To me, it’s incredibly obvious. To everyone else, not so much.
I’ve been consulting, and writing, on the subject of business design resulting from the distributed ledger economy and blockchain for about three years now. The findings from my work are summarized in articles posted here on LinkedIn and Medium. To put it in one sentence, blockchain will change everything, and most do not understand what that means.
Everything you’ve learned, all that you’re comfortable with as it relates to economic ecosystems, business designs and their impacts on economies is changing, and what you think you know no longer applies.
No Current Business Will Survive
Before you decide to flame me, hear me out. Yes, that position is mostly provocative, but to be honest, it’s going to be looking a whole lot different and EVERYTHING is going to change. As you’ve heard, “centralized business design” is a solution for disparate parties needing to work together when they don’t or can’t trust each other at scale. This centralized business design provides trust, “mostly”, that will be replaced with blockchain or DLT designed businesses. Since most operating models today are centralized in nature, they all are open for replacement, hence the massive use case possibilities circling around blockchain. As a result of this replacement frenzy, the equation for the future is basically:
New Economy = Decentralized Business Models(Wherever today there is a centralized one) = a whole lot less jobs
Although this post isn’t to get into the “how” of the above statement, but to point out that when the “information age” ushered in fairly significant impacts to the current economy in the form of automation, we failed to see its significance, its impacts and failed to plan for it. Looking at the current civil mindsets driving Nationalism as well as regional economic trends from “Main Street” to the “Rust Belt” in the United States and beyond just highlights this reality. We automated jobs away a few at a time and it has now reached a level that impacts the economy in a substantial way. With the promise of massive economic and social disruption stemming from blockchain, we need to look at our approach differently
Enter Blockchain
Blockchain will change everything. What does this mean exactly? Well, let’s start here. Absolutely no one is prepared for this change.
Business Professionals
As a result of the new economy that emerges from the blockchain revolution, business professionals are not prepared or educated on how to think, design, build and operate business models in the decentralized economy. All experience and education today is based on the centralized paradigm, not the decentralized paradigm. Designing and operating businesses on the capabilities of blockchain will:
- Require different thinking and different education that people hold today,
- Drive a different profit and loss mix not common in today’s businesses,
- Run with much higher margin and much lower operating costs as a result of peer-to-peer designs and low human resource requirements,
- Displace very significant portions of the workforce that make up centralized businesses today,
- Significantly flatten the hierarchies and costs in today’s designs having more in common with “Exponential Organizations” than any model seen before.
This business impact and need for an alternative way of thinking is the subject of most of my work. You can read many a rant here on LinkedIn or on Medium. What’s new to some of you who follow me is my now broader thinking on the subject. In conversations with colleagues and clients over the past month, it has occurred to me that we need to think even differently than I’ve been advocating until now.
We MUST include a thoughtful, purposeful approach to designing the new macro and micro economies that will result from this change. It is not enough to just declare that a new economy is evolving around us and go after our piece of it, it’s much more important to gather the appropriate regional and global leaders to purposefully define, plan and implement these new economies so that we arrive in a well-designed future, not one — like our current economy — where we arrived here by accident and leaving many people, cities, regions and countries behind.
…to purposefully define, plan and implement these new economies so that we arrive in a well-designed future, not one — like our current economy…
This massive shift in corporate design will have impacts on corporate relationships, structures, operating models and ultimately employment trends. This all will lay waste to the current economic model we’re all accustomed to. As a result, economies will be affected at all levels.
Local Economies
As a result of this tidal wave of change, local economies must understand what’s coming and start today to define the future they wish to design. For example, South Florida is the best-positioned region and economy to take the leadership role in driving the new financial ecosystem that results from the blockchain revolution; as the epicenter of many cultures and value flow today, South Florida can grow to become the epicenter of financial value exchange for the new global economy if it plans and executes on such a vision.
