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strategy and business
 / Winter 2006 / Issue 45(originally published by Booz & Company)


Alvin Toffler: The Thought Leader Interview

S+B: A fascinating section of your book is the discussion of assets that are “nonrival”: those that aren’t diminished by someone else’s use of them. Are there any viable models for valuing knowledge assets?
Companies everywhere are trying to put a price on certain forms of intellectual property. But if, as we say, knowledge is at the core of the money economy, then we need to understand knowledge much better than we do now. There’s a passage in Revolutionary Wealth that lays out 10 ways in which knowledge dramatically differs from any other resource that we’re accustomed to working with. For example, it is inherently nonrival. You and a million other people can use the same chunk of knowledge without diminishing it. It is nonlinear. Tiny insights can yield huge outputs. Stanford students Jerry Yang and David Filo started Yahoo by simply categorizing their favorite Web sites. Fred Smith, also while still a student, flashed on the idea that in an accelerated economy people would pay extra for speed — and went on to found Federal Express. Knowledge is promiscuous. It mates with other knowledge. And the more there is, the more numerous and varied the possible useful combinations. And it can be stored in smaller and smaller spaces. Toshiba entered the Guinness World Records in 2004 with a computer hard drive smaller than a postage stamp. Coming soon is storage at the nanoscale, which is measured in billionths of a meter.

S+B: That may be why there is a backlash against science, and you call that backlash a fundamental threat to revolutionary wealth creation. Is this a new form of Luddism?
I think there’s a combination of things going on. First, I think there is Luddism, fear of the new technology. Some of that fear is appropriate; it’s scary technology. We’re playing with big chips. The Manhattan Project was the first time humanity could blame scientists for effects so great that they shook the world. There are now lots of technologies that could have dangerous consequences on a very large scale.

At the same time, the public perception of potential danger is even greater and often misdirected. Uncertainty levels are at least as high as they were at the beginning of the Industrial Revolution, when it was fashionable among intellectuals to be pessimistic.

The second factor feeding pessimism is a revival of religion — certainly in the United States, Latin America, and Africa. I attribute that, in part, to the high levels of uncertainty with which we live. Pessimism is also affected by the aging of the population, because the older the population gets, the more people we have, as a friend of mine puts it, “cramming for the finals.” They worry about their mortality.

S+B: Surely there’s more to this than aging and uncertainty.
I am a secular person, but I recognize that the social functions of religion are extremely important. We wrote in The Third Wave back in 1980 that religion had three dominant functions in society. It gave people a systemic view of the world. It gave people community; if you go to church, you assume you’re dealing with good people who share your values. And it gave people structure in an unstructured environment, in which things are going crazy. People are told what to do and what not to do in very clear terms. Those are not trivial things for religion to do within society; they can be important benefits.

Since writing that book, we lost our daughter. She died after suffering through more than a decade from a neuromuscular disease, and she was quadriplegic for long stretches. I found myself going to the cemetery, which was quite near where we lived, and thinking, I wish I could believe I’d see her again. I then realized the obvious thing that I think religious people know well and that I did not fully appreciate: the degree to which religion offers solace in times of misery and agony.

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