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Best Business Books 2005: The Future

Seven Ways to See What’s Next

(originally published by Booz & Company)

Futurism used to be an expensive nostrum, prescribed exclusively by think tanks and dispensed by pundits, but now it has turned into an essential survival skill for managers, entrepreneurs, those starting out in life, and those thinking about retirement. Knowing what is happening now is necessary but no longer sufficient: We need to find clues to what is going to happen next — even if that knowledge turns our world views inside out.

In response to this expanded need for prognostication, a thousand books, keynote speeches, and consultancies have sprung forth. Skepticism rapidly set in when readers, speech-goers, and consultees recognized that an excess of foresight can be as dangerous as a dearth if such foresight pursues wrong clues or promotes faulty explanations. This year, however, has been a good one for thinking about the future: Seven new books can provoke useful insights into (if not answers to) the questions you should be asking yourself about your business, your life, and the world your grandchildren are going to grow up in: What’s happening today — geopolitically, economically, technologically, socially — that wasn’t happening yesterday? What’s likely to happen tomorrow that isn’t happening today? How should I think about these happenings? And most important: What can anyone do to influence tomorrow’s events so that they favor survival, abundance, and meaning?

These books are at best sketches of what aspects of future life might look like. It’s up to you to weigh the authors’ insights against their biases. But if any of these books seem particularly contrary to your own values, pay closer attention to them: If you want to see clues to what hasn’t happened yet, you need to recognize the meaning of what is right in front of you in new ways. Sometimes, that means looking through the eyes of those with whom you disagree. Precisely because their views conflict with yours, they might be seeing aspects of reality that you fail to see, refuse to see, or don’t want to see.

To understand what makes 2005 radically different from 1999, whether you are in Bentonville, Ark., or Bangalore, India, start with Thomas L. Friedman’s The World Is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux, 2005), my pick as the year’s best look at the future. The dot-com bubble may be ancient history, but the forces it set in motion are only beginning to make themselves felt. Mr. Friedman offers a very definite theory of how and why your world has changed. Mr. Friedman’s is the flavor of neoliberal globalization theory in which the current Davos crowd is steeped — which is both an endorsement of the theory’s importance and a warning about its limits.

According to Mr. Friedman, we’re halfway into the first decade of “Globalization 3.0.” Globalization 1.0 started in 1492 and was driven by conquest and empire — the globalization of nation-states. Globalization 2.0, starting around 1800, was driven by the first industrial-era capitalist enterprises organizing internationally around markets and labor — the globalization of companies. Globalization 3.0, which started around 2000, is flattening the global playing field and shrinking the world of labor, markets, and ideas to person-to-person size — the globalization of individuals and small groups. (For another perspective on this, see “Carlota Perez: The Thought Leader Interview,” by Art Kleiner, s+b, Winter 2005.) Mr. Friedman attributes Globalization 3.0 to 10 “flatteners,” events and forces that he believes converged approximately at the turn of the millennium:

1. November 9, 1989, the date the Berlin Wall came down, marked a sharp transition from “a world of walls to a world of networks,” as Mr. Friedman wrote in the New York Times, “which was critically important because it allowed us to think of the world as a single space.” A big part of Mr. Friedman’s forecasting methodology involves finding the linkages that tie geopolitical, macroeconomic, and technological events into the same story line: One enabler of his first “world-flattening event,” for example, was the introduction of Windows 3.0, “which helped to flatten the playing field even more by creating a global computer interface, shipped six months after the wall fell.”

2. August 8, 1995, the day Netscape went public, igniting the dot-com boom and transforming the Internet into the World Wide Web, was significant for another reason. It helped lead to massive overinvestment in fiber-optic cable. When companies like Global Crossing sank, their stockholders suffered, but hundreds of thousands of highly educated knowledge workers in India and China suddenly had inexpensive broadband connectivity to the industrialized world.

3. The third flattener was the advent of “workflow,” which Mr. Friedman defines as “all the software applications, standards and electronic transmission pipes, like middleware, that connected all those computers and fiber-optic cable. To put it another way, if the Netscape moment connected people to people like never before, what the workflow revolution did was connect applications to applications so that people all over the world could work together in manipulating and shaping words, data and images on computers like never before.”

