I am currently checking out Chris Andersons new book “Makers: The new industrial revolution” and finding he has many similar views to myself on the trajectory of the world’s economy. Back in August of 2008 (prior to the onset of the Great Recession) I wrote a series of blog post on The forces of economic change in the world today; Business Model Migration, Life Cycle versus Long tail and Rise of the micro-multinational. IMHO these trends continue to be pervasive in the world today and account for likely 80% of the global economic momentum.
These forces of change; business model migration, life cycle to longtail and rise of the micro-multinational are now even more pronounced because of what I like to refer to as change accelerants. There are three key accelerants to change; Localization, Velocity of Knowledge and Learn Rate.
Localization is the ability of census metropolitan areas to basically become self-sufficient. The key contributing enabler of localization is open source hardware. Open source hardware is today where open source software was in 2003 to 2005, however, open source hardware will have even a greater impact on society than open source software. Open source hardware is likely a decade away from becoming main stream.
Open source hardware consists of 3D printers, maker movement, hardware hackers, shared design and the ability to make small run manufacturing profitable … this is a huge development and a game changer. This movement is in its infancy and the primary participants currently are crafts people and artisans.
The most significant change that Localization will drive is essentially business model migration for hardware based companies and manufacturing. Manufacturing globally is going to change significantly and migrate from hierarchy to ecology. This is such a massive change that it will have business repercussions that are difficult to forecast and imagine today. I have a few ideas on the trajectory of change, however, let’s keep those for a later post.
Escalating energy and transportation costs will only add to the importance of Localization. The world’s finite supply of energy resources will continue to diminish. The global demand for energy is only going to increase. Demand will be most pronounced in emerging BRIC economies and competition for scarce resources will increase. This will drive up energy and transportation costs and further necessitate the need for Localization.
Therefore Localization will be the single biggest driver of change in the global economy for the next decade.