Marc Luyckx Ghisi CBA De Marc Luyckx Ghisi CBA De an, Zagreb an, Zagreb 1 IFL Brussels April IFL Brussels April 24 2006 24 2006 WHY IS BUSINESS WHY IS BUSINESS CHANGING? CHANGING? Marc LUYCKX GHISI Marc LUYCKX GHISI Dean « Dean « CBA Business School CBA Business School »ZAGREB »ZAGREB Brussels Brussels dean dean @ @ cba.com.hr cba.com.hr
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Marc Luyckx Ghisi CBA Dean, Zagreb 1 IFL Brussels April 24 2006 WHY IS BUSINESS CHANGING? Marc LUYCKX GHISI Dean « CBA Business School »ZAGREB Brussels.
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A SHARP A SHARP TRANSFORMATION…TRANSFORMATION…
(Peter DRUCKER)(Peter DRUCKER)
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Every few hundred years in Western History Every few hundred years in Western History there occurs a sharp transformation. there occurs a sharp transformation.
Within a few short decades, society rearranges Within a few short decades, society rearranges itself : its worldview (paradigm), its basic itself : its worldview (paradigm), its basic values, its social and political structures, its values, its social and political structures, its arts, its key institutions. arts, its key institutions.
Fifty years later there is a new world.”Fifty years later there is a new world.”
Peter DRUCKER: Peter DRUCKER: “Post Capitalist Society”.“Post Capitalist Society”. p.1. p.1.
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Transmodern Business
Knowledge SocietyTRANSMODERN
Danger
Industrial leftovers who have not grasped the changeAgrarian
premodern
Agrarianleftovers
Culturalcreatives
IndustrialMODERN
Sept. 11, 2001?
New Women-Men Partnership Society
End ofPatriarchal Society
Transmodern Business
Knowledge SocietyTRANSMODERN
Danger
Industrial leftovers who have not grasped the changeAgrarian
premodern
Agrarianleftovers
Culturalcreatives
IndustrialMODERN
Sept. 11, 2001?
New Women-Men Partnership Society
End ofPatriarchal Society
Transition to Transmodern
Death ?
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One of the most fundamental One of the most fundamental shiftsshifts• ““We are living through one of the most We are living through one of the most
fundamental shifts in History: fundamental shifts in History: • a change in the actual belief structure of a change in the actual belief structure of
Western Society. Western Society. • No economics, political or military power can No economics, political or military power can
compare with the power of a change of compare with the power of a change of mind. mind.
• By deliberately changing their images of By deliberately changing their images of reality, people are changing the world.” reality, people are changing the world.” Willis HARMAN Stanford Research Institute, Willis HARMAN Stanford Research Institute, Founder of the “World Business Academy” Founder of the “World Business Academy” (+1997)(+1997)
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FIVE LEVELS OF CHANGEFIVE LEVELS OF CHANGE
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1.1. Humanity is in danger of collective Humanity is in danger of collective death death although we have money and technologyalthough we have money and technology
2.2. End of the Patriarchal values (Command, End of the Patriarchal values (Command, control)control)
3.3. End of “Modernity”. “Transmodernity” = the End of “Modernity”. “Transmodernity” = the best of premodern and modern. post secular, best of premodern and modern. post secular, flat, tolerant, new level of resp. & flat, tolerant, new level of resp. & consciousness.consciousness.