4. The effect of the first three flatteners was the creation of a platform for inexpensive worldwide collaboration among people, enterprises, and software, which in turn enabled the remaining six flatteners.

5. If moving your help desk to India is the flattener so many have come to know as outsourcing, then moving an entire factory to China is the next flattener — offshoring. And when China starts to benefit from the new ways of manufacturing that its cheap labor force has enabled, offshoring is likely to have its own global economic consequences as China begins to exert decisive influence over world markets.

6. Open sourcing is a mode of production, enabled by the collaboration platform of Internet-linked PCs, that has potential far beyond challenging Windows with the Linux operating system and Internet Explorer with the Firefox browser.

7. Insourcing is allowing a company like UPS to take over your entire logistics operation. When you ship your malfunctioning Toshiba laptop via UPS, it is delivered to the UPS hub, where UPS repairs it the next day, and then ships it back to you for arrival on the third day.

8. Supply-chaining is what fuels the Wal-Mart juggernaut, which uses the data-collaboration platform of PCs, the Internet, and barcodes to ensure that when an item leaves the shelf in a Wal-Mart in Florida, for example, it automatically triggers the manufacture of a replacement in China.

9. “Informing” is what Mr. Friedman calls the democratized access to personal knowledge that we take for granted today, but that would have been unthinkable a decade ago — the ability of hundreds of millions
of people around the world to use a search engine, free of charge, to find out nearly anything they need to know at any time.

10. Wireless access and voice communication over the Internet are what Mr. Friedman calls “the steroids” of the flatteners: “What the steroids do is turbocharge all these new forms of collaboration, so you can now do any one of them, from anywhere, with any device.”

Seeing the world through Mr. Friedman’s corner-office window won’t show you what will certainly happen to everyone in the future, but it might help you understand and react knowledgeably when Globalization 3.0 comes to your industry, hometown, or nation. Of particular interest in this regard is Mr. Friedman’s focus on the economic challenge that will be posed to the rest of the world by Chinese and Indian competitors in the future, and the failure of the U.S. education system to come anywhere near addressing the challenge. When weighing for bias while reading The World Is Flat, note how almost everyone Mr. Friedman quotes is a CEO, a secretary of state, or a prime minister. This is authoritative information about what the people who run the world are thinking, with insightful linkages between politics, economics, and technology. At the same time, Mr. Friedman’s authoritative sources also limit his world view: The world is flattening for the elites Mr. Friedman quotes, but he provides very few quotes from those more than one level below the CEO. You might miss something as big as the fall of Communism — as the CIA did — if the views from those penthouse windows are the only ones you see.

Impending Doom
After reading Mr. Friedman, James Howard Kunstler’s The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century (Atlantic Monthly Press, 2005) is a bucket of cold water in the face. If Mr. Kunstler is correct, we’re sliding down the ugly slope of the petroleum production peak and all hell is likely to break loose as a result, rendering Mr. Friedman’s picture of the world obsolete. It is possible that industrial civilization’s inability to come up with energy replacements for petroleum would render Globalization 3.0 as outdated as the dot-com bubble. Take a look at the trend in oil prices over the past few years and it’s hard not to pay attention to Mr. Kunstler’s argument. Even if the catastrophe Mr. Kunstler fears is averted, he asks questions that are difficult to ignore about the local impact of globalization and its perhaps unsustainable driver.

Mr. Kunstler’s concerns are twofold: First, he believes that the “Hubbert Peak” (the point at which total oil production begins to decline) has been reached, and that “the fossil fuel efflorescence was a one-shot deal for the human race.” Second, he fears that the economic system that grew in the era of cheap energy, and that undergirds the globalized world that Mr. Friedman describes, will be unable to function as it does now: “The so-called global economy was not a permanent institution, as some seem to believe it was, but a set of transient circumstances peculiar to a certain time: the Indian summer of the fossil fuel era.”

World-girdling, hyperefficient, delocalizing supply chains, Mr. Kunstler asserts, have sucked capital, civic association, and know-how out of communities. Now those communities are unprepared for a world in which local self-reliance will become important because the global support infrastructure will no longer be affordable: “Conditions over the past two decades made possible the consolidation of retail trade by a handful of predatory, opportunistic corporations, of which Wal-Mart is arguably the epitome.… In effect, Americans threw away their communities in order to save a few dollars on hair dryers and plastic food storage tubs, never stopping to reflect on what they were destroying.”

