Challenges of Globalization, Flattening and Unbundling

We are currently witnessing a major transformation of twentieth-century institutions. It is not that the sovereign state, the business corporation or the other major institutions of national and international life are going away, but they are experiencing substantial ‘unravelling’. Driving this process are two underlying dynamics: the dramatic expansion of information and communication technology and a pervasive expansion of human capacity caused by wider access to education. The unravelling of institutions which results from these dynamics has three key elements. The first is globalization—a fundamental change in time–distance relationships and in the impact of physical and political boundaries. The second is the increased ability of single individuals or informally organized, non-hierarchic groups to solve complex problems, resulting in a ‘flattening’ of effective organizations. The third transformation is the ‘unbundling’ of services, as the ability of organizations to control information and markets declines. These transformations promise to change the relative competitiveness of various institutions.