Beyond Growth

Beyond Growth:

Measures of Progress

Article by Wayne Visser

The Concept of Indicators

The world we live in is exceedingly complex. We use indicators to simplify things. Indicators work in the same way as a map. They are meant to be a guide, a representation of reality, which help us to understand the lie of the land. The scale of the map and what it is trying to measure will determine how accurately and completely it approximates reality.

It is the same with indicators. Some indicators are high level, global estimates; others are detailed, local measures. Some focus on economic activity; others on social welfare. They help us to understand ‘where we’re at’ and how things have changed over time. Checked against our objectives, indicators tell us whether things are good or bad, better or worse.

So far, so good. Except that sometimes we get lazy. In the midst of our information overload, we are tempted to oversimplify. We settle for using in a 1:50 000 scale map, when we really need a 1: 5 000. Or we use a two-dimensional route map, when a three dimensional contour map is called for. This is the main problem with economic indicators today.

Limitations of GDP

Gross Domestic Product (GDP) is the classic example. GDP is a simple and useful measure of economic activity: the sum of all the goods and services produced and sold in a country in a given year. Yet ever since its invention, politicians, multilateral agencies and economists have used GDP as a proxy measure for progress, welfare and quality of life.

This was never the intention. GDP’s creator Simon Kuznets said in 1934: “The welfare of a nation can scarcely be inferred from a measurement of national income.”

The main weakness of using GDP as a measure of progress is that it measures the quantity, but not the quality, of economic growth. Hence, if there is a war or an environmental catastrophe or a growth in the drugs trade, more goods and services are sold, but society is not better off as a result. To simplify, it makes no distinction between the ‘goods’ and ‘bads’ in the economy.

Another fundamental flaw with GDP is that it ignores vast areas of economic activity, simply because it is not included in the formal economy. This includes the ‘invisible’ work performed by households, parents, communities, charities, religious institutions, non-governmental organisations and the informal sector. The economic value of these ‘free’ activities is substantial.

The third limitation of GDP is that it hides inefficiencies and double counting. If a bakery in Cape Town bakes bread and trucks it up to Johannesburg to sell, and a Johannesburg bakery sends identical bread to Cape Town for sale, GDP counts the economic effort spent on both. But is this efficient? Are we better off than if each had sold the bread locally?

GDP also fails to pick up inequity or ethical considerations. It tells us nothing about the conditions under which the goods and services were produced, who are buying them or how the revenues are  …

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Visser, W. (1997) Beyond Growth: Measures of Progress. Money Values online column.

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Holism

Holism:

A New Framework for Thinking About Business

Article by Wayne Visser

The Phoenix of Business

For me, the image of the phoenix from Native American Indian mythology rising up from the ashes of its dead body symbolises our potential to transform the dying metaphor of business as a ‘rational machine’ into a new metaphor:  business as a ‘living whole’.

This idea arose out of one of my business lectures at university some years ago in which Peters and Waterman’s famed bestseller, In Search of Excellence (1982), was under discussion.  As it happened, I was concurrently reading Jan Smuts’ scientific and philosophic treatise, Holism and Evolution (1926) and was struck by the conceptual parallels between the ‘rational mode’ of business which Peters and Waterman were criticising and the restrictive ‘mechanism’ which Smuts attributed to the scientific community of the 1920s.  Since Smuts regarded his theory of holism as the “necessary antidote to the analytical methods which prevailed”, I began to wonder about its remedial potential for the ailing business theory of the present day.

This article is the fruit of my contemplation along those lines – namely, how holism might be applied as a new framework for thinking about business.

Mechanism in Science in the 1920s

Smuts’ starting point in the 1920s was his conviction that the prevailing view of science was both outdated and limiting.  He was referring, of course, to the commonly-held believe that the universe was “a system or combination whose action can be mathematically calculated from those of its component parts”.  In more simple terms, it was Newton’s concept of the clockwork universe where, “when isolated elements or factors of the complex situation have been separately studied, they are recombined in order to reconstitute the original situation”.