Mr. Kunstler’s phrase “the Long Emergency” is both the title for his book and the name of the scenario he thinks is most likely over the rest of the 21st century. If you accept the author’s argument about the impending end of cheap fossil fuels as plausible, his warning about the consequences is sobering: “Virtually all of the economic relationships among persons, nations, institutions, and things that we have taken for granted as permanent will be radically changed during the Long Emergency. Life will become intensely and increasingly local.”

Even if the world’s economies and societies dodge or avert that catastrophe, there are other huge impending changes to worry about. There’s the matter, for instance, of what will happen when scientists crack the secrets of evolution and intelligence. This is examined in Joel Garreau’s Radical Evolution: The Promise and Peril of Enhancing Our Minds, Our Bodies — and What It Means To Be Human (Doubleday, 2005). Whether you regard the author’s far-reaching vision of decades to come as a disaster warning or a utopian forecast depends on what you think “human” ought to mean. With germ-cell-line engineering that gives your great-grandchildren extra brain cells, more muscle power, or, for that matter, gills or superhuman computer intelligence, the possibilities that technological innovation may make practical in this century pose questions that used to be confined to philosophy, theology, and fiction.

Mr. Garreau is a zesty storyteller, a gonzo futurist who builds alternative universes from solid science, and he’s neither a technology booster nor a Luddite. The questions his moral quandaries raise are among the deepest questions we know how to ask: What kind of creatures are we — the apelike animals from which we evolved, or the angels we imagine we can become? If we accept the Darwinian explanation of our origins, where do we want to go next, now that we’re harnessing the very engines of evolution? Is there a “too far” for biotechnology, nanotechnology, and artificial intelligence? And what would anyone be able to do about it if there really is a line that technology shouldn’t cross — a line that could mean the end of Homo sapiens?

Radical Evolution paints a future that presently seems unimaginable, with everything from IQ implant chips to superpowered exoskeletons, microscopic factories that assemble anything you need from raw materials, and smart computers that design smarter computers, but Mr. Garreau grounds his scenarios in current research. Much of his narrative brings readers into the halls of the Defense Advanced Research Projects Agency (DARPA), the U.S. military’s R&D lab that brought us such technologies as computer graphics, personal computers, and the Internet — all of which must have seemed similarly unimaginable before they were invented.

Heaven or Hell?
Mr. Garreau also enlists the scenario method that was pioneered by Shell and refined by the Global Business Network — a methodology that starts with predetermined factors (the amount of petroleum in the ground, for example), driving forces (the need to fuel the transportation of physical matter that keeps the global economy running), and critical uncertainties (will anyone come up with energy sources to replace petroleum when we run out of it?), then uses those elements to construct plausible stories about the future.

Mr. Garreau’s scenarios deal not just with unprecedented power to alter the external environment — the arena in which Mr. Friedman’s and Mr. Kunstler’s analyses play out — but also with the power to augment the human body and brain, perhaps even to replace them. His driving force is what he calls “the Curve” — the acceleration of change and knowledge brought about by the combination of organized research and mind-amplifying tools from computers to the Internet. This, in his view, guarantees more and more powerful technological capabilities in coming decades. He focuses on what he calls the “GRIN technologies” — genetic, robotic, informational, and nanotechnological. He introduces big ideas about radically better or worse futures through the stories of some of the colorful characters who have championed them: Bill Joy, creator of Berkeley Unix and cofounder of Sun Microsystems (who now fears that desktop bioengineering, runaway nanofactories, or self-reproducing robots could end the human era before we have a say in our fate); Ray Kurzweil, brilliant inventor and entrepreneur (whose track record at creating technologies lends weight to his belief that the generations who will live for centuries are alive today), and dreadlocked virtual-reality visionary Jaron Lanier (who puts his bet on the human capacity to prevail).

Mr. Garreau’s scenarios are Heaven, in which people use techno-superpowers to create an earthly paradise; Hell, where intellectual power trumps wisdom and we become slaves to our creations, die out as victims of our own tools, or are replaced by more intelligent robots who see no need to keep us around; Prevail, where humanity collectively does what it has always done before — step up to the challenges posed by external circumstances or humankind’s own inventiveness; and Transcend, in which we or our descendants use technological powers to achieve the spiritual goals our great religions have set for us for thousands of years. Like all good scenarios, they aren’t predictions, but believable pictures of different futures, intended to inform decisions we make today.

