Why Innovation in the Knowledge Era Will Change Everything

In my recent post about innovation ecosystems, you may have noticed two of my introductory slides about the knowledge era and innovation. I’d like to expand on that here.

This graph is taken from PBS’ The First Measured Century (a fun resource if you have never seen it). It’s a snapshot of employment trends (of men only) in the 20th century, the story of which was clearly dominated by the industrial era.

But if you look at the graph, there wasn’t that much change in secondary jobs (which include manufacturing, laborers, drivers)-they began and ended the century at roughly the same level +/- 40%.

So in a way, the real story of this “industrial” century was in other sectors. The century started with slightly more jobs in the primary sectors (including farming and mining). It was only when we industrialized farming that we freed up the labor for the beginning of the knowledge era and the increase in tertiary “white collar” jobs.

Now, the industrial era paradigm is reaching its limits. In the industrial era, the prevailing story was about using technology to reduce labor. It was built on a system that had cheap sources of energy and did not consider externalities such as pollution or population health to the extent that we now feel they should. This paradigm was applied to agriculture, manufacturing and, in a way, even to the early information technology industry (energy use of computers was not considered an issue, for example, until recently).

But today, the industrial assumptions about energy use, pollution and population well-being are facing increasing challenges all across our economy even in agriculture, the industry changes so drastically in the last century. Today’s industrial agriculture model uses high levels of fuel and petrochemicals as well as producing pollution and high levels of unhealthy foods.

In the knowledge era, new constraints and technologies will apply. Business and society will continue to emphasize material wealth but will also focus on lowering energy use, decreasing waste and pollution and increasing health. This new set of constraints will fuel a whole new era of innovation. The tool that will drive this change is the set of technologies that help us share, collaborate and use our knowledge more efficiently than ever. This is why innovation is the focus of attention today. It is the answer to all the pressing problems of our society. We can and we must get smarter and optimize our economy for this new set of restraints.

This is why my talk on innovation ecosystems started with a laundry list of industries that will be changed dramatically in the coming decades:

• Energy – shift from carbon-based energy to more abundant, less damaging fuels
• Transportation – adapt to new energy and pollution constraints
• Healthcare – remake the system to maximize healthfulness rather than merely addressing sickness
• Education – use technology to widen access to the best teaching and match learning tools to learning styles of users
• Food production – return agriculture to a model built on a sustainable ecosystem
• Manufacturing – rethink models to lower energy use and cradle-to-grave waste
• Construction – rebuild/retrofit buildings for conservation and sustainabilty
• Services – continue the trends to connect with both suppliers and customers to enhance the total experience
• Information technology – adapt to lower energy use and maximize connectivity

This isn’t meant to be a complete listing. But I want you to see that just as we “industrialized” almost every part of our economy in the industrial era, in the coming knowledge era we will “knowledge-ize” everything. We will re-make every industry in a way that maximizes innovation, lowers energy and materials use and maximizes human health.

The first chapter of Intangible Capital is called Knowledge is the New Oil. Innovation is the process of tapping the “oil” of this era, our collective knowledge turbocharged by information technology. It is the incredible business opportunity there for the taking. It creates the possibility for a new era of prosperity and well being. It’s time to get busy.