Smuts’ main criticism of this reductionistic view of reality, which he called ‘mechanism’, centred on its failure to recognise the countless synergies which exist in the world around and within us, as well as its inability to account for the process of creative evolution.  In his own words, it was “a fixed dogma, that there could be no more in the effect than there was in the cause; hence creativity and real progress became impossible … In its analytical pursuit of the part”, therefore, “science had missed the whole, and thus tended to reduce the world to dead aggregations rather than to the real living wholes which make up nature.”

Smuts’ belief was that “in studying and interpreting Nature, we need to be faithful to our experience of her”, and that, “our experience is largely fluid and plastic, with little that is rigid and much that is indefinite about it”.  His recommendation was that “we should as far as possible withstand the temptation to pour this plastic experience into the moulds of our hard and narrow preconceived notions.”

Rationalism in Business in the 1980s

This diagnosis by Smuts of the malaise infecting science of the 1920s bears striking resemblance, we find, to the critique by Peters and Waterman of the ‘rationalist view’ which was dominating business thinking in the 1980s.  In a sense, this is not surprising, given that both stem from what …

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Visser, W. (1995) Holism: A New Framework for Thinking about Business. New Perspectives, No. 7.

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New Paradigms in Business

There is a growing body of literature on what could be loosely described as explorations in ‘new paradigm’ thinking.

Included in this is an implicit belief about the nature of transformation.  It is that revolutionary change is more often the result of new ways of thinking about things (i.e. changes in perception) than new ways of doing things.

This article attempts to apply this thinking to business, i.e. to explore more deeply the emerging new paradigm in business.  What are the new perspectives which are beginning to challenge the old way of thinking about and doing business?  And is there a common thread or theme which runs through the heart of these new insights?

So what are these basic assumptions about business which have come on trial of late?  There are many but this article will focus on only three of the most important, namely profit, competition and rationality.  Discussion of each will be prefaced by a belief statement from the old paradigm and concluded with a suggested new paradigm belief statement.

Profit

The old paradigm belief statement is:  The ultimate and sole function, goal and responsibility of business is to make a financial profit.

Although this belief has been tempered by a growing awareness of social responsibility since the 1960s, the mindset of the vast majority of business leaders still places exclusive profit making firmly at the apex of the business pyramid.  Everything else is regarded as peripheral to this core process.

This emphasis on short-term individual gain all too often results in the long-term wellbeing of employees, the community, society and the environment being sacrificed as pawns in a ruthless game of corporate chess.

This approach – with its tacit assumption that people are primarily motivated by conquest and material acquisition – has been a major limiting factor in managers’ ability to tap the human potential of their organisations in any significant way.

The call now being sounded therefore is for what US futurist Willis Harman would call a new “central project” in business.  This transformed focus could include service to society as the key goal of business. Enhanced quality of life could be its guiding principle and a strong set of ethics and values its foundation.  Further, the search for meaning and creativity in the work place as well as holistic personal and collective learning could become the key measures of performance within an organisation.

This image may not be as far-fetched as many would suppose.  UK business commentator Francis Kinsman for example, cites evidence from an SRI International study which suggests that a growing proportion of British society (currently more than a third) is becoming ‘inner directed’ in nature.

These are people whose behaviour is typically driven by non-materialistic factors and whose emphasis is more on the esoteric and qualitative than the material and quantitative.

An outstanding example of an inner directed personality would be Anita Roddick, who also happens to be one of the most remarkable business leaders to have experimented with a new ‘central project’. She is founder and director of The Body Shop, a global cosmetics business with more than 600 shops trading in 18 different languages in 37 countries around the world.

As Roddick talks about beliefs and business philosophy it becomes clear that a non-materialistic approach to business does not preclude success. “The status quo says that the business of business is to make profits. We have always challenged that. For us the business of business is to keep the company alive and breathlessly excited, to protect the work force, to be a force for good in our society and then, after all that, to think of the speculators (shareholders).”

So the heart of the message is not that profits be abandoned as a measure of business success, only that they cease to be the ultimate focus and assumed motive.

After all, we need to breathe to live but breathing is not the grand purpose of our existence. Just so, profits need to become the means rather than the end of commercial activity.

The new paradigm belief statement therefore is: Service to society and the earth is the core purpose, goal and responsibility of business.

Competition

Old paradigm belief statement: Competition is the law of the market and promotes effective and efficient business performance.

