Monthly Research
& Market Commentary

It’s Time to Challenge the Value of Everything

/ 29 Nov 2018 / By Richard Davies, Bill Murray

Our recent Executive Forum Old Models, New Models within Western Economic Thinking - was conceived for attendees to consider how business models are changing as well as the wider socio-economic and political landscape, while challenging their own conventional wisdom on business and the world in which it operates.  We asked attendees to come with an open mind and think about how ‘we’, as business leaders and citizens, perceive value.  We heard about whether there was a crisis in Western capitalism and the value of everything, and to consider this in the context of emerging platform plays at both an industry and a national level.


These were big questions to frame the day, and we were thrilled to be able to bring together three eminent economists to set the scene and give their analysis, including a panel Q&A moderated by LEF’s Bill Murray fielding questions from the floor.  It was a rare opportunity for the audience to question and challenge economic thinking in the context of their own businesses:

  • Mariana Mazzucato (Professor in the Economics of Innovation and Public Value at University College London) challenged the view that markets are always good and governments always bad. She challenges us to ask ourselves what adds value to society and how to create an economic and social order that promotes that.
  • Carlota Perez (Visiting Professor at London School of Economics) described a 'long wave' or Kondratiev cycle view of economics, where successive waves of technological innovation drive the 50- or 60-year cycles. She argued that rather than view climate change and resource scarcity as limitations, we can use “smart green” technology to unleash a sustainable direction for economic growth.
  • William H Janeway (Managing Director, Warburg Pincus) gave a provocative critique of the breakdowns of neoclassical economics. To fix these he argued there has to be a balance in the Trilemma of state, markets and speculators. Here, governments have a responsibility to ensure that innovative capitalism thrives. They must actively regulate markets that that breakdown; they must support long-term R&D; they must serve as lenders of last resort, and they must intervene when demand flags. Counterintuitively, financial bubbles and monopoly profits are also sometimes necessary for large-scale technological innovation.

A number of overarching themes and statements stood out from the sessions with our guest speakers:

  • Finance can help and harm technologically driven innovation – we must manage the interplay of financial cycles with technological and business cycles. 
  • The delegitimizing of government, paradoxically by the technological revolutions it funded, has increased economic inequality and social stress.
  • Value should be defined, driven and shared by society as well as business and finance.
  • Governments have a responsibility to ensure that innovative capitalism thrives.
  • Firms disrupting the old physical economy will also have to responsibly manage the political and cultural elements of our new ecosystems.
  • There is a great opportunity to steward the next revolution - the Green Economy.

As always, the LEF sessions focused on some of our recent research reports and publications, with the findings presented in the context of how the economic and technological landscape is going to impact both business and people’s individual roles:

  • David Moschella talked about his latest book, Seeing Digital, which envisions the coming Post-Cloud era, characterized by an increasingly intelligent, aware, autonomous and self-healing digital infrastructure.  The session explored how this powerful matrix of capabilities will reshape the way business innovates, operates and competes in the 2020s.

  • Simon Wardley outlined why serverless as a new paradigm shift in the development of applications, will have profound economic and practice impacts on software engineering. Whilst many companies have been undergoing their journey to the cloud over the last decade, the game has already started to change to a world focused solely on code execution, rather infrastructural elements of utility computing.

  • Bill Murray explained why giant platform organizations increasingly own the digital infrastructure on which everyone else has to do business.  Their scale and reach mean they also exert systematic influence on our access to information and therefore shape how we act on it. Traditional businesses, fearful of them entering their own market are fighting back with their own platform plays. Bill gave attendees insight into what platform organizations are, the value they create, how to build them and what makes them successful.

  • And Glen Robinson explained how we need to adapt to the digital capabilities used to augment our daily lives. LEF refers to “The Matrix” to define the synergistic combination of Cloud, AI and other technologies that create an intelligent, pervasive infrastructure which is increasingly able to perform just about everything that companies and individuals can do, and many things we cannot. Glen outlined how those companies and individuals need to develop a “Matrix Mindset” to help them embrace the impact The Matrix is having on our evolution as individuals, businesses, governments and nations

We were also treated to a stark reminder of the different ways value can be measured.  A case study presentation by James Findlay, former CIO at HS2 and DFT, talked about a project where he used mapping techniques to help solve the challenging problem of connecting emergency services to rapidly increase the speed with which RNLI lifeboats could be launched on to the Thames Tideway – where every second can be the difference between life and death when somebody is in the water.  James achieved this against a backdrop of complex systems and dwindling resources, to create a solution where now many more people are pulled alive from the water when they get into difficulty.  We struggle to think of a better representation of value.

This latest LEF Executive Forum was an intensely interesting day, that promoted much discussion amongst attendees during the breaks.  Whilst we were asked to consider challenging the value of everything, it was clear was attendees found the day personally very valuable and took much away to think about!


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