"BUSINESS FIRMS AND MANAGERS INTHE 21st CENTURY"

bySpyros MAKRIDAKIS*

N° 88 / 12

* Spyros MAKRIDAKIS, Research Professor of Decision Sciences andInformation Systems, INSEAD, Fontainebleau, France

Director of Publication :

Charles WYPLOSZ, Associate Deanfor Research and Development

Printed at INSEAD,Fontainebleau, France

BUSINESS FIRMS AND MANAGERS IN THE21st CENTURY

Spyros MAKRIDAKISResearch Professor, INSEAD

Abstract

This paper predicts the type of business firms and managers most likelyto emerge in the 21st century. The forecasts are based on rationalprinciples which avoid the common mistakes made in the past by long-termforecasters. Such forecasts are developed by examining long-termpatterns in human history and exploiting the analogy between theIndustrial and Information Revolutions. Moreover, the assumptions usedto forecast are made explicit. The paper points out strong similarities,as well as differences, between the Industrial and the InformationRevolutions which are consequently used to forecast forthcoming changesin business firms and managers. In addition, the impact of theInformation Revolution on society is predicted, as is and the importanceof problem-solving, learning, and creativity. These are shown to be thecritical skills which will be needed in the 21st century.

*BUSINESS FIRMS AND MANAGERS IN THE 21ST CENTURY

What will business firms look like in the 21st century? What type of

managers will be needed to operate them? Will the trend towards larger

firms continue? How will the Information (computer) Revolution affect the

organisational structure and mode of operation of the business firms of

the next century? Where will the new opportunities be found? What are the

dangers lying ahead? What type of strategies will be needed to survive

and prosper in the 21st century? These are interesting and useful

questions. Can they be answered, however, with any degree of confidence?

Many people have become wary of any form of forecasting, in particular

of long-term predictions. They view forecasting as nothing more than

crystal-balling with little, or no, scientific or rational basis. Such a

view has been reinforced by prominent errors in forecasting events that

did not materialise (e.g., the anticipated widespread use of nuclear

energy) as well as failures in predicting events of far-reaching

consequence (e.g., the appearance and impact of computers and the

Information Revolution) that have already occurred. It is, therefore,

important for the reader to accept that the approach used in this paper

(what I call metaforecasting) has nothing to do with crystal-balling.

Instead it is based on rational principles that enable us to arrive at

predictions about the future which are scientifically sound.

* This article is based on a chapter of the same title, of a book

currently being written by the author entitled, Facing the Future: In

Search of Pragmatism.

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This paper is organised as follows: first, the basis of

metaforecasting, together with its requisite methodology, is presented.

In section 2, the rationale of forecasting the type of business firm

most likely to exist in the 21st century is discussed. This requires

identifying megapatterns in human history and extrapolating from them to

the next century. Section 3 shows the kind of managers most likely to

emerge to direct these firms. Finally, there is a concluding section in

which the assumptions of the proposed approach and the uncertainty

involved in any form of predicting the future are considered.

METAFORECASTING

By now millions of forecasts, coming from many sources, have made

their appearance. These sources include governments, international

agencies (e.g., the O.E.C.D.), economists, academic forecasters, business

forecasters, and businessmen using a wide variety of econometric and

statistical models. Studying the track record of such forecasts has

provided us with an impressive body of empirical evidence to judge their

accuracy and to assess their effectiveness and usefulness.

Metaforecasting is based on this empirical evidence. Its aim is to

understand, as well as possible, the problems confronting statistical

methods, and the types of mistakes made in the past by those forecasting

the future. At the same time, metaforecasting searches for effective

solutions to these problems and seeks to avoid, or minimize, the impact of

mistakes similar to those made in the past. Thus, metaforecasting

advocates going beyond existing methods and practices by introducing

feedback and learning in the process of making new forecasts. This paper

concentrates on judgmental forecasting as it applies to the long term,

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although the author has considered additional aspects of metaforecasting

elsewhere (Makridakis, 1988).

LONG TERM METAFORECASTING

Long term forecasting requires two kinds of tasks; first, discovering

established patterns and, second, determining how such patterns might

change in the future. Both tasks are predominantly judgmental, although

historical data and statistical methods may also be useful. Before

examing patterns and how they might change, it is necessary to analyze

long term predictions made in the past in order to understand the types of

mistakes that were made so as not to repeat them. These mistakes can be

classified into five categories.

1. Hidden and/or Complicated Assumptions: The accuracy of long term

forecasts depends, to a great extent, on the assumptions on which

these forecasts are based. Such assumptions are numerous and rarely

made explicit, which leads Ascher (1979) to conclude that defining

them is as time-consuming a task as making one's own forecasts from

scratch (see also Willis, 1987). Furthermore, users of forecasting

might not agree with some of the assumptions (assuming that these can

be figured out) while accepting the rest. At present, it is not

possible to discover the specific influence of each assumption on the

final forecasts. It is necessary, therefore, to restrict in number and

to explicate the assumptions used. Furthermore, the influence of each

assumption on forecasting must be made as clear as possible.

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2. Unfounded Predictions: Future predictions are often made without an

explicit rationale. The user cannot, therefore, judge their validity

and either has to accept such forecasts on good faith, or to ignore

them. Most often, decision and policymakers choose the latter

alternative which obliges them to formulate and use their own

intuitive forecasts.

3. Long-Term Trends Versus Cyclical Swings: Cycles of various durations

(the most common cycles are economic with an average duration of 4 1/2

years, operating within long cyclical waves with a duration of up to

60 years - Kondratieff, 1935; Burns and Mitchell, 1946) and depths

seem to exist alongside secular, long-term trends. Although cycle

forecasting has proven to be extremely difficult, the occurrence of

cycles is widespread in the economic/business fields. By definition,

the booms and downswings caused by cycles are temporary, and interrupt

the continuation of long term trends for the duration of the boom or

downturn only. Forecasters and decision or policymakers, however,

often confuse temporary cyclical changes with permanent changes in

trends. This, for instance, happened when increases in raw material

prices between 1940 and 1979 were considered to be a prelude to raw

material scarcities resulting in discussions of the limits to growth

(Meadows et.al., 1972). Similarly, the increase in oil prices that

followed the 1973 oil embargo was thought to signify a permanent price

rise. Simon (1981), on the other hand, has shown (see Exhibits 1 (a)

and (b)) that the long term trend for raw material and commodity

prices is downward sloping and should not be confused with shorter

term cyclical swings. Exhibit 1(a), for example, demonstrates that

had copper prices from 1935 to 1979 been used to determine the long-

term copper price trend, the resulting conclusion would not have been

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the correct one. Similarly, if oil prices from 1970 to 1979 are used

to predict future oil prices, the conclusions will be different than

if the oil prices taken from the middle of last century are used (see

Exhibit 1(b)).

4. Forecasting Specific Events: Exhibit 2 shows some important events

(products/innovations) of far-reaching consequences which were not

predicted, in some cases, even a few years before they occurred.

Exhibit 3, on the other hand, lists events that were forecasted as

imminent, which did not occur until much later, or which have not as

yet materialised. Exhibits 2 and 3 show that two types of forecasting

errors are possible: specific events that have not been predicted can

occur, and events that have been predicted as forthcoming might not

happen, or they might occur much later than expected.

5. Inability to Conceive of the Extent of Technological Change: With the

exception of science fiction writers, the vast majority of people have

been completely unable to conceive of the implications of new

technologies and of the consequence to their personal and professional

lives. Consider, for example, a watchmaker living 200 years ago.

Could he have imagined, in his wildest dreams, that a watch which he

and his apprentices required several months to produce, could be

maunfactured automatically today by a machine in less than one minute.

Similarly, could we today conceive that a jumbo jet might be built in

less than one hour by the mid-21st century?

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LONG TERM PATTERNS IN HUMAN HISTORY

Exhibit 4 lists the major innovations/breakthroughs since the dawn of

civilisation. A study of such innovations/breakthroughs reveals that the

following conclusions are of importance in long-term forecasting:

(a) The manual work performed by human beings has been supplemented

(e.g. through the use of tools to better perform certain tasks),

substituted (e.g. using tractors in land cultivation), or amplified

(e.g. employing levers or cranes to lift heavy weights) by a variety

of means.

(b) Mental work has been also supplemented, substituted, or amplified

by a variety of means although this occurred much later than is the

case with corresponding manual tasks.

(c) There are clusters of innovations/breakthroughs that occur

concurrently or within a relatively short time span.

(d) The rate of innovations/breakthroughs has increased considerably

in the last 200 years. The reason for this increase is the invention

of machines that use mechanical energy, to supplement, substitute, or

amplify manual work. This has given rise to what is nov known as the

Industrial Revolution.

(e) The late 1940s mark the beginning of another revolution, the

Information, or Computer Revolution. This has also supplemented,

substituted or amplified work, but this time, mental, and not manual

labour. The Information Revolution has, so far, produced results

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similar to those of the Industrial Revolution, and has further

accelerated the rate of technological change.

(f) There are considerable spin-offs of the Industrial and Information

Revolutions to all areas of our personal and family lives, as well as

to entertainment, transportation and medicine.

(g) The importance of technology has increased over time. Consider

for instance, the role of technology in the discovery of America by

Christopher Columbus versus its role in the Neil Armstrong moon

landing. Furthermore, even in areas such as medicine, or in the

harnessing of nature's resources or capabilities, innovations and/or

breakthroughs depend to a greater extent on technology now than ever

before.

