How networks are defeating hierarchies and changing the way the world works

Citation

Howell, D. (2002), "How networks are defeating hierarchies and changing the way the world works", European Business Review, Vol. 14 No. 6. https://doi.org/10.1108/ebr.2002.05414fab.002

How networks are defeating hierarchies and changing the way the world works

David Howell

Keywords: Networks, Commmunications, Problem identification

A new and dangerous point has been reached in the debate about globalisation and its impact on the world's nations. It is just beginning to dawn on policy makers everywhere that the globalising process, and the rise of networking power in the information age, create entirely new and unfamiliar problems of governance and of relations between states. Major challenges are being posed both for nation state governments and for those running international institutions which they show little sign yet of being able to handle.

For those planning the future structure of Europe these new trends are particularly challenging. Europe's biggest problem has become its disconnection from the lives of its citizens, its apparent control by élites and its persistent centralisation in a decentralising age. How can it be reformed to meet the radically changed conditions of the new century? How can it resolve the democratic deficit and the pressures for diversity and flexibility which the information age both permits and demands?

Whichever way this reform goes, Europe's leaders will have to take massive account not only of new dangers, scarcely dreamt about a few years ago, but also of a common phenomenon unfolding in all their societies. It is that the living of life has become more a matter of self-organisation, of network relationships rather than conformity with hierarchies and superior levels of authority. To an almost frightening degree, most people find that the simplicities of just looking upward – to "them", the central administration, the state, the federal authorities – have been replaced by a whole host of connections and points of power, guidance, influence and pressure, and by a whole host of choices about which connections to activate or join.

In one sense this is a hugely democratising and de-concentrating process, vastly increasing the accessibility to all of technology, information, finance and power itself, with major implications for all existing institutions, whether in the private corporate or the public and governmental sector. But it is also a process full of new dangers and threats, as the grim events of 11 September confirmed.

In a networked structure the old deference towards high and official authority, whether raised up by votes or appointment, faded dramatically. A network has no centre on high, no godhead from which all wisdom flows and no need of such an arrangement. If authority remains then it has to govern and reign by different means and cope with quite different attitudes towards itself. Networks can be for immense good or bottomless evil, but either way they now have the power and they will use it.

The incredible world we have now entered is itself the outcome of the convergence and bringing together of a uniquely wide range of technologies, sciences and new perceptions from what were recently quite separate branches of learning and human enquiry.

It is this convergence and accumulation of discoveries and insights, confounding almost every prediction of how the world would change (no one foresaw the Internet, no one foresaw the full, hideous potential of e-enabled terror), which has created the present atmosphere of unsettling turbulence and unease, huge opportunity and terrifying yet fascinating problems of adjustment in all aspects of modern life.

In the last five years the world has changed beyond recognition, even if policy makers and politicians still find difficulty in grasping the fact. In almost every activity, notably but not just in business, the individual has come surging up the chain of supply and origination. The consumer has come much nearer the point of design and production, elbowing aside a whole familiar world of retailing and distribution (although also reviving older retailing traditions): the investor has felt empowered to move much nearer to global capital markets, pushing aside whole professions of bankers, managers, research analysts and advisers – the so-called financial intermediaries: the voter has demanded to be brought much closer to the sources of policy and public decision, insisting on transparency and access, dismissing the fudge and fix of the political middleman and rejecting the proverbial lack of political choices which the old systems offered.

Most unsettling of all, protesters, rebels, revolutionaries and even loners have everywhere gained enormous connective power. Instantaneous access for the individual to information and planet-wide connections and alliances turn the network into a more powerful tool, for more people, than ever before in history.

Wave on wave of new technology and new applications have come crashing against the shores of familiar living and working, each wider and seemingly more powerful than its predecessor. Mobile telephones are now universal, a growing number of them connected to the World Wide Web. Additional connections to the Internet are continuing at an estimated rate of 1 million a week. Business is on the Web or it dies. Now after the Internet comes the evernet, embedding network-lined chips in everything from jeans and kitchenware, to furniture and footwear. The dotcom bubble and bursting saga proves to be only a marginal check on this overwhelming onrush of new systems.

