First Published in 2018 by Economic Systems Press

Cover and interior design by Ida Fia Sveningsson at IdaFiaSveningsson.se

Cover Figures & Illustrations by author K. Limkin, licensed under Creative Commons license.

Illustrations in the text by Marlon Brando Gonzales at getyourbookillustrations.com.

All rights reserved by Rodney B. Wallace, LLC, except as noted in the text.

All rights reserved. No part of this publication may be reproduced, distributed, or transmit-

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mechanical methods, without the prior written permission of the publisher, except in the case

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ISBN-10: 1-7326240-0-3

ISBN-13: 978-1-7326240-0-9

T O M Y FA M I LY :

M Y S O U R C E O F

I N S P I R A T I O N ,

L O V E , A N D D E S I R E

F O R A B R I G H T

F U T U R E .

About the author

Rod Wallace, PhD, is a leading business strategist and speaker

focused on energizing organizations to deliver profit and make a

difference.

With a unique background combining international business,

economics, and technology, Wallace challenges teams to integrate

diverse perspectives into a coherent purpose with value for

both investors and society. Wallace recent research provides

groundbreaking insights, strategies, and tools for overcoming our

society’s most pressing issues.

Organizations choose to work with Wallace because of his

innovative approach. He challenges businesses to deliver the greatest

profit by expanding their ability to improve society.

Wallace guides companies and executives from startups to

Fortune 500 toward concrete solutions to large-scale problems.

Global leaders working with Wallace have delivered strategic plans

for businesses with over $10 billion in turnover and strategic fit

analyses for more than $4 billion in potential acquisitions.

Wallace served as a Leadership Team Member for Cargill

Incorporated Refined Oils Europe, a $3 billion enterprise head-

quartered in the Netherlands.  He collaborated with Silicon

Valley pioneer  Dr. Steve Omohundro in exploring the impact of

artificial intelligence and other cutting-edge technology on society.

And he was an invited researcher to the Japanese Ministry of

Economy, Trade, and Industry.

Wallace earned his PhD from the University of Michigan. A

Fulbright Fellow,  he studied with leading economic historian  Gary

Saxonhouse. Wallace’s academic research and publications have

focused on the interplay between business collaboration and

competition.

Wallace has lived on four continents and is currently based in

Wilmington, Delaware. As a husband and the father of three young

sons, he worries about the state of the world we will pass on to the

next generation. Wallace believes American society must do more

than survive—it must flourish.

For more about the author, visit RodWallacePhD.com

CONTENTIntroduction

1. Technology and Society: Successes and Failures in Moving Society Forward How Does Technology Evolve?

How Does Society Respond to Evolving Technology?

Summary: The Relationship Between Technology and Society

2. Digital Technology: Potential and the 3 Ways It’s Making Our Lives More Challenging What Are Digital Technology’s Direct Impacts?

How Is Digital Technology Changing Our Environment

Through Indirect Impacts?

Summary: The Origins of Digital Technology’s Impacts

3. The Impact on American Culture: Loneliness, Lack of Neighborhood, and Other Curses of Digital Technology Why Does Culture Find Our D-Tech Environment Challenging?

How Has Culture Adapted to Our D-Tech Environment?

What Is the Impact of Cultural Adaptation?

Summary: Impact of Digital Technology on Our Culture

4. The Impact on American Government: Lost and Confused in the Digital Technology Age Why Is D-Tech Stressing Our Government’s Functioning?

How Has Government Adapted to Our D-Tech Environment?

What Is the Impact of Government Adaptation?

Summary: Impact of Digital Technology on Our Government

01

091 3

22

40

4349

64

101

1051 17

128

170

185

189198

205

2 1 3

234

5. The Impact on American Business: Economic Perversionand Our Critical Business-Skill Failures Why Is D-Tech Stressing Society’s Ability to Benefit

from Business?

How Have Our Businesses Adapted to Our D-Tech Environment?

What Is the Impact of Business Adaptation?

Financial Market

Healthcare Market

Housing Market

Food Market

Education Market

Grey Market

Labor Market

Other Markets

Summary: Impact of Digital Technology on Business

and Our Economy

6. Solutions: Vision Beyond the Bottom Line and Other Remedies How Do We Find What We Need? Markets for Precise Concepts

How Can We Enhance Understanding? Reputation-

Based Storytelling

How Must We Strengthen Coordination? Society-Serving

Leadership

Conclusion: Solutions to Our Ills

Review Request AcknowledgmentsEndNotes BibliographyINDEX

237

247

262

280

285

29 1

306

3 14

3 17

337

339

350

362

367373

385

403

420

427428432442455

| 1

Introduction

Three hours after being admitted to New York Central Hospital,

78-year-old Betty lies on a gurney in an emergency room corridor.

