We live in a crisis of institutions that spans all kinds of organisations. One of the reasons for this crisis is the fact that these institutions primarily relied on governance mechanisms designed in the 19th century. So these governance mechanisms are pre-digital and need to catch up with technical innovation.
We need not only to upgrade governance from analog to digital but also to find ways to effectively create positive-sum games, positive externalities, and to evolutionary upgrade governance systems and market mechanisms by accelerating technological innovation.
Due to flaws in analog governance, artificial stakeholder groups have been created. Most noteworthy are the management complex and the audit complex. In addition, big tech has grown to dominate many industries due to the digital transformation and the emergence of digital network effects and platforms. Both led to highly centralized power structures that sometimes use surveillance capitalistic digital methods to manifest, sustain and even enlarge their power.
Due to flaws of analog governance, artificial stakeholder groups have been created. Most noteworthy is the management complex and the audit complex. In addition, due to the digital transformation and the emergence of digital network effects and platforms, big tech has grown to dominate many industries. Both led to highly centralized power structures that in some cases use surveillance capitalistic digital methods to manifest, sustain and even enlarge their power.
But these intermediaries are claiming too much of the economic value created and accumulated governance power. Regulation and state interventions are the first reflexes in overcoming this situation. Still, there is also the possibility to upgrade market mechanisms and create community-owned and -governed token-based platforms to out-cooperate Web2 platform incumbents and align cross-organisationally around a common purpose.
The most advanced approaches of decentralized governance and token-based platforms are coming from the Blockchain and Web3 space. I mainly focus on the concepts of RadicalxChange, Token Engineering, and Platform Design.
What most people don’t know is that more regulation is not the only way of responding to the rise of these market failures but that we can reshape market and governance mechanisms on their own to improve fairness, agency, and regeneration of our socio-economic systems with the above mentioned social innovation concepts.
Experimentation is the scientific way of gaining insights and inventions. This is also true for social systems. Predictions are becoming increasingly difficult in our highly interconnected and fast-paced world. Therefore, we need to innovate iteratively and with experimentation in the social and people space.
Once the “product-market fit” of a new product, platform, or system is proven by experimentation, the goal is to achieve significant scale adoption. One critical point is to leverage network effects and bootstrap the ecosystem so that it gets beyond the inflection point (the chasm) of adoption.
