less on their words than on the quantity and the quality of power each brings to the table.Some speak of the world organized around Europe, Japan and the United States. Others see the world broken into
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POWERSHIFT six or eight regional blocks. Still others believe the bi-polar world is turning into a fivestar, with China at one end, India at another. Will new Europe stretch to the Atlantic to the Soviet border or beyond? No one can solve these puzzles with certainty. But the power shift principle can help. It reminds us that while many other factors – from political stability to population growth - all count but violence wealth and knowledge are the three main rivers from which all other power resources flow, and each is now in the process of being revolutionized.
The Global Gladiators: A new group of powers seekers are leaping onto the world stage and seizing sizable chunks of the colour controlled by nations alone. Some are good some decidedly evil. The question of whether some non-national gladiators ought to be represented in world bodies is closely related to the design of the new organization on the world scene. A key question facing the architects of the new global order is whether power should flow vertically or horizontally.A clear example of vertical organizations is the European community, which seeks to build in effect a supra government that would, according to its critics reduce the present countries of Europe to the status of provinces rather nations by imposing supra national controls over currency central banking educational standards environment, agriculture and even national budgets. This traditional vertical model seeks to solve problems by adding another echelon to the power hierarchy. It is high rise institutional architecture.The alternative model congruent with the emerging forms of organizations in the business world and the advanced economies flattens the hierarchy rather than extending it upwards. It will be based on networks of alliances consortia specialized regulatory agencies to accomplish ends too large for any single state. In this system there is no higher level of top down control and specialized agencies are not grouped hierarchically under a non-specialized central body. It is the equivalent of low-rise architecture. It parallels the flex firm.We are witnessing a significant shift of power from individual or groups of nation states to the global gladiators. This amounts to nothing less than the next global revolution in political forms. 19
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What is brilliantly clear, that as the new system of wealth creation moves across the planet it upsets all our ideas about economic development in the so called south, explodes socialism in the east throws allies into killer competition and calls into being a new dramatically different world order - diverse and risk filled at once hopeful and terrifying. New knowledge has overturned the world we knew and shaken the pillars of power that held it in place. Surveying the wreckage, ready once more to create a new civilization we stand together now at ground zero.
Other Areas: Now lets look at some of the other areas where shifts are taking place:
Social Structures: The third wave is breaking down all the traditional social structures that are existent in the society.t family system is increasingly shifting towards nuclear families. Besides this new forms of social relationships have come into the picture. These include – live in relationships, homosexual relationships, sexual relationships between the parents and children, four to five people married to one another and staying together as one family and contract marriages.Life styles are also changing. The work pressures are bringing about changes in the lifestyles. There is no fixed working hours of work and this is affecting relationships of people at home.
Education: Our education system today is based majorly on the requirements of the second wave economy. The second wave industries require mass labour with almost uniform skills.
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POWERSHIFT They were not to be thinkers but doers only. The requirement was such that a structured form of education could serve the purpose of the industry.
But now as the industry requirements are changing the education will also have to change to service the needs of the industries of the new economy. Education in the third wave economy will have to give a high choice to the students to customize their own course structures.Take the case of Symbiosis Institute Of International Business, which gives the students a choice of seven electives to be chosen from any field without actually going in for a specialization.Access to computers and advance ways of communications and information will have to be given in the education in the third wave.
Media: The basic direction of change in the media has been towards the breakup of mass audiences into segments and sub groups, each receiving a different configuration of programs and messages. This is the reason for the image explosion.The transition to a knowledge-based era sharply increases the demand for communications and swamps the old image delivery systems. Advanced economies require a work force, which can quickly adapt to and even anticipate repeated changes in the work methods, organizations and daily life. This work force needs instant and largely free access to all sorts of information.The best workers in the new wave will be the ones who are alert to new ideas, fashions, customer preferences, economic and social changes and competitive pressures.Information also comes in indirectly through entertainment programmes as well, which deliver information about new life styles, social issues and relationships. Today “kyuki saas bhi kabhi bahu thi” is giving us much more than entertainment. It is telling us about relationships, about people and social problems related to the family life. What is seen is then filed away in the mind, forming part of a person’s general bank of knowledge about the world. Thus it influences the bag of assumptions brought to the work place thus influencing his productivity at work. 21
POWERSHIFT
Few businesses, which I feel, will grow in the third wave economy. During the era of heavy machinery and industry the entry barriers for the new entrants were really high. These were either in the form of huge investments or as was the case in India – licenses.But now the entry barriers have come down. Money no longer is the first criteria for setting up a venture or business.
