From the June 2008 issue of Research Magazine • Subscribe!

What Is the Shape of Things to Come?

Who: Alvin Toffler

Where: Bel Air Hotel, Los Angeles, CA,

April 9, 2008

On the Menu:

Accelerating time, changing spatial relationships and shared knowledge.

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In 1970, around the time when others were producing fairy tales like the 2001: A Space Odyssey and Star Wars, Alvin Toffler's book Future Shock laid out soberly and precisely how advances in technology would change society, culture and the way we do business. At the Bel Air Hotel they know how to recognize a celebrity. They also know how to distinguish mere transient fame from lasting influence. Toffler surely has that. He has been consulted by politicians ranging from the last Soviet leader Mikhail Gorbachev to former Speaker of the House Newt Gingrich. He has been named among the 50 most important Westerners shaping China's modern development since Jean-Jacques Rousseau, and one of the most listened-to voices in American business, on par with Bill Gates and Peter Drucker.

This is why, perhaps, the restaurant staff in Bel Air treats Toffler with understated reverence. Toffler, who will celebrate his 80th birthday in October, certainly looks very much the sage. But he is anything but pompous. On the contrary, he has a nimble mind and takes a lively interest in the world around him. He certainly continues to give a lot of thought to the forces that will influence our world over the next three decades.

Major Concepts

But first, he warns against extrapolating the future from the present and encourages us to look at broad, fundamental concepts instead. The first such concept is time. "Sure, time has accelerated -- we predicted that in Future Shock. What's important now is that time accelerated differently for different parts of society."

Imagine a cop standing on the side of a highway with a speed gun. A car zooms by at a hundred miles per hour. It is Big Business, which moves very quickly and, because it needs to compete, adapts instantly to the changing environment. Non-governmental organizations and other parts of civil society are like small cars with people in them. They are tooting around at a slower speed but they still move very fast. And then there are various institutions and the public sector, which are crawling along at no more than 15 miles per hour -- if that.

This is a condition which Toffler terms "desynchronization." His worst example of desynchronizationis the education system. In their current form, public schools in the United States came into being in the late 19th century. A great debate was raging at the time. Most parents didn't want schools, because they needed their kids to start working early. Public education was instituted when Big Business weighed in and demanded schools that would instill industrial discipline into future workers. Schools had to teach the importance of being on time, how to follow instructions and other skills that would be required at a large factory.

But changing the education system, adapting it to the needs of companies competing in the age of informatics, runs up against tremendous institutional inertia that may be impossible to overcome.

"Bill Gates did something recently which I had been expecting him to do for a long time," says Toffler. "He came out and said that our educational system is broken. It can no longer be fixed and a new one will have to be built from scratch."

Toffler shakes his head in disbelief every morning, when he sees yellow school buses ferrying students to school: "They are teaching kids to commute."

Shifting Space

Commuting, however, has to do with another fundamental concept -- space. Location, location, location is the realtor's motto, meaning that where the property is situated determines its value. But the value of a location changes over time, notes Toffler. Factories were built in what is now known as the Rust Belt because it was a great location for the age of industrial revolution.

Indiana, where Toffler worked at a factory as a young man, used to advertise itself as a great business location because it had limestone. In the age of telecommuting, nice places to live -- like Southern California -- become all the more attractive.

There may be a certain cyclicality in the way humans use space. Three thousand years ago China was the richest and most technologically advanced country in the world. Then came Europe's turn, and then eonomic and industrial leadership leaped across the Atlantic. Now, Asia may once more move into the lead.

But just as time has accelerated, so spatial relationships have changed.

"What is the most important thing about our time that people will remember in a hundred years?" asks Toffler and then answers: "We are the first generation in history to make money off the ground."

Indeed, every time we turn on the TV, pick up a cell phone or drive a car -- or, for that matter, whenever we execute a trade -- we make use of satellite communications. A portion of the money we spend on those services will be invested into further space exploration.

A New Type of Commodity

The industrial revolution made use of basic commodities such as coal and steel. The age of technology also runs on a commodity, but of a different kind -- knowledge. Knowledge, among its other interesting characteristics, is different from other commodities because it is not consumed when it is used. On the contrary, it expands both when it is used and when it is shared.

This makes a mockery of the traditional definition of economics, the science about the allocation of scarce resources, laughs Toffler. Knowledge also benefits from openness and inclusion. People from different cultures and backgrounds tend to add to the overall store of knowledge -- as opposed to old-style organized production, which put a premium on homogeneity and uniformity.

Does it sound a bit vague as a way to predict the future? Well, the Chinese didn't think so. After a rocky start, Toffler's book The Third Wave, was translated into Chinese and widely disseminated in China. It argued that after the 1950s most advanced countries moved away from Second-Wave society created by the industrial revolution and into Third-Wave, post-industrial society.

Beijing, in designing its development model, decided not to follow the usual economic prescriptions and go through the industrial revolution first and move into the age of technology later. It did both, simultaneously.

Toffler Associates, the consulting firm, uses Toffler's ideas to do classified work for the government and not-so-secret work for a slew of private sector clients. For example, it advises large telecom companies on what kind of workforce they will need in a decade or two. It's a crucial bit of information, because those companies already have technology development plans this far into the future.

Predicting the future has become fairly commonplace. Economists are constantly asked to do so -- to gaze into the crystal ball of their computers and to tell us whether we're going to have a recession and how long it is going to last. Economists do so by looking at past recessions and extrapolating from them. Toffler, on the other hand, looks not so much at what will be similar, but at what will be different in the future. So far, his approach has proved quite a bit more accurate.

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Alexei Bayer runs KAFAN FX Information Services, an economic consulting firm in New York; reach him at abayer@kafanfx.com. His monthly "Global Economy" column in Research has received an excellence award from the New York State Society of Certified Public Accountants for the past five years, 2004-2008

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