This belief, commonly paraphrased as ‘survival of the fittest’, has long been upheld as the bastion of modern business. The assumption is that, not only does competition drive people and organisations to perform at their best, but that the collective effect of this competitive behaviour is one that is in the best interest of society at large. Mounting evidence, however, points to this assumption being partial on both counts.

Firstly, extensive work by Alfie Kohn suggests that, both in an educational and a business context, competitive behaviour undermines individual and group performance, whereas cooperation enhances it. Kohn also makes the point that competition in nature is extremely limited and always takes place within the larger context of cooperation.

Similarly, Rosabeth Moss Kanter, Professor of Business Administration at Harvard Business School and respected consultant and author, believes that cooperation, not competition, is becoming the survival imperative in the market place of tomorrow.

She talks about the old adversarial model and the ways in which she sees the new paradigm of cooperation beginning to manifest itself:

“Today the strategic challenge of doing more with less leads companies to look outward as well as inward for solutions to the competitiveness dilemma …. Lean, agile, post-entrepreneurial companies can stretch in three ways. They pool their resources with others, ally to exploit an opportunity or link systems in a partnership. In short, they can become better ‘PAL’s’ with other organisations – from venture collaborators to suppliers, service contractors, customers and even unions. The adversarial mode with its paranoid world view centres on images of domination and fear of being dominated. It stands in start contrast to the cooperation mode better suited to the challenge of the global (corporate) Olympics.”

This theme of interdependence and connectedness is actually the basis for a powerful alternative theory which can be applied not only to economics but to business as well. Pioneer in this field is MIT’s Peter Senge who describes the emerging discipline of ‘systems thinking’ and its merits as follows:

“Systems thinking is a discipline for seeing wholes. It is a framework for seeing interrelatedness rather than things, for seeing patterns of change rather than static ‘snapshots’ … And systems thinking is a sensibility – for the subtle interconnectedness that gives living systems their unique character. Today, systems thinking is needed more than ever because we are becoming overwhelmed by complexity …. All around us are examples of ‘systemic breakdowns’ – problems that have no simple local cause … Systems thinking is a discipline for seeing the ‘structures’ that underlie complex situations and for discerning high from low leverage change. That is, by seeing wholes we learn how to foster health. To do so, systems thinking offers a language that begins by restructuring the way we think.”

All of these insights, therefore, seem to point towards a new business paradigm involving greater cooperation. John Dalla Costa who, after first studying for the Catholic priesthood, later went on to become president and chief executive of one of Canada’s most successful advertising agencies, describes this as “the model of reciprocity – giving back to nature, to our people and to our society as much as we in business extract from them.”

New business paradigm belief: Cooperation and reciprocity are the guiding principles by which business can create synergies within the greater living system.

Rationality

Old paradigm belief statement: Business is essentially a rational undertaking and should rely exclusively on the faculties of reason and analysis to support all of its processes.

This belief is a direct ‘hangover’ from the mechanistic Newtonian era with its assumptions about objectivity and the rigid scientific method of proof.

After all, it was the reductionistic spirit of this period which led Frederick Taylor to his concept of ‘scientific management’ and Max Weber’s to his of ‘bureaucratic organisation’.

A critique of these managerial approaches was delivered by the now famed Peters and Waterman duo in In Search of Excellence:

“Professionalism in management is regularly equated with hard-headed rationality … The problem with the rationalist view of organizing people (however) is that people are not very rational. To fit Taylor’s old model, or today’s organizational charts, man is simple designed wrong (or, of course, vice versa, according to our argument here). In fact, if our understanding of the current state of psychology is even close to correct, man is the ultimate study in conflict and paradox.”

The successful performance of split-brain surgery in recent years seems to confirm this view as well as lend some insight. Doctors found that, not only can the two hemispheres of our brain operate independent of one another, but that they also seem to control essentially opposite functions.

While the left-brain is associated with rational and intellectual engagements, the right-brain is oriented more towards intuitive and creative processes.

This theme of duality and balance is one which the ancient Chinese understood well as is represented by their Tai Chi symbol which depicts the opposites within a greater whole. Contained within the circular symbol, the one extreme (yin) represents the feminine, passive, cooperative and flexible while the other (yang) symbolises the masculine, active, competitive and rigid.

