New Rules for the New Economy by Kevin Kelly

Were you paying attention 11 years ago when Kevin Kelly’s book New Rules for the New Economy came on the scene?  I wasn’t, and I should have been.  I read it and set it aside; but I knew better, so recently I went back and gave it a careful reading.  Have you ever done that?  Have you ever gone back and examined the predictions of a book you really liked?  Have you found them sadly lacking?  I have, more than once.  Somehow the ebb and the flow and the development of the real world are not all that easy to predict.  Vast and erudite academic tomes shrink in the distance, usually coming to nothing. Years later they are not even a footnote in history.

But Kelly’s work is different.  He talked about the development of Facebook while the founder was still in middle school.  He predicted the ascendancy of the Net and its storage locker the Cloud.  He predicted that the traditional rule driven production of the Industrial Age would give way to the constant but productive flux of the Information Age… he even predicted that the Information Age would give way to the Age of Relationships and Wikinomics.  He predicted that the computer would become a commodity and that it was the Network and its ultimate result, the Relationship, which was coming. 

Today, in the midst of vast economic flux, Mainframes have given way to Desktops, Desktops have given way to Laptops, and Laptops are giving way to iPhones and Netbooks. Now it is our connectivity to that vast web of Relationships that we call the Internet that matters most.  Whether we are using a GPS, or an iPhone or a Netbook, the most important information of our day to day life is on the Net and in the Cloud.

This ubiquitous repository of knowledge seems to be everywhere and nowhere.  Driven by the value of having the data and the information of our lives and work updated, synced and in real time, most of us have our calendars, our work and our research on the Net.  More and more we work from the Cloud and not from our desktops. The power of the Cloud extends from a Google calendar shared between spouses  to the data flow that an international executive needs to track the critical real time issues of his organization. 

This is today’s news, but Kelly told us about it first.  Eleven years ago.  In this brilliantly fast moving world, that’s like predicting the failure of TWA in 1900. Did we see a prophet? Did we listen?  Some certainly did.  Many of us did not.  What should we have heard 11 years ago? His rules were admittedly a bit cryptic for the uninitiated:

1. Embrace the Swarm
2. Increasing Returns
3. Plentitude not Scarcity
4. Follow the Free
5. Feed the Web First
6. Let Go at the Top
7. From Places to Spaces
8. No Harmony, All Flux
9. Relationship  Tech
10. Opportunities Before Efficiencies

Let’s tease out the meaning of Kelly’s Rules in the context of the present.

Embrace the Swarm is about the power of distributed knowledge.  The soccer Mom next door can spend an afternoon on the Net and know more about her son’s rare cancer than the family doctor. This enhances her son’s chance of survival and increases her power, while decreasing the doctor’s lock on the exclusiveness of his.  Knowledge, they have said for years, is power.  But it must be known and acted upon to matter.  With the spreading power of distributed knowledge comes new aggregations that can be tapped.  Formal and informal organizations are created, break apart and re-form on a daily basis.   The best of this organized knowledge and its power can be repackaged for action; and the soccer Mom (with husband, family, friends and other Relationship allies from across the Globe) can save her son’s life; adding his life and its value to the world.

Increasing returns.  Kelly wrote early in the history of the Net.  The number of connections could still be counted and more or less understood. Almost daily those of us watching were amazed at the breadth and depth of the knowledge and connections being created.  As a group we were just discovering the power of Greater Numbers.  Two people communicating through a node or a phone call is a conversation.  Twenty is a research consortium.   A few thousand and you have a revolution… and on the Net this can happen overnight. 

Plentitude, Not Scarcity.  Today the knowledge component of each product and service increases at a blistering pace, and whole new whole new areas of work and research are spun off on a near daily basis. Not only does knowledge itself increase, but as Ray Kurzweil argues in The Singularity, the acceleration of the production of knowledge of all sorts increases.  In this, knowledge is passionately unique.  It is not used up by sharing, it is increased dramatically.  The more we share it, the more we increase it, and nothing shares knowledge like the Relationships driven by the Net.

