About the Author

Geoffrey Moore

Managing Director, TCG Advisors Venture Partner, Mohr Davidow Ventures

Geoffrey Moore is a best-selling author, a Managing Director at TCG Advisors and a venture partner at MDV.  More...

November 2008

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Dateline Davos: Dealing with Darwin—or Not

One of the things I love about coming to Davos is that the perspective is Euro-centric, not US-centic, and everything looks different when you change the lens.  This time I had not even got to the hotel before I had my first Davos moment.

Taking the shuttle from the train station I met a European executive and his wife who commented to me about how odd America's denial of evolution and preference for intelligent design seems to a European sensibility.  How could so international and cosmopolitan a power be so backward in its thinking?

I think there are actually a number of good answers to this question, most of which center on a loss of moral confidence brought on by a post-modern culture, the remedy (for some) being a return to fundamental—and fundamentalist—values.  But set that aside for a moment.  Today, as I participated in a series of economic workshops, I was struck by an ironic reversal:  In the world of economics, it is the U.S. that believes in natural selection, and it is Europe, specifically the EU and its leading countries, which clings to an outmoded ideology of intelligent design. 

Specifically, a key theme of the conference is one that is central to Dealing with Darwin, namely the commoditizing impact of global competition driving the need for a more innovative enterprise.  Surprisingly to me, this appears to be a predominantly American idea.  Europeans tend either to deny the need for a radical response or shirk the issue because they know their country cannot mount the political and social will to embrace such change.  Meanwhile, the Americans are scared witless, don’t mind saying so, and are casting about for more effective alternatives.

This bodes well for us and ill for Europe.  As someone remarked today, in Europe the safety net has become a hammock.  Still, let's be fair: entitlements are sweet to those that have them.  Unfortunately, Darwin doesn't care.  France has 12% unemployment, largely held in place by the entitlements of the current and prior generation of workers—how high does it have to get before policy makers say enough is enough?  Alitalia is bankrupt in all but name, yet still its workers go on strike to protect their current entitlements and indeed to try to extend them, with the prime minister tacitly supporting the action by refusing to let the airline go into bankruptcy.  Alitalia, he argues, is a symbol of national pride—how long before he and his colleagues acknowledge this is not a performance to be proud of? 

Now, when you directly ask policy ministers talk about how to address these problems, their answer is, by introducing more intelligent policies.  Unfortunately, the last set of policies were also presumed to be intelligent, as were the set before them.  The problem with intelligent design is that it is rarely intelligent enough to out-perform self-organizing systems shaped by natural selection.  Consider the recent example of the Katrina hurricane in the US, where our intelligently designed FEMA agency could not mount a response in less than a week, whereas a self-organizing Internet-enabled volunteer community was at work within hours.

To be sure, embracing the risk and uncertainty of natural selection is painful, and entitlement-rich constituencies will always work powerfully to defeat reform.  It is enough to discourage even the most passionate reformers.  But we before we simply give up in despair, we should recall Peter Dricker’s famous remark, made when he was asked if the kind of changes he advocated were really necessary.  His answer was, “No, change is not required—because survival is not mandatory.” 

There is a secular change under way in the world economy that will devastate those who do not realign their values and priorities to meet it.  This is one battle where the U.S. is positioning itself reasonably well.  I wish I could same the same about the E.U. 

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{ One more note, Geoffrey Moore has a blog (!) and it is called Dealing with Darwin (!!) and he posted this great missive from Davos, where he hosted a roundtable. I love this: "In the world of economics, it is the U.S. that believes in natural... [Read More]

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There is so much I want to cover and I haven't kept up with posting that this is my 'catch up catch all' post after New York. First, I want to send a shout out to my newest reader, Mishti, [Read More]

Comments

Carlos Leyva

Yeah but the real question is are these positions entirely mutually exclusive?

zog

Possibly the most innacurate analogy ever! - I guess us Australians (and those Swedes, etc) will just have to cling to our outmoded ideology driven high average life expectancy
( http://www.cia.gov/cia/publications/factbook/rankorder/2102rank.html )
delivered by those dinosour state health systems

Geoff Moore

Replying to zog, here's my concern. The social model you describe is based on subsidized entitlements that redistribute wealth for a common benefit--hard to argue with the soundness of that. But what happens if and when the society cannot afford the entitlements? I think things start to get ugly pretty fast. Darwinian threats jeopardize entitlements. The "right" response in my book is to jettison the entitlement and make the adaptive response. The "wrong" response is to insist on the entitlement no matter what. Australia and Sweden may not be facing this issue today, but my view is that no country gets a free pass forever.

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