The Technologies of Spontaneous Order: How Interconnected Individuals Are Augmented
- Spontaneous order is a self-organizing system that emerges from individuals and groups who can connect both online and offline.
- This emergent order depends on protocols and general rules that enable freedom to connect.
- There is a new set of starting conditions in the form of concurrently maturing new technologies.
- Universal access to resources, augmentation, disintermediation, and global exchange platforms will unleash individual potential.
- Entrepreneurs will drive innovation through new sets of practices—especially networking practices and knowing practices.
- Innovation becomes a social capability—a shared doing facilitated by interconnections and a socially constructed value creation.
People Can Find Each Other in Emergent Order
Spontaneous order is decentralized and networked to distribute power, influence, and opportunity among people who find each other. The new order does not depend on hierarchy, centralized institutions, or global clients’ mass marketing, mass distribution, and mass advertising. It is dynamic and self-organizing.
First, let’s define spontaneous order.
It means a stable system generating the greatest mutual good for all participants that emerges without central direction or planning. Adam Ferguson identified spontaneous social order as “the result of human behavior but not of human design.”1 The system emerges rather than being intentionally prescriptive.
Spontaneous order has a long history in both social systems and biological systems. Examples of spontaneous order systems include language, rain forests, and crystal formation.
MIT researcher Steven Strogatz2 observes that there are enormous congregations of fireflies in Southeast Asia blinking on and off in unison. In experiments to simulate such events, he describes how groups of fireflies, starting from a condition of random blinking on and off, self-adjust to pulse and glow in synchrony. “Sync somehow emerges spontaneously,” says Strogatz; “the fireflies organize themselves.”
One of the starting conditions for emerging sync is “coupled oscillators.” These are entities that cycle and repeat automatically (i.e., the “oscillator” condition) and are able to respond to one another (i.e., the “coupled” condition). These coupled oscillators synchronize themselves. When many coupled oscillators synchronize, a system emerges: spontaneous order.
Strogatz tells us that the tendency to synchronize based on coupled oscillators is one of the most pervasive drives in the universe. It results in self-organization, the spontaneous emergence of order out of chaos. He describes how this emergent order can be modeled mathematically and simulated by computers.
In an economic system, the coupled oscillators are entrepreneurs and customers, the sellers and buyers. The entrepreneurs respond to customers by understanding their needs and offering a new service, product, or solution. The customers respond by the quantitative feedback of buying or not buying and by the qualitative feedback of recommendations, comments, ratings, and expressions of satisfaction or dissatisfaction.
Today, as a result of mobile devices for universal access, platforms, and apps, the coupled oscillators of the entrepreneur and customer have a universal network to respond to each other directly. There is more scope for peer-to-peer exchange: more speed, lower transaction costs, and higher quality of continuous, direct communication. We have given the name entrepreneurial order to this special technological version of spontaneous order.
The idea of entrepreneurial order requires a new humility on our part. We should avoid the hubris of predictive design—the idea that human beings can see and plan the future in detail. To do this, we can encourage the most beneficial kind of spontaneous order in two ways:
- Establish—or be alert to—the starting conditions from which a spontaneous order can emerge.
- Identify some general rules that apply and enable equal access to all participants and that do not favor one form of development over another.
We’ve already seen the unlimited potential of systems that exhibit spontaneous order. In 1973, Vint Cerf and Bob Kahn originated the internet protocol TCP/IP, which describes the fundamental architecture of the Internet. This starting condition made possible Wi-Fi, Ethernet, LANs, the World Wide Web, e-mail, FTP, 3G/4G/5G, and all of the inventions built upon those inventions.3
The inventions enabled spontaneous order among a billion entities. They were free to self-originate websites in a system that provided order, but did not pre-allocate ownership.
When the Internet was first established, no one could have envisioned the vast interconnected network it has become: how many apps run across the Internet, or the many forms of apps that would emerge, from e-mail to e-commerce to human collaboration and knowledge sharing. The starting conditions were a minimum level of network development and connectivity. There could be no Internet as we know it without these starting conditions. General rules were established via network and communications protocols and standards. Everyone, everywhere who connected data to the network would comply with those standards, enabling universal communications and sharing. These are general rules that apply to all participants.