Electronics & communications This industry has reshaped businesses across the board. The advances made in the industry have helped the world economy as a whole to grow as a whole to grow at a faster pace. Now you can sit and shop from your living room through the Internet. This industry I believe will & still grow further in the third wave.
Space industry No body would have thought of landing on the first wave. But now space industry is emerging as one of the most important ones. Satellites have made communication much easier and faster. It has increased production by predicting the weather conditions of a particular area and the farmers can grow the crops which are most suitable for the climate over there. Some nations are planning to create colonies at other planets and commercial space travel will soon become a reality.
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Biotech industry Biotech is the industry of the future. It can be used for better agricultural yields. Besides this, with the genome project running successfully we may be able to find cures to diseases to which the cures are not known today.
CRITICAL ANALYSIS: •
Alvin Toffler's understanding of power as three aspects 1) Wealth 2) Authority 3)Knowledge. This can become a useful model for application within organisations. Too often people associate "power" with "authority" only e.g. CEO with institutionalised authority has "power to change things, to make things happen", ignoring other more enduring power :"Knowledge". This leads to conclusion and slogan in management literature that "CEO must be committed (implying he has the power, which is actually the authority, to implement change). Much opportunities are lost in the pursuit of organisation excellence, generating stress and frustration, when little attention is made on "Knowledge" as an enduring source of Power. "Knowledge" needs not necessary reside in those with institutionalised authority. Illustration of "Knowledge" power on a societal scale that causes power-shift by Alvin Toffler's certainly gives us the right focus in our quest for excellence or quality life the organisation that we live in.
•
Toffler says that companies are merging because of a lot of changes taking place in the market and the info tech revolution. This is true to a certain extent but I believe that the companies are merging not just because there has been a shakeup but also because their synergies match. Take the case of the merger of AOL and TIME WARNER. They decided to merge because they had matching synergies and not wholly because of any kind of shake ups in the business world. 23
POWERSHIFT
•
The author mentions the point about businesses not producing their own violence but buying the services of the government. I do not agree to that point because, if as he says that government makes a law than that law is applicable across the board and even workers can, after acquiring the right kind of knowledge use this tool that is law against the management.
•
In the shift of power between the manufacturers and retailers Toffler says that the power shifted because of the bar code. I don’t think this is true .the Power Shift did take place but I believe that it could have been because of rising consumerism and competition in the markets.
•
As far as education is concerned, the author talks about online schooling and college education but I feel that though online education may pick up but it will only be an additional tool. Online education will not be able to replace the teacher from the class completely. At best it will supplement the classroom learning.
•
I donot agree with the author when he says that monetary policy will no longer be an effective instrument in curbing unemployment.
Positives •
The book was written in the early 90’s and whatever the author has written is coming true. He gives a lot of real life examples to supplement whatever he is saying. This helps us in understanding the change that is taking place around us, so that we are better prepared to face that change.
•
The book augments our vocabulary with phrases that prove useful in identifying modern day occurrences.
24
POWERSHIFT •
like
“info-warrior”,”eco-spasm”,”fam-firm”,”smokestack”,”super-
symbolic economy” , and now “powershift” help us better understand the changes sweeping every facet of society.
Negatives •
The book is not at all structured. I had to read the book four times over to make a structure out of it. To cite an example at one point of time he is talking about politics and then he suddenly jumps on to ecology. There are many instances in the book where you have to read the same thing four to five times over to make some sense of what he is saying.
•
The book is repetitive at times. He talks about the same thing so many times that at times the book becomes a real drag.
•
This book is a mere completion of the trilogy and only explains the issues raised by “toffler” in “Third Wave”.
Bibliography: Books: Alvin Toffler future shock Alvin Toffler the third wave Alvin Toffler power shift
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Websites: www.amazon.com www.barnes&nobles.com www.xibo.com/books. www.google.com www.msn.com www.altavista.com
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