With Mr. Friedman claiming a broad view, Mr. Garreau encouraging us to take the long view, and Mr. Kunstler trying to draw our attention to a looming abyss ahead, let’s not neglect the interior view: What are we to think? More important, how are we to think if these analyses and forecasts turn out to be accurate? I agree with Daniel H. Pink’s claim that what we need is A Whole New Mind: Moving from the Information Age to the Conceptual Age (Riverhead, 2005), although I found his harking back to the useful but limited “right brain/left brain” metaphor and revival of John Naisbitt’s decades-old “high-tech/high-touch” trope to be more retro than futuristic.

Mr. Pink agrees with Mr. Friedman about the reasons 20th-century knowledge workers need a new mental tool kit, although he simplifies these causes to “Asia, abundance, and automation.” The current transformation that is driven by these forces, as Mr. Pink characterizes it, is one from the information age, where analytical left-brain skills (“L-directed thinking”) such as computer programming, the law, and business administration were requisite for success, to a “conceptual age,” in which right-brained skills (“R-directed thinking”) of pattern recognition, storytelling and meaning-making, and empathy and inventiveness become paramount. Again, the metaphor for the complex changes that took Mr. Friedman 10 different “flatteners” to describe has been reduced by Mr. Pink to extreme, perhaps crippling simplicity. But I find useful Mr. Pink’s insight that the most valuable cognitive and social skills in an increasingly globalized world of many-to-many media are going to be different from those that enabled success in a world of few-to-many media.

“Design, story, symphony, empathy, play, and meaning” are the six “essential aptitudes” — human capabilities that can be mastered through practice — that Mr. Pink offers as an appropriate mind-set for the conceptual age. His explanatory framework may be simplistic, but the essential aptitudes he describes, like Mr. Friedman’s flatteners, can help you perceive significant new forces in the world — in this case, interior forces that are to some extent under your control. Read the book quickly, try the exercises, but don’t feel the need to ponder the depths of Conceptual Age theory.

Steven Johnson probes the depths of cognitive futurism more deeply than Mr. Pink in Everything Bad Is Good for You: How Today’s Popular Culture Is Actually Making Us Smarter (Riverhead, 2005). Mr. Johnson argues that television today is becoming more complex and requires heavier intellectual lifting than it did in the past. He also thinks that the high-resolution graphic simulations and massive multiplayer online games favored by teenage males are cognitive gymnasiums where sophisticated conceptual frameworks and exploratory methodologies attune brains to the current techno-social worldview.

The most challenging contemporary games, such as “Zelda,” “Myst,” and “Half-Life,” Mr. Johnson claims, require active exercise of “the basic procedure of the scientific method,” through the mental practice of what he names “probing,” a tactic required to test game environments in which the rules aren’t given but are meant to be puzzled out by the player (a term Mr. Johnson borrows from computer games scholar James Paul Gee). And an abstraction-juggling strategy Mr. Johnson calls “telescoping” is required when, in order to befriend the prince in “Zelda,” you must collect water in the jar the girl gave you, then water the bomb plant and use the bomb to blow up the rock that blocks the river, so you can fill the gorge and swim across to get to the top of Dragon Roost Mountain, where the prince can be found.

The mental skills of reverse-engineering the goal to learn what to do right now, probing for the hidden rules by performing experiments, and keeping in mind nested and chained sequences of procedures, Mr. Johnson asserts, are not just interesting side effects of game playing, but more nuanced versions of the kind of essential aptitudes Mr. Pink prescribes: “If you were designing a cultural form explicitly to train the cognitive muscles of the brain,” Mr. Johnson proposes, “and you had to choose between a device that trains the mind’s ability to follow narrative events, and one that enhanced the mind’s skills at probing and telescoping — well, let’s just say we’re fortunate not to have to make that choice.” Taken together, A Whole New Mind and Everything Bad Is Good for You illuminate possible ways our intellectual coping mechanisms may be changing, and point to means for augmenting and adapting our mental tool sets to deal with a changing environment. These books are not prescriptions, but exercises; not playbooks, but mental playgrounds.