Vint Cerf describes the original vision:
The theory we had is that if we just specify what the protocols would look like and what software you needed to write, anybody who wanted to build a piece of Internet would do that, and find somebody who would be willing to connect to them. Then the system would grow organically because it didn’t have any central control.
And that’s exactly what happened.
The network has grown mostly organically. The closest thing that was in any way close to central control is the Internet Corporation for Assigned Names and Numbers (ICANN) and its job was to allocate Internet address space and oversee the domain name system, which had not been invented until 1984.4
Starting Conditions for Spontaneous Order
For the rainforest ecosystem, there are starting conditions of climate and soil (no rainforest in the Arctic, for example) and some biological standards of translating light into plant energy and the transfer and exchange of energy between plant and animal types. For crystal formation, there are starting conditions of available chemicals and moisture, and general rules about how atoms and molecules combine.
For the synchronized fireflies, there are the starting conditions of oscillation and coupling. The entities must be able to respond directly to each other.
For our market economy of entrepreneurs and customers, sellers and buyers, some new starting conditions and new general rules are beginning to emerge as a result of the technologies of spontaneous order (Figure 3.1).
Figure 3.1 Technologies of spontaneous order
In the first category of starting conditions are those that augment the capabilities of the individual via great access to knowledge and machine learning/machine intelligence. This augmentation technology can be applied vertically within professions and occupations to make individuals more capable within the occupation, across a wider range of tasks and at a higher level of performance. The same applies horizontally by augmenting the agile attributes of individuals in border-crossing, multiple skills, collaboration, and teaming. As a general rule, the access to knowledge and augmented cognition will be universally available. The coupled oscillators of entrepreneur and customer will both be augmented, enabling individualized and personal responsiveness.
Disintermediation
The second category is disintermediation—making service systems better, faster, and at a lower cost by cutting out middlemen, back rooms, and intermediate process steps and replacing them with peer-to-peer exchange. Blockchain is the leading emergent technology of disintermediation, and the general attribute of blockchain secures peer-to-peer transactions and asset transfers. It generates trust based on encryption, anonymity, and unhackable distributed public and private key computing. This replaces human trust with Internet of things (IOT)—a big advance for service systems. Mediators such as banks and financial institutions can be subjectively biased and discriminatory. Disintermediating technology is objective and data based.
Dr. Per Bylund of Oklahoma State University has identified5 how intermediaries and regulators place sand in the gears of economic growth and progress by blocking the realization of many channels of innovation—businesses that never get to start, options that never get to be presented, jobs that never get created.
When markets are deregulated and disintermediated, entrepreneurs are free to experiment so resources can be created and used in more valuable ways. The market is a creative enterprise always aiming for the future and satisfying more wants and newly discovered wants. Thus, a governmental regulator or central planner has no data to use in making a “rational” plan because the data doesn’t exist yet. That’s the problem with central planning—you cannot plan with only unknowns and unknowables. That’s also why markets are messy, but decentralized decision-making within a profit-and-loss system generates the very structure needed for such decision-making.6
Global Exchange Platform Technology
In the third category are global market exchange platforms, where multiple parties on multiple sides of a platform can exchange, collaborate, assemble teams and disassemble teams, and create short-term or long-term single outcome-focused project collaborations. Organizational and social fluidity are a result of these platforms in the context of spontaneous order.
All of this is made possible by cloud computing—cognitive and the cloud combine and are inseparable.
The results of these new starting conditions and general rules will be the emergence not only of new and better service systems but also of changes in the hierarchy of values and changes in forms of organization. We predict that a new form of augmented self-reliance will emerge and new forms of social and economic structures, such as boundary-less commercial organizations and functionally independent political structures, such as prosperity zones.
A new definition of entrepreneurship will emerge. Entrepreneurship is not the linear, sequential idea of finding a market gap and filling it or a consumer dissatisfaction and solving it; entrepreneurship lies in interconnecting people, knowledge, technology, ideas, and actions, so that new innovations emerge. It is the interconnecting that constitutes entrepreneurship.
