Transition Redefined

In an earlier post, I discussed the movement from manufacturing to services which has followed the prior movement from agriculture to manufacturing. As each of these processes got more efficient and effective, they sowed the seeds of their own profit destruction. Capitalism, for all its benefits, competes to zero profits.

Another way to frame up the drivers of these shifts is to identify the movement from the Industrial Age to the Information Age. The CEO of Softbank, Masayoshi Son, has driven his acquisition strategies based on drivers of the Information Age. Despite his well-known failure at WeWork, his investments have worked out incredibly well (Alibaba $20 million becoming $100 billion).

In a sense the manufacturing process is layered over the Industrial Age and continues to be layered over the Information Age. For example, I grew up on a farm populated with John Deere "A" and "B" tractors. We continually tinkered with and repaired these machines and they lasted forever. Most of these were built in the 1940s and were still operating for us in the 1990s. However, the new John Deere tractors are technically not owned by the purchasers and are ineligible for repair due to its software composition. This is an example of a manufacturing company that has moved from the Industrial Age to the Information Age.

To identify secular drivers, it might be most useful to understand the competitive stack using the farming sector as an example:

Approach:                          Artisanal                         Manufacturing                 Services

Organizing Principle:         Individual                        Industrial                         Informational

Industry:                            Organic Farming             Farming                           Farming

                                          (pre-1900)                       (1900-2000)                    (post-2000)