It seems that for better or worse, we are destined to be all connected, rich and poor, developed and developing, benign and malign, small and mighty. A state of "permanent revolution"' has indeed been reached, but of a nature undreamt of by Lenin or Mao Tse-Tung or Che Guevara – or any other of the revolutionary ideologues of the twentieth century.

The rise of e-enabled protest and resistance

What kind of government can catch up with this new human condition?

First, the speed and scope of it all means that huge "markets" of a quite new character, borderless bodies of opinion, unfamiliar alliances of interests, new supply chains, new business-to-business connections, giant pressure groups, worldwide standards, lobbies, tastes, preferences, fashions and trends – all can build up almost overnight on a worldwide scale long before traditional hierarchies and structures of authority catch up with what is happening.

The rioters at the World Trade Organisation's Ministerial meeting in December 1999, as well as those in the City of London, at the G-8 Meeting, in Prague, Nice, Davos, Genoa, 2001, and elsewhere, all give a foretaste of what is directly ahead. Every kind of interest feeling itself threatened by the information age, and by its progeny of globalised finance, unrestricted trade, Internet technology and e-commerce, is now ready to come together, driven by moods and states of mind not dissimilar from those of Ned Ludd's followers as they set about smashing the textile machinery of Nottingham.

The original Luddites eventually brought down governments, fermented revolution and laid the foundations of twentieth century rivalries and ideological horrors to come. The neo-Luddites will be taking on not just governments but the power that is now in the hands of the network and global capitalisation. They will fail, of course. Technology will defeat them. But they could inflict enormous pain and damage along the way, unless democracy's leaders do an infinitely better job of explaining the new environment, and the anxieties of a bewildered age are infinitely better understood.

But second, and much worse than this, the very conditions which allow the network and culture of self-organization to flourish – the surrounding and supporting "container" of rules, order and trust which the old state apparatus provided – are being eroded, leaving people to face the frightening and unanticipated new costs of their amazing new found freedom. The huge new irony of our times is that the technology which underpins that new degree of freedom also empowers those who want to abuse and destroy it and all its associated values.

Tribes and ethnic groups can link up at the speed of light. Dormant local identities can be resuscitated almost overnight. Violence, fanaticism and nihilism acquire new organizational impetus, as events are proving daily, and as a visit to the Web sites of a dozen extremist "movements" and causes confirms. International criminal networks, interwoven with drugs and terrorism, also become vastly more effective and elusive.

In these circumstances the hierarchies which have hitherto governed our lives, institutions public and private, and the social order generally, have to adjust with agility and foresight to fulfil entirely new roles.

None of these trends can be ignored by democratic governments, either within their own boundaries or internationally. If they do so, then the immediate results are civic breakdown mutating into a Kosovo or an East Timor, an Ambon or a Chechnya, or eventually an Afghanistan. Instead of state sponsored terrorism we see the rise of the terrorist-sponsored state, e-enabled, technologically equipped and determined to assault the civilised order.

It is not too late for the democracies and their value systems to handle these phenomena and to halt the forces of disintegration. But there needs to be a new and deep comprehension about what has occurred and is occurring. That is the point. Only those governing authorities which spend more time truly understanding these potential dangers and disaggregating threats to the social and civic order, and less time proclaiming their supposed economic prowess or welfare generosity to a sceptical general public, have a chance of survival and success.

We cannot wait for the grim shock therapy of 11 September, or its repeat, to jerk the policy makers and leaders into awareness. There is a less violence-paved way forward for wise democrats to pursue in the network age. But it will require a greater degree of insight and humility among democracy's leaders, and a deeper understanding of the completely transformed nature and limits of authority, than many governing groups and classes seem yet to have grasped.

These are the issues that the institutions of a more united Europe, no less than the institutions of each democratic state, must be reshaped to meet.