THE INDUSTRIAL REVOLUTION

The application of technology to produce desired goods has followed

four stages (see Exhibit 5). The turning point, however, was the

Industrial Revolution, which necessitated the construction of factories

and brought about huge economies of scale. Such economies, coupled with

improved means of transport, modified established patterns that had

existed for millenia (see Exhibit 5) and set off the modern trend towards

mass production and widespread distribution which gave rise to the large,

multinational corporations of today. Technology was, therefore, the

instrumental factor which, directly or indirectly, necessitated the shift

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towards large firms capable of producing and distributing goods more

economically than could individual, or small groups of producers.

The Industrial Revolution began in England when peasants (previously

working at home) were brought to the factory, where they could be better

supervised and could work more efficiently. The output of these workers

increased substantially as productivity increased through the use of the

manually-operated tools in the factories. Increases in productivity

encouraged the construction of more and larger factories which began

producing greater (by all previous standards) quantities of goods. Thus,

the deployment of the steam engine, a new invention capable of powering

those machines and tools requiring the most manual energy, was a

propitious technological breakthrough. Factory output increased

considerably with the use of steam engines as did the gains in

productivity which spurred factory owners towards the mechanization of the

production, while, at the same time, permitting them to pay their workers

higher wages.

A turning point in the Industrial Revolution came when production

costs, and, consequently the price of goods sold were reduced to a point

where a considerable segment of the population could afford to buy them.

This resulted in a surge in demand and the subsequent need for even

greater production, necessitating higher employment and bringing about

more gains in productivity through additional economies of scale which

permitted even further reductions in prices. In turn, higher employment

and lower prices further stimulated demand. Increased demand,

consequently, produced more profit and motivated the development of

improved technologies capable of producing these goods, faster, more

efficiently and cheaper. This cycle of greater productivity, lower costs

and prices, higher demand, increased employment and better pay, more

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spending on R & D, improved technology, etc., set off a spiral which has

endured until today.

As the Industrial Revolution moved into the 70th century, innovative

engineers increasingly found ways of producing goods more efficiently by

replacing manual energy with as much mechanical energy as possible. In

addition, they amplified human abilities by inventing machines (e.g.,

cranes that could lift huge loads) which could perform tasks that were

previously impossible. Finally, where human skill; could not be replaced,

appropriate tools were designed (e.g., electric drills) to supplement and

aid human work. By the mid 1920s, gains in productivity were enormous,

resulting in reduced production costs and prices, which enabled a large

part of the population to acquire the goods being produced. Higher demand

increased employment in the manufacturing sector substantially and

provided more buying power for the acquisition of more goods.

The Industrial Revolution brought about great changes in employment

patterns. The manual skills of the farmer, craftsman and artisan were

replicated into machine designs which, once operational, could perform the

same tasks faster, more cheaply and with less effort. A skilled shoemaker

who could make fewer than one pair of shoes per day vas replaced by a

machine producing thousands of shoes in a single day. Similarly, a farmer

who cultivated less than one acre of land by hand and horse could

cultivate hundreds with the use of the appropriate tractor. For the first

time in the history of civilisation, hand skills, acquired through many

years of apprenticeship and long practical experience, became obsolete.

Machines were introduced everywhere bringing unemployment to farmers,

craftsmen, and artisans, and creating a new form of employment - that of

the factory worker.

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As the Industrial Revolution progressed, manual labour was

increasingly replaced by powerful machines, further reducing production

costs and prices and bringing a wide choice of goods to the market. New

products, or several varieties of the same product, were introduced as

spending income further increased and consumers started looking for

new/better products on which to spend their expanded earnings. A new

entrepreneurial class of industrial captains emerged who mastered the

financial resources needed to build large firms capable of harnessing in

full the huge potentials of the new mechanical technologies. In addition

to the economies of scale which, until then, had been the driving force of

the Industrial Revolution, marketing skills, required to distribute the

mass-produced goods, became of equal or more critical importance, giving

birth to the modern, large corporation.

THE INFORMATION (COMPUTER) REVOLUTION

The Industrial Revolution substituted, supplemented, and amplified

manual work by machines (hardware). The Information Revolution is,

instead, substituting, supplementing and amplifying mental work through

the use of computer programs (software). The consequences of the

Information Revolution, which began in 1946 with the appearance of the

first programmable computer (ENIAC), are similar to those of the

industrial one. Higher efficiency and better productivity are achieved by

replacing those performing mental work by computer programs. Initially,

such replacement have mainly involved repetitive, high-volume tasks (e.g.

payrolls, billings, processing of cheques etc.) but lately replacements

have been extended to a multitude of other tasks. As with the Industrial

Revolution, the substitution of more work by computer programs will

continue into the future.

The parallels between the Industrial and Information Revolutions are

strong (they both aim at substituting, supplementing, or amplifying human

work) and are of great interest. At the same time, there are some

substantial differences (see Exhibit 6). Such differences are likely to

increase the pace of the Information Revolution compared to that of the

Industrial Revolution (see explanation below). Extending human manual

abilities, for instance, started as early as 1 750 000 years ago (see

Exhibit 7(a)) while the extension of mental abilities did not take place

until 40 000 years ago. Humans were chiefly preoccupied with improving

their chances of survival and it was not until much later that they began

to be concerned with mental activities. The pre-history, therefore, of

Industrial and Information Revolutions (Exhibit 7(a)) is uneven in terms

of the length of time it took each to take off.

The same pattern can be seen in the lower section of Exhibit 7, which

shows the history of Industrial and Information Revolutions, pointing out

some important, corresponding events between the two. In my opinion, the

Information Revolution is today, in 1988, at about the same stage as the

Industrial Revolution was in the 1930s (interestingly, the penetration of

cars into the USA economy in 1935 was 17.7%, while the corresponding

penetration of computers today, is 17%). This means that the Industrial

Revolution required some 175 years to achieve what the Information

Revolution has achieved in 42 years, which implies that the pace of the

latter is about four times greater than that of the former (see Exhibit

7(b)). Thus, the change brought about by the Industrial Revolution

between the 1930s and today (i.e., a little more than 50 years) is likely

to be matched by the Information Revolution in about a fourth of this

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time, that is, twelve and a half years, bringing us to the beginning of

the 21st century. By this time, society and business firms will be as far

advanced in terms of the Information Revolution as today's firms are in

terms of the Industrial Revolution. This represents a great deal of

change.

THE BUSINESS FIRM OF THE 21ST CENTURY

Manufacturing firms appeared and prospered during the Industrial

Revolution. Their raison d'être was to master human and capital resources

and use them to apply the machine technology required to produce large

quantities of goods. They could, therefore, enjoy large economies of

scale, although, once these reached a certain size, increased complexity

and settled-in bureaucracy minimized the benefits to be gained from them,

or even resulted in diseconomies.

As the Industrial Revolution progressed, technology became more

complicated. Specialized firms to build the machines and tools needed by

the manufacturing companies appeared, making technology available to

anyone who could afford to pay for it. The competitive advantages of using

better machines specially built for a single manufacturer disappeared. As

a matter of fact, new entrants were often at an advantage because their

machinery was more modern than that of their established competitors.

Competitive advantages, (in addition to economies of scale) in production

were, therefore, restricted to . using the most modern technology bought

from specialized engineering firms producing and selling such technology.

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Attention then shifted to marketing the goods produced and to introducing

new or better products.

Manufacturing technology proliferated in many areas, including

transportation, weaponry, agriculture, housing, domestic comforts and home

entertainment. In addition, a host of service industries appeared (e.g.,

banking, insurance, travel, entertainment) to satisfy the needs of the

growing (both in size and number) business firms and those of the affluent

consumers whose income exceeded their requirements for necessities and

durable goods. In addition to the manufacture of goods, chemical

production was a growth area during the Industrial Revolution. A wide

variety of chemicals were discovered and used to improve agricultural

production (e.g., fertilizers), replace raw materials (e.g., synthetic

rubber and fibres), to produce consumer or industrial goods, and to come

up with new medicines. The trend towards plentiful and inexpensive goods

covering all consumer needs was established.

The strong parallels between the Industrial and Information

Revolutions (see Exhibit 7), can be used to predict the type of firm that

will exist in the 21st century. The manufacturing firm of the 21st century

will be in a position similar to that of the agricultural firm of today.

This means that the percentage of people employed in manufacturing will

drop substantially (the percentage of people employed in agriculture

amounted to over 60% of the population before the Industrial Revolution,

while it is less than 2% in the USA today) to a percentage similar to that

of agriculture today. Similarly, manufactured products will be in

plentiful supply and competition among the firms producing them will be as

fierce as it is among agricultural firms today. Competitive advantages

among the various manufacturers will be few, as the same high-level

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technology will be available to all. Differences in the quality of

products will be slight or non-existent, as several/many firms will be

producing the same goods using the same technologies. Furthermore, since

material needs are finite, they will eventually be satisfied. This would

result in a slowdown of the growth in demand, bringing overcapacity

similar to that existing today in agricultural production.

Economies of scale will become the single, most important factor in

gaining competitive advantages in manufacturing. This is particularly

true for information products because once developed, they can be

reproduced and shipped at almost zero cost (see Exhibit 6). Thus, the

larger the production, the smaller the unit cost and the faster the

recovery of the developmental, sunk costs. Firms would, therefore, be

motivated to produce as much as possible, to license or sell their

production technology, to achieve the maximum number of distribution

channels and, in general, to reach production and distribution levels

which are as high as possible. Thus, the trend towards larger firms will

continue in the 21st century, resulting in some super-giant manufacturing

organizations.