Only a sheet covers Betty and she is shivering. Betty was admitted

with a potentially life-threatening infection but hasn’t seen a doctor

yet. She is terrified and doesn’t know if anyone has called her son.

Too flustered to flag one of the medical staff people who scurry by,

Betty lies there silently, praying that someone might acknowledge

her. She practices the words to request a blanket but speaks them to

no one.

On the other side of the ER, Nurse Nancy glances down at her

pager that is calling her to deliver medication to Patient 18-532. She

clips the pager to her scrubs, then with cell phone in her pocket and

digital tablet tucked under her arm, Nancy begins her trek to Room

2 | D R O W N I N G I N P O T E N T I A L

302 where Patient 18-532 should be. But Betty’s not there. Nancy’s

colleague Anna settled Betty in the corridor instead: Room 302 wasn’t

ready, and Anna had other patients to see. In her hurry, Anna didn’t

even think about updating Betty’s chart with her new location.

Already feeling short-staffed and overworked, Nurse Nancy

searches across the ER for Betty. With every second away from her

desk, Nancy feels the weight of all the incomplete paperwork waiting

on her computer. The hospital recently introduced a new platform

for keeping patient records and Nancy does not yet feel comfortable

with it.

Nancy finds Betty in the hallway and delivers the medication

with a brisk smile. While she updates Betty’s chart on her tablet,

Nancy’s cell phone rings with an emergency and she dashes off to her

next task before Betty can ask for a blanket. Nancy became a nurse to

care for others, but due to the frenetic schedule and digital demands

that have become her norm, she did not get a chance to think about

connecting with Betty on a personal level.

Nancy, Anna, and their colleagues have access to the most

cutting-edge medical technology. Yet, they failed Betty at the most

basic, human level. Superficially, this scene seems independent of

technology. Two nurses failed to provide warm, humanizing care to a

patient. This perspective is true to an extent.

Nonetheless, the impact of Digital Technology (D-Tech) lurks

just below the surface. Technology has changed the nature of Nurse

Nancy’s challenges. One hundred and fifty years ago, Nancy would

have worked with a single, generalist physician and a handful of notes

I N T R O D U C T I O N | 3

on paper. Her medical knowledge would have been limited, but she

would have gotten to know the patient and paid attention to their

comfort.

As technology has improved, Nancy’s world has become more

complex. Despite Nancy’s years of training, she is an expert on only

a sliver of modern medical technology. Large teams of healthcare

workers with different specialties are now required to take care of

an individual patient. Rather than a handful of notes, Nurse Nancy

has access to hundreds of electronic records about Betty. By pushing

a button, Nancy can access records created by six doctors, eleven

nurses, and two clerical workers involved in Betty’s check-in, and

that’s just within New York Central Hospital.

While easy access to such information saves time and untold

number of lives, it also creates confusion and pulls medical staff

away from patients and onto screens. Medical error is now the third

highest cause of death in the United States (Institute of Medicine

2000). No wonder Nurse Nancy lost sight of human connection and

of her desire to care for others.

So, what did we witness in the interaction between Betty and

Nurse Nancy? We saw the side effects of Digital Technology. As we

apply D-Tech, we often make our world more complex. As a result,

we frequently lose the ability to connect on a human level, we miss

critical insight, and our attempts to coordinate slip into disarray.

Drowning in Potential explores such unintended consequences.

Despite the potential embodied in Digital Technology and seen in

its direct impacts, the side effects are just as impactful and generally

destructive.

4 | D R O W N I N G I N P O T E N T I A L

D-Tech’s direct potential inspires awe: the internet, cell

phones, artificial intelligence, blockchain, big data—even traditional

spreadsheets and word processors—are amazing tools. Every day

brings a new breakthrough that could be used to solve one of society’s

biggest challenges:

• Game-changing cameras and earpieces can read documents to

the visually impaired (Spera 2017).

• Headsets can control prosthetic limbs based on brainwave

messages, with the prosthesis providing feedback and sensation

(Prattichizzo et al. 2018).

• Virtual and augmented reality can immerse students in learning

(Schmitt 2018).

“We’re entering . . . the age of abundance,” says Eric Schmidt,

former executive chairman of Alphabet, Inc., Google’s parent

company (Brynjolfsson, Rock, and Syverson 2017). We could use

D-Tech to solve all—or most—of society’s problems. Nonetheless, we

all have a Betty in our lives—someone who has experienced a failure

of American society due to Digital Technology.