Follow the Free.  For Kelly, as the abundance of knowledge increases, we are driven in the service of its Freedom.  It has been said that on the Net knowledge wants to be free.  The more knowledge is shared and worked and re-worked, and the more creative minds that have access to it, the greater the value of that knowledge and the lower the cost of both atoms and knowledge.  Can anyone say Google and Wikipedia here?  And maybe Wolfram|Alpha (the scientific problem-solving engine of Stephen Wolfram). If you and I have one sandwich between us for lunch and we share it with each other, we each have half.  If we share it with 20 co-workers, we each have a smell and a few crumbs. However, turn that sandwich into knowledge—each co-worker adds an idea, and we now have the original knowledge bit and 20 new spin-offs, 20 new ideas… and those are then shared.  Our current economic crisis aside, the rules of Scarcity and Costliness have been repealed because of the Nature of Knowledge and the ubiquitous Relationships of the Net.

Feed the Web.  As the nodes of communication and relationships in a particular arena expand and entangle us, our loyalty is driven into the Web itself.  Thus, the Wiki becomes a massive force to be reckoned with.  Knowledge is aggregated and organized and learned and used amongst a group of peers.  In return they drive this value by returning to add their own knowledge to the process.  The speed and ubiquity of this driven knowledge becomes more important than the companies that people work for.  They feed the web and the web helps them feed the company.

Let Go at the Top.  Wrap a web of knowledge and relationship around the world, and where is the top? There is none.  With the acceleration of innovation and knowledge driven by the Web, the leader often becomes the follower.  The Servant Leader, as Stephen Covey calls him, facilitates the minds that drive the innovation that drives the company.  This Leader lets go of the legacy of the Industrial Age command-and-control model and puts himself in the roll of servant to the Mission of the Organization.  It is this vision and innovation that drives the choices of the modern organization.

From Places to Spaces.  Place has become unimportant and Space (the Space of connected communities on the Net) has become important.  We are at the point where many of our most important connections and relationships are nurtured on FaceBook and MySpace and LinkedIn.  Thanks to the Net, we are much better at the connections that drive warmth and relationship.  Ask anyone who has reconnected with old friends and former colleagues via the Net.  Spaces do not replace Places, but they can augment them dramatically. I have a friend who tells me of a spontaneous party of over 300 former high school friends who re-connected through Facebook, and brought their families and children together for an afternoon of fun just because they could.  Today, Spaces drive Places, and both drive the Relationships that make us better both personally and professionally.  When others were telling how the Net would de-personalize our world, Kelly was telling us it would bring us together.

No Harmony, all Flux.  Wasn’t it Heraclitus who said that all is flux and change?  Whatever his philosophic mistakes, he might well have been writing about the drive of a knowledge economy in this millennium.  When real human value comes from the Idea and not from the incremental improvements of productivity, we know that the Industrial Age has come and gone. Kelly re-iterates again and again, almost in repetitive redundancy, that if you can measure “productivity” as the economists do, by counting widgets per hour, the task is not important enough for humans to be doing.  In fact he takes this further; he says that most of the jobs that the unions are fighting for today will be considered inhumane in a few decades.  He champions our freedom from the assembly line and our explosion into creativity and innovation of all kinds.

Relationship Tech.  Oddly and surprisingly, all the hard technology and the computers and the Networks of Wires and Wireless connecting us at light speed have come down to this; the furthering of Relationships.  It maybe the resurgence of the interconnected and extended family that Don Tapscott talks about in Grown Up Digital, or it may be colleagues wrangling over esoteric knowledge on a private Wiki.  But it is the Relationship that has arisen as the clear winner in this world

Opportunities Before Efficiencies. Here Kelly returns to the roots of what it means to be human with a resounding “and I mean it.” For Kelly, to be human is to be creative; to dive into the opportunities of a life unbounded by the repetitions that are measured and called productive and efficient.  He is quite clear in this.  If a machine can do it, it should. This frees another creative mind to add to the benevolence of a growing race.

Can I sum up Kelly’s book? Yes, that is pretty simple.  If you didn’t read it and act on it 11 years ago, go back and read it and act on it today.  The very long term principles that he brought to light in this brilliant tour de force are as fresh today as they were then.  Buy it.  Read it.  Digest it.  Act on it.  Your life and your portfolio will thank you.