Where are the limits to growth? Will increased complexity and reduced

efficiency work to slow down the benefits gained from economies of scale?

Similarly, will the reduced motivation of employees working for super-

giant companies put the brakes on size? If the organisation of firms

does not change considerably from that of today, there is no doubt that a

plateau in growth will be reached. However, decentralised, semi-

autonomous firms and/or new forms of organisations (e.g.,

manufacturing/distribution organisations similar to the fastfood chains of

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McDonalds or Burger King, manufactuing/dealers symbiosis where the dealer

is a part-owner of the firm) are likely to emerge. Furthermore, better

telecommunications, fewer people working in manufacturing firms, and

improvements in computerised management systems are likely to extend the

limits to growth in size before diseconomies of scale result.

At present, the largest organisation is the Catholic Church, whose

structure and management has not fundamentally changed for almost twenty

centuries. There is no compelling reason why, if needed, business firms

using creative forms of organisation and new tools cannot and will not

achieve or surpass the size of the Catholic Church. Unless, of course,

their size is restricted by governments, or other international bodies.

The above discussion does not imply that the only type of

manufacturing firms in the 21st century will be giant ones. Obviously,

peripheral firms supplying or serving the giants will also exist. In

addition, specialized manufacturers geared towards specific markets will

also operate alongside the super-giants. However, the dominant firms of

the 21st century will inevitably be giant multinational corporations

capable of fully exploiting economies of scale in research, manufacturing,

and marketing.

Together with economies of scale, competitive advantages will be

gained by developing/introducing new products (primarily by combining

hardware and software technologies) and/or creating new needs. Thus,

identifying new markets, creating new wants, and introducing new fads and

fashions will become imperative if one is to avoid product saturation and

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in order to achieve competitive advantages. In turn, these activities

will require huge R & D budgets, and/or enormous advertising/marketing

expenditures, further fuelling the need for super-giant firms capable of

mastering the required resources and willing to take the risks necessary

to develop and commercialise new products/ideas.

Biochemistry and genetic engineering will play roles that are similar

to or more crucial than those played by chemistry and genetics during the

Industrial Revolution. Their growth and importance will increase as the

biochemical and genetic engineering technologies are linked to computers,

lasers and computer-driven production. Improved or new products for both

consumer and industrial uses will appear, and new, improved industrial

processes will emerge. As with manufacturing firms, R & D costs for

biochemistry and genetic engineering will be enormous, necessitating the

creation of large firms capable of harnessing economies of scale. As the

synergy between biochemical/genetic engineering firms, information

technology companies, and the traditional manufacturing corporations

becomes more critical, joint firms covering all three areas will

eventually emerge. The integrating factor of such firms will be research

and development, marketing/distribution capabilities, as well as the

capital and human resources required to conceive, develop, manufacture,

and distribute/market the new products/processes.

The Industrial Revolution has increased the personal disposable income

of a large segment of the population. At the same time it has created a

wealthy class of rich and super rich whose expectations and needs differ

from those of the "average" consumer. Product positioning to reach the

high-income segment has been a successful practice of firms that

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distinguish themselves and/or their products from those which are mass

produced. The Information Revolution will further increase spending

income and create even more rich and super rich. Marketing skills in

segmentation and positioning one's product will, therefore, become

critical ingredients in the battle to satisfy the needs of the affluent.

The size of the firms in this category could range from the very small,

geared to a particular segment, to the super-giants that apply a mixture

of high-tech and individualised production to create and/or satisfy the

needs of specific segments. Thus, a form of mass-produced, customised

products aimed at specific segments (this is possible using computer-

driven manufacturing systems), could become feasible.

The service sector will grow substantially more than manufacturing, in

particular, once the Information Revolution has reached a plateau similar

to the one that the Industrial Revolution has entered into today. The

growth in services will increase employment and will compensate for

decreases in manufacturing workers. However, as service companies will

also automate their operations, overall employment will, eventually,

stagnate or decrease, necessitating fewer hours of daily work, fever

workdays per week, or considerably longer yearly vacations.

Changes in the service sector will be substantial and are also more

difficult to predict. New forms of services and new types of service

firms will probably emerge. Furthermore, service and marketing practices

will most likely change in the 21st century. Service industries, as well

as the types of services they offer, will be greatly affected by the

Information Revolution, as service differentiation and customer loyalty is

usually weak in this sector. Small changes in the conception of the

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service being offered or of its perceived utility, or of the by-products

of such services, can drastically affect sales and market shares. Service

firms will, therefore, have to be constantly re-thinking their business,

innovating and/or keeping up with their competitors. The marketing of

services will, thus, become the crucial factor determining successful

service firms. Furthermore, since barriers to entry would be weak,

competition will be keen, necessitating that service firms be flexible and

that they constantly monitor the environment for changes that might affect

them.

The size of service firm need not be large. Family operations and

small firms can operate alongside super-giant multinationals. Economies

of scale, although important for advertising purposes, are not critical

when providing specialised services which might even be thought to be of

greater value if individualised and customerised. For instance, high-

quality restaurants, small high-priced hotels, first-rate universities,

high-power research centres and similar services cannot be mass produced

or mass marketed. Their value lies in their uniqueness and the limit to

the number of customers they can serve. Thus, segmentation and

positioning will leave room for small service firms (in particular as

there will be a lot of wealthy people willing to spend their money on

individualised services if these can identify and appropriately serve the

right segment).

Exhibit 8 lists some major aspects/characteristics of the 21st century

compared with those of today. In addition, it points out the various

service industries and discusses how such industries will be affected by

the trends which will occur between now and the next century. Although

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specific developments are difficult to predict, general trends point

towards significant growth in entertainment, education and re-education,

travelling, vacationing, medical care, marketing and research/consulting.

These can be considered to be the emerging growth services of the 21st

century that will compensate for decreases in manufacturing and stagnation

in other service sectors.

THE MANAGER OF THE 21ST CENTURY

The architects of the industrial revolution were engineers. Using

their ingenuity, they transformed manual skills (which took many years of

apprenticeship and numerous years of practice to acquire) into a machine

design that could replicate them and, in so doing, produce similar goods

at a fraction of the cost, and at a higher speed. Moreover, their ability

to produce such machines economically and repair them when they did not

work properly, enabled entrepreneurs to use machines for production

purposes.

Initially, a single engineer was capable of mastering the technology

required to both create and repair the new machines, or variations of

existing ones. As technology became more complex, however, specialised

engineers (mechanical, civic, chemical, electrical, etc.) were needed. As

engineering expertise cannot be instantly acquired, schools specializing

in teaching engineering knowledge and skills became essential. As the

Industrial Revolution progressed, so did the demand for engineers who were

paid high salaries and were often promoted to managerial positions and the

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top job(s) within the firm. This privileged role, high salaries, and

heavy demand for engineers, however, reached a plateau in the 1960s when

the focus shifted to MBA education and business graduates. Today there

are still many well-paid engineers, although they are diminishing in

number, but their pay is usually less than that earned by MBA's, and their

tasks differ fundamentally from those performed by engineers before the

peak of the Industrial Revolution.

In machine engineering, for instance, the major role of today's

engineers is to develop (design, construct, test) new machines and

production processes, or to improve the efficiency of existing ones.

Their task is aided by the use of standardised parts which can be

purchased from specialised firms that design, construct and produce such

parts. Engineers are not obliged, therefore, to start from scratch. Their

designs are based on readily available "building boxes". Moreover, few

engineers today are involved in machine repair. First, machines do not

break down as often as before, but, should they, it suffices to identify

the problem and change the defective part (an important principle in

designing machines today is that they can be easily repaired by

substituting the part(s) that frequently cause problems). In other cases,

it might even be more economical to replace the inoperative machine by a

new one. Engineers, however, are not needed in either case. The repair

side of the engineering job has been simplified and standardised in such a

way that it can now be delegated to maintenance personnel, who can do the

job using appropriate tools and procedures that were also developed by

engineers. The end result is a new type of engineer, whose task is to

perform creative work, or to solve new, important problems. All other

functions that were previously part of engineering jobs have been

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delegated. In my opinion, the job of managers has followed and will

continue to follow stages similar to those of engineers.

First, there was a single manager, usually the owner, who managed the

entire firm. He was superseded by the specialised functional manager

(finance, production, marketing managers) whose job, in addition to

dealing with people, was mostly to perform repetitive tasks required for

the day-to-day operation of the business. Today we are at a point in the

Information Revolution when many repetitive managerial tasks could be

standardised and performed by the computer, or be simplified and made part

of an expert system. Computer programs and expert systems would, in turn,

permit the delegation of all repetitive managerial tasks to clerical

personnel who could perform them aided by the appropriate software

program. This raises the question of who the new manager will be and what

qualities will be required to manage the firm of the 21st century.

Exhibit 9 shows various types of manual and mental work and the amount

of experience and/or knowledge needed to perform them. Some typical jobs,

outside the field of management, are also listed for each category. It

might be an interesting exercise for the reader to consider the extent to

which the Industrial Revolution has substituted, supplemented, or

amplified the manual jobs in each category by drawing a horizontal line

proportional to the extent of substitution, and then putting a vertical

line at its end. The reader should do the same for each category of

mental job, marking the extent to which he or she believes it has been

substituted, supplemented, or amplified by the Information Revolution.

Once this is done, using a different colour pen, the reader should extend

the horizontal lines in each category to where he or she believes that

-22-

each manual and mental task will be substituted, supplemented or amplified

by the Industrial and/or Information Revolutions and/or combinations of

the two in the future.

