In Global Peace Through The Global University System

2003 Edited by T. Varis, T. Utsumi, and W. R. Klemm

University of Tampere, Hameenlinna, Finland

EVOLUTION TOWARDS HUMAN-CENTRIC

KNOWLEDGE SOCIETY. CAN SOCIETIES LEARN FROM GLOBAL CORPORATIONS?

Kaisa Kautto-Koivula and Marita Huhtaniemi

Nokia Ventures Organization

Abstract

Transformation from the Industrial Age to Knowledge Age is a paradigm shift. In addition to corporations, societies are also forced to redesign their operation modes to meet the challenges of the Knowledge Age. A three-phased evolution model to Human-Centric Knowledge Society is introduced in this paper. This evolution "road map" - called APC (Access, Performance, Creativity) model - is based on experiences and insights from global high-tech corporations. The experiences in global corporations have shown that transformation from Industrial Age to Knowledge Age is a demanding and expensive process. So it is important to be able to find shared understanding of the right steps - the key phases of evolution - to keep