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COPYRIGHT 2002 Journal of Business Administration
I. THE SHAPE OF THE NEXT INDUSTRIAL REVOLUTION
On a Thursday in April 1996, I was in Boston on a panel speaking to 500 people. The subject was "Planning for Tomorrow," and the panel was about technology's role and impact on the strategic decisions companies make. The discussion was sponsored by the International Interior Designers Association. The audience was about one-third interior designers and two-thirds business people, including some of my company's competitors.
While the subject of the discussion was technology, I think that the audience's understanding of the term probably had to do with the technology in the offices where most of them worked: information technology such as office automation, computers, e-mail, radio mail, laptops, word processors, CADs, telephones, voice mail, video conferencing, faxes, Internet, intranets, websites, and so on. There is an infinite variety of gadgets, networks and servers that helps us do arithmetic faster and store, manipulate, retrieve, transmit, receive and examine information--in written, spoken, picture and virtual reality form. Technology gives us faster, surer information when, where and in whatever form we want it. Understanding the information and using it wisely, of course, is then up to you and me. Technology does not do that for us. We're on our own in developing the wisdom, knowledge and understanding to make the information useful.
That's my mental map of what most people--especially people who work in offices--think and mean when they talk about technology. But the definition of "technology" in The American College Dictionary states:
1a. The application of science, especially to industrial or commercial objectives.
1b. The entire body of methods and materials used to achieve such industrial or commercial objectives.
2. The body of knowledge available to a civilization that is of use in fashioning implements, practicing manual arts and skills, and extracting [emphasis added] or collecting materials.
There's quite a lot there that we don't find if we just look in the office: technology that's not electronic, and not about storing, manipulating, sending, receiving, and examining information. There's chemical, mechanical, electrical, civil, aeronautical and space technologies, construction, metallurgical, textile, nuclear, agricultural, automotive technologies, and now even biotechnology.
I illustrated the point for my Boston audience with an example: I told them that I run a manufacturing company that produced and sold $802 million worth of carpets, textiles, chemicals, and architectural flooring in 1995 for commercial and institutional interiors. We have offices chock full of technology: mainframes, PCs, networks, you name it. And people who are hotelling and teaming, working anywhere, any time. Information technology makes it all possible, hooking us up around the world.
But we also operate factories that process raw materials into finished, manufactured products, and our raw material suppliers also operate factories. When we first examined the entire supply chain comprehensively, we found that in 1995 the technologies of our factories and our suppliers, together, extracted from the earth and processed 1.224 billion pounds of material so we could produce those $802 million worth of products--1.224 billion pounds of materials from Earth's stored natural capital. I asked for that calculation and when the answer came back, I was staggered.
Of the roughly 1.2 billion pounds, about 400 million pounds was relatively abundant inorganic materials, mostly mined from the Earth's lithosphere (its crust), and 800 million pounds was petro-based, coming from either oil, coal, or natural gas. Roughly two-thirds of that 800 million pounds of irreplaceable, non-renewable, exhaustible, precious natural resource was burned up to produce the energy to convert the other one-third, along with the 400 million pounds of inorganic material, into products. That fossil fuel, with its complex, organic molecular structure, is gone forever--changed into carbon dioxide and other substances, many toxic, that were produced during combustion. These substances were dumped into the atmosphere to accumulate, and to contribute to global warming, to melting polar ice caps, and someday in the not too distant future to flooding coastal plains, such as much of Florida and, in the longer term, maybe even the streets of Boston, New York, London, New Orleans, and other coastal cities. Meanwhile, we breathe what we burn to make our products and our livings.
Don't get me wrong. I let that Boston audience know that I appreciated their business! And that my company was committed to producing the best possible products to meet their specifications as efficiently as possible. But my company's technologies and those of every other company I know of anywhere, in their present forms, are plundering the earth. This cannot continue indefinitely.
However, is anyone accusing me? No! I stand convicted by myself, alone, and not by anyone else, as a plunderer of the earth. But no, not by our civilization's definition. By our civilization's definition, I am a captain of industry. In the eyes of many people, I'm a kind of modern day hero, an entrepreneur who founded a company that provides over 7,000 people with jobs that support them, many of their spouses, and more than 12,000 children--altogether some 25,000 people. Those people depend on those factories that consumed those materials. Anyway, hasn't Interface paid fair market prices for every pound of material it has bought and processed? Doesn't the market govern?