My completion and interpretation of the implications of Exhibit 9

tells me that the large majority of manual tasks have or will be

substituted, supplemented, or amplified by combinations of hardware and/or

software technologies. Even a highly skilled task performed by a brain

surgeon will be greatly supplemented and amplified by computers,

electronic microscopes, TV scans, computer-guided lasers, and a host of

other technologies (Makridakis, 1987). The neuro-surgeon would be

required to be a first-class technician, capable of operating all of this

equipment, as well as a medical doctor. The judgement of such a neuro-

surgeon would be restricted to interpreting the information provided and

intervening should problems arise. Moreover, experience would become less

important, or even disadvantageous, as new doctors, right out of school,

would be better masters of the new, fast-changing technology. In the

final analysis, the only tasks that cannot be substituted by computers

and expert systems will be new, important problem-solving situations as

well as functions/tasks that require creative thought processes.

Dealing with people will always remain a critical management task.

However, its nature will also change. First, there would not be so many

people to manage (in particular in manufacturing firms). Second, people

will no longer perform routine boring tasks; this will increase

motivation and decrease the amount of supervision required. Third,

employees will perform well-defined tasks facilitating the evaluation of

their performance. Fourth, a great deal of work will be creative

-23-

(conceiving of new products/services, research, strategy, advertising

etc.) requiring new types of imaginative managers capable of maximizing

the output of such creative people.

Thus, in addition to his or her own creativity, a critical management

skill for the manager of the 21st century will be the capacity to

supervise the creativity of others, since creative thought would be one of

the few remaining factors that could not be supplemented, or substituted

by computers and which, if properly used, could bring competitive

advantages.

Top managers, and their qualities, are more difficult to predict. In

my opinion, they will be rare and paradoxical: creative and practical,

visionary and pragmatist, flexible and persistent, easygoing and

demanding, risk-takers and conservative, in addition to being excellent

politicians, superb deal-makers, as well as visible and effective public

statesmen. However, once found, they will be extremely yell paid.

Can people with creative potential be identified? Can creativity be

taught? At present, advertising agencies, and R&D departments are some of

the few areas directly concerned with the management of creativity. But

no firm conclusions regarding creativity can be reached. Although

creativity can be encouraged, it is not easy to identify creative people

beforehand. Moreover, although some organizations (e.g. Bell Laboratories,

3-H) seem to have produced more creative output than others it does not

seem that rules encouraging organizational creativity can be found and

applied across the board. Finally, it does not seem that special

-24-

education or background increases creativity. On the other hand, we are

still in the early stages. Once the importance of creativity becomes

clear, resources and talent will concentrate their efforts finding new,

"creative" solutions. In my opinion, this is the new challenge of

management education if business schools are not to become obsolete.

CONCLUSIONS

In this paper, I have predicted the type of business firms and managers

that are most likely to exist in the 21st century. In making my

predictions, I have attempted to avoid the mistakes made by forecasters of

the past when making long-term predictions. By analyzing established

patterns in human history (see Exhibit 4), a trend showing that technology

has been playing an increasingly important role became obvious.

Furthermore, such a trend does not seem likely to change, but, instead, it

will probably accelerate through the influence of the Information

Revolution (see Exhibits 5, 6, & 7). The critical assumption of the

predictions made in this paper has been that there is an analogy between

the Industrial and Information Revolutions. If the reader does not accept

this assumption, he or she should not accept my predictions. Another

important assumption is that, at present, we are at the same time period

on the time scale as the Industrial Revolution was in the mid 1930s. This

assumption is not as critical, since the reader may decide on another time

period. Such a modification will only affect the rate of change expected

to result from the Information Revolution in the coming years. Finally,

the reader might not agree with some of my reasoning. This is not

critical either as different viewpoints and alternative conclusions about

the future are inevitable. My objective has been based on an endeavour to

-25-

provide a consistent rationale showing major trends rather than on the

believe that I can predict specific events or the exact time of their

appearance. The reader may accept only part of my reasoning and modify the

forecasts provided accordingly.

It is necessary to understand and accept that all forecasts about the

future are uncertain and must always be considered as such. On the other

hand, uncertainty must not become an excuse to avoid making decisions and

taking actions to prepare oneself to better face the future. Such

decisions are necessary in order to reduce the impact of future surprises.

To this end, major trends must be identified and predictions based on such

trends made.

Forecasting presents a paradox. To be accurate, forecasts must be

general in terms of the event(s) being predicted and vague in terms of the

time that these event(s) could occur. However, to be useful, forecasts

must be specific and precise. This paradox can only be resolved on a

case-to-case basis through individual (or company-wise) thinking. The

role of a forecaster is to present a wide range of alternatives which can

neither be specific nor precise in order to avoid inaccuracies.

Individuals and companies must consequently evaluate these forecasts and

translate them into specific predictions and then decide how they might

affect their future existence. In so doing, they must inevitably take

certain risks. A list of general and vague (in terms of time) predictions

are presented in Exhibit 9. Individuals and companies need to evaluate

them to determine which will affect them and how, and what actions and

strategies are needed to succeed.

- 26-

Another mistake forecasters often make is to underestimate the rate

and degree of technological change. Exhibit 10 develops further the

watch/airplane analogy. Although the implications might seem like science

fiction, they might not to be too far from future reality. Business

executives should, therefore, consider the consequences involved and the

type of decisions and actions they will need to take at present, in the

face of what Toffler calls, the future shock.

Finally, the question is often asked, "What will happen after the

Information Revolution?" The answer is "Not much". Exhibit 4 clearly

shows that people perform manual and/or mental tasks. Once such tasks have

been replaced to the maximum by machines and/or computers, there will be

nothing left. The next stage will come when computers can imitate and/or

surpass the highest of the human intellectual abilities, that is problem-

solving, learning, and creativity. However, such computers are not likely

to appear soon. When and if they do, it will be interesting to see if the

prediction that, at that time, humans will be to computers what pets are

to humans today, will actualize. In the meantime, humans will continue to

hold a huge competitive advantage over computers by the fact that they are

superb problem-solvers, that they can learn, if given adequate feedback,

and that they can be creative. These talents, which must be cultivated as

far as possible, will become the critical skills of the 21st century.

REFERENCES

Ascher, W., 1978, Forecasting: An Appraisal for Policy-Makers and Planners, John Hopkins University Press, Baltimore, MD.

Burns, A.F. and W.C. Mitchell, 1946, Measuring Business Cycles, NationalBureau of Economic Research, New York.

Kondratieff, N.D., 1935, "The Long Waves in Economic Life", Review of Economic Statistics, Vol. 17, pp. 105-115.

Makridakis, S., 1987, "The Emerging Long Term: Appraising NewTechnologies and their Implications for Management", in S. Makridakisand S. Wheelwright, (Eds), The Handbook of Forecasting, John Wiley,New York.

Makridakis, S., 1988, "Metaforecasting: Ways of Improving ForecastingAccuracy and Usefulness", International Journal of Forecasting,forthcoming.

Meadows, D.H. et al., 1972, The Limits to Growth, Universe Books, NewYork.

Simon, J.L., 1981, The Ultimate Resource, Princeton University Press,Princeton, New Jersey.

Willis, R.E., 1987, A Guide to Forecasting for Planners and Managers,Prentice-Hall, Englewood Cliffs, New Jersey.

Exhibit 1(a): Long-Term Copper Prices Relative to the Consumer Price Index

•for eachseen in

This diagramI

isof the

the Appendix

1typical ofmetals, as

I

the patternmay be

1

.• ...

.. :•• •

. ... 1

•.•

. •

.

. .

1

• .1

• i.

-,Is'•

: •so.

.' •i•.'

se

1

iII

1840

1860

1880

1900

1920 1940

1960

1980

V1935

(Note how prices have been increasing since 1935)

Exhibit 1(b): Long-Term Oil Prices Relative to the Consumer Price Index

14

12

10

8

6

4

2

-

I •

I.•

.: •

••

•

0 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980

1970

(Note how prices have been increasing since 1970)

1.2

1.0

.6

.4

.2

01800 1820

Exhibit 2: Things that happended which were not predicted

The Computer and the Information Revolution before 1950

The maximum demand for computers in USA is 100 (forecast made in theearly 1950's).

The airplane

Airplane travel

Wireless communication

The atomic bomb

X-rays

Roads for cars

The maximum market for cars in Europe is 1000 (there is, after all, alimit to the number of drivers).

