Commonwealth in the networked economy [2]

September 29th, 2009
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Overcapacity results in a bailout of General Motors to the tune of $50billion

Last December the boss of Fiat, Sergio Marchionne, predicted that the economic crisis would finally force the world’s car industry to confront profit-destroying overcapacity and change its broken business model. He also thought that, by the end of 2010, consolidation would result in there being only six high-volume carmakers left in the world. This week, as the industry gathered in Frankfurt, he returned to his theme. But his predictions look increasingly like wishful thinking, writes the Economist.

I raise the point about overcapacity, industry estimates predict overcapacity in Europe next year will be around 7m units, or 30%. Whereas if we look to the open source networked model which I touched on here we can see  new paradigm emerging that is [1] more efficient [2] kinder to the planet [3] is even more effective.

Overcapacity is not the only structural problem confronting the carmakers, says The Economist,  the other, potentially just as damaging to profits, is a shift toward smaller and more fuel-efficient cars (see article).

The summary,

All this means that the industry’s return to health is by no means assured. Government aid, in the form of bail-outs and scrappage schemes, may have prevented outright collapse, but it has merely delayed the reckoning. Rather than waiting for the crisis to strike once again, the inevitable restructuring will be less painful if it is done during an upswing. The industry needs to get smaller while finding a profitable way to make small, green cars.

In looking at new models of manufacture, I also came across a project in Rotterdam called c,mm,n (c,mm,n wiki) like the Local Motors concept it has a very different agenda and mission statement to that of a legacy industrial giant. c,mm,n’s goal is this,

C,mm,n (pronounced ‘common’) is an open source community for sustainable personal mobility. You might think c,mm,n is about a new type of vehicle, and it’s true that we are developing a new type of electric car. But c,mm,n is more than that: it is a total mobility concept for the future. Our c,mm,nity is open to anyone with a creative, intelligent and enterprising perspective on mobility issues, and who wants to help create a better world. C,mm,n follows the open source model: as with open source software, we focus our services around the product. Anyone can use it to offer mobility services, just as long as any derived work produced is released back to the community under an open source licence.

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c,mm,n craftsmanship for the 21st Century

We are today, as social philosopher Richard Sennett argues; seeking too recover something of the spirit of the Enlightenment on terms appropriate to our time. In his recent book The Craftsman, Sennett explores the idea of craftsmanship, from the basics of technique and personal expression to how craftsmanship might be at the very heart of social good in modern society! In the New York Times, reviewer Lewis Hyde writes,

“Using craftsmen as symbols of the Enlightenment turns out to be part of an argument that Sennett is conducting with one of his teachers, Hannah Arendt. In her own portrait of the human condition, Arendt distinguished between the world of animal needs and a “higher” world of art, politics and philosophy. This division is, for Sennett, a serious philosophical mistake with serious ethical and political consequences. It isn’t only that it demeans those who labor with their hands, but that it fails to recognize one of the foundations of good citizenship and cannot then imagine the kind of democracy in which governance is widely diffused, not given over to expert elites.

For it is Sennett’s contention that “nearly anyone can become a good craftsman” and that “learning to work well enables people to govern themselves and so become good citizens.” This line of thought depends, among other things, upon the Enlightenment assumption that craft abilities are innate and widely distributed, and that, when rightly stimulated and trained, they allow craftsmen to become knowledgeable public persons.”

Indeed, Stephen Heppell considers the 21st century to herald the ‘learning age’. In the 20th century, he argues, we built big things (railways, universities) but the focus for the 21st century is ‘helping people to help each other’. In his view, “The old stuff won’t do any more”. We are currently reprogramming communication networks and renegotiating the power relationships between individuals, communities and organisations.

In combining the view points of Sennett and Heppell, we get what c,mm,n is all about in complete contrast to the death throws of the car industry

The path to truly sustainable mobility is the open source concept. Just like open source software, the product is ‘open to all.’ The c,mm,n car blueprint and the c,mm,n mobility concepts are freely available under an open source licence. This allows the whole world to take part in the development of truly sustainable mobility. Everyone is free to use and modify the design. The only condition is that any resulting derived designs are returned to the c,mm,nity as open source. We believe that the best results are achieved through cooperation.

As with other open source products like software, you can use c,mm,n to offer your own services. You can base your own mobility services around c,mm,n, for example to offer your clients a lease or rental car or provide transportation or other mobility-related services.

Generally, any new generation of car builds on existing models. Refinements in design result in a new car that surpasses its predecessor in all aspects: bigger, more powerful, safer and better-looking.

C,mm,n abandons this working method completely. The concept of the development of c,mm,n is built around the society of the future, with the needs of the mobilist of 2020 in mind.

Garage

c,mm,n garage

Of course its not easy, in fact its so hard it hurts for companies saddled with massive debt, eyes fixed on the quarterly numbers, institutional shareholders breathing down their necks to step away from an entire way of doing business + how on earth do you migrate from an old model to a new one. It takes more than a small dose of courage and vision. But it can be done. Perhaps by pointing to such projects, we can help others leave the world of linear thinking, and linear business models and embrace the world of no straight lines, with all its flexibility that is required in the networked economy?

Picture 5

Open source, creative commons innovation

Further reading: Networked economics

Richard Sennett makes the observation that closed systems thrive, closed systems eventually die off.

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