• Strategy
  • The Economist

Survey: The Near Future

Peter Drucker explains how it will differ from today, and what needs to be done to prepare for it.

And Then?

So much for getting ready for the future that we can already see taking shape. But what about future trends and events we are not even aware of yet? If there is one thing that can be forecast with confidence, it is that the future will turn out in unexpected ways.

Take, for example, the information revolution. Almost everybody is sure of two things about it: first, that it is proceeding with unprecedented speed; and second, that its effects will be more radical than anything that has gone before. Wrong, and wrong again. Both in its speed and its impact, the information revolution uncannily resembles its two predecessors within the past 200 years, the first industrial revolution of the later 18th and early 19th centuries and the second industrial revolution in the late 19th century.

The first industrial revolution, triggered by James Watt’s improved steam engine in the mid-1770s, immediately had an enormous impact on the West’s imagination, but it did not produce many social and economic changes until the invention of the railroad in 1829, and of pre-paid postal service and of the telegraph in the decade thereafter. Similarly, the invention of the computer in the mid-1940s, the information revolution’s equivalent of the steam engine, stimulated people’s imagination, but it was not until 40 years later, with the spread of the Internet in the 1990s, that the information revolution began to bring about big economic and social changes.

Equally, today we are puzzled and alarmed by the growing inequality in income and wealth and by the emergence of the “super-rich”, such as Microsoft’s Bill Gates. Yet the same sudden and inexplicable growth in inequality, and the same emergence of the “super-rich” of their day, characterised both the first and the second industrial revolutions. Relative to the average income and average wealth of their time and country, those earlier super-rich were a good deal richer than a Bill Gates is relative to today’s average income and wealth in America.

These parallels are close and striking enough to make it almost certain that, as in the earlier industrial revolutions, the main effects of the information revolution on the next society still lie ahead. The decades of the 19th century following the first and second industrial revolutions were the most innovative and most fertile periods since the 16th century for the creation of new institutions and new theories. The first industrial revolution turned the factory into the central production organisation and the main creator of wealth. Factory workers became the first new social class since the appearance of knights in armour more than 1,000 years earlier. The house of Rothschild, which emerged as the world’s dominant financial power after 1810, was not only the first investment bank but also the first multinational company since the 15th century Hanseatic League and the Medici. The first industrial revolution brought forth, among many other things, intellectual property, universal incorporation, limited liability, the trade union, the co-operative, the technical university and the daily newspaper. The second industrial revolution produced the modern civil service and the modern corporation, the commercial bank, the business school, and the first non-menial jobs outside the home for women.

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