"Who the hell wants to hear actors talk?" (Henry Warner, 1921)

The Walkman

The Post-it Pad

Jogging shoes

Overnight delivery mail

Exhibit 3: Preditions that did not materialize

The widespread use of nuclear power

The economics of synthetic and shale oil

The feasibility of computer translation

A computer chess program becoming World Champion

Plastic paper

Plastic teeth

Instant yoghurt

The extended use of robotics (being much higher than it is today)

AND/OR PREVAILING ATTITUDESi:xhihit 4: MAJOR INNOVATTONS/BREAKTHROUGHS THAT CHANGED ESTABLISHED TRENDS IN HUMAN HISTORY

Approximate TimeEPOCH

A

(Tenre from loRH)

I 750 000

TNNOVATIoN/BREAKTHROUGH CONSEQUENCE./REASON

I TECHNOLOGY

. Primitive Tonle )B 100 000 . Making and using Gear for Hunting )

40 000 • Making and using Weapons ) • Extending Human Capabilities5 500 . The Wheel )

0 4 000 . Brenee and other Metals )3 500 . Boats and Sailboats )

800 . The Clock, Compass and other Measurement Instruments) • Reducing and/or Making Manual Work EasierE 600 Gun Powder 1

500 The Printed Book )350 Mechanical Calculators ) • Facilitating and/or Making Mental210 Engines ) Work Easier

F 180 Railroads )150 Electricity )130 Image and Sound Reproduction ) • Improving Comfort and/or Speed of90 Telecommunications ) Transportation

G 85 Airplanes )70 Automobiles and Roads )60 Mama-Produced Chemical Products ) • Increnning Speed and/or Availability of45 Nuclear Weapons ) Telecommunications40 Computers )35 Mass Produced Home Appliances 1 • Improving Quality of Arts and Entertainment35 The Transistor )30 Sal:animise line or Feet I I I zern /30 Artificial Satellites 1 • improving Material Quality of Life25 Lasers20 Micro Technology (Micro Chips, Biochemistry )

and Genetic Engineering) )20 The Moon Landing )

II EXPLOITING NATURE'S RESOURCES/CAPABILITIES

400 000 . Hunting )A 300 000 . Harnessing of Fire ) • Decreasing Dependence on the Environment

150 000 • Shelter )20 000 • Permanent Settlements )20 000 • Domestication of Animals ) • Exploiting Nature's Capabilities

C 15 000 . Agriculture 110 000 • Using Animals for Transportation and Labour )

3 500 • Irrigation Systems )D 3 000 • Harnessing Wind Power ) • Using Nature's Resources

2 000 • Using Horses for Transportation and Labour )E 800 • Using the Energy of Falling Water )F 180 • Using Coal and Oil for Energy ) • Adapting to Changes in the EnvironmentH 45 • Nuclear Energy )

III SOCIAL AND INTELLECTUAL HUMAN ACHIEVEMENTS

A 1 500 000 . Social Organization to Care for Children ) • Better Mastery of the Environment500 000 . Language )400 000 . Immigration )

C 20 000 . Religion ) • Need for Socialization7 000 . First Cities )5 500 . Alphabet 15 000 . Abacus 1 • Need for Knowledge

D 3 500 . Money for Transactions )3 000 . Number System )2 500 . Arts, Philosophy, Sciences )2 500 . Democracy ) • Drive Toward Equality

500 . Scientific Experimentation )E 500 . The Discovery of the New Worlds )

475 • The Prince by Machiavelli In written )400 . Large-Scale Commerce )300 • Scientific Astronomy ) • Desire for Achievement300 • Mathematical Reasoning )210 . Discovery of Oxygen (Beginning of Chemintry) )200 • French and American Revolutions )150 . Babbage's Failed Computer ) • Appreciation of Arts

F 150 • Political Ideologies (Communism, Capitalism) )120 • Foundations of Genetics )100 • Financial,Banking,and Insurance Institutions )

G 80 • The Theory of Relativity 1 • Desire to Reduce Future Uncertainty50 • The Concept of the Computer is Demonstrated )

MathematicallyIV MEDICINE

D 2 500 • The Doctor as a Healer ) • Curing DiseaseE 500 • Therapy Based on Sound Medical Reasoning )

300 • Drugs with Real Medical Value ) • Prolonging Life Expectancy90 . X-Ray )55 • Antitibiotics ) • Providing Better Diagnostics

H 30 • Oral Contraceptives )20 • Tissues and Organ Transplants ) • Preventing Unwanted Pregnancies10 . The CT (CAT or Body) Scan )

A: The emergence of human domination; B: The first hand-made tools to extend human capabilities; C: The beginning of humancivilization; D: The foundation of modern civilization; E: The foundations of modern science and society; F: The start of theIndustrial Revolution; G: The Industrial Revolution; H: Spin-offs of Industrial Revolution, the start of the Information Revolution

Exhibit 5: The Four Stages of Production

Type of Marketing and/orProduction Important/Scarce Area of DistributionFacility Type of Production Resource Distribution SkillsAnd Time

Individual craftsman Skills of Village or townor artisant helped craftsman or where craftsman/

IndividualProduction

by apprentice(s) artisant artisant opera-ted

1500 000 BC

to

None

1500 AD

Workshop typeof production Family type workshop Skills of the Wider area Traders

with several crafts- craftsman or than village capable ofmen or artisans artisans plus or town knowing

1500 (usually members some entre- people'sof the larger preneurial needs and of.

to family) and abilities to organizingapprentices/ produce on a commerce

1760 workers larger scale

Factoryproduction Large business

firms which can. Capital

1760

(IndustrialRevolution)

mass produce(thus achievingeconomies of

. Entrepre-neurship Mostly

National

Marketingskills

to

scale) and massmarket theirproducts

. Organiza-tionalabilities

. Adequatedistribution system

1960

. _ .

*Productionin largefactories

. Need forglobaldistribution

of the . Creativity . Marketingsame firm Huge multinational skills toscattered business firms . Strategy differentiategeogra- capable of mass GGlobal one's ownphically producing and

mass marketing. Deal-Making product

1960 their products . Human and . Continuousand/or services capital quest for

to

1988

world-wide resources positioningand segmen-tation

Exhibit 6 : SIMILARITIES AND DIFFERENCES BETWEEN THE INDUSTRIAL AND INFORMATIONREVOLUTIONS

Industrial Revolution Information Revolution

Substitutes, supplements or amplifiesmanual work through the use of toolsand/or machines powered by mechanicalenergy.

Substitutes, supplements or amplifiesmental work through the use ofcomputer programs (software).

Replace work done by peopleMake work easier/less boring by eliminatinghard repetitive tasksAllow for more and less costly material goodsImprove quality and length of life

Requires energy to produce goods.Possible side-effects in terms ofpollution and/or waste disposal.

The energy required is zero forpractical purposes. There are noside-effects.

The cost of developing new products/applicationsis considerable.The success of the new products/applicationsis uncertain.

Once developed and successful aproduct must be produced andshipped to consumers. The cost ofmanufacturing and transportis usually substantial.

Once developed, a product/applicationcan be reproduced and shipped atvirtually no cost.

The sales and marketing costs can besubstantial

The product is destroyed when used(either at once, or slowly as withdurables).

The product/application can be usedan infinite number of times. As amatter of fact the usefulness ofthe product/application might improve

repeated use.through

The larger the production the bigger theeconomies of scale achieved

Machines cannot operate on theirown. They require supervisionand/or guidance.

Computers can operate (throughappropriate programs) on their own.Moreover, they can supervise and/orguide machines.

The techniques of the Industrial (hardware)and Information (software) Revplutions canbe combined to produce super-automation

Production facilities can breakdown because they consist ofmechanical components. Similarly,durable products (e.g., cars) dobreak down.

Information facilities and products/applications break down much morerarely because they do not consist ofmechanical parts.

Exhibit 7(a): Important Events in Human History up to the Industrial and Information (Computer) Revolution (Years from pr n 1988)

Using Sticks and Makin; and UsingStones as Tools Gear for Hunting

Using animalsfor labour andtransportation The Wheel

Using the horsefor labour andtransportation

Industrial Revolution(Peasants are broughtto work in the factory)

1 750 000 1)0 000 10 000 5 000 2 000 Present228

Using the Mechanical Babbage's Hollerith's (IBM) Information RevolutionFingers to Count The Abacus calculators Difference Engine Punched card (First Programable Computer)

40 000 5 000 350 150 100 42 Present

Exhibit 7(b): Important Events of Industrial and Information Revolutions

G.M.'s Application of technology to all areaswater where labour could be substituted aided or

Industrial Steaz Electricity Motorized Ford's cooled Variety of affordable improved. These included home, factory,Revolution Engine Railroad Electricity in Home Use Airplane T-Car K-Car Car Types and Models transportation, entertainment, etc.

1760

1776 1805 1830 1880 1903 1909 1925 1930'S

Present 11988 I

About 175 Years About 50 Years

Compeersfor

The BusinessInformation trans- Applic-Revolution istor ation Microchips

Apple's IBM's 4rPersonal Micro- Variety of Affordable

Time-shared Micro- Comp- Comp- Efficient and Fast YearComputers Processors uters uters Computers 2000

Future

About 12.5 Years 1

1946 1948 1952 1969 1971 1973 1977 1981 Present1

198842 Years

The Information Revolution is progressing about four times as fastas the Industrial Revolution (i.e.. 175 / 42 4.17 or about 4).

1One can expect that it will take theInformation Revolution 12.5 years

1 (i.e., one fourth of the time) to1 accomplish what took the Industrial

Revolution 50 yearsto accomplish.

1 1

Exhibit 8: Aspects/Characteristics of the 21st Century (in comparison to today) and their Implications for the Various Service Industrial

TYPE OFSERVICEINDUSTRY

Higher incomeHigher income

Mora tree Time More and DeclininBirth Rates

Longe lifeLongerexpectancy

Greateraccumulation ofknowledge

Higher techand morecomplicatedtechnoloov

Faster rateof technologicalobsolescence

More fashions and fads (

Dai ly Wook ly ' Yea rly

cheaperproducts

Entertainment(includingspectator sports Fore free tin. will .....•.. • large

aaaaaa for •l/ types of aaaaa tal aaaaa t

Cheaper andplentiful Decliningand non-pro-fessional publishing) productswill have

birth rateswill saturate

two major demand and Education will become longer. Specialisation willbecome finer. Pr cu).e. training will become •Education All service

ardustries

effects

(a) they will

populationwill stopincreasing.Market

necessity. Longs life expectancy will make moreyears in education acceptable.

