Third Wave

Alvin Toffler has named the Information Age "Third Wave" society.  He had previously characterized the transition in developed countries from Agricultural to Industrial Age society as the “Second Wave”. In the Third Wave, Toffler had predicted broad social transformations missed in the earlier waves of agricultural and industrial revolution. The Third Wave began in 1955 and it’s therefore complete. Now it’s the best time to analyze and validate what Toffler has stated. 

In the third wave, Toffler had predicted that our work will be demassified. This means our work environment becomes less uniform or centralized as we shift employment from the larger factories to smaller plants and eventually homes. The phrase “telecommuting” is the first thing that comes to mind with this prediction. Toffler had also predicted a trend toward increased specialization, increased involvement of human in reengineering their own evolution through eugenics, and break up of larger nations into smaller countries due to race, languages, or other driving forces. Lastly, Toffler had predicted increased interest in religion and clustering of minority parties in temporary basis to gain control of government.

William Sherden in his 1998 book called “The Fortune Sellers” claims that with few exceptions Toffler’s predictions are dead wrong. I have to disagree with this view. A lot of Toffler’s predictions are actually right. It’s true that economies of scale in manufacturing still exist in companies like GE, Philips, Cisco, and HP. What drives this trend is the need to take advantage of high-cost technologies in larger production plants. But there has been and increasing demand in telecommuting due to higher cost of Real Estate and other offices related expenditures. Other factors which influence telecommuting are related to new tools and technologies for home offices. Remote employees can use email and teleconferencing solutions such as WebEx (or Goto Meeting) to do their work from home almost as efficiently as they if are in the office. Telecommuting has been growing due to these technological and other forces including traffic and geographically disbursed workforce. This is a workforce that reaches beyond the restrictions of a traditional office environment. These are the business realities that multinational corporations in many countries are facing today to support and sustain recruitment of the right talent. Toffler’s prediction of telecommuting is therefore more correct than dead wrong!

The split up of former Soviet Union and Yugoslavia to 15+ new countries is an interesting trend. Since the gulf war, there has been lots of ethnical violence in Iraq and pressure to split to 3 regions. The Kurds in the north want to form a nation of their own while the Shiats in the south want to merge with the neighboring countries. This is an unfortunate trend that larger nations such as china or India may also get into right after USSR. But William Sherden again claims that voluntarily confederation of the European States is a major trend in the opposite direction. The European Union (EU) was meant to an economic and political union of 27 member states which are located primarily in Europe. But the EU has had more setbacks than success. The failure of EU’s currency (Euro) is now recognized as an experiment that has almost failed. Martin Feldstein in his famous article called “The Failure of Euro” calls this failure “not an accident or the result of bureaucratic mismanagement but rather the inevitable consequence of imposing a single currency on a very heterogeneous group of countries”. The forces of race, religion, language, and culture outlined in Toffler’s book have indeed driven larger nations to split into smaller countries. This is another prediction of Toffler that has actually been more correct that being dead wrong.

David Sarokin in his famous non-scholarly article called “How the Specialization of Labor Can Lead to Increased Productivity” considers labor specialization as one of the key features of modern economic systems which has enabled manufacturing and other business operations to produce goods on a global scale and to increase productivity. Adam Smith in his classic economics text "Wealth of Nations" has helped our understanding of labor specialization as it relates to the technology-driven world in which we live. Sarokin insists that when workers perform special labor tasks it can lead to increased productivity and argues that the division of labor leads to a large increase in efficiency for two key reasons. First is the “allocation efficiency” which makes the best use of a particular worker's skill. A worker who is good with research can do a better job in Research and Development than one who is not. The second force relates to technical efficiency which arises from a division of labor by reducing the transition time between tasks. This transition is removed when the resources are focused and specialized on what they do. Because of these factors, there is an increasing trend for specialization that we can observe in many industries such as semiconductor, consumer electronics, education, biochemical, and biomedical engineering. This trend is yet another prediction of Toffler that has actually been correct.

References

Feldstein, M. (2012).  The failure of the euro. Foreign Affairs 91(1): 105-116.

Sherden, W. A. (1998). The fortune sellers: The big business of buying and selling predictions. New York, New York: John Wiley & Sons.

Smith, A., D. Stewart and M. Garnier (1825).  Wealth of Nations.