The possible implication of these ideas for business in the new paradigm is that, while in the past left-brain type thinking and actions have been emphasized and rewarded, there is great value to be gained from encouraging the counter balance of a more right-brain orientation.

This may include greater respect for the role of intuition in decision making, a restructuring of the work place to encourage creativity among employees, more emphasis on cooperation as opposed to the competitive attitudes of the past, more flexibility in organisational design and a review of existing patriarchal systems and practices within business.

New paradigm belief statement: Business is a human institution and should strive to be more holistic, reflecting a balance between symbolically masculine and feminine qualities.

Conclusion

This article has described some of the assumptions being questioned and themes emerging on the journey towards a transformed view of business. They are by no means sacred truths cast in stone but rather evolving concepts of an ongoing experiment.

Anita Roddick captures the essence when she says: “What are we trying to do is to create a new business paradigm simply showing that business can have a human face and a social conscience.”

What is most heartening about this exploration is that much of the ‘African tradition’ (if those in business could but understand and appreciate it more) is already grounded in these emerging ‘new’ ideas.

A respected South African author and Nampak director, Lovemore Mbigi, says: “This is the essence and spirit of an African village and its moral base of ubuntu … (it is) the African communal spirit of grassroots democracy based on respect and human dignity.”

Ubuntu therefore – also more generally referred to as ‘African humanism’ and encapsulated in the Xhosa proverb: “a person is a person through other people” – may well be Africa’s unique interpretation of and contribution to the search for a new paradigm in business. May we journey with pride and hope.

Citation and download

Visser, W. (1994) New Paradigms in Business: The Power of Perception. HRM, October.

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Community Business

Although it is heartening to note the growing worldwide interest in building sustainable communities for the future, it is at the same time disconcerting that so many of these community visions provide no place for the potential role of business within their working structure.

Community Visions

Instead, a rather predicable and in my opinion limited model seems to have been widely adopted.  Its main characteristics are:  food-growing self sufficiency (e.g. permaculture); environmental conservation (e.g. renewable energy); volunteer work (e.g. kibbutz-type arrangements); education services (e.g. conferences and work-shops); accommodation services (e.g. retreats and get-away weekends); and the sale of locally-made arts and crafts.

This largely self-enclosed, subsistence type of approach, with its distinct lack of any facilitation of business initiatives other than the most basic kinds, seems to me to fall substantially short of anything which may be considered a large-scale, viable lifestyle alternative for the future.  This is because business, in one guise or another, forms a completely natural, necessary and valuable part and expression of any developed society.  (This is not, take note, the same as saying that business as it is currently organised and practised is ideal, or that it should not be modified to better serve the needs of both individuals and society as a whole).

What shapes and forms might business take if it were to be integrated into the community vision, with its implicit goal of creating a more sustainable, co-operative, meaning-filled future society?

Before doing so, however, it would be just as well to look at why business has been largely excluded from this vision in the first place.  Part of the reason has to do with some ‘community seekers’ simply failing to appreciate fully the basic functions which business serves in a society.  But I would suggest that there is a more covert and accurate explanation which goes something like this:

Many of the things associated with modern-day business are precisely those things which community seekers are trying so hard to get away from:  greed, dishonesty, stress, lack of meaning in their work, competition, money problems, power struggles, win-lose situations, and generally unwholesome living, to mention but a few.  Hence, they remain fearful and suspicious of business and also sceptical about its desirability in any new system of living.

And, considered from the other side, most business people are too busy pursuing success in the old-fashioned profit-seeking way to be aware of, or concerned about, community initiatives.  Others, who may be more aware, are yet to be convinced that there can be any viable alternatives to existing ways of organising and conducting business.  So they either opt out of business completely, or remain within its traditional structures while introducing some positive changes inside the existing context.

But what about a full transformation of business?  A new community business concept?  If this were to materialise, what might the ‘new face’ (and body) of business look like?

Partial answers to these questions can be found among stories of experiments in community business which already exist.  Let’s look at two such stories, although there are many more to tell.

