We've been sharing thoughts in this blog about how the rapid growth of the emerging economies, along with other modern realities, will reshape the practice — and thus rewrite the rules — of capitalism. Many readers are aware that these are ideas in development for our forthcoming book on the topic. This week we decided on an important question: the Title.
Our choice was inspired by a friend, Dick Morley, an MIT physicist and manufacturing iconoclast (also Harley rider and long-time consultant to the automotive industry). Morley is a legend in the manufacturing automation world, and an accomplished inventor. (He was instrumental in the development of the floppy disk and of programmable machine tools.) Captivated by the application of complexity science to business, in the 1990s he developed for General Motors an ingenious way to increase utilization of the paint booths at the end of an automotive assembly line. He reconceived the booths as service providers competing for work, and equipped them individually to "bid" for each car coming off the line based on their availability and need or lack of need for a color changeover. It was a brilliant solution that reversed the typical manufacturing perspective: the car as customer rather than object.
What kind of mind works this way? How did Morley consistently come up with novel approaches that paid off? We understood the key when we heard him reflecting on the achievement of Copernicus. He impressed on us what a fundamentally different perspective the astronomer had adopted. "To see the universe as it really was," he explained, "Copernicus had to stand on the sun."
We think that, as businesspeople think about emerging economies — as they have so much in recent years — it is similarly useful to adopt a different perspective. Rather than assume that the global economy will function as it does today, but with new markets and resources driving growth, we look at capitalism as a set of rules that continually adapt to the economic environment, as a species' genome adapts to the ecology around it. It's taking Morley's beloved complexity theory and applying it to economics.
The book, therefore, will be called "Standing on the Sun." And given that the reference is cryptic at first glance, there will be a subtitle: How the Explosion of Global Capitalism Will Change Business Everywhere.
Pasted below is the description that will go out in Harvard Business Press's catalog. We're eager to hear your reactions.
Standing on the Sun
How the Explosion of Global Capitalism Will Change Business Everywhere
For a long time the US has sat at the center of the global economic system, and Western-style capitalism has held sway. Now, the center of gravity is shifting. The advanced economies that in 2000 consumed 75% of the world's output will, by 2050, consume just 32%. Meanwhile, the emerging economies of the world -Brazil, India, China, and others - will surge forward.
As these fast-growing, low-income economies mature, will they adopt the practices of the old guard? Or will they make their own way, and create the next prevailing version of capitalism? What new opportunities will that create for firms around the world?
In Standing on the Sun, Christopher Meyer and Julia Kirby tackle these questions with fresh ideas and provocative examples. Based on firsthand observations of companies defying capitalism's old rules yet prospering, the authors outline new principles for commercial success. Among them:
- The obsession with return on equity gives way to more broad-based measurements of success.
- Adam Smith's invisible hand of the market is redeemed by the "invisible handshake" of collaborative networks.
- Businesses take ownership of the impacts they now call "externalities."
Copernicus offered a lesson to all who would challenge orthodoxy: to see the workings of the solar system clearly, he gave up the assumption of being at its center and adopted a new vantage point. Likewise, those who need to understand the emerging shape of global capitalism will benefit fromStanding on the Sun.
Christopher Meyer is founder of Monitor Talent, a unit of Monitor Group, and writes frequently on business strategy. Among his past books is Blur: The Speed of Change in the Connected Economy. Julia Kirby is editor-at-large at Harvard Business Review.