4.4. Knowledge society as a turbo of changeKnowledge society as a turbo of change
5.5. Crisis of all institutions.Crisis of all institutions.
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The Iceberg of ChangeThe Iceberg of Change
Level 5 : Credibility gap of all Institutions Level 5 : Credibility gap of all Institutions is increasing is increasing dramatically…dramatically…
Level 1 : Danger of Level 1 : Danger of collective death collective death
Level 2 : End of Patriarchal myths, Level 2 : End of Patriarchal myths, sacred and valuessacred and values
Level 3: End of Modernity: REASON Only Level 3: End of Modernity: REASON Only Truth, Science, Violence, Pyramids, ControlTruth, Science, Violence, Pyramids, Control
Level 4 : The knowledge society : post-Level 4 : The knowledge society : post-capitalist society (Drucker)capitalist society (Drucker)
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LEVEL 1:LEVEL 1:
HUMANITY IS IN DANGER OF HUMANITY IS IN DANGER OF COLLAPSECOLLAPSE
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WorldWatch Institute WorldWatch Institute Washington Washington
• ““Our global economy is outgrowing the Our global economy is outgrowing the capacity of the earth to support it, moving us capacity of the earth to support it, moving us ever closer to decline and possible ever closer to decline and possible collapse….collapse….
• ““We have the technologies needed to build We have the technologies needed to build the new economy…”the new economy…”
• Lester BROWN: “Lester BROWN: “Plan B 2.0” Norton NY, Plan B 2.0” Norton NY, LondonLondon
• 2006. Presentation text on the cover.2006. Presentation text on the cover.
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INFLUENCE on RELIGIONSINFLUENCE on RELIGIONS
• Patriarchal values are below the Patriarchal values are below the religionsreligions
• In theory Religions can adapt. Jesus and In theory Religions can adapt. Jesus and Mohammed were definitely more post Mohammed were definitely more post patriarchal that their followers. (“Da patriarchal that their followers. (“Da Vinci Code”!)Vinci Code”!)
• Will Religions adapt to post patriarchy ? Will Religions adapt to post patriarchy ? • Or will the XXIst century be spiritual-Or will the XXIst century be spiritual-
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Level 4 :Level 4 :THE KNOWLEDGE SOCIETYTHE KNOWLEDGE SOCIETY
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DEFINITIONSDEFINITIONS• Data:Data: Mainly facts about things or records (eg Mainly facts about things or records (eg
in databases) also what is on the WWW, it may in databases) also what is on the WWW, it may be structured and/or unorganisedbe structured and/or unorganised
• Information:Information: Data that may be already sorted Data that may be already sorted eg by Google™. There is an oeg by Google™. There is an overabundanceverabundance of of thisthis..
• Knowledge:Knowledge: is data and information ‘processed’ is data and information ‘processed’ by by human cognitive systems and passed outhuman cognitive systems and passed out
• Human brain and networks are the NEW TOOLS Human brain and networks are the NEW TOOLS of PRODUCTIONof PRODUCTION
• WisdomWisdom, Knowledge are , Knowledge are less common. Perhaps less common. Perhaps there is not enough.there is not enough.
Tom Spoors
'We can be knowledgeable with other men's knowledge but we cannot be wise with other men's wisdom' - Michel de Montaigne
Tom Spoors
The Ancient Greeks might argue the point about this human brain and networks being new tools!!!
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Knowledge society= Post Knowledge society= Post capitalist?capitalist?
(Peter Drucker 1993) (Peter Drucker 1993) This new economy is POST CAPITALIST This new economy is POST CAPITALIST
because capital becomes less because capital becomes less important than knowledge in the value important than knowledge in the value creation processcreation process
Value creation is linked to knowledge Value creation is linked to knowledge applied to knowledge.applied to knowledge.
This This new tool of productionnew tool of production is more is more important than important than capitalcapital and and technologytechnology. .
Tom Spoors
Perhaps we can argue that knowledge is the new capital and that post capitalist needs to be defined as something slightly different
Tom Spoors
Aren't tools of any kind classifiable as technology?
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NEW VALUE CREATION NEW VALUE CREATION PROCESPROCES• INDUSTRIAL SOC.INDUSTRIAL SOC.
• Add value to objectAdd value to object
• From steel to car !From steel to car !