Permanentleave more Permanent edu- notraining will

b• required atat oni and/orand/education

retraining

will profit

f^-m increased

•ismd at catching up withsow dowel 0 0000 t.

income tospent

expansioncan onlybe achievedin third

cation willbecome necessary

frequent inter-val.

on servicesand/or Organized Travel

Travel consumer

income eitner

d.rectly or

indirectly.

Ne or oo oo000 a dn hol i daytravel

saved forlater and

(b) they willmotivateservice Ifirms

worldcountries,

travel andvacationsfor thosewithout workor who haveretired

and/orvacationingin fashionableplaces

Holiday.00000 ili.s

distanc••to acquire i Considerable Medical technology will advance to • greet extentsuch need for medical 1-w:wiring ismolaiimmi doctors Mee are experts

Mclicine Moreover, the products . lifeservices asIn high tech. Export systens for medical

to automatel(computer-

becomes longerdiagnosis will become available.

firms (bOth Considerable growth tatellita technology.Medical carefor the sickand elderly

in theize) theiroperationsmoreefficiently

am the number of theelderly and Oak willmenu* dramatically

fibres and computerswill reduce the costof telecomunications

manufacturingTelecommuni- mete sad 0000•o tine spent ell tel•COAAM01- and morecations ono service catieee •Via telephoto, computer. or effectively

lmege t 00000 Ittley 00000 Meat

Data banks,se:tors) v.11

Ace... to data hanks tad lib 000000 via As knowledge becomes more special i zed and fasterlibraries, elec-tronic storage

themselves increase .8 will the 00000 0

of information to commerciale and rot 00000 i

aad/er privet.changing, the need for data banks, specializedlibraries and expert systems will increase.

and retrieval generate

additional

de-.and for

Banks andfinancialinstitutions

Simeiaiisid financialinatitutiOn tosmog* pensionswill emerge

liug• changes willtake piece inthe eel Verticesare provided, feteare charged endfirm; operate

Insurancecompanies companies in Carpet/Clan among

firer will increase.

The legalthe service

Computerized retrieval of legalprofession industry. information and expert legal

systems will appear.

Advertising agencies(including opinionresearch and

las people speed more ties watChiee TV andreading. they becom. prime t 000000 far ad-

As products bermeless differentiated Publicity willcreate new products,...my firms) ••rti••r• ••arching for pot•nti•I cu•t 00000 there will be a fads end fashionsgreater need for to atieul•te ..1...

As knowledge and technology become more complicatedmien-tieing to Specialized con-Consultants differentiate Um* many firms will not be able to afford their own sultents andfrom ors and todetermthe

ine consumer Teeearch firmsin-house experts, thus creating a new industry of will be chargedperceptions and specialized consultants to service them. The with identifying/needs same will be true for doing specialized research; creating newgese arch institutions/including specialized thus, necessitating specialized research centres .

or collaborative research among severalnrodunt./r.O.//fashions.

research centres)many firms.

Exhibit 97 Type of Work, Knowledge and/or Experience Needed, Typical Jobs and How They are Affected by the Industrial and/or Computer (Information) Revolutions

TYPE OF WORK

MANUAL MENTALAMOUNT OF KNOWLEDGE

AND/OREXPERIENCE NEEDED Unskilled Semi-skilled Skilled High Level Clerical Non-Clerical Special Problem Creative or

Motor Skills (Repetitive) IntellectualSkills

Solving for"New" Events,Situations

Specialtalents

I Example Adisiwndher A Writ teller A newly disoaveredgreet actress

r -NOT NOT NOT NOT NOT NOT

None Substitute

ISupplement POSSIBLE PCSSLIILE POSSIBLE POSSIBLE POSSIBLE POSSIBLE

I Amplify

AwoHcer An asserbly line A clerk processing An office A fireman NI advertisingI Example pitting fruit worker credit applications wpm-visor copy-writer

I SubstituteSome L

NOT NOT NOT -6

I Supplement POSSIBLE POSSIBLE POSSIBLEI-

Amplify

Afhlit,vegetthle A bank officer A MTV consultantAu/rat:enter moi/orfloer bairn dA skilled A police cbtective A faadcn dosiMerI newer

movingAd airplane pilot oxionterpmgramer A sPY A TV Entertainer

Substitute NOT NOT NOTI

Consi-derable I Supplement

rPOSSIBLE POSSIBLE POSSIBLE

Amplify

I A neuro-surgeon A neuro-surgeon Asenmedprect- A prect,- in emerisioded tin eqxrimiced his-

ExampleAcquir:d aftermany Substituteyears dfeducaton/1,_training I Supplementandpractise

NOT

POSSIBLE.

NOT

POSSIBLE

just out ofmedical school

practising frWymrs

NOT

POSSIBLE

iticner just out ofmedical schcol

itionervorkingfor 2D years ireLtatcrAte., i4=::re:=

Amplify

Exhibit 10: POSSIBLE FUTURE INNOVATIONS/OREAKTHROUGHS THAT WOULD PROBABLY CHANGE ESTABLISHEDTRENDS AND/OR PREVAILING ATTITUDES

Guess in Years from nowWidespread Applications

Low Likely High Innovation/Breakthrough Consequence/Reason

I HARDWARE BASED TECHNOLOGY

9 10 20 . Mass Globe/ Telecommunication^(Message/Data, Sound, Image)

• Continued auhatituton of unskilledand semi-skilled labour by machines

5 15 35 . Super Automation (in Office and Factory) • Large shifts in employment patterns5 20 40 . Applications of SuperconductivityIn :0 dn Mena Use of Lwanre • Fewer bourn of work15 25 35 • Mass Use of Light-weight Super Strength

Materfals(CiramiO,P/astic,Syrithetic Metals) • Cheaper and more plentiful products20 40 150 . Super Miniaturisationin no Inn . ruiner Efficient. Ensinen • Foster trrannportntion and nneedior and30 60 200 . Hypersonic Transport (Air,Train,Other ) less costly telecommunications

II SOFTWARE-BASED TECHNOLOGY5 15 35 . Super Automation (in Office and Factory)5 15 50 . Widely Used Expert Systems • Heavy substitution of office and/or service

20 50 100 . General Purpose Robots personnel by "computer"-based technology25 50 150 . Intelligent Products (Cars, Home Appliancesostc.))25 100 400 . Real Artificial Intelligence • Large shifts in employment patterns50 200 600 . Intelligent Computers75 400 800 . Intelligent Robots • "Automation" of homes and offices100 600 1000 . Super Smart Specific Purpose Robots500 5000 20000 . Computers and Robots that can Imitate or Surpass)

Human Intelligence, and/or Creativity• Large changes in the way professional work

is done

III BIOCHEMICAL AND RELATED TECHNOLOGIES5 15 30 . Improved Agricultural Production • New and improved products

10 20 50 . Eradicating Pollution10 25 60 . Improved Production from Animals10 30 70 . Mass-Produced Biochemical Compounds • Cheaper and more plentiful products25 40 80 . Widely-Used Biochemical Processes15 30 100 . New Bic and/or Genetically Engineered Products ) • Clean air and water30 50 200 . Altering Gene Structure50 300 800 . New, Powerful Energy Sources

200 1000 5000 . New Forms of Life • New and vast sources of energy

IV EXPANDING HUMAN PRESENCE

15 40 80 . Full Scale Space Stations20 50 150 Marine Life • Opening new frontiers to expand human30 200 400 . Colonizing the Moon presence

100 400 1000 . Colonizing Planets of our Splar System10 500 Never . Communicating with Extra-terrestrials

1000 5000 100000 . Colonizing Planets beyond our Solar System

V MEDICINE

10 30 50 . Preventitive Medicine • Towards eradicating disease15 40 60 . General Purpose Drugs15 40 60 . General Purpose Vaccines • Substantially prolonging life expectancy15 25 50 . Expert Systems far Medical Diagnosis30 50 100 . Mass Produced Artificial Organs • Improving diagnostics40 60 120 • Preventive Organ Transplants60 100 400 . Cures and Preventions before Birth150 300 2000 . Growing Limbs Naturally • Replacing the doctor with expert systems

VI HOME LIFE,LEISURE TIME,EDUCATION

3 6 10 . Super Powerful, Affordable Home Computers • Reducing and facilitating work at home3 6 10 . Electronic Post, On-Line Messages, Ordering of )

Goods, Reservations, Transfer of Money andSimilar Transactions through Home Computers • Improving quality and expanding entertainment

4 8 15 . Super High Fidelity Sound and Image Systems coverage at home5 10 20 . The Fully-Integrated Home Communication

Centre ( Sound, Image, Telephone and Computers) ) • Performing a host of tasks by home computer5 10 20 . Tele-Copying(Buying or Renting)and Storing

Music, Videos, Films, Books, Newspapers,Magazines in Home Computers • Super- automated homes

5 10 25 . Vacation Supermarkets5 15 25 . Super Automation at Home

10 20 30 . The Home Entertainment Centre (ReceivingProgrammed and Live Events from around the World )in Large,Colour,Stereophonic TV Type Sets

• New forms of education and research

10 20 30 . Home Appliances Programmed by Computers15 25 35 . Life Like Computer Games & Realistic Simulations)15 25 40 . Specialized Research Universities15 30 50 . Specially Tailored Computer Education15 30 60 . Flexible Workplace in Widespread Use30 50 100 . Robots as Home Servants

Exhibit 11: Making Watches 200 Tears Ago and Airplanes 50 Tears from Now

Fabricating a watch 200 years ago Implications Making a mass-producedwatch today

The 250, or so, parts needed Imagine a watchmaker (or any other person) Digitial watches are madeto make a watch were made 200 years ago. Could he, in his wildest automatically using speciallyseparately using the crudehand-tools that existed atthat time

dreams, have conceived that a watch couldbe produced in ten minutes,or that digital watches showing time in

designed microchips.

