MIT Sloan lecturer finds “acupuncture points” could help create new economic system

Senior Lecturer Otto ScharmerSenior Lecturer Otto Scharmer

Increased Collaboration and Innovation Needed to Solve Current Crises

CAMBRIDGE, Mass., Oct. 13, 2009 — There are a lot of conversations going on these days about crises. Whether it’s the financial crisis, the climate change crisis, the food crisis, the education crisis, or the security crisis, each topic has its own conferences, Websites, programs, and funding mechanisms. What is missing from the discourse, according to Otto Scharmer, senior lecturer at the MIT Sloan School of Management and co-founder of the MIT Green Hub, is a conversation about how the crises are interconnected in terms of systemic root issues and innovating solutions.

He maintains that the problem today is that we are trying to solve “3.0 challenges” with “2.0” frameworks and response patterns. “By ‘3.0’ challenges, I mean problems that require us to innovate at a whole systems level. By ‘2.0,’ I mean response patterns that are driven by special interest groups that lobby for their narrow self-interests regardless of the costs that they impose on the whole system. The 2.0 system is what we have now — think of Wall Street lobbying in Washington to prevent new banking rules even though they would be in the interest of taxpayers,” he said.

To make progress, said Scharmer, we need to move out from the silos of each issue to create a broader alliance of stakeholders across different institutions and sectors who can work together to evolve our overall economic framework and create a win-win system.

He pointed to the automotive industry’s attempts at addressing the climate change crisis as an example of where a 3.0 system of collaboration and innovation is necessary. To drastically reduce CO2 emissions, automotive companies must pull together and collaborate on innovating some new basic technologies as well as work with government and community players to create a new regulatory framework.

“It’s not about getting rid of the competition,” said Scharmer, “but about redrawing the line between collaboration and competition.”

In his paper “Seven Acupuncture Points for Shifting Capitalism to Create a Regenerative Ecosystem Economy,” Scharmer found that to move toward a new 3.0 system — one with a new set of mechanisms to help stakeholders across the demand and supply chain to collaborate and innovate together — there are seven “acupuncture points” that need to be simultaneously addressed.

The first point involves teaching new collective leadership skills where students learn to collaborate and innovate with stakeholders across sectors with very different ways of thinking and operating. “We have to reinvent leadership education to facilitate learning from the emerging future rather than reproducing the patterns of the past,” he said.

“Today, leadership learning focuses on single sectors — business, government, or social sector — and single individuals rather than multiple sectors and whole systems.”

Related to that point is the need to upgrade the economic operating system from one that is driven by the coordination mechanisms of markets, regulation, and special interest groups to one that introduces innovation mechanisms for the system as a whole.

A third point is reinventing banking and money. “We need to redesign and redirect the flow of money and capital throughout the economic system to better serve the health and well-being of all,” he said, noting that inventing commons-based property rights would better facilitate this circulation.

Additional acupuncture points include:

  • Nature: Design all production and consumption cycles completely earth-to-earth.
  • Labor and creativity: Create access to basic income, education, and health services, and entrepreneurial opportunity as a human right to better unleash the untapped human creativity that is the ultimate driving force for all economic development and growth.
  • Technology: Access to free or inexpensive green and social technologies that would help change makers across sectors to connect to bring about changes.
  • Consumer Awareness and Public Conversation: Create infrastructure innovations that allow all citizens to become aware of their real power in co-creating the intentional ecosystem economy and in deepening democracy.

“The seven acupuncture points focus our attention on seven key concepts that would reframe and reinvent traditional economic theory and practice in light of the 21st century challenges that lie ahead,” wrote Scharmer. “In the past, these seven dimensions of societal reality — and how they interrelate — were blank spots in conventional economic theory. In the future, these seven dimensions should be core principles of advanced economic theory and practice.”

Full paper (PDF)

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