Talk at MIC Bud pest

1. The Innovative Power of Commons in
Managing Creativity to Support
Network Economics
Dr. Eva Gatarik, eva.gatarik@zfrk.org
Univ.-Prof. i. R. Dr. Rainer
Born, rainer.born@jku.at
Johannes Kepler University, Linz, Austria & University of Vienna - Cognitive Science

2. 2
... our heads are round
to allow our thoughts to change direction ...
Francis Picabia & Marc Lowenthal
New Edition MIT Press 2012, page 283 (Ausstellung in NÖ diesen Sommer)
"I am a Beautiful Monster: Poetry, Prose, and Provocations"
Stepping out of the system to support „Creativity and Innovation“:
Illustration: A masochist approaches a sadist and pleads to be tortured,
but the sadist says: "NO !“ -- Humour vs. Documentation?

3. 33
Some Introductury Remarks:
Manufacturing for Sustained Success
Gary Pisano and Willy Shih (Producing Prosperity: Why
America Needs a Manufacturing Renaissance, Boston,
2012, 6thOct.) for some time already show the disastrous
consequences of years of bad outsourcing decisions and
underinvestment in manufacturing capability. They go on to
reveal how today’s undervalued manufacturing operations
often hold the seeds of tomorrow’s innovative new
products, arguing that companies must reinvest in the
collective operational capabilities that underpin new product
and process development in the industrial sector, not only
in the US. Topic “outsourcing”

4. Indusrial COMMONS are the
(Pisano/Shih: 2009 p1 & 2012 p 3)
R&D manufacturing
infrastructure, know-how, process-
development skills, and
engineering capabilities embedded
in firms, universities, and other
organizations that provide the
foundation for growth and
innovation in a wide range of
industries.
4

5. Some Introductury Remarks: The
Third Industrial Revolution
„…traditional, hierarchical organization of
economic and political power will give way to lateral
power organized nodally (o.e.) across society.“
(Rifkin, The Third Industrial Revolution, NY, 2011, p. 5)
„…today, however, the collaborative power
unleashed by the merging of Internet technology and
renewable energies is fundamentally restructuring
human relationships, from top to bottom to side to
side, with profound implications for the future of
society.“ (ibid.) // e.g. network economics .
5

6. 6
Primary definition:
A Commons is „a ressource shared
by a group of people that is subject to
social dilemmas.“
[over-exploitation of common ressources]
(Hess & Ostrom, Understanding Knowledge as a
Commons, Cambridge, 2007, p. 3)

7. 77

8. Commons as (Knowledge) Nodes in
a new Network Economy?
Overcoming the misuse and over-
exploitation of outsourcing (!) with
the help of "industrial commons" (as
special case of commons).
What can WE and especially
Management learn from
Ostrom, Rifkin & Pisano/Shih and
others and how can we
extend/develop/tranfer their
messages to and into practice ?
8

9. On „Living Commons“ in Business:
A Case Study from Upper Austria
In an Upper-Austrian SME we found that the
sustainable economic success of that enterprise has
been built upon re-thinking their local explanation of
success. They have learnt to think together and learn
from each other to prevent an excessive overuse of
resources, i.e., it helped them to constrain the local
maximization of profit [and its negative consequences
for business success in the long run].
9

10. Understanding the Relation Between
Local Knowledge (Expertise) and the
World as a Chance for Realizing
a New Competitive Advantage:
Basic Metaphor
10

11. 11

12. 12
Local approximization:

13. To repeat: Rifkin emphasizes that
„today, however, the collaborative power
unleashed by the merging of Internet
technology and renewable energies is
fundamentally restructuring human
relationships, from top to bottom to side
to side, with profound implications for
the future of society“. (2011 p 5) ==> see
our graphic

14. COMPUTATION / ARGUMENTATION
14
S R
P
f(P) f(Q)
Q
H+
REAL / CAUSAL
CONNECTIONS
CATEGORIZATION NEW CASES OF
APPLICATION
f
g
h
f f
g nach f (P) = f nach h (Q)

15. 15
P
f(P) f(Q)
Q
H+
REAL / CAUSAL
CONNECTIONS
CATEGORIZATION NEW CASES OF
APPLICATION
f
g
h
f f
g nach f (P) = f nach h (Q)

16. INFORMATION / KNOWLEDGE
16
P
f(P) f(Q)
Q
H+
REAL / CAUSAL
CONNECTIONS
COMPUTATION / ARGUMENTATION
CATEGORIZATION NEW CASES OF
APPLICATION
16
A C

17. core
Cognition
P
f(P) f(Q)
Q
H+
REAL / CAUSAL
CONNECTIONS
CATEGORIZATION NEW CASES OF
APPLICATION
MAPPING
INTERPRETATION
[P] [Q]
SIMPLIFICATION
DE-CONTEXTUALISATION
RE-CONTEXTUALISATION
f f
M
K
E
F
.
MAPS
THE TERRITORY
Emotion
„Managerial Rationalizations“
COMPUTATION / ARGUMENTATION
INFORMATION PROCESSING
Local Approximization(s):
AspectsofSimplification
AspectsofRe-Application
„If, then …“ f (P ==> Q) = f (P) --> f (Q) „If, then …“

