This is the final part of my series on digital transformation. During it, we have learned that digital transformation is much more than a technology revolution. It is arguably the most consequential socioeconomic revolution in human history. We are at the beginning of an unprecedented inflection point in the development of civilization - the transition from the first human epoch where centralized hierarchies that leveraged individual intelligence were the basis of social organization to the second human epoch whose social structures will be highly sophisticated distributed networks capable of rapidly leveraging human and artificial collective intelligence.
This fundamental architectural shift is far bigger than most of us are prepared for because the vast majority of us are lacking in an understanding of the dynamics of networks. We are much more conversant in the mechanics of the hierarchical structures that have shaped the evolution of the human experience since the dawn of civilization. Unfortunately, our knowledge deficiencies in the ways of networks cause us to significantly underestimate both the magnitude of the inflection point and its related exponential rate of change.
A New Form of Intelligence
This growing knowledge gap is problematic because hierarchies and networks are neither equal nor interchangeable structures. Networks tend to outperform hierarchies by a wide margin in terms of both intelligence and speed because, by leveraging the collective intelligence of the many rather than the individual smarts of the elite few, networks dramatically accelerate the path to knowledge. The natural proclivity of networks to leverage collective intelligence is the great game changer and, arguably, the single most important consequence of Digital transformation because it is a new and far more powerful form of intelligence.
In the coming decade, we will experience two of the most far-reaching events in human history: the connection of all humans and things via a common digital network and the proliferation of human collective intelligence via sophisticated artificial intelligence (AI) systems. These two events will result in an Cambrianesque leap in the human species because humanity itself will be transformed as we gain access to the extraordinary speed and capacity of collective intelligence through a metamorphic human-machine symbiosis. It is this metamorphosis that will radically change all the rules for how the world works and usher in the dawn of the second human epoch.
The Waning Epoch
An epoch is an extended period of time marked by distinctive features or events and is usually comprised of several successive ages. The first human epoch is known as the Holocene Epoch. It began about 12,000 years ago with the emergence of humans as the dominant species. Until recently, the entirety of human civilization has evolved within the context of this single epoch over the course of three ages: the Hunter-Gatherer Age, the Agrarian Age, and the Industrial Age.
One of the consistent characteristics across the three ages is the persistence of the top-down hierarchical model of social organization. While our social structures have evolved with each age as we have morphed from tribes to bureaucracies, the one common proposition that persevered across the ages was the unquestioned assumption that, for human organizations to work, somebody needs to be in charge. Whether you were a tribal chief, a monarch, or a CEO, power belonged to those in charge and they had the wherewithal, either through force, law, or position, to exert their will over large numbers of people. Even modern-day democracies are a variant form of the top-down hierarchy, the difference being that we get to elect the people who will be in charge.
A Watershed Moment
The digital revolution is a watershed moment in human history because its technological innovations have made it possible for the peer-to-peer network to be what it never could before: a practical form of social organization. Digital technology has provided the ubiquitous means for people to self-organize within the context of hyper-connected networks in ways none of us could have imagined a mere two decades ago. For example, who would have thought that the world’s largest reference work would be a self-organized effort of volunteers working without assignments and without pay? None of us could have conceived of an enterprise such as Wikipedia. After all, how would anything get done if no one was in charge? Surely, such an enterprise would be powerless and doomed.
As we now know, things did not turn out as we might have expected. The Wikipedia self-organized network didn’t just survive, it thrived and created a level of productivity far beyond anyone’s expectations. And, without any intention to do so, it ended the reign of the 244-year-old market leader within a mere decade. How did this bossless structure become so powerful?
Perhaps the most important thing to understand about this new form of social organization is the way it radically transforms the way power works. In networks, power belongs to those who are connected, not to those who think they are in charge. And when a network takes firm hold in the market place, it tends to operate far smarter, far faster, and far more efficiently than hierarchical counterparts. The unprecedented benefit of networked collective intelligence structures is that they open up the door to the practical ability to do, in Daniel Kahneman’s terms, System 2 thinking at System 1 speeds and, thus, greatly reduce the ill effects of individual human biases that are the inherent hazards in the top-down hierarchical structures that have defined the first human epoch.
The Emerging Epoch
Over the next decade we will become increasingly aware of the emergence of the second human epoch as tandem developments in the Internet of Things and blockchain technology come together to enable a human-machine symbiotic network that will morph into a super-intelligent artificial intelligence system exponentially smarter and faster than any of us individually or even all of us combined.
The continued rapid emergence of the peer-to-peer network as the dominant form of social organization in combination with the use of collective intelligence dynamics to shape the development of AI systems will ignite an extraordinary leap in the social exercise of human judgment and human decision-making. The symbiotic relationship that combines the strengths of both humans and machines could usher in a new era of enhanced human learning and intelligence that could very well be the ultimate renaissance of humanity.
Transforming Individual Agency
Contrary to the concerns of those who are fear that AI will somehow create an army of highly intelligent individual agents to rise up and subjugate humans, AI holds the potential to become a powerful extension of human intelligence. That’s because the ultimate manifestation of AI will not be a collection of mechanical agents, but rather a real-time collective intelligence system that holistically integrates the best of both human and machine learning. In other words, AI - especially if it’s built on a blockchain platform - holds the great potential to transform individual agency as we have known it.
For example, when driverless cars become the norm, the car will not be an individual agent navigating the road the same way human drivers do today. Instead, each autonomous vehicle will be part of a holistic collective intelligence network that will allow every car to navigate the road with the real-time knowledge of what every other vehicle in the vicinity is doing.
This is possible because AI networked intelligence is not limited by the information storage capacity of the human brain and is capable of instantly transferring the complete knowledge in the AI system to any of the individual vehicles. This collective intelligence system will not take away the freedom for the individual vehicles to make decisions and act. Rather it will inform those decisions to optimize choices in ways that do not harm the overall system. That’s why the number of accidents will drop dramatically at the same time that speeds will probably increase. Individuals will be free to make choices that will do no harm but will be prohibited by the collective intelligence dynamics within the system from willfully crashing into another car.
Individual agency will be transformed because our systems will no longer rely upon traditional control mechanisms to execute activity. This means that no single individual agent will be able to seize unilateral control over any activity, which will greatly diminish, if not eliminate, the fraud and hacking so prevalent today. Instead, every action in networked blockchain systems will need to be validated by collective intelligence protocols in real time before an action can be executed. While this may be hard to imagine, none of us thirty years ago could have conceived that we would build a system that could search the entire world’s information stocks and present us with intelligent results in a fraction of a second. Today we take Google searches for granted.
The Great Promise of Digital Transformation
The shift from hierarchical individual agency to networked collective agency, which is the inevitable consequence of a hyper-connected world, will be the single most consequential event in human civilization, and it will remain so until the second human epoch runs its course. How we build and lead organizations, the way intelligence works, how we create and distribute value, and what it means to be human will all rapidly evolve in ways that, at this point, are beyond our imaginations.
However, for an insight into how the world may work very differently and how humanity might be transformed, chances are our new ways will reflect the wisdom of the two foundational principles, referenced in an earlier blog in this series, which were used by Chris Rufer, the founder of Morning Star, to design his self-organized networked company: 1) no individual should use force against others or their property and 2) individuals should keep their agreements with others.
The socialization of these two simple rules in the context of a highly intelligent human-machine symbiosis that moves us beyond the hazards of individual human bias will indeed transport us into a second human epoch that will leverage the remarkable power of AI collective intelligence to radically transform humanity for the better. This is the great promise of digital transformation.