Leadership and follower strategies in a complex world

Photocopier. Photo Credit: Wikimedia commons
Photocopier. Photo Credit: Wikimedia commons

There are a lot of papers about the goodness of entrepreneurship, however, in a world that makes itself more complex every day common activities can change their value every day too.

The value of innovation is based on the creation of new value for the society. How this value must be distributed is an old question with a very difficult answer.

In the modern world, technological innovation is the result of complex processes where scientific research and development is usually involved as a starting point. Scientists and engineers have fill the place of artisans in our modern societies. Their tools are more powerful because they were able to provide more effective and more efficient products, and they can produce disruptive innovations.

Bertrand Russell thought that the value of science proceed from the fact that science provides knowledge that cannot be got from simple observation of nature. Maxwell’s laws of electromagnetism cannot be deducted looking at nature. Mathematical developments and experiments guided by the scientific method are required to be able to produce electricity as we know and use nowadays.

Technology from science is very difficult to be understood and copied, however, as technology becomes more complex it cannot be developed by a single person. Scientific development required specialization, and innovation a way to share the knowledge of different experts to make new technologies and products.

Information is something that be reproduced indefinitely. Science requires the dissemination and copy of information in order to be able to advance. When the aim is the creation of value for society this fact increases the value of science hugely, however, for an economy in competition the classical problem of how value must be distributed arises again.

Must the scientific creator got more retribution than a copier? If innovation proceed from knowledge distributed among many kind of expert sources, how must they be retributed?

If we analyze how the value of an innovation is distributed we will find that most of this value will go to the developer of the final idea instead of all the people preceding his development.

In our societies, the copy of a book is considered a little crime, however the copy of the knowledge to write a new book, for instance, is highly promoted from the educational system and very well retributed.

Knowledge and information do not produce competitive advantages if they cannot be protected from copies, however, advanced societies require that knowledge and information are shared in order that science can progress.

Science is a clear example of how competition and progress seem to be simultaneously opposite and interdependent, because competition and progress depend on the same thing: improvements and advantages.

In a market economy, the production of something new is done with the aim of getting an advantage. If that new thing is fastly copied, we lose the advantage and innovation is less interesting.

The more complex the world is the more required the need for sharing knowledge is in order that scientific progress can advance. Or from a different viewpoint, the more complex the economy is the more difficult the innovation is.

The increasing complexity is producing that follower strategies get more retribution than the strategies of leadership. And this will make science and innovation unsustainable if there is not a change of paradigm related to the retribution and protection of science and technology.

Nowadays, the ratio cost-benefit of copying technology is many times lower than the ratio cost-benefit of developing it, and even, in many situations a simple marketing campaign saying that some products are equivalent to other innovative ones is enough to get better cost-benefit ratios in a complex environment. This is problematic for both competition and progress because it is drowning the production of advantages in the society.

The trendy sentence seems to be: “If you cannot defeat your enemy, copy him” instead of: “join him”.

From the evolution of the current scenario, the future will be driven by disruptive innovations from complex technologies at large enterprises, because they will be the only ones that could provide competitive advantages being more difficult to be copied. Traditional entrepreneurship will be substituted by intrapreneurship in large organizations and markets will be very far from the perfect competition market model, because large companies will be able to copy easily the advances of smaller ones but the smaller ones will not be able to copy the advances of the largest ones.

Of course, this scenario can change if governments find a way to protect competition in a complex economy. That is not a trivial matter.


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