As D-Tech creates new potential, it creates new hurdles, as well.

The waves of information and confusion emanating from D-Tech

may be figurative rather than literal. But our methods for working

together—methods that served us well before Digital Technology—

are now drowning in those waves. We are Drowning in Potential.

As we’ll discuss throughout this book, problems across society

remain unsolved. We are barely inching forward—and, in many

I N T R O D U C T I O N | 5

respects, we’re regressing. Type the words, “Society is,” into Google,

and you’ll see that the most common searches characterize society as:

Problems are growing across society’s sub-systems of Culture,

Government, and Business/Economy.

Our Culture is currently characterized by deaths of despair: the

population of Americans without a single friend in whom they could

confide grew by more than a third between 1984 and 2004. By 2004,

more than half of all Americans (53%) felt that they could only confide

in a family member; a quarter had no one—not even a family member

to confide in (McPherson, Smith-Lovin, and Brashears 2006). Since

1999, suicides by middle-aged men have increased 43% and women

by more than 60% (Curtin, Warner, and Hedegaard. 2016).

We are applying technology to connect with more people in

more ways than ever before; social media and video-calling apps put

us in contact with loved ones and strangers across the world. Yet,

rather than applying technology to bring us together, our culture

guides us to develop hollow relationships. Betty’s grandson doesn’t

use his phone to call Betty. And when he occasionally visits her, his

eyes and fingers are glued to the digital device.

Our Government is failing as well. Due to inadequate

government regulations, the average professional, without realizing

Doomed

Brainwashed

A l ie

S ick

Broken

Falling apart

6 | D R O W N I N G I N P O T E N T I A L

it, commits several federal crimes daily (Silverglate 2011, xxv).

For example, businesspeople regularly delete emails and physicians

often write prescriptions for off-label pharmaceutical uses. Yet these

normal, everyday occurrences can be, and have been, prosecuted as

felonies (Silverglate 2011).

Government does not use technology solely to protect us from

our most destructive instincts. Instead, due to the growth of D-Tech

jobs and the ease of creating new digitally stored regulations, new

rules are continually written for our multitude of new professions

and their expanding capabilities. The U.S. Federal Government

currently enforces more than 250 million constraints on our actions.

Many of these constraints are so complex and broadly worded that

our everyday actions can be indicted as felonies.

Our Business/Economy is also failing to serve society. More

than 60% of our economy is dedicated to industries that fail to deliver

our most basic requirements. For example:

• The United States spends more on healthcare than any other

nation in the world, yet Americans’ lifespans are the shortest of

any developed country.

• Through the help of Digital Technology, the average American

supermarket is now crammed with an incredible 47,000

processed, bred, genetically modified, and preserved foods. Yet

these foods do not nourish us. Even our organic foods are less

nutritious than their traditionally farmed counterparts from

the 1950s and 1960s (Plumer 2015).

I N T R O D U C T I O N | 7

While each failure is unique, Digital Technology’s unintended

consequences are causing fundamental failures in every industry I

reviewed.

As a society, we can’t turn off technology. Digital Technology

has invaded every aspect of our lives—home, work, school, hospitals.

D-Tech is here to stay. We need to come together with our technology

turned on.

As a parent, an economist, and a citizen, I feel worried. I will

pass this society on to my children. And this society must support me

in my old age. How can we manage the unintended consequences of

D-Tech? How can we survive?

I believe we can survive—and, in fact, flourish—by changing

our approach to collaboration. Technology does not solve problems.

People solve problems. And we solve problems most effectively when

we work together. Thus, our collaborative approaches must withstand

the rigors of today’s D-Tech-driven complexity.

In this book, I present insights, strategies, and tools for

eliminating the unintended consequences of Digital Technology. Over

the following six chapters, we will explore the following questions:

• How have some societies successfully overcome the unintended

consequences of past new technologies, when most have not?

• What are the side effects of Digital Technology?

• How can we redesign our approaches to leadership and

collaboration so we can overcome the fallout from Digital

Technology?

8 | D R O W N I N G I N P O T E N T I A L

I promise you valuable insight. You will grasp our problems

more deeply, and you will encounter new approaches to resolving

society’s problems.

Don’t miss the opportunity to transform your world. Learn why

we are Drowning in Potential. Become clear about what is happening

to our society. Be the one to meaningfully improve society—while

benefiting yourself.