• Tool is MachineTool is Machine
• Humans are costHumans are cost
• Management is Management is machine-centeredmachine-centered
• Machine is centralMachine is central
• KNOWLEDGE SOC.KNOWLEDGE SOC.• Create new K Create new K • From data, info to KFrom data, info to K• Tool is Human brain Tool is Human brain
in Networksin Networks• Humans are capitalHumans are capital• Management is Management is
Human-centeredHuman-centered• Machine is at Machine is at
serviceservice
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BEYOND TRADE (I)BEYOND TRADE (I)
• If I exchange an object against money, If I exchange an object against money, I loose the object. This is “trade”: I win I loose the object. This is “trade”: I win and I loose. “Win-Loose” logicand I loose. “Win-Loose” logic
• If I exchange knowledge, If I exchange knowledge, I do not loose I do not loose my knowledge. my knowledge. I win and you win. I am I win and you win. I am not trading anymore. I share. This is a not trading anymore. I share. This is a ““win-win logic” of sharing.win-win logic” of sharing.
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• Immaterialization of Immaterialization of prod.prod.
• Qualitative growthQualitative growth
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ANOTHER ECONOMY(I)ANOTHER ECONOMY(I)
QualityQuality of knowledge is more of knowledge is more important than quantity. important than quantity.
ProgresProgres becomes more becomes more qualitative qualitative than quantitative.than quantitative.
MMeasurementseasurements areare more more qualitativequalitative: : ““IntangibleIntangible”” value value are increasing are increasing
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ANOTHER ECONOMY (ANOTHER ECONOMY (IIII))
• Secrecy and patentingSecrecy and patenting are in crisis are in crisis
• FFrom rom “W“Win-in-LLooseoose”” to to ““Win-WinWin-Win””
• From From “e“exclusionxclusion”” to to ““inclusioninclusion””
• From From Logic of war to logic of love Logic of war to logic of love !!
• From From ““command and controlcommand and control”” to to ““enabling creativity and sharingenabling creativity and sharing””
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ANOTHER MANAGEMENTANOTHER MANAGEMENT
• Human capital is central because it is Human capital is central because it is caring for the tool of production: caring for the tool of production: Please come back! Please come back!
• Thus Thus Management : shifts 180° Management : shifts 180° towards human centeredness = more towards human centeredness = more creativity-centred, gender & culture – creativity-centred, gender & culture – centred.centred.
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ANOTHER SYSTEM OF ANOTHER SYSTEM OF MEASUREMENTSMEASUREMENTS• « Intangible assets » is a new concept « Intangible assets » is a new concept
invented by Karl Erik SVEIBY (Sweden)invented by Karl Erik SVEIBY (Sweden)
• They are becoming more and more They are becoming more and more important in the knowledge societyimportant in the knowledge society
• BecauseBecause the knowledge society is about the knowledge society is about knowledge which is knowledge which is immaterial, immaterial, intangible and qualitative.intangible and qualitative.
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A NEW CONCEPT : A NEW CONCEPT : INTANGIBLE ASSETS (I)INTANGIBLE ASSETS (I)• Intangibles assets = Intangibles assets =
– Know how, Know how, – Reputation, Reputation, – Trust in the company, Trust in the company, – Structure of the company, Structure of the company, – Strategy (balanced scorecards)Strategy (balanced scorecards)– Relations with personnel, Relations with personnel, – Relations with clients,Relations with clients,
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A NEW CONCEPT : A NEW CONCEPT : INTANGIBLE ASSETS (II)INTANGIBLE ASSETS (II)
• Relation with civil societyRelation with civil society
• Relation to environment Relation to environment
• Relation to our collective Future and Relation to our collective Future and sustainabilitysustainability
• But also But also quality of the Networksquality of the Networks
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NEW TOOLS OF PRODUCTIONNEW TOOLS OF PRODUCTION
1st Tool of production1st Tool of production ==Human Human brain brain : : Knowledge is produced by Knowledge is produced by human brain which digests data and human brain which digests data and information and creates knowledge. information and creates knowledge.
2 d tool of production =Networks : 2 d tool of production =Networks : Knowledge is increased only by Knowledge is increased only by sharing in a network. sharing in a network. This is anThis is an inclusive inclusive logic. (love).logic. (love).
