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The book's ideas hold powerful potential for Latin America in particular, where steady commodity based economic growth has increased wealth, decreased poverty, and expanded the middle class, the reviewer argues.
Monday, December 3, 2012
Books

Democratizing the Tools of Innovation


Chris Anderson’s ideas hold powerful potential for Latin America in particular

 

BY GABRIEL SANCHEZ ZINNY

 

“Now that the power of information-sharing has been unleashed through technology and social networks, Makers are able to collaborate on design and production in ways that facilitate the connection of producers to markets”. This is only one of Chris Anderson’s many disruptive concepts in his fascinating new book, Makers, The New Industrial Revolution, published by Crown Business in October.

 

For years, Anderson has been describing the way the internet is changing how we interact – socially, economically, and culturally – in his role as editor in chief at Wired magazine. His last two books, The Long Tail and Free: the Future of a Radical Price, each provided new insights on the changing state of commerce, branding and price setting in the knowledge society.

 

In his new book, he introduces us to the concept of “makers”, those individuals numbering in the thousands, which are expanding the “do it yourself”, or DIY, culture. Of course, the entrepreneur is nothing new in America. But according to Makers, what has changed is that “the new manufacturing is a powerful economic force not because any one business becomes gigantic, but because technology makes it possible for tens of thousands of small businesses and entrepreneurs to find their customers, to form their communities.”

 

The internet, in other words, amplifies human potential and expands the pool of available human talent – at the same time as it expands the market for that talent. It not only allows anybody to create and innovate, but it also facilitates the rapid sale, distribution and dissemination of those products and services.

 

At the same time, the “atom world” is still dominant. According to Citibank and Oxford Economics, the digital economy accounts for some $20 trillion in revenues, compared with about $130 trillion in the brick and mortars economy. As Anderson himself admits, “the world of atoms is at least five times larger than the world of bits.” But while it’s a slow process, it’s a much needed one, particularly in developed economies in which the manufacturing sector is playing a smaller role in GDP and making up a smaller proportion of the labor force.

 

This new economic reality deeply effects economic growth and employment. It represents a “democratization” of production – or, to steal a concept from Thomas Friedman, it “flattens” the economic landscape. That is, it allows more individuals to become entrepreneurs by providing easily accessible tools to become both inventor and producer.

 

Indeed, much of this we are already seeing, for example in the publishing of books and other information content. An aspiring author doesn’t need to depend on a big publisher to approve her book and agree to distribute it. She can write the book herself, publish it on Amazon.com, and sell it directly to her audience. The same applies if you produce mathematics content, or teach a class at online curriculum sites like Coursera or Udacity. As Anderson says, “the digital revolution has been largely limited to screen.”

 

Since the industrial revolution, big companies have tended to dominate large scale production and consumer manufacturing. The fact that the production paradigm is shifting, however slowly, will have dramatic implications – since it was none other than Karl Marx who first understood that those who control the means of production hold the power in society. In Anderson’s words again: “would-be entrepreneurs and inventors are no longer at the mercy of large companies to manufacture their ideas.” The web has created thousands of new, open markets, and the new “open-hardware” movement is to the physical goods producing industries as open source was to the software sector. Even the way entrepreneurs get funding is changing: crowd funding is increasingly replacing venture capital or bank lending, as innovators tap the collective effort of individuals who pool their resources to fund their projects.

 

Anderson’s ideas hold powerful potential for Latin America in particular, where steady commodity based economic growth has increased wealth, decreased poverty, and expanded the middle class. But now only increased productivity, accelerated innovation, and a growing pool of dynamic entrepreneurs creating small and medium sized businesses will take the region to the next level of development. Unfortunately, Latin America still faces serious challenges regarding access to capital and unequal access to quality education – the type of human capital resources that are crucial to creating an economy built on high value products and services for local and global consumption.

 

These changes won’t necessarily be easy to grapple with, but they can no longer be ignored. With the economic debate in the US almost completely dominated by the “fiscal cliff” and marked by a neurotic obsession with its decline compared to the rest of the world, Chris Anderson brings a much needed perspective: an optimistic view of US – and global – economic growth based on the combination of human creativity and 21st Century technology.

 

Gabriel Sanchez Zinny is managing partner at Blue Star Strategies. He wrote this review for Latinvex.



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