Mondragon

The first is an experiment taking place in Mondragon, a small town in the mountainous region of north-eastern Spain.  Here, based on the teachings and initiatives of a Roman Catholic priest who taught the application of the gospel to business and the economy, one electric stove manufacturer with five employees established in 1955 has grown into a complex of companies with annual sales in excess of $2.5 billion, all of which actively pursue a philosophy of local community development.  The Mondragon Complex, with companies as diverse as a community bank (with assets of $3 billion), various technical production companies, a retail chain (with 264 outlets and annual sales of over $350 million) and an export company, is outstanding empirical proof that local, community-oriented people can launch businesses which are both large and internationally successful.

New Findhorn Directions

The other experiment is that of the emerging community business culture at the well-known Findhorn Community is northern Scotland.  This began with the establishment of New Findhorn Directions (NFD) in 1979, a legal entity designed to serve as a framework in which private enterprise initiatives could emerge without violating the charitable status of the Findhorn Foundation itself.  Subsequently, many promising business ventures have been initiated, though not all have succeeded; nor have they all chosen to function under the umbrella of NFD.  Those currently in operation include the Wood Studio, Bay Area Graphics, Findhorn Bay Apothecary, Weatherwise Solar and Alternative Data.  The unique characteristics of these companies are that they are all trying to demonstrate their broader community philosophy of ‘spiritual management’ and ‘work as love in action’.

These two examples serve to illustrate that success stories in alternative ways of doing business do exist.  The details of exactly how they are different, however, still needs more thorough exploration.

Principles of Community Business

Firstly, a different set of values underscores the community business.  For instance:  money is made to serve human development and not vice versa;  the business is a means of human and community development and not an end in itself;  work is seen as an opportunity for creativity and personal development, as well as a contribution to serving the needs of society; democratic action and consultation are encouraged;  integrity and competence in the management and conduct of business, as well as effective leadership, are considered necessary disciplines to be learned; and sensitivity to and solidarity with the local community is a prerequisite for a business operating in any particular area.

In order for these values to be translated into action, however, the community business needs to employ different structures to those traditionally used in private enterprise.  For instance, there is a difference in ownership.  Whereas conventional companies are owned by shareholders who may live anywhere, the shareholders of community businesses are people who live in the area where the company operates.  The use of profit is also different.  Whereas the traditional company tries to make a profit to return to the shareholders wherever they may live, the community company aims to use its profits to start new local businesses and to improve life in the local community.

The benefits of the community business approach are readily apparent.  Since its focus is local, business will be much more sensitive to local needs as well as local opportunities in a way that traditional companies might not be.  With the emphasis of people rather than on money-making, business will naturally be more responsive to human development in its staff and in its community than has been customary in the past.

It would be a mistake to assume that these ideas are conclusive or easy to implement.  On the contrary, growing ‘spiritual businesses’ is an open-ended and challenging experimental process, according to Francois Duquesne, past ‘focaliser’ of the Findhorn Foundation and present partner in the Alternative Data software company.

“I thought meditations on Monday mornings and being nice to customers would do it,” he says.  “Instead, I had to deal with intense personality conflicts in a system where power is equated with money.  Yet there is great excitement.  All the problems have had to do with perceptions of power.  Power to stifle and manipulate, or to create, enliven and challenge.  There is no other way of dealing with power issues except by bringing them out and working them through until there is some result.”

Integrating business into an emerging community vision may prove to be one of the most critical lessons to be learned if we are to evolve further as a collective society.  Whether or not this be the case, I endorse Duquesne’s statement:

“I am going ahead in faith, trusting that this path also has a heart.”

Citation and download

Visser, W. (1994) Community Business. Odyssey, Volume 17 No. 5, October 1993 / January 1994.

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Beyond the Information Age: In Search of New Images of the Future

As the new millennium looms large on the horizon, speculation about humanity’s recent progress are becoming ever more frequent.  Even more so are whisperings that humanity might be teetering on the threshold of a new phase in its evolutionary development.  Not surprisingly, a search for new images and metaphors to serve as positive visions for the future has begun in earnest.  The purpose of this article is to explore some of the more recent of these images to emerge from the outstanding research and imagination of a few pioneering individuals.

A good place to start is to get the Industrial Age well behind us, for it has been a crumbling image for at least the past four decades.  In its wake however, we find the explosive rise of a revolutionary successor.  I am of course referring to the Information Age.  Notable authors on this subject include Peter Drucker, Robert Theobald, Daniel Bell, Yoneji Masuda, John Naisbitt, Alvin Toffler and Peter Russell.

