The Five Ages of Disruption

How ironic: disruption is the "breaking" of the status quo: the introduction of the new to break the old. Yet disruption itself is not at all new, and has a storied history. Is there a lesson here? Consider the five major "ages" in this history. Yes, there is a lesson here...

Iron Age: While historians will point out that there were in fact "many" ages (Stone age, Bronze age, Iron age) before, but broadly, this is when society learned to craft (and to use) tools and objects made from Stone, Bronze, and Iron. It changed how people lived their lives in a profound way.

Guild Age: Fast forward through the centuries; the Guild Age is epitomized by the European specialists who developed a system of learning, craftsmanship (since they were usually only men who did the work), and commerce in a particular trade. Interestingly, the guilds gave birth to a number of well-known Universities (such as Oxford), professional associations, and the modern-day trade-union movement. Guilds, with their specialized knowledge and their monopoly powers, disrupted what came before.

Industrial Age: This encapsulated the use of machines, specialized factories for mass production, and transportation systems to accomplish what before was done by hand. It began a massive increase in the standard of living, as the cost of "luxuries" became available to just about anyone. The Industrial Age disrupted entire industries: no more horse-and-buggy makers, and no more shops with people making needles, one at a time. Think the British textile mills or Ford.

Information Age: The growth of the semiconductor industry meant that significant computing power was available to governments, companies, and eventually individuals. This spawned new industries, even greater wealth, and for the first time, near-real-time access to an organization's data. Clanging factories gave way to chip foundries, knowledge workers, and unparalleled productivity. Think IBM, Apple, and Microsoft.

The Connected Age: This has been spurred by the trifecta of the internet, the social networks, and smartphones. Answers to just about any question are instantly available via Google, and entire infrastructure moved from data rooms to "the cloud". And data became one of the world's newest currencies. Think Google, Facebook, and the myriad cloud computing and internet access providers.

The Virtual Age: While we're not quite there yet, the foundational pieces for this are quickly coming into place. In a certain sense, it is a wild-west land grab, with everyone trying to grab a stake in a future virtual world, or "Metaverse". The Virtual Age is one where we can "be" virtually anywhere, interacting as an avatar with others. The most successful players in the Connected Age are already jockeying for position with Virtual Reality and Augmented Reality hardware, developer kits, multi-player games, and more.

Three observations:

1. One age doesn't replace another ? they are cascaded on top of each other. We still use Steel knives, there still are professional associations and unions, and we still make things in factories. We still use computers, they are still connected, and yes, we are seeing the beginnings of Virtual and Augmented reality. In other words, at the macro level, disruption is additive. But at the micro level, there are very few blacksmiths, buggy makers, abacus-users, etc.
2. We are at an early point in the inflection to the Virtual Age, and there will be many organizations that will not survive. To survive will mean adopting one of three strategies: become a specialist, become a very-low-cost producer of what you currently offer, or become a disruptor yourself.
3. Different countries — and different organizations — can be in different ages at the same time. For example, manufacturing — where cost is an issue — is now mostly done in low-cost developing countries... who also use computers, and are tightly connected to their global neighbours. Interestingly, these developing countries have an opportunity to "leap-frog" from an Industrial age-centric economy to a Virtual age-centric one, if they are able to develop a workforce that is appropriately educated and skilled. (Of course, the question then becomes where will low-cost manufacturing go...)

This Week's Action Plan:

Movement into the Virtual Age is not costless: it takes time and resources. So if there was one thing that your organization should do to take advantage of the Virtual Age, what would it be? And if there was one thing that your organization had to let go, in order to get there, what would that be? If you answer these two questions, then welcome to the age of disruption - or at least the first step towards it.

Disruption Insight: it can be easily argued that the next age might be “the age of artificial intelligence” (AI) as well. This is where computers begin drawing conclusions and making decisions by themselves. This can mean everything from self-driving cars, to reducing the number of people in factories, to medical diagnoses. It can even mean using AI to build... better AI. The implications for society are wide-ranging: massive changes in the labor market, an explosion in scientific discovery, and an entirely new regulatory regime that will be necessary. And as the age of AI and virtual age will overlap, it will become increasingly difficult to tell the difference between real and artificial life. This will lead to profound sociological (and commercial) change. And whenever there is change, there is opportunity.