Part 1

by Lawrence Butts

Introduction

.
I came to this town in 1970.  As you might imagine, there have been many changes since that time.  Some of these changes have been for the better and some have been for the worse.  This is a much larger community with more to do and with better sets of services. In 1971, I drove to work on the Beltline (Veterans Parkway) at 3 o’clock in the afternoon.  I could drive the entire distance to Morrissey Avenue and not see one car!  This is hard to imagine today.

.
Bloomington/Normal at that time had a mix of white color and blue color jobs.  State Farm had their building downtown and their corporate headquarters (that was relatively new).  General Electric and Eureka Williams employed roughly 1500 people and there were a few other small factories that provided good paying jobs to anyone who could do factory work. ISU had about 12,000 students at the time with the majority of them living in dormitories.  There was a more even balance between education, white collar, and blue collar jobs.  The community (its inhabitants and economy) were a reflection of that balance and diversity of jobs that drove our economy at that time.

.
The demise of factories and the rise of State Farm changed Bloomington/Normal dramatically.  ISU followed State Farm and grew both in size and in the number of people it employed.  Mitsubishi’s rise and relatively quick decline offered 27 years of economic diversity that is now only a memory.  The explosive home building and growth was principally driven by State Farm’s building and staffing of the buildings that they have today.  I remember that in the early 70’s State Farm employed roughly 3000 people.  That number now is over 14,000.  The factories are all gone.  We essentially (with a couple exceptions) really don’t make anything here anymore.  We are a hub for insurance and education.

.
I have no idea what the percentage of jobs in Bloomington/Normal are dependent on the money and people who State Farm and ISU bring to this community, but it must be very high.  I would just guess that State Farm and ISU drives between 60 to 70 percent of the economic activity in this town.  So the Bloomington/Normal of the 1970’s has been transformed into one trick pony economies.  Bloomington is totally dependent on State Farm and Normal is totally dependent on ISU.  Even in the best of times, this is not a good situation for a community to be in.  Hundreds of (one company) factory towns across the country were devastated by the effects of NAFTA and outsourcing.  They were totally dependent on one industry and thus extremely vulnerable to any disruptive event.

.
Exponential Technological Change

.

Everyone alive today is witnessing the beginning of an age like no other in human history.  From the beginning of our first tool making until quite recently, the rate of our technological advancements has been relatively slow.  The Dark Ages in Europe stopped the advancement of science and technology and delayed what we are experiencing today by several hundred years.  There have been spurts of rapid change due to things like the introduction of machines in factories.  But for the most part, the change has come at a rate that allowed us to adjust.  We humans have pretty much been able to adapt to everything that technology has thrown at us, so far.

.
All of what we knew and experienced in the 20th Century and before, about technological change is now ancient history and cannot be used as a predictor of the future.  We are at the beginning, a launch point of sorts, that has taken thousands of years to get to.  We are at the beginning of the Age of Exponential Technological Change.  We are at the beginning of what is going to be a geometric progression of change of unimaginable size and scope.

.
We are experiencing the intuitive effects of exponential technological change in our lives every day.  Things seem to be moving very fast.  Your latest and greatest phone becomes dinosaur-like in a very short period of time.  There are new tools, new devices and new everything coming out almost daily.  This of course is just the beginning of what is to come in the 21st Century.  Significant advancements in areas like artificial intelligence, nanotechnology, material sciences and bio-medical technology (to name just a few) are right around the corner.  There are estimates that the 21st Century will usher in technological advances equal to 200 Centuries of our past advancements!

.
A recent study in Europe found that roughly 53 percent of all the current jobs can or will be able to be done in the near future by machines.  Yes, coming to your workplace soon is a machine to replace you or a new system that makes you obsolete.  That is assuming that the company you work for still exists! Life cycles of companies in the past have ranged from decades to over a hundred years (in rare occasions).  That is all about to change.  The accelerated rate of change is going to make companies sometimes instantly obsolete or unable to compete.  Technological advancements are going to lead to disruption events that will ultimately effect most of the companies whose roots are in the 20th Century.  Even the most progressive and adaptable among them will not be able to escape the axe of a disruptive technology that in one swing makes everything they do obsolete or worthless.

.
Vulnerabilities of State Farm and ISU

.

Technology was always driven by our human desire to make things easier and more efficient.  Our technology now has evolved to a point where it is self-generating more and more efficiency into every aspect of our lives and our world.  So this drive toward more efficiency is somewhat of a runaway train.   We cannot stop it.  We can only try to adjust to the new realities it is creating each day.

.
Large bureaucratic management systems are pinnacles in the evolution of hierarchical control.  Thousands of years of hierarchical control combined with the 20th Century economies of scale and stable markets, resulted in the evolution of large Zeppelin-like systems that still manage many companies today.  We have at the heart of the two economic drivers of Bloomington/Normal (State Farm and ISU), 20th Century Zeppelin-like hierarchical control systems.
.
So what does this mean for the institution and the company that we rely on for the lion’s share of our economic activity?  Neither are very adaptable.  Neither are very quick to change.  Both have inefficiencies and inflexibilities built into their management systems.  Both have just too many unnecessary people working in service to their bloated bureaucratic systems.  Both have brick and mortar assets that tie them to their past way of doing business or educating.  Both have nurtured corporate/institutional cultures that make them less able to adapt.

.
So we have two entities driving our economy that are essentially coasting on the momentum they gathered from the 20th Century.  They are both ripe for massive disruption.

Part 2 tomorrow

(reprinted with permission)

.

.

.