Analogue watches are assembledMethod hundreds of seconds, the day of the week,

the year, including multiple alarms,calculators and a place for storingtelephone numbers and appointments couldexist? Could the watchmaker have imaginedhis skills becoming obsolete?

semi-automatically usingready-made parts producedautomatically elsewhere

Time to About one month The month has become minutes. A time Less than one minute for digitalcomplete task reduction of between 1200 and 12 000 About ten minutes for analogue

The equivalent of today's wages A cost reduction by between 2000 Less than one dollar for digital

Cost incurrent, 1986,dollars

(of workers at a similar level ofskill) for a master watchmaker,an assistant, and threeapprentices, plus equipmentoverheads, etc. Estimated costof about $ 10 000.

and 10 000 times About five dollars for analogue

================m . ===.

Constructing a Jumbo Jet today Imagine a technology that could producea small passenger airplane in less thanone hour, at a cost of about $ 10 000

Making a mass-produced airplane50 years from now

(based on conservative estimates).The various pre-made parts are Consider the implications: will there be Giant machines, guided by computersassembled together by skilled air-traffic jams similar to those on and robots construct a conventional

Method workers as the body is built today's highways? Will people live in the airplane.

___

using an assembly line approach.

garages?

Caribbean and work in Atlanta? Will peoplespend their week-ends skiing in the Alps(in the winter) or the Andes (in thesummer)? Will houses have two airplane-

A new type of airplane (usinga completely brand-new technology)is mad, by a single machine.

Less than two minutes for airplanesWhat about vehicles (combining helicopterTime to design with that of en airplane) that using the new technology.complete task

—

Cost in

About two months can take off and land on roofs, or inback-yards?Even if the estimates are off by a

factor of ten, the basic analogy andtrends hold. Alternatively, consider thepredictions which will be made, not 50,but 100 or 150 years from now.

About twenty mintues for airplanesusing the old technology.

Less than $ 7 000 (at 1968 prices)for airplanes using the newtechnology.

current, 1966,dollars

About $ 75 000 000 About $ 75 000 000About $ 37 500 (at 1988 prices)for airplanes using the oldtechnology.

INSEAD WORKING PAPERS SERIES

85/17 Manfred F.R. KETS DE "Personality, culture and organization".VRIES and Danny MILLER

85/27 Arnoud DE MEYER

1985

85/01 Jean DERMINE

85/02 Philippe A. NAERTand Els GIJSBRECHTS

85/03 Philippe A. NAERTand Els GIJSBRECHTS

85/04 Philippe A. NAERTand Marcel WEVERBERGH

85/05 Ahmet AYKAC,Marcel CORSTJENS,David GAUTSCHIand Ira HOROWITZ

85/06 Kasra FERDOWS

85/07 Kasra FERDOWS,Jeffrey G. MILLER,Jinchiro NAKANE andThomas E.VOLLMANN.

85/08 Spyros MAKRIDAKISand Robert CARBONE

85/09 Spyros MAKRIDAKISand Robert CARBONE

85/10 Jean DERMINE

85/11 Antonio M. BORGES andAlfredo M. PEREIRA

85/12 Arnoud DE MEYER

85/13 Arnoud DE MEYER

85/14 Ahmet AYKAC,Marcel CORSTJENS,David GAUTSCHI andDouglas L. HacLACHLAN

85/15 Arnoud DE MEYER andRoland VAN DIERDONCK

"The measurement of interest rate risk byfinancial intermediaries", December 1983,Revised December 1984.

"Diffusion model for new product introductionin existing markets" .

"Towards a decision support system forhierarchically allocating marketing resourcesacross and within product groups" ."Market share specification, estimation andvalidation: towards reconciling seeminglydivergent views" .

"Estimation uncertainty and optimaladvertising decisions",Second draft, April 1985.

"The shifting paradigms of manufacturing:inventory, quality and nov versatility", March1985.

"Evolving manufacturing strategies in Europe,Japan and North-America"

"Forecasting vhen pattern changes occurbeyond the historical data" , April 1985.

"Sampling distribution of post-sampleforecasting errors" , February 1985.

"Portfolio optimization by financialintermediaries in an asset pricing model".

"Energy demand in Portuguese manufacturing: atvo-stage model".

"Defining a manufacturing strategy - a surveyof European manufacturers".

"Large European manufacturers and themanagement of R 6 D".

"The advertising-sales relationship in theU.S. cigarette industry: a comparison ofcorrelational and causality testingapproaches".

"Organizing a technology jump or overcomingthe technological hurdle".

"The dare:— .q ide of entrepreneurship".

"Narcissism and leadership: an objectrelations perspective".

"Interpreting organizational texts".

"Nationalization, compensation and wealthtransfers: France 1981-1982" 1, Final versionJuly 1985.

"Takeover premiums, disclosure regulations,and the market for corporate control. Acomparative analysis of public tender offers,controlling-block trades and minority buyout inFrance", July 1985.

"Barriers to adaptation: personal, culturaland organizational perspectives".

"The art and science of forecasting: anassessment and future directions".

"Financial innovation and recent developmentsin the French capital markets", October 1985.

"Patterns of competition, strategic groupformation and the performance case of the USpharmaceutical industry, 1963-1982",October 1985.

"European manufacturing: a comparative study(1985)".

"The it i D/Production interface".

"Subjective estimation in integratingcommunication budget and allocationdecisions: a case study", January 1986.

"Sponsorship and the diffusion oforganizational innovation: a preliminary view".

"Confidence intervals: an empiricalinvestigation for the series in the M-Competition" .

"A note on the reduction of the workweek",July 1985.

85/18 Manfred F.R. KETSDE VRIES

85/19 Manfred F.R. KETS DEVRIES and Dany MILLER

85/20 Manfred F.R. KETS DEVRIES and Dany MILLER

85/21 Hervig M. LANCOHRand Claude J. VIALLET

85/22 Hervig M. LANGOHR andB. Espen ECKBO

85/23 Manfred F.R. KEYS DEVRIES and Dany MILLER

85/24 Spyros MAKRIDAKIS

85/25 Gabriel HAVAVINI

85/26 Karel O. COOL andDan E. SCHENDEL

1986

86/01 Arnoud DE MEYER

86/02 Philippe A. NAERTMarcel VEVERBERGHand Guido VERSVIJVEL

86/03 Michael BRINK

86/04 Spyros MAKRIDAKISand Michele HIBON

86/05 Charles A. VYPLOSZ

85/16 Hervig M. LANGOHR and "Commercial bank refinancing and economicAntony M. SANTOMERO

stability: an analysis of European features".

86/06 Francesco GIAVAllI,Jeff R. SHEEN andCharles A. WYPLOSZ

86/07 Douglas L. MacLACHLANand Spyros MAKRIDAKIS

86/08 Jose de la TORRE andDavid H. NECKAR

86/09 Philippe C. HASPESLAGH

86/10 R. MOENART,Arnoud DE MEYER,J. BARBE andD. DESCHOOLMEESTER.

86/11 Philippe A. NAERTand Alain BULTEZ

86/12 Roger BETANCOURTand David GAUTSCHI

86/13 S.P. ANDERSONand Damien J. NEVEN

86/14 Charles WALDMAN

86/15 Mihkel TOMBAK andArnoud DE MEYER

86/16 B. Espen ECKBO andHervig M. LANGOHR

86/17 David B. JEMISON

86/18 James TEBOULand V. MALLERET

86/19 Rob R. WEITZ

86/20 Albert CORHAY,Gabriel HAVAVINIand Pierre A. MICHEL

86/21 Albert CORHAY,Gabriel A. HAVAVINIand Pierre A. MICHEL

"The real exchange rate and the fiscalaspects of a natural resource discovery",Revised version: February 1986.

"Judgmental biases in sales forecasting",February 1986.

"Forecasting political risks forinternational operations", Second Draft:March 3, 1986.

"Conceptualizing the strategic process indiversified firms: the role and nature of thecorporate influence process", February 1986.

"Analysing the issues concerningtechnological de-maturity".

"From "Lydiametry" to "Pinkhamization":misspecifying advertising dynamics rarelyaffects profitability".

"The economics of retail firms", RevisedApril 1986.

"Spatial competition A la Cournot".

"Comparaison Internationale des merges brutesdu commerce", June 1985.

"How the managerial attitudes of firms withFMS differ from other manufacturing firms:survey results", June 1986.

"Les primes des offres publiques, la noted'information et le march6 des transferts decontrOle des soci6t6s".

"Strategic capability transfer in acquisitionintegration", May 1986.

"Towards an operational definition ofservices", 1986.

"Nostradamus: a knowledge-based forecastingadvisor".

"The pricing of equity on the London stockexchange: seasonality and size premium",June 1986.

"Risk-premia seasonality in U.S. and Europeanequity markets", February 1986.

