Last updated: 22 december, 2010 - 16:14 GMT

Capitalism Reconstructed

About this programme by Peter Day

I recently ran into John Naisbitt in Beijing. He's the man who became very well-known for a series of best-selling books in the 1980s under the Megatrends umbrella, an interesting way of looking at the future. He was one of the first people to predict clearly and emphatically the rise of China.

He and his Austrian wife Doris now live there when they aren't in Austria. And the encounter set me thinking about the technique John used in the Megatrends books.

Megatrends uses an interesting technique to peer at the future, borrowed from the remote spying process originated (I think) in the Second World War.

Western intelligence agencies would scan dozens of newspapers bought in neutral countries. Using curiosity and the correct tangential perspective, joined up trends would emerge. For example a succession of funeral reports in scattered papers might indicate a disaster at sea that that censors would never allow national news outlets to report.

Or a distant unreported epidemic might emerge using this sort of close analysis of undertakers notices in a region. John Naisbitt heads a team doing this work on China at the Naisbitt China Institute based in the soaraway city of Tianjin, half an hour by high speed train east of Beijing.


It is something you can do for yourself, of course, if you have (like me) an inexhaustible appetite for print. Accumulated cuttings on the same subject can eventually add up to a trend. So can repeated mentions of (say) a topic such as biofuels in the pages of that blissfully thin newspaper the International Herald Tribune, the global edition of the New York Times. If the IHT goes on about it, then Something Is Up.

One or two things scanned in this way recently have started me thinking about attitudes to business and attitudes in business.

Item one: The American magazine Foreign Policy carried a piece in the November issue arguing that the rapturous optimism of American technology is a bit misleading. Moore's Law is flawed, it says.

The 45-year-old road map produced by the cofounder of the chip makers Intel, Gordon Moore, observes that computer power on a chip doubles every two years.

It has certainly worked as a roadmap for the semiconductor industry for more than 40 years, and provided a heartbeat for the expansion of the industries that rely on chips: computers, the internet, maybe almost every business everywhere.

But Foreign Policy argues that Moore's Law strikes a particularly American chord with its prospect of a virtually unlimited future; the trouble is (says FP) it does not apply to everything. Bill Gates of Microsoft said "We’ve been spoilt and confused by the Information Technology model", speaking about the (non) relevance of Moore's Law to (for example) the energy industries.

That applies to a lot of other businesses that have been backing the assumption that onwards and upwards is where we're all going.

In other words, in the future, progress will be difficult, not as inevitable as it seemed to be in the 1990s.

One straw in the wind.

Item two is a recent edition of Fortune with an endpiece by the canny and amusing observer of corporate life who calls himself Stanley Bing. He devoted his column While You Were Out to what he called The Big Yawn: things we will be tired of in 20 minutes.

This is a very serious idea disguised as a light-hearted stream of consciousness, written in a notably exasperated heartfelt way.

Stanley Bing (a businessman in real life) decries the cult of marketing: it's the death of the new, he says. It finds the things we like to dream of and shovels them into the maw of collective desire, and spoils them.

His list of over-marketed products heading for the Big Yawn includes Twitter, Facebook, smart phones, and email. He is tired of the things that make most corporate people tick. When Fortune gets tired of corporate life and the ideas that are supposed to inspire it, then clearly Something Is Up. Another straw.

Item three is a big one. The hugely influential Harvard Business School Professor Michael Porter thinks it is time for no less than a new corporate purpose that will reinvigorate the very idea of Capitalism itself.

Michael Porter calls for business genuinely to embrace the wider world in which a company operates, not just the nominal acknowledgement afforded by the now familiar practice of corporate social responsibility, CSR.

In the Harvard Business Review, Professor Porter and his co-author Mark Kramer write: "Too many companies have lost sight of the most basic question: Is our product good for our customers".


It is time (says the article) to redefine nothing less than the purpose of the corporation ... around the idea of "shared value", an honest embrace of the wholeness of the world in which companies, employees work and live.

This from one of the prime architects of the hugely influential idea of business strategy ... and the way countries can compete, which has been taken up by business thinkers all over the world.

While other media are winding down for what the Americans call The Holidays and New Year, Global Business brings its listeners one of the most potent ideas of the decade from a prof who is always listened to.

These are three magazine article I have bumped into expressing a certain disillusionment with business practices hitherto regarded as absolutely normal: techno optimism as a general business principle, marketing's magic dust impact on good but underexposed stuff, and (from Michael Porter) a company only in pursuit of growth, financial profits and "shareholder value".

These mantras are now being challenged.

Something Is Up in what we expect from business. I think these are just advance warning signs of trends we will be hearing a lot more about soon.

Maybe it is what always happens after a crisis; as the world's most successful investor Warren Buffet says, it is only when the water goes out that you see who is swimming naked.

Or - just maybe - this search for some kind of new realism is really going to change the way that business people behave.

Previous updates - November



  • The media is going through a 'double-mangle' says Peter Day.

  • In San Diego, Peter Day investigates the company that produces WD40's secret formula.

  • Peter Day looks back on a year of the credit crunch with Simon Johnson, former chief economist for the IMF.

  • Peter Day finds out from the experts how to start a bank.

  • Peter Day looks at the great expectations in landlocked Bolivia and its part in the auto revolution.

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