Recently, thousands of people from all over the world came together to design a new car. The context was a development project called Fiat Mio— “the first collaborative car.”7 It was a deliberate attempt to overturn the traditional development process by interconnecting as broad a network of people as possible to gather and shape innovation ideas. Thousands of ideas from over 100 countries were gathered and integrated into a new car launch. Moreover, all the ideas were placed in creative commons, so that they remain available to all, a complete inversion of the traditional route of secrecy and patent protection.
Research conducted by Dr. Cristina Mele and Dr. Tiziana Russo Spena (both of the University of Naples Federico II, Department of Economics, Management and Institutions, Napoli, Italy) points to this and other examples of interconnectedness as the opening of a door to an emergent and entirely new and revolutionary concept of economic, social, and cultural innovation.
Dr. Mele uses health care as a current example. The old paradigm is producer centric. The doctor is the producer, and the patient must go to the doctor, seek the doctor’s knowledge, attend the hospital when instructed, follow the prescription, and take the medicine. The new paradigm is user centric. The patient is no longer passive, but a knowledgeable actor using devices to collect data on their health and well-being, wherever they are. The patient can interconnect with data and make choices about specialists or treatments or personal behaviors. The center of gravity of health care moves from clinics and hospitals to the home or wherever the consumer is. This revolution is in progress now and may have a way to go before it is fully implemented, but there is no doubt that it is in motion and unstoppable.
Using this health care example as illustration, Dr. Mele points to three massive shifts enabled by interconnectivity.
First, knowledge has shifted, from scientific to social. By scientific, she means that specialized and specific knowledge used to be limited to the trained, isolated expert who has devoted a career to accumulating and protecting the knowledge. The user must go to the expert to have the knowledge interpreted for them. Now, knowledge is social. It lies in the social domain. Users can collect knowledge through interconnection—with online sources, with peers who have relevant experience they will share, with communities who give knowledge support. The consumer is active and not passive, and devices enable the connection—what Dr. Mele calls a socio-material connection, that is, person + device—and collection and curation and interpretation of the knowledge.
Second, therefore, the context has shifted. The user is more in control, and chooses and manages their own interconnections. Systems are now shifting to user centric and are no longer producer centric. The producer does not have control.
Third, the expertise of innovation has consequently shifted. It is no longer a scientific or technical process competence of the producer “bringing new products and services to the market” or “introducing” or “launching.” Innovation is now a social competence. It is a socially embedded co-creation in which human actors co-construct innovation with the help of nonhumans (devices and software).
Entrepreneurs Co-create and Co-construct Based on Networks
Entrepreneurship is the continuous co-construction and co-creation that result from the interconnections among a network of market actors, actions, contexts, and resources. Innovation is the emergent outcome. Rather than a breakthrough action of one entrepreneur or one R&D lab or one company, innovation is “a shared knowing and doing” of society.
Digital entrepreneurs are the agents who integrate the activities through which market innovation emerges. Pursuing specific actions, they enable four practices that shape innovation:
Engaging: Connecting market actors who are seeking opportunity to co-create innovation. These actors could be designers, thinkers, engineers, inventors, teachers, or parents or could play any one of a myriad of roles. They have talent and interest in innovation and want to collaborate, share, and develop ideas and projects. Engagement is the practice of expanding the variety of actors and roles in any collaboration to capture new possibilities for novelty.
Exploring: The continuous dynamics of knowledge creation and recombination is through shared interaction—knowing and learning together. This is where problem solving occurs, through interconnected creativity, knowledge, and competency.
Exploiting: This is the combination and transformation of knowledge in new contexts and seeking ways to reuse and recombine knowledge and technologies in new ways. Collaborators modify and extend their concepts into new opportunities, translating knowledge in new ways and developing commercial concepts.
Orchestrating: This ensures, out of all the possibilities, the best flow of actions and resource integration. Orchestrators frame the network of collaborators to promote the most effective linkages and connections, mobilizing individuals to increase their personal empowerment and confidence, while also fostering community-level speed and alignment.
Networking and Knowing
Viewed together, these practices can be grouped into networking and knowing. Networking means all the ways of connecting people and resources. The emerging technologies of entrepreneurial order make it possible to bust the silos that previously impeded individual opportunity (such as the barriers between health care providers and patients in a health care system). Knowing means the shift of knowledge from object to action—a knowing that is co-constructed through the interaction of individuals (such as patients, doctors, researchers, medical specialists, and data gatherers), so that new common understanding can emerge.