Yes, but does the market's price cover the cost? Well, let's see. Who has paid for the military power that has been projected into the Middle East to protect the oil at its source? Why, you have, in your taxes. And who is paying for the damage done by storms, tornadoes, and hurricanes that result from global warming? Why you are, of course, in your insurance premiums. And who will pay for the losses in Florida and the cost of the flooded, abandoned streets of Boston, New York, New Orleans, and London someday in the distant future? Future generations, your progeny, that's who. (Bill McDonough, Dean of the School of Architecture at the University of Virginia, and a leading proponent of "green" architectural design for many years, calls this "intergenerational tyranny," the worst form of remote tyranny, a kind of taxation without representation across the generations, levied by us on those yet unborn.) And who pays for the diseases caused by the toxic emissions all around us? Guess! Do you see how the revered market system of the first industrial revolution allows companies like mine to shift those costs to others, to externalize those costs, even to future generations?
In other words, the market, in its pricing of exchange value without regard to cost or use value, is, at the very least, opportunistic and permissive, if not dishonest. It will allow the externalization of any cost that an unwary, uncaring, or gullible public will permit to be externalized--caveat emptor in a perverse kind of way.
Business writer Paul Hawken and architect Bill McDonough have called for "the next industrial revolution," an idea that, as you can see, I have latched onto, because I agree with them that the first one is just not working out very well, even though I am as great a beneficiary of it as most anyone.
To my mind, and I think many agree, Rachel Carson, with her landmark book, Silent Spring, started the next industrial revolution in 1962, by beginning the process of revealing that the first industrial revolution was ethically and intellectually heading for bankruptcy. Her exposure of the dangers of pesticides began to reveal the abuses of the modern industrial system.
So, by my own definition, I am a plunderer of the earth and a thief --today, a legal thief. The perverse tax laws, by failing to correct the errant market to internalize those externalities such as the costs of global warming and pollution, are my accomplices in crime. I am part of the endemic process that is going on at a frightening, accelerating rate worldwide to rob our children and all their descendents of their futures.
There is not an industrial company on earth, and--I feel pretty safe in saying--not a company or institution of any kind that is sustainable, in the sense of meeting its current needs without, in some measure, depriving future generations of the means of meeting their needs. When Earth runs out of finite, exhaustible resources and ecosystems collapse, our descendants will be left holding the empty bag. Someday, people like me may be put in jail. But maybe, just maybe, the changes that accompany the next industrial revolution can keep my kind out of jail.
I have challenged the people of Interface to make our company the first industrial company in the world to attain environmental sustainability, and then to become restorative. To be restorative means to put back more than we take, and to do good to Earth, not just no harm. The way to become restorative, we think, is first to become sustainable ourselves and then to help or influence others toward sustainability.
When we think of the technologies of the future--sustainability--this issue of absolute, overriding importance for humankind, will depend on and require what I believe are the really and truly vital technologies, whether developed by us, our suppliers, or others like us; the technologies of the next industrial revolution. I don't believe we can go back to pre-industrial days; we must go on to a better industrial revolution than the last one, and get it right this time.
But what does that mean? I have read Lester Thurow's view that we are already in the third industrial revolution. He holds that the first was steam-powered; the second, electricity-powered; making possible the third, which is the information revolution, ushering in the information age. Clearly, all three stages have emerged with vastly different characteristics, and it can be argued that each was revolutionary in scope.
However, I take the view that they all share some fundamental characteristics that lump them together with an overarching, common theme. They were and remain an unsustainable phase in civilization's development. For example, someone still has to manufacture your 10-pound laptop computer, that icon of the information age. On an "all-in" basis, counting everything processed and distilled into those 10 pounds, it weighs as much as 40,000 pounds, and its manufacturers, going all the way back to the mines (for materials) and wellheads (for energy), created huge abuse to Earth through extractive and polluting processes to make it. Not much has changed over the years except the sophistication of the finished product. So I refer to all three of those stages collectively as the first industrial revolution, and I am calling for the next truly revolutionary industrial revolution. This time, to get it right, we must be certain it attains sustainability. We may not, as a species, have another chance. Time is short.
At Interface, we have undertaken a quest, first to become sustainable and then to become restorative. And we know, broadly, what it means for us. It's daunting. It means creating and adopting the technologies of the future--kinder, gentler technologies that emulate nature. That's where I think we will find the model.
Someone has said, "A computer, now that's mundane; but a tree, that's technology!" A tree operates on solar energy and lifts water in ways that seem to defy the laws of physics. When we understand how a whole forest works, and apply its myriad symbiotic relationships analogously to the design of industrial systems, we'll be on the right track. That track will lead us to technologies that will enable us, for example, to operate our factories on solar energy. A halfway house for us...
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