By Sam Vaknin

palma[at]unet.com.mk
http://samvak.tripod.com

Five thousand years ago, people were still roaming the earth as nomads. They carried along their few precious possessions in their hands and on their backs. They hunted and gathered food at random.

Then came the Agricultural Revolution: people settled down and got attached - physically, emotionally and legally - to specific plots of land. They grew their food in accordance with a pre-meditated plan. They domesticated animals. This new pattern of human existence led to enormous shifts in demographic patterns.

It took yet another 4500 years before the dawn of the next Revolution: the Industrial one. Its main achievement was to separate the raw materials and the means of production from the land. It also created the need to have an educated workforce. This Revolution brought in its wake the formation of cities (which supplied workers to mega-factories), mass education systems and leisure.

For the first time in history, people began to have free time on their hands.

Numerous organizations, firms and institutions sprang up in an effort to satisfy the insatiable desire for entertainment and the necessity to cope with the ever growing complexity of social and economic institutions.

Contrary to common opinion, the service oriented society was - and still is - an inseparable part of the industrial world.

Today, we are in the eye of the biggest storm ever: the Third Wave (to borrow Alvin Toffler's excellent coinage). This is the Information and Knowledge Revolution. It is leading to an economy which will be based on the accumulation, the processing and the delivery of information (the equivalent of raw materials) and of knowledge (the equivalent of processed goods). All these will be made accessible to ever widening strata of society.

This, indeed, is what separates this Revolution from its predecessors:

(1) It is equitable - anyone and everyone can partake in it.

To participate in the previous two Revolutions - large amounts of capital were needed. Where capital was amiss - raw force was used to obtain raw materials, capital goods, land and other means of production (including very cheap labour in the form of slavery).

This Revolution is different: all that is needed is good ideas, some (ever lessening) technical background and ever cheaper infrastructure.

So, this Revolution is open to young people in home garages (this is how computer giants such as Apple Computers and Microsoft were established).

It is non-discriminating: age, gender, race, colour, nationality, sexual preferences - they all do not matter. This Revolution is the Great Equalizer.

(2) This is the first time in human history that raw materials, production processes, finished products and marketing and distribution channels are one and the same. Let us examine the example of the sales of products (e.g., software) through the Internet:

Software is written on computers using programming languages - a manipulation of electronic bits in a virtual environment. Thus, the product (=the software), the production processes (=the programming languages), the raw materials (mental algorithms translated to electronic bits) and the channels of marketing and distribution (the electronic bit streams of the Internet) - they are all made of the same elements and components.

This is why the technology is so cheap. This is why the products of the forthcoming Revolution will be disseminated so easily. To manufacture and to distribute will become mundane - rather than arcane - operations.

(3) Only some of our forefathers have been influenced by the Agricultural Revolution. Only some of them have been influenced by the Industrial Revolution. Gradually, the percentage of the population working the land decreased from well over 60% to less than 3% (in the USA, for instance). An equal drop can be discerned among the part of population engaged in industry.

But this is not the case with the third Revolution:

There is not a single human on earth who is not influenced by the third, biggest Revolution of all: the Information / Knowledge Revolution.

All of us are exposed to radio, television, computers, cellular phones, the Internet. These products and services are becoming cheaper and more available and accessible by the month. The new Revolution is all- pervasive and all-encompassing.

(4) All the above characteristics brought about a new form of economic development: non-centralised, high value added, fast progressing with quick business cycles. It is the first non- mercantilist, non-colonial phase in human history. All economic activity in the past was characterized by the importation of raw products at low prices from the very same markets that absorbed the final products (produced from those raw materials) at much higher prices.

This form of exploitation will gradually become impossible. Today, it is no longer important where goods are produced. The demarcation lines between finished products and raw materials are so blurred (even where old-fashioned industrial products are concerned) - that the old distinctionbetween "colonizer" and "colony" has all but vanished.

This holds a great promise for less-developed and developing countries.

In the (near) past, they would have needed huge amounts of capital and other, non-monetary, resources to equate themselves with the more developed part of the World. Today, much less investment is needed to achieve the same results. The world is finally becoming what the sage of Western media, Marshall McLuhan called: "The Global Village". It matters less WHERE you are - it matters more WHAT you think. A global economic premium is placed on innovation, creativity, improvisation and the entrepreneurial spirit.

These - the new mental commodities - are abundantly and equally available to all the countries in the world: poor and rich, off- center and on-center, developed, developing and less developed.

The old economic conception of an evolution: from the agricultural to the industrial to the service economies is being replaced. The new breed of economic thinking encourages countries - such as Macedonia - to move directly from the Agricultural phase to the Third Wave: that of Information and Knowledge industries. Macedonia can better accommodate this type of industries: they are affordable, accessible, easy to understand and to implement, highly profitable, ever evolving and progressing.

Macedonia will not be the first country to implement such a daring policy of leaping forward and skipping the Industrial stage - straight into the age of Information. Israel has done it before and so have Switzerland, Hong-Kong, Singapore and (to a certain and hesitant extent) India. All these countries were naturally under- privileged. Some of them are mere deserts, others isolated, barren islands or severely overpopulated. But they all managed to get heavily involved in the unfolding revolution. All of them (with the exception of India which is a new, half-hearted, entrant) possess the highest per capita GNP in the world.

The gamble has paid off.

But there is a fascinating side-benefit to such a choice.

The shift from industry to the information technology and knowledge industries - is a shift from dealing with reality to dealing with symbols. The techniques used to manipulate symbols are the very same - no matter what the symbols are. If a country is successful at developing trained operators of symbols - they will know how to manipulate, operate and transform any kind of symbol.

This is also true when it comes to the biggest symbol of all: to Money.

Money - as we all know - is a symbol. It represents an agreement reached amongst members of a group of people. It has no intrinsic value. The same techniques which are used for the manipulation of information are easily applicable to the manipulation of the symbol called money.

THE MORE ADEPT A COUNTRY IS AT PROCESSING SYMBOLS (=INFORMATION) - THE MORE ADEPT IT IS IN FINANCIAL TRANSACTIONS OF ALL KINDS. It is more likely to attract investments, to develop flourishing stock exchanges and money markets, to train young professionals, to trade and in general: to get enmeshed in the very fabric of the modern international economy.

Until recently, he served as the Economic Advisor to the Government of Macedonia.

Visit Sam's Web site at http://samvak.tripod.com

Published - December 2005