86/22 Albert CORHAY,Gabriel A. HAWAWINIand Pierre A. MICHEL

86/23 Arnoud DE MEYER

86/24 David GAUTSCHIand Vithala R. RAO

86/25 H. Peter GRAYand Ingo WALTER

86/26 Barry EICHENGREENand Charles VYPLOSZ

86/27 Karel COOLand Ingemar DIERICKI

86/29

86/30

86/31 Arnoud DE MEYER

86/31 Arnoud DE MEYER,Jinichiro NAKANE,Jeffrey G. MILLERand Kasra FERDOVS

86/32 Karel COOLand Dan SCHENDEL

86/33 Ernst BALTENSPERGERand Jean DERMINE

86/34 Philippe HASPESLAGHand David JEMISON

86/35 Jean DERMINE

86/36 Albert CORHAY andGabriel HAVAVINI

86/37 David GAUTSCHI andRoger BETANCOURT

86/38 Gabriel HAVAVINI

"Seasonality in the risk-return relationshipssome international evidence", July 1986.

"An exploratory study on the integration ofinformation systems in manufacturing",July 1986.

"A methodology for specification andaggregation in product concept testing",July 1986.

"Protection", August 1986.

"The economic consequences of the FrancPoincare", September 1986.

"Negative risk-return relationships inbusiness strategy: paradox or truism?",October 1986.

"Interpreting organizational texts.

"Flexibility: the next competitive battle",October 1986.

"Flexibility: the next competitive battle",Revised Version: March 1987

Performance differences among strategic groupmembers", October 1986.

"The role of public policy in insuringfinancial stability: a cross-country,comparative perspective", August 1986, RevisedNovember 1986.

"Acquisitions: myths and reality",July 1986.

"Measuring the market value of a bank, aprimer", November 1986.

"Seasonality in the risk-return relationship:some international evidence", July 1986.

"The evolution of retailing: a suggestedeconomic interpretation".

"Financial innovation and recent developmentsin the French capital markets", Updated:September 1986.

86/28 Manfred KETS DEVRIES and Danny MILLER

Manfred KETS DE VRIES "Why folios the leader?".

Manfred KETS DE VRIES "The succession game: the real story.

86/39 Gabriel HAVAVINIPierre MICHELand Albert CORHAY

86/40 Charles WYPLOSZ

86/41 Kasra FERDOWSand Wickham SKINNER

86/42 Kasra FERDOWSand Per LINDBERG

86/43 Damien NEVEN

86/44 Ingemar DIERICKXCarmen MATUTESand Damien NEVEN

1987

87/01

87/02 Claude VIALLET

87/03 David GAUTSCHIand Vithala RAO

87/04 Sumantra CHOSHAL andChristopher BARTLETT

87/05 Arnoud DE MEYERand Kasra FERDOWS

87/06 Arun K. JAIN,Christian PINSON andNaresh K. MALHOTRA

87/07 Rolf BANZ andGabriel HAVAVINI

87/08 Manfred KETS DE VRIES

87/09 Lister VICKERY,Mark PILKINGTONand Paul READ

87/10 Andre LAURENT

87/11 Robert FILDES andSpyros MAKRIDAKIS

"The pricing of common stocks on the Brusselsstock exchange: a re-examination of theevidence", November 1986.

"Capital flows liberalization and the EMS, aFrench perspective", December 1986.

"Manufacturing in a new perspective",July 1986.

"FMS as indicator of manufacturing strategy",December 1986.

"On the existence of equilibrium in hotelling'smodel", November 1986.

"Value added tax and competition",December 1986.

"An empirical investigation of internationalasset pricing", November 1986.

"A methodology for specification andaggregation in product concept testing",Revised Version: January 1987.

"Organizing for innovations: case of themultinational corporation", February 1987.

"Managerial focal points in manufacturingstrategy", February 1987.

"Customer loyalty as a construct in themarketing of banking services", July 1986.

"Equity pricing and stock market anomalies",February 1987.

"Leaders vho can't manage", February 1987.

"Entrepreneurial activities of European MBAs",March 1987.

"A cultural view of organizational change",March 1987

"Forecasting and loss functions", March 1987.

87/13 Sumantra GHOSHALand Nitin NOHRIA

87/14 Landis GABEL

87/15 Spyros MAKRIDAKIS

87/16 Susan SCHNEIDERand Roger DUNBAR

87/17 Andre LAURENT andFernando BARTOLOME

87/18 Reinhard ANGELMAR andChristoph LIEBSCHER

87/19 David BEGG andCharles WYPLOSZ

87/20 Spyros MAKRIDAKIS

87/21 Susan SCHNEIDER

87/22 Susan SCHNEIDER

87/23 Roger BETANCOURTDavid GAUTSCHI

87/24 C.B. DERR andAndre LAURENT

87/25 A. K. JAIN,N. K. MALHOTRA andChristian PINSON

87/26 Roger BETANCOURTand David GAUTSCHI

87/27 Michael BURDA

87/28 Gabriel HAVAVINI

87/29 Susan SCHNEIDER andPaul SHRIVASTAVA

"Multinational corporations as differentiatednetvorks", April 1987.

"Product Standards and Competitive Strategy: AnAnalysis of the Principles", May 1987.

"METAFORECASTING: Rays of improvingForecasting. Accuracy and Usefulness",May 1987.

"Takeover attempts: what does the language tellus?, June 1987.

"Managers' cognitive maps for upward anddownward relationships", June 1987.

"Patents and the European biotechnology lag: astudy of large European pharmaceutical firms",June 1987.

"Why the EMS? Dynamic games and the equilibriumpolicy regime, May 1987.

"A new approach to statistical forecasting",June 1987.

"Strategy formulation: the impact of nationalculture", Revised: July 1987.

"Conflicting ideologies: structural andmotivational consequences", August 1987.

"The demand for retail products and thehousehold production model: new views oncomplementarity and substitutability".

"The internal and external careers: atheoretical and cross-cultural perspective",Spring 1987.

"The robustness of MDS configurations in theface of incomplete data", March 1987, Revised:July 1987.

"Demand complementarities, household productionand retail assortments", July 1987.

"Is there a capital shortage in Europe?",August 1987.

"Controlling the interest-rate risk of bonds:an introduction to duration analysis andimmunization strategies", September 1987.

"Interpreting strategic behavior: basicassumptions themes in organizations", September1987

Manfred KETS DE VRIES "Prisoners of leadership".

87/12 Fernando BARTOLOMEand Andre LAURENT

"The Janus Read: learning from the superiorand subordinate faces of the manager's job",April 1987.

07/30 Jonathan HAMILTON "Spatial competition and the Core", AugustW. Bentley MACLEOD and 1987.Jacques-Francois THISSE

87/31 Martine OUINZII and "On the optimality of central places",Jacques-Francois THISSE September 1987.

88/01 Michael LAURENCE andSpyros MAKRIDAKIS

87/32 Arnoud DE MEYER

87/33 Yves DOZ andAmy SHUEN

87/34 Kasra FERDOWS andArnoud DE MEYER

87/35 P. J. LEDERER andJ. F. THISSE

87/36 Manfred KETS DE VRIES

87/37 Landis GABEL

87/38 Susan SCHNEIDER

87/39 Manfred KETS DE VRIES

87/40 Carmen HATUTES andPierre REGIBEAU

87/41 Gavriel HAVAVINI andClaude VIALLET

87/42 Damien NEVEN andJacques-P. THISSE

87/43 Jean GABSZEVICZ andJacques.F. THISSE

87/44 Jonathan HAMILTON,Jacques-F. THISSEand Anita VESKAMP

87/45 Karel COOL,

David JEMISON andIngemar DIERICKX

87/46 Ingemar DIERICKXand Karel COOL

"German, French and British manufacturingstrategies less different than one thinks",September 1987.

"A process framework for analyzing cooperationbetween firms", September 1987.

"European manufacturers: the dangers ofcomplacency. Insights from the 1907 Europeanmanufacturing futures survey, October 1987.

"Competitive location on networks underdiscriminatory pricing", September 1987.

"Prisoners of leadership", Revised versionOctober 1987.

"Privatization: its motives and likelyconsequences", October 1987.

"Strategy formulation: the impact of nationalculture", October 1987.

"The dark side of CEO succession", November1987

"Product compatibility and the scope of entry",November 1987

"Seasonality, size premium and the relationshipbetween the risk and the return of Frenchcommon stocks", November 1987

"Combining horizontal and verticaldifferentiation: the principle of max-mindifferentiation", December 1987

"Location", December 1987

"Spatial discrimination: Bertrand vs. Cournotin a model of location choice", December 1987

"Business strategy, market structure and risk-return relationships: a causal interpretation",December 1987.

"Asset stock accumulation and sustainabilityof competitive advantage", December 1987.

"Factors affecting judgemental forecasts andconfidence intervals", January 1988.

"Predicting recessions and other turningpoints", January 1988.

"De-industrialize service for quality", January1988.

"National vs. corporate culture: implicationsfor human resource management", January 1988.

"The swinging dollar: is Europe out of step?",January 1988.

"Les conflits dans les canaux de distribution",January 1988.

"Competitive advantage: a resource basedperspective", January 1988.

"Issues in the study of organizationalcognition", February 1988.

"Price formation and product design throughbidding", February 1988.

"The robustness of some standard auction gameforms", February 1988.

"When stationary strategies are equilibriumbidding strategy: The single-crossingproperty", February 1988.

88/02 Spyros MAKRIDAKIS

88/03 James TEBOUL

88/04 Susan SCHNEIDER

88/05 Charles WYPLOSZ

88/06 Reinhard ANGELMAR

88/07 Ingemar DIERICKXand Karel COOL

88/08 Reinhard ANGELMARand Susan SCHNEIDER

88/09 Bernard SINCLAIR-DESGAGN6

88/10 Bernard SINCLAIR-DESGAGN6

88/11 Bernard SINCLAIR-DESGAGN6