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MMEASURING INTANGIBLE EASURING INTANGIBLE ASSETS ASSETS ??• Stock exchange measurements are still Stock exchange measurements are still
looking at financial “tangible” assets looking at financial “tangible” assets (quantitative) but they increasingly look at (quantitative) but they increasingly look at “intangible” assets (qualitative). “intangible” assets (qualitative).
• Today a company is measured more and Today a company is measured more and more by its intangible assets. more by its intangible assets.
• Example: “Example: “Men’s WearMen’s Wear” USA. & “” USA. & “World World Business Academy”, “Spirit in Business”.Business Academy”, “Spirit in Business”.
• See also Neskey: See also Neskey: www.neskey.comwww.neskey.com
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CONCLUSION : NETWORKS CONCLUSION : NETWORKS AS CRUCIAL INTANGIBLE AS CRUCIAL INTANGIBLE ASSETASSET• Networks increase creativity in K Networks increase creativity in K
product.product.• Networks are part of the Networks are part of the NEW TOOL of NEW TOOL of
PRODUCTION. PRODUCTION. • It is crucial to be active participant in It is crucial to be active participant in
excellent networksexcellent networks• As individualAs individual• As a companyAs a company• It is not an option: it is It is not an option: it is indispensableindispensable
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CONCLUSION (II): NEW CONCLUSION (II): NEW VALUES…VALUES…• Underlying values needed in the Underlying values needed in the
industrial capitalist society are industrial capitalist society are freedom, initiative, ceativity…freedom, initiative, ceativity…
• NEW NEW (more feminine)(more feminine)Values are Values are needed: needed: – Freedom (of sharing)Freedom (of sharing)– Solidarity, Caring, RespectSolidarity, Caring, Respect– TransparencyTransparency– Concern for the Common GoodConcern for the Common Good
• Failure of Community of Defense 1954.Failure of Community of Defense 1954.
• Treaty of Rome 1957.Treaty of Rome 1957.
• Single Act, Maastricht, Amsterdam, Nice.Single Act, Maastricht, Amsterdam, Nice.
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History of the EU : 2History of the EU : 2
• Under Delors 1985-1995:Under Delors 1985-1995:– + social policy : social fund for poor citizens+ social policy : social fund for poor citizens– + devpt Policy for the ACP (“Lomé”)+ devpt Policy for the ACP (“Lomé”)– + regional policy solidarity/ poor regions+ regional policy solidarity/ poor regions– + Environment policy overarching all !+ Environment policy overarching all !– + Cultural policy not very rich!+ Cultural policy not very rich!– + abolition of visas ( “Schengen”)+ abolition of visas ( “Schengen”)– +Foreign Policy + Defense & Security Policy+Foreign Policy + Defense & Security Policy
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History of the EU : 3History of the EU : 3
• 1999: Commission is killed by the 1999: Commission is killed by the European Parliament. European Parliament.
• Hence period of Retreat and fear…Hence period of Retreat and fear…
• 2000- 2005: is “Free Market” period, 2000- 2005: is “Free Market” period, although = obsolete “industrial” although = obsolete “industrial” concept.concept.
• 2006- 2010: Transitions and dangers?2006- 2010: Transitions and dangers?
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The EU = The EU = first transmodern entityfirst transmodern entity• Alliance of non-violence between Alliance of non-violence between
StatesStates• In a global world we need non violence In a global world we need non violence
between States. Success of EU model.between States. Success of EU model.– New Foreign policy ?New Foreign policy ?– New Defense and Security policy ?New Defense and Security policy ?– Importance of International Human rights ?Importance of International Human rights ?– New economic policy: Lisbon (I) ?New economic policy: Lisbon (I) ?– Global actor for “Sustainable” economics ?Global actor for “Sustainable” economics ?
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Paradigm shift in Foreign Policy Paradigm shift in Foreign Policy 11
PremodPremod..