Design as Salvation
If the world is flattening, the energy bubble is threatening to burst, and science is on track to make humanity as we know it obsolete, Mr. Pink and Mr. Johnson give us important clues to how to prepare our minds. But what can possibly be done to influence a future of such gigantic forces and daunting problems? Consider the energy problem. Barring massive Malthusian disasters, today’s billions of living humans can’t go back to a world with a more manageable population, so the question of how so many people are going to find the energy to maintain an industrial lifestyle without cooking the atmosphere remains to be addressed. Fortunately, the very ephemeral abundance of the past century left us with at least one dimension of wiggle room. In a world designed for energy abundance, opportunities to redesign wasteful systems abound. Innovation doesn’t always mean inventing a new widget. The best design concerns thinking really deeply and broadly about the methods we use to get things done, the things we use to do that, and the consequences of the ways we do things.

Mr. Kunstler, for instance, seems to lump together “technology” and “innovation” when evaluating humanity’s ability to meet the looming crisis of petroleum depletion. But not all great innovations are technologies. In the 1970s, in response to the first oil shock, the notion that families and nation-states could adapt, in part, by installing more efficient appliances and better-insulated windows led to a design revolution worth billions of barrels of oil. Not being as dreadfully unmindful as we are today about the externalities we design into vehicles, buildings, cities, appliances, and business processes is one possible response that doesn’t require inventing desktop cold fusion or building thousands more nuclear reactors than it is possible to build in a decade. Design isn’t color or pattern, but the way things work, and their relationship to all the human and natural systems in which they are embedded.

The past year was a good one for future-thinkers who want to learn about design, with two such exemplary books as In the Bubble: Designing in a Complex World (MIT Press, 2005), by John Thackara, and Massive Change (Phaidon Press, 2004), from Bruce Mau and the Institute Without Boundaries. Mr. Thackara is a prime example of a globalized knowledge worker. He lives in France, and the “design futures network” he directs, Doors of Perception, is based in Amsterdam and Bangalore. His premise is, “If we can design our way into difficulty, we can design our way out.” His encyclopedic knowledge of the systemic costs of bad design is complemented by his ability to marshal abundant examples of designers, companies, institutions, and systems that are beginning to get design right — mitigating environmental externalities that used to be invisible but are now potentially lethal, while remaining profitable. Design is not just an aptitude restricted to specialists in the bubble — as Mr. Thackara says, “It’s what humans do.” (The book’s title refers to the state of human thought and communication and technical information flow that air traffic controllers use to control a complex technological system that could go disastrously wrong at any moment.) Mr. Thackara not only thinks broadly, deeply, and systemically — he practices what he foresees, all over the world.

Mr. Mau’s Massive Change is not about the world of design; it’s about “the design of the world” — the guiding principle behind a beautifully realized, highly visual book created by a network of designers. Where Mr. Thackara tells us about the way design ought to inform the use of technology — and why, and how — Mr. Mau and his associates show how people today are solving problems large and small, global and local. In the Bubble analyzes the whole system integrally; Massive Change looks systemically at the major pieces, through many lenses. The image that sticks in my mind from this book is of a simple metal stove in use in Africa: The Turbo Stove is a lightweight, inexpensive device that can be assembled without tools in 15 minutes; it burns biofuels such as peanut shells, cornhusks, straw, and animal dung with maximum efficiency, providing heat for the poorest populations without exacerbating the problems caused by deforestation and fossil fuel use. This book is as big as the others in this collection, taking on everything from energy and information to markets, manufacturing, and transport.

Read all these books and you’ll know more than you do now about what to think about, and how, when pondering the future. For less than the cost of a half-hour consultation with a futurist, and a few hours of engaging reading or listening on your part, you can clue yourself in to the issues that you and your family, colleagues, customers, and community will be facing in what is already shaping up to be the most surprising century in human history.

Author profile:

Howard Rheingold (, author of Tools for Thought (Simon & Schuster, 1985), The Virtual Community (Addison-Wesley, 1993), and Smart Mobs (Perseus, 2002), coined the terms “virtual community” and “smart mobs” to describe the social phenomena that have emerged via the Internet and mobile telephony. He teaches digital journalism at Stanford and participa-tory media at the University of California, Berkeley. The text of two of his books and many of his articles are available at, and his blog is
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