Few people today would disagree that the Information Age represents the new and popular metaphor of our time.  However, the question for the future is, does this fashionable image have the energy and endurance to carry humanity into the 21st century and beyond?  In reply, many say:  “Yes, for it has yet to fully transform society”, and they cite visions of an emerging global society, decentralized, yet intimately linked by the wonders of information technology.  Others, though less prescriptive and fewer in number, say: “No, society is already reaching beyond the Information Age and a new vision is needed which will help clarify and call forth the next phase of our collective development”.  It is the latter call for a new vision which I wish to pursue further in this article.

One of the pioneering voices in this regard is American futurist Hazel Henderson.  In her recent book Paradigms in Progress, she states her position unequivocally:  “The Information Age is no longer an adequate image for the present, let alone a guide to the future.  It still focuses on hardware technologies, mass production and economic models of efficiency and competition, and is more an extension of industrial ideas and methods than a new stage in human development.”

Henderson’s suggested alternative is what she calls a “repatterning of the exploding Information Age” into an emerging new Age of Light.  She bases this image on evidence of a growing realisation by humanity of its dependence on nature, and more precisely, on light from the sun.  Beyond the mushrooming ecological movement and the call for sustainable development, she draws support for her theory from the recent phenomenal growth in leading edge technologies which do nothing more than attempt to mimic the ingenuity of Nature.  Examples of these include:

  • Artificial intelligence technologies:  Expert systems, hypertext, associative learning programs, multi-processor parallel computers, neural net computers.
  • Biotechnologies:  Gene splicing, molecular engineering, cloning, plant hybridization, bio-remediation, immunology, gene machines, nano technologies.
  • Energy technologies:  Photovoltaic cells, fusion reactors, biomass converters, membrane technologies, molecular assemblers, synthetic photosynthesis.
  • Lightwave technologies (phototronics): Fibre optics, optical scanners, lasers, holography, optical computers, imaging technologies, solar technologies.

Henderson explains her conception of the Age of Light even further, however, and suggests that it includes a symbolic interpretation, namely the “flowering of our consciousness in a new Age of Enlightenment”. This idea of Henderson’s dovetails nicely with the work of Peter Russell, author of the ground-breaking book The Awakening Earth. He draws the following conclusions from his research:

“Rapid as the growth of the information industry is (with the number of people employed in the industry doubling every six years by 1980), it may still not be the fastest growing area of human activity. There are indications that the movement towards the transformation of consciousness (i.e. self-development and inner growth) is growing even faster. The number of people involved in this area seems to be doubling every four years or so (by 1980) …. If the growth of interest continues to swell, so will the number of people, and we may reach a point, possibly sometime early next century, when the employment curve for the “consciousness processing” will overtake that of information processing. The evolution of human consciousness will then have shifted from the Information Age into the Consciousness Age”.

The implications of a transition to the Consciousness Age are outlined by Russell in a scenario which he calls the High Synergy Society. He describes some of the likely consequences of such a shift in the following terms:

  • No limits to growth: Personal and spiritual growth become as important, if not more important, than growth defined in material terms.
  • Unemployment revalued: The reduced need for formal employment and a growing use of time for inner development (self-actualisation).
  • Healthy, holy and whole: A movement towards holistic health practices and a corresponding decrease in physiological stress and illness.
  • Left and right: A shift towards greater synthesis of right-brain (feminine/yin) and left-brain (masculine/yang) qualities.
  • Synchronicity rules: An increase in the occurrence of meaningful coincidences at an individual and collective (social super-organism) level.
  • ESP and the miraculous: An increase in phenomena such as telepathy, clairvoyance and precognition.

Certainly positive, transformative visions of the future – beyond the Information Age – are not limited to those of Henderson and Russell. Others may be found in the writings of Marilyn Ferguson, Fritjof Captra, Francis Kinsman and Willis Harman, to mention but a few. The purpose of the article has merely been to draw attention to the importance of identifying and working with these “post-industrial” guiding images and thereby creating a better future for all life on Earth. After all, we do, literally, create our future, limited only by the boundaries of our imagination.

Citation and download

Visser, W. (1993) Beyond the Information Age: In Search of New Images of the Future. New Paradigms, No. 4, pp.9-12.

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