"Capitalism is the Crisis" (Occupy Wall Street Sign).
The industrial age is finally coming to an end, and with it the old model of capitalism is ending as well.
The continuing global economic mess, growing inequalities and environmental destruction, to name a few crises, are causing many to ask: Is global capitalism fixable as a system, and if so, what is to be done?
While free enterprise and markets have proven essential for product innovation, all around us we see industries in crisis and governments that can't get things done. Old media companies are failing, and a few years ago the core modus operandi of Wall Street basically imploded. Schools and universities teach with century-old methods. Global co-operation and problem-solving institutions such as the World Bank, the UN and the G20 seem impotent. Youth unemployment is a global epidemic, and as young people choose increasingly not to vote, democratic institutions face a crisis of legitimacy.
During capitalism's first iteration, the means of production was machinery. The most important assets were physical and financial. Companies had command-and-control hierarchies, and capitalists focused on maximizing personal wealth.
No longer. The most important assets now are in the crania of knowledge workers, and the most effective work systems are social and collaborative. Citizens increasingly realize that an economy driven solely by greed, with companies interested only in shareholder value, is unworkable and threatens the planet.
We're in the early stages of a massive transformation. Just like the printing press moved the world from a feudal, agrarian society to industrial capitalism, the Internet ushers in a new era.
Close to a billion people use social media daily. In 10 years the number of Internet users will soar from 2 billion to 7 billion. Today, 80 per cent of the world's population uses cell phones. The social world is transforming the way we create wealth, work, learn, play, raise our children, and probably the way we think.
We're all collaborating like never before and in business the hottest concepts are social -- collective intelligence, mass collaboration, crowd sourcing and collaborative innovation.
As knowledge becomes more distributed, so does power. People are becoming smarter, scrutinizing institutions, organizing collectively and forging innovative ways of doing almost everything. Peers are creating encyclopedias and new ways of funding entrepreneurship. Wiki-revolutions are challenging tyrants.
For capitalism to have a future it must change fundamentally. We need to understand that business can't succeed in a world that's failing. We need to bake integrity into corporate DNA. A good start is to rethink executive pay-packages so that corporate leaders are motivated to do the right thing.
Industrial capitalism brought representative democracy, but with a weak public mandate and inert citizenry. The digital age offers a new democracy based on public deliberation and active citizenship.
We need collaboration in areas such as education, health care and science. Cities must become open, with smart power grids, intelligent transportation systems and transparent government. Change is required urgently and the contours of a new model are emerging.
But we need leadership to make this transition. Many leaders of industrial capitalism will resist. History tells us those who don't join in will be swept away.
This article originally appeared in The Toronto Star.
Roger Martin, Richard Florida and Don Tapscott discuss The Future of Capitalism? Or Not? Tuesday, May 21 at 5:30 p.m. at the University of Toronto. For details, visit here.
Don Tapscott is Adjunct Professor at the Rotman School of Management, University of Toronto and the Inaugural Fellow of the Martin Prosperity Institute. He is the author of 14 books most recently (with Anthony D. Williams) MacroWikinomics: New Solutions for a Connected Planet. Twitter: @dtapscott