GR8 changes ahead

It’s July 2020, and today we celebrate reelyActive’s eighth anniversary of incorporation amidst a global pandemic and a tumultuous global climate, both political and planetary. If anything is certain, it is that great changes lie ahead.

After the team flew to San Francisco in March to proudly accept an Elastic Search Award for “making physical spaces searchable like the Web,” within a matter of days, everything changed with the global spread of COVID-19. We abruptly lost our single biggest active client to bankruptcy, and, due to lockdown, lost access for visitors and prospective clients to our new Park Avenue Research Centre (connu également comme Crap), which was core to our business strategy.

We had to change our business to survive. And we did.

Businesses that are adaptive and resilient stand the best chance to survive the indefinite disruption to the economy and to their operations. Moreover, as a “new normal” emerges, such businesses are most likely to see the inevitable changes as opportunities rather than obstacles. Those businesses are now our best prospective clients.

Almost exactly one year ago we asked Are we selling discomfort? The answer is YES, and it is good that we are because buying (and selling!) comfort isn’t a viable strategy for the foreseeable future.

The businesses, organisations and individuals that will emerge the strongest are those that find their comfort in continuous change, embracing a culture of continuous improvement.

And if the “new normal” which emerges is to be led by such forward-thinking actors in critical numbers, is it too ambitious to imagine this as the definitive start of the third industrial revolution, Industry 4.0 and/or catallaxy? Many of the authors featured in our bibliography would surely argue that this essential to the advancement of humanity—if not the very survival of our species!

Again, if anything is certain, it is that great changes lie ahead. From a macro perspective, it is not difficult to argue that such change is both necessary and overdue. It’s a good time to embrace change, and we at reelyActive enter our ninth year with exactly that in mind.

The catallaxy of Industry 4.0

Consider the following prediction by Matt Ridley, in his 2010 book The Rational Optimist:

I forecast that the twenty-first century will show a continuing expansion of catallaxy — Hayek’s word for spontaneous order created by exchange and specialisation. Intelligence will become more and more collective; innovation and order will become more and more bottom-up; work will become more and more specialised, leisure more and more diversified.

Catallaxy is an alternative to the term economy, emphasising the emergent properties of exchange not among actors with common goals and values, but rather among actors with diverse and disparate goals, a concept central to the Austrian School of which Friedrich Hayek was a renowned contributor.

Could one argue that Ridley’s prediction, and Hayek’s definition of catallaxy, represent a central tenet of Industry 4.0? In other words,

should we be discussing Industry 4.0 catallactics rather than economics?

While those questions are far too broad to address in a blog post, we can nonetheless address a single concept that we at reelyActive believe to be core to Industry 4.0: ubiquitous real-time location. If computers are able to understand who/what is where/how in any physical space, they can elevate efficiencies by magnitudes rivalled only by previous industrial revolutions. For instance, Jeremy Rifkin argues for a trebling of aggregate energy efficiency from 13% to 40% or more.

But alas, applying ubiquitous real-time location to the benefit of “actors with common goals and values” too easily equates with Big Brother, or surveillance by a state or entity, typically under the auspices of the “greater good”. In short, top-down organisation of ubiquitous real-time location is likely to restrict the free exchange of real-time location data, and hence the efficiencies of Industry 4.0, unless all actors’ interests are aligned.

And it is not difficult to argue that the actors—individuals, entities and their assets—are not aligned and do indeed have “diverse and disparate goals”. For instance, when you walk into a store, you may be motivated to find what you’re looking for as quickly as possible while a salesperson may be motivated to upsell you, while a competitor may be motivated to promote their product or get you into their store. If a delightful retail experience is to spontaneously emerge, it will be the result of the voluntary exchange of location data by the “motivations and actions of individuals”: the basis of the Austrian School. In short, bottom-up organisation of ubiquitous real-time location arguably affords better outcomes to actors with competing motivations, especially when those actors and their interests vary so greatly across countless industries and contexts!

Would it be possible to imagine an emergent Pervasive Sharing Economy as anything but bottom-up?

Perhaps the closest thing to ubiquitous location we have today is through mobile, hence the retail example above. In Still Place for optimism? we illustrated how industry relies on top-down “baseline location data” where, often to the detriment of the located mobile user, that user’s competing interests are ignored rather than embraced. Couple this with state surveillance by means of mobile location data, and it becomes very difficult to make the case for a top-down approach as the catalyst for the widespread exchange of real-time location data necessary to deliver the promised efficiencies of Industry 4.0.

So, returning to Ridley’s prediction, the case for expansion of the catallaxy and bottom-up order is therefore strong, provided we can break from the long-standing top-down traditions of Industry 3.0. But isn’t breaking established traditions what revolutions are all about? And if we are to break from tradition, the economy of Industry 4.0 may well be described as a catallaxy. At least in the case of ubiquitous real-time location it’s difficult to imagine otherwise!