ModernModern Trans +Trans + Trans -Trans -
1. State1. State EmpireEmpire StateState Post -Post -State State EU EU
AnarchAnarchyy
2. 2. Foreig Foreig PolicyPolicy
ConqueConquerr
EconoEconom m interestinterestss
For pol For pol internalinternal
AnarchAnarchyy
3. 3. PowerPower
LandLand CapitalCapital KnowleKnowledd
ManipulManipul
4. Interf4. Interf ColonieColoniess
No/No/tradetrade
Hum Hum RigRig
MaffiasMaffias
5.Nat. 5.Nat. InterestInterest
ImperiaImperiall
StateState Com. Com. GoodGood
Relig. Relig. Expans.Expans.
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Paradigm shift in Foreign Policy Paradigm shift in Foreign Policy 22
– Economy Economy • ““Free Trade” + Social Free Trade” + Social
• Sharing in networks?Sharing in networks?
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US and EU DREAMS : 3US and EU DREAMS : 3
• US DREAMUS DREAM– EnvironmentEnvironment
• Against US freedomAgainst US freedom
• National approachNational approach
• Burden on consumerBurden on consumer
– Human rightsHuman rights• National approachNational approach
– Integration processIntegration process• By indentification By indentification
(//F)(//F)
• EU DREAMEU DREAM– EnvironmentEnvironment
• Sustainability is normSustainability is norm
• World ConsciousnessWorld Consciousness
• ““Precaution principle”Precaution principle”
– Human rightsHuman rights• Global & transnationalGlobal & transnational
– Integration processIntegration process• capitalize on diversitycapitalize on diversity
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US and EU DREAMS : 4US and EU DREAMS : 4
• AMERICAN DREAMAMERICAN DREAM– WorkWork
• Life for workLife for work• Time efficiency+doingTime efficiency+doing• More efficientMore efficient
– National National identityidentity • God given missionGod given mission
– Death Instinct Death Instinct (Rifkin!)(Rifkin!)• Consume without careConsume without care• No care for survivalNo care for survival
• EUROPEAN DREAMEUROPEAN DREAM– WorkWork
• Work for lifeWork for life• Quality of life, beingQuality of life, being• Less efficientLess efficient
– Multi level identityMulti level identity• Our common survivalOur common survival
– EU = Life projectEU = Life project• Non-violence projectNon-violence project• Also towards nature Also towards nature • Global ethicsGlobal ethics
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EU dream and citizensEU dream and citizens
• Are citizens aware of the EU dream?Are citizens aware of the EU dream?• Are the governments speaking about Are the governments speaking about
transmodern dimension?transmodern dimension?• Why are Europeans so skeptical?Why are Europeans so skeptical?• Are they aware of the transmodern Are they aware of the transmodern
quality of their dream?quality of their dream?• Are the EU governments getting the Are the EU governments getting the
See: Jean François Rischard, Vice President of the See: Jean François Rischard, Vice President of the World Bank Paris.World Bank Paris.
Civil society is squeezed between the Civil society is squeezed between the full speed of technological and full speed of technological and demographical changes…and the demographical changes…and the immobility of the institutions.immobility of the institutions.
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Confronting the anguish of Confronting the anguish of changechange
Acceptation of Acceptation of the the TransformationTransformation
Cloud of deep transformation of our Cloud of deep transformation of our world societiesworld societies
NEUROTIC: NEUROTIC: There is NO There is NO changechange
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Dangers of the Stress of Dangers of the Stress of changechange
• If the transformation is not analyzed If the transformation is not analyzed properly and if our Stress is not faced properly and if our Stress is not faced and analyzed properly….and analyzed properly….
• Our collective subconscious could Our collective subconscious could lead us exactly towards the lead us exactly towards the catastrophecatastrophe we want to avoid. we want to avoid.
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BUSINESS AND STRESSBUSINESS AND STRESS
• Example: war on terrorism. Seems to Example: war on terrorism. Seems to foster more anger and terrorism, and foster more anger and terrorism, and “clash of civilizations”. Exactly the “clash of civilizations”. Exactly the opposite result.opposite result.
• Like persecution of Christians Like persecution of Christians
• Are business leaders more able to Are business leaders more able to confront the changes?confront the changes?
• What is their mission today?What is their mission today?
