Thomas L. Matula

Recently several authors have written about the new business age. Auhors like Peter Diamandis (Abundance: The Future is Better than you Think) talks about an age of abundance, but that has been true of economic progress since the the 15th Century. First in terms of new commodities that created wealth, then industrialization creating more wealth. For the last 500 years abundance has been increasing, so it is not that much of a prediction to say the future will be more abundant than the present.

The Shift Age by David Houle declaring the Shift Age as the successor to the Information Age. But that really doesn’t convey much for businesses to use. It talks about how advances in communication has changed how individuals interact with information and each other. But it involves more than simple communication. It also includes knowledge, advances in production, and a resulting advancement in expanding the human economy into both cyberspace and space.

The weakness in both books, and others, is that they ignore the history of business over the last five centuries, changes which resulted from the interaction of entrepreneurs with global society and their shaping of it. Understanding the history and impact of these interactions are critical to predicting the future of the business world. In this blog I plan to discuss how understanding those interactions and business innovations are key to understanding the future of business.

After an absence of many years due to the demands of teaching and research I have decided to restart this blog. The blog will still focus on strategic leadership but its emphasis will be more on how the major transformations taking place in today’s economy are simply the most recent result of a series of transformations the world has been going through since the 15^th Century. These changes enabled the global economy to break free of the constraints it had been confirmed in since the Agricultural Revolution made generated the surplus in wealth that enabled business to emerge as a profession. By understanding current events in terms of these long term trends corporate leaders and business educators will have a clearer vision of the future of the business enabling them to become better business leaders.

Welcome to my blog on strategic leadership.

Complexity economics is a term that Eric Beinhocker uses in his book “The Origin of Wealth” to identify the new paradigm emerging from the application of evolutionary systems theory to the study of economics.  In his book Beinhocker uses Complexity Economics to explain how wealth is created by the expansion of “econsystems”, the economic equivalent of ecosystems, through competition.  He illustrates how organizations that are best able to adapt to the constant changes found in econsystems grow and survive.

The concepts presented in “The Origin of Wealth” have major implications for developing new dynamic models for strategic management and strategic leadership. The key feature of Complexity Economics is the replacement of the closed linear “clockwork” model of classical economics that constantly seeks equilibrium with an open, dynamic nonlinear model where ‘equilibrium” is irrelevant.  This has major implications for the traditional concept of corporate behavior where the focus has been on profit maximization by replacing it with a new focus on maximizing the probability of corporate survival.

Since economics provides the foundation that underlay many of the basic concepts of strategic management, marketing and decision making the shift to a new paradigm has major implications for those interested in leading organizations.  In this blog I plan to explore the implications of the emerging paradigm of Complexity Economics for corporate leadership, the formation of corporate strategies, organizational design and the crafting of business models.

Beinhocker, Eric D. (2006). “The Origin of Wealth: Evolution, Complexity,  and the Radical Remaking of Economics” Harvard Business Press: Cambridge, MA.