18. Practical Consequences
1) Questioning and correcting the unrestricted action
guiding use of local correspondences between causal
relations P  Q in (segments of) reality and logical (or
conditional) relations f(P)  f(Q) in language and
2) Overcoming this identification as a source of
insufficient economic achievements by
3) Re-establishing Commons as a means for evaluating
and correcting actions, i.e. as mediators between the
economic micro- and macro- level (resp. between
market and “state”) approaches, and in the sequel
4) Investigating Commons as lateral connections
between Ecosystems of Innovation
14

19. E
F
[Q]
E
K
Q*
Q?
Q??
[Q*]
P
ACTIONS
Dialogue
Scissors of Life
Q
19
COMMONS
F*
M
(creating and explaining the
meaning of road-marks)

20. Summing up
1) In Commons we are actively living sharing expertise as a
basis for ecologically sound and innovative problem
solutions.
2) Network Economy re-combines expertise inherent in
Commons.
3) With respect to sharing expertise/knowledge Commons
are not things or resources by themselves, they are (and
this is essential for network economy) resources
together with a social community (willing to share
expertise and take care for the common future) and
therefore also social values and especially rules and
norms, which are used to manage the resource in
question.
4) Commons can foster acceptance of explanatory
arguments to support and instantiate future actions.
20

21. From Business Models to
Knowledge Models:
Re-Combining Business and Knowledge in
Decision Making, Decision Evaluation and
Real Life Actions.
The Creative and Innovative Power of
C O M M O N S
as competitive advantage and general
problem solution approach
21

22. P Q
S R{E, F, K, M} =:
solution(s) [1]
CUSTOMER SEGMENTS
CUSTOMER RELATIONSHIPS
[4] F
[2]
VALUE PROPOSITION(S)
5th DISCIPLIN
(SYSTEMS THINKING)
Peter Senge
shared vision/meaning
user/folk knowledge
CHANELS
[3]
personal mastery
expertise (communication)
KNOWHOW/EMOTIONS
KNOWWHAT/COGNITION
E
H;
COST STRUCTURE REVENUE STREAMS[5][9]
KEY PARTNERSHIPS
[8] problem(s)
[6]
[7]
M
K
mental models
team learning
routines/rules /
regulations/heuristics
KEY ACTIVITIES
KEY RESOURCES
measures
for corrective
acting
meta-knowledge/structure
models/explanations
argumentation

23. On Applying LIR++ in Business and
especially creative and innovative
Regional Developments (A)
 Systemic SWOT-analysis of an enterprise or a region with
particular regard to quality of decisions about measures in
handling common resources in dependence on availability of
expertise/knowledge, and understanding of consequences.
 What people can become aware of in general is that
understanding the coming about of some (business or
regional) success by just producing the right or agreed upon
parameter values is not enough. Real success is not
explained by strictly obeying (or following) rules but primarily
by applying them reflectively, i.e., with “hindsight”, foresight
and an understanding of consequences especially in a
network economy, where this approach will lead to a
competitive advantage allowing for ecologically sound and
innovative problem solutions.
23

24. On Applying LIR++ (B)
 Improving interdisciplinary discourse, understanding
knowledge and transfer of expertise: One can achieve not
only a better way of understanding each other but one can
also improve the culture of dialog and mutual ways to deal
with errors and reflect the limits of any “rule system”, i.e., any
method to generate results.
 How the economic idea of Commons can lead to local
improvements of knowledge nodes in a Network Economy:
The point is that in/between small and therefore survey-able
units common aims and insights (by means of sharing
expertise) can lead to local mutual corrections of and within
knowledge nodes and thus can help to prevent an excessive
overuse/exploitation of resources as a consequence of
maximizing local profit unreflectively.
24

25. „The map is not the territory!“
(Alfred Korzybski, Gregory Bateson)

26. 26
These are the days of quick
trips, disposable
diapers, throwaway
morality, one night
stands, overweight
bodies, and pills
that do everything from
cheer, to quiet, to kill.
George Carlin's The Paradox of Our Time-Fiction!
Written AFTER THE DEATH OF HIS WIFE!

27. 27
And mentally those pills leave everything just as it is!
WE do not have to change any of our own attitudes or insights.
WE can use the pills without having to change our own minds or ourselves
NOR are we trying to learn anything really new
(about us or the world).
There is no endeavour, no ambition to put forward an
effort to understand what is going on behind the screen, the scenes
and to alter our preconceptions (however wrong they may be),
we simply turn around and do not take notice of anything
that does not fit into our worldview(s)).
Inxergt rb
Insert rb

28. 28
And mentally they leave everything just as it is!
WE do not have to change any of our own attitudes.
WE use the pillswithut changing oursselves
NOR are we trying to learn anything really new
(about the world).
There is no endeavour, no ambition to put forward an
effort to understand what is going on behind the scene
and to alter our preconceptions (however wrong they may be),
we simply look away and do not take notice of anything
That does not fit into our worldview(s).Try to put on the shoes of someone else.
If they hurt you, they might hurt
the other person as well.

29. 29
It is a time when there is much in the
showroom window and nothing in the
stockroom. A time when technology
can bring this letter to you, and a time
when you can choose either to share
this insight, or to just hit delete.
George Carlin's The Paradox of Our Time-Fiction!
Written AFTER THE DEATH OF HIS WIFE!

30. Thank you!
30
Chances for turning round the economics?
(discussion, questions, examples)