Dr. Mele’s research findings have massive economic, social, and cultural implications. They highlight, from another viewpoint, the futility of central planning and “management” of the economy. Dr. Mele suggests the emergence of three new perspectives.
- We must decisively abandon all vestiges of the linear and sequential views of the innovation process. Searching for consumer dissatisfactions and designing solutions for them is one example of a linear, sequential thought process. Innovation is not about solutions designed by a few; it is about interactions between networks of actors. Innovating is not a process; it is a set of collaborative practices taking place on these nested, interconnected networks.
- The next great phase of innovation is the bridging of disconnected worlds: interconnecting humans and nonhumans in new ways to build new innovation opportunities. These opportunities can be further explored, and ultimately exploited, through the integration of ideas, tools, images, and languages. There is no predicting the new experiences that will emerge.
- Entrepreneurship and innovation are no longer merely business issues. We must open up a much broader landscape: social, cultural, material, and contextual. The shared knowing and doing of an interconnected society can improve lives, evolve new institutions, and change culture. Connections-in-action can lead to a new collective sense of co-created market and social betterment.
There are new perspectives for individuals, too. Digital entrepreneurs are shaping markets through their agency and practices as they create the new ways of developing, diffusing, and using knowledge and the new ways to generate and promote innovation. Dr. Mele calls these digital innovators “inno-mediaries.” They encourage new innovators (consumers, communities, and experts) to enter into the co-creation of innovation by enabling new practices through the use of diverse resources.
Emphasizing practices creates a new way to conceptualize market innovation as a set of practices that are not merely the sum of individual acts (entrepreneur as hero), but as social actions and accomplishments (shared practices). Focusing on practices, lets us see and analyze the interconnections between individuals, groups, organizations, and institutions. It is the interconnections between knowledgeable individuals—dynamic interconnections that are ever changing, adapting, shifting, and adjusting—that enable new activities. Entrepreneurship consists in this complex interconnectedness of actors and actions. Individualism consists in the unique efforts we can each undertake and the unique contribution we can each make as a result of the greater intelligence that comes from interconnecting.
Each one of us represents a critical component. The more we work at being interconnected, the more we contribute. We all should seek to be more knowledgeable and better equipped for the collaborative economy. We should be active, constantly interacting, and always crossing and blurring organizational and institutional boundaries.
Summary
The technologies of spontaneous order—cloud, cognitive, blockchain, and platform exchanges—democratize opportunities for all that were previously available only to a limited class of participants.
The result is the emergence of superintelligent interconnected entrepreneurs and a more unhampered system of market exchange, freed of all kinds of frictions, interventions, centralized institutions, and mediation. It is the entrepreneur who will lead the way to greater freedom and more efficient, global market exchange.
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1A. Ferguson. 1767. An Essay on the History of Civil Society. 5th ed. (London, UK: T. Cadell). http://oll.libertyfund.org/titles/ferguson-an-essay-on-the-history-of-civil-society, (accessed September 11, 2017).
2S. Strogatz. 2003. Sync: How Order Emerges from Chaos in the Universe, Nature, and Daily Life (New York, NY: Hachette Books).
3R. Singel. 2012. “Vint Cerf: We Knew What We Were Unleashing on the World.” Wired Business. https://www.wired.com/2012/04/epicenter-isoc-famers-qa-cerf
4R. Singel. 2012. "Vint Cerf: We Knew What We Were Unleashing on the World." Wired Business. https://www.wired.com/2012/04/epicenter-isoc-famers-qa-cerf
5P.L. Bylund. 2016. The Seen, the Unseen, and the Unrealized: How Regulations Affect our Everyday Lives (London, UK: Lexington Books).
6P.L. Bylund. November–December, 2016. Interview in The Austrian (Auburn, AL: Ludwig von Mises Institute).
7“Fiat Mio,” The World’s First Collaborative Car. https://www.youtube.com/watch?v=UF6pXmt2-WU, (accessed December 27, 2017).