South Florida is the best-positioned region and economy to take the leadership role in driving the new financial ecosystem that results from the blockchain revolution; as the epicenter of many cultures and value flow today, South Florida can grow to become the epicenter of financial value exchange for the new global economy.
This candidate vision statement, if adopted, would serve as the guidepost for a public-private forum in which concerned and future looking citizens come together to define a region’s — in this example, South Florida’s — future. I argue that now is when this opportunity need’s to be seized. With an economic impact the size of that being created by blockchain, you could absolutely argue that a regional plan is required to design a future that is inclusive and well planned to include all citizens (a.k.a. the opposite of what we see in today’s information economy) but also to stem off the loss of an opportunity by planning, designing, and executing on a roadmap that elevates the role a region plays in the new global economy.
Sticking with our example, today South Florida is primarily a vacation and retirement destination, which makes the primary industries tourism, healthcare and real-estate. But given it’s multi-cultural and current cross-border financial place within the Americas, a position of strength in the current complex ecosystem of the region, a well-designed plan for the new economy could elevate the current financial ecosystem to the premier and ecosystem for blockchain based, global financial systems and management.
Global Economies
Global economic impacts will be substantial as well. It’s not a stretch to understand that the types of shifts that will occur will disrupt not only companies and therefore their regional economies, but due to the globalized nature of today’s economies, corporate changes will have rolling impacts across the globe.
Key areas to consider and understand in planning for global impacts — a job, and a problem that is hard to assign responsibility to any person, entity, organization or country to cover — will be felt for a number of macro-level reasons. A few to consider:
- The Flattening of Global Corporations: Global corporations, now a staple in the world’s economy, will feel the sting of shifting trust paradigms described above with services currently rendered through centralized organizations such as banking, payments, remittances, insurance, investments, etc. shed hundreds of thousands of workers globally as trust management for these services move to blockchain based businesses.
- The Flattening of global micro economies: Global self-contained economies that make up global supply-chain, financing, investment, identity and other services will flatten also shedding hundreds of thousands of globals jobs each.
- With Flattening, some will come up, some will go down: Current underdeveloped or “third world” economies will play a different role in the future. Without the legacy overhead of the developed, centralized economy, they will have the opportunity to move in a more agile way to build decentralized, new economy businesses. This will raise global citizens and poorer countries up from their current standing, but also, developed economies like that of the United States, European Union, etc. could feel significant wealth drain to an overall flattening, distributed and decentralized world economy. This equalization will have political as well as social and economic impacts.
Now What?
Where do we go from here is the question at hand. Let us not do this again. Let us all come together through education, awareness, and planning and design the future. If you think it’s too big a task, if you feel like it’s impossible, you’re already doomed to be left behind. Given the origins of blockchain architectures and the purpose and nature behind Satoshi’s whitepaper which defines equity, democratization and undoes millennia of power and wealth accumulation in the dismantling of the centralized economy, it is only wise to understand, plan, and build the future we all want. Remember, we can’t continue the way we are going; it just doesn’t scale any longer.
As a result, here in South Florida I am leading the charge to build a local alliance that not only brings awareness to the impacts the new economy will have on the region, but to also bring together businesses, government, and other concerned entities in a public-private forum to discuss and plan how South Florida can become a purposefully designed force in the blockchain economy, similar to the way that Dubai and Estonia are aggressively pursuing their blockchain e-government initiatives. In those cases, the vision is driving awareness, collective planning, and energy toward a common goal. This is a great start, but it’s up to others to do the same. Do you find it fascinating that economies like the US and EU are not pursuing the same? Too many competing priorities? Hmmm.
As a business leader either in today’s or tomorrow’s new decentralized economy, it is incumbent upon you to understand not only how to design your business for tomorrow, but your regional economy and how it fits into the evolving global ecosystem we are all creating.
Remember, everything you’ve learned and know no longer applies. Don’t be a blockchain failure, it’s time to get ahead of this.
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