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BUSINESS AND ETHICS BUSINESS AND ETHICS ::AA NEW RELATION NEW RELATION• Industrial objects are Industrial objects are “tangibles” & “tangibles” &
ethically neutral.ethically neutral.• Knowledge is Knowledge is IMMATERIAL, IMMATERIAL,
“intangible” & always linked to a “intangible” & always linked to a meaningmeaning
• AAnd thus to ethics.nd thus to ethics.• Producing knowledge thus involves a Producing knowledge thus involves a
meaning and a business reputation = meaning and a business reputation = an an “intangible” “intangible” asset.asset.
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EU : ONLY 5 % ARE CHANGING EU : ONLY 5 % ARE CHANGING
• 9955 % of the EU Business leaders stick % of the EU Business leaders stick to the old industrial strategies:to the old industrial strategies:– More capital + advanced technologyMore capital + advanced technology
• 5 5 % of the EU Business leaders % of the EU Business leaders change change really really their strategy:their strategy:– Capital+ Technology.+Capital+ Technology.+human human creativcreativ– Enterprise in Enterprise in NetworkNetwork : :win-win strat.win-win strat.– Personnel is not a cost but Personnel is not a cost but key assetkey asset
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US: 10 % SURVIVED THE US: 10 % SURVIVED THE CRASHCRASH
• Verna ALLEEVerna ALLEE: : • ˝̋InIn US, only those 10% have survived US, only those 10% have survived
the dot.com crash: Example: CISCOthe dot.com crash: Example: CISCO˝̋• ˝̋Because they have changed :Because they have changed :
– The tools (ICT)The tools (ICT)– The structure of their enterpriseThe structure of their enterprise– The underlying vision of their scope and The underlying vision of their scope and
valuesvalues˝.˝.
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Four definitions of Four definitions of entrepreneurshipentrepreneurship
1.1. Agrarian Agrarian : Conquer More land : Conquer More land 2.2. IndustrialIndustrial : Conquer Markets. CEO : Conquer Markets. CEO
controls and knows.controls and knows.3.3. Knowledge entrepreneurKnowledge entrepreneur : cares for : cares for
human capital, fosters creativity, human capital, fosters creativity, Sustainable. Facilitator. Sustainable. Facilitator.
4.4. ““Spiritual” entrepreneurSpiritual” entrepreneur: conscious : conscious of his mission towards the Common of his mission towards the Common Good of Humanity.Good of Humanity.
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Challenges for Business?Challenges for Business?
• Administrations and politicians are Administrations and politicians are slow to understand and adapt to the slow to understand and adapt to the change. change.
• Business is sometimes more quick to Business is sometimes more quick to grasp the changes and to adapt. grasp the changes and to adapt.
• Business has perhaps a crucial role in Business has perhaps a crucial role in warning politicians and showing the warning politicians and showing the way forward?way forward?
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Some good Books…Some good Books…
• Peter DRUCKER: “Peter DRUCKER: “Post capitalist societyPost capitalist society”, Harper ”, Harper Business, New York, 1993.Business, New York, 1993.
• Verna ALLEE: “Verna ALLEE: “The future of knowledge” The future of knowledge” Elsevier Elsevier Science, 2003, USA.Science, 2003, USA.
• Rob CROSS: Rob CROSS: “Networks in the Knowledge “Networks in the Knowledge economy” economy” 2003.2003.
• LEIBOLD and al. : LEIBOLD and al. : “Strategic Management in the “Strategic Management in the Knwoledge economy” Knwoledge economy” 2002.2002.
• David ROONEY (Australia): David ROONEY (Australia): “Handbook on the “Handbook on the Knowledge economy”Knowledge economy” 2005. 2005.
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Good Books (II)Good Books (II)
• Jeremy RIFKIN: “Jeremy RIFKIN: “The European Dream: The European Dream: when Europe’s vision of the future is when Europe’s vision of the future is silently eclipsing the American dream” silently eclipsing the American dream” Penguin 2004.Penguin 2004.