Decentralized collaboration between companies, small teams and individuals could unleash innovation and growth in the real economy. Financialization and politics have held back business and society.
A quarter century ago it was understood that the world needed a paradigm shift. The Cold War had ended. The world was entering an End of History or a Clash of Civilizations. Aging populations would bankrupt the welfare states in the next decades. The post-colonial west had to evolve beyond reliance on cheap third world labor and find a way to grow and compete on equal terms with emerging economies.
The internet emerged as a great decentralizing and equalizing force. Universal access to information and communication would bring down borders, remove the middlemen, level the playing field. Kids working from their bedrooms could take on dinosaur multinationals. Big business embracing the challenge would become more nimble and competitive. Real growth can only come from technology-driven innovation.
The virtual frontier promised a new way of life for a new century. We would work for ourselves, from home, collaborating remotely with individuals and companies anywhere on the planet. Commuting could be eliminated. We would control our own destiny, keep the fruits of our labor. The information sectors - media, advertising, later ecommerce - were the first to see the benefits of the new economy.
The internet became conflated with an information society and the ideological concept of a post-industrial service economy; dirty manufacturing would presumably be done on another planet. The digital revolution also got caught up in financialization. Speculation helped build out the internet infrastructure, but when the dotcom bubble collapsed around 2000, much of the idealism and optimism of the early internet went down with it.
After 9/11 the internet morphed into a tool for an Orwellian surveillance society. 'They trust me,' Mark Zuckerberg wrote about the first Facebook users. 'Dumb fucks.' The guiding principle for web 2.0 became the vaguely fascist wisdom of crowds. Personal data collectors with seemingly limitless access to capital were able to suck up much of the value on the internet and monopolize entire industries.
When the reinflated financial sector crashed again, the political response was more centralization, exponential government expansion and increasing authoritarianism. The west gave up on liberal principles and followed China's model of central planning and debt-fueled "growth". Central bank interventions inflated asset prices, increasing inequality. The thread of another Great Depression was turned into the reality of a Great Stagnation. Technology, trade and immigrants were blamed.
None of this was inevitable or a natural outcome of technology or capitalism. Opportunity and social mobility declined, because the market became less free and open. Government picked winners and losers, propped up a status quo. Technology is still the great equalizer. Decentralization is now getting a second look. Blockchain could help solve the problems caused by fiat currencies and centralized control over the means of production.
Cryptocurrencies for now have become another speculative asset, but distributed ledger technology and smart contracts have potential to fulfill some of the early internet promises; to remove middlemen, automate transactions, connect the internet with real world assets and processes. Blockchain applications could anchor accounting in math instead of in "trusted" central authorities that count the deficits on their books in trillions.
Blockchain is the next phase of an ongoing digital revolution. The future will be decentralized and self-organizing; how nature works. Leaders will head this way. Any market can and will be decentralized. Unicorns that centralize generic markets like room rentals or ride sharing will be replaced by decentralized peer-to-peer markets. Automated transactions will transform supply chains and how we design and manufacture physical goods.
Modified Ventures has covered these themes since 2010 with regular Geoweb and Design for Manufacturing Summits in New York, Toronto and London. The summits bring together different parts of changing industries, to promote innovation and growth for companies and opportunities for younger generations. In 2018 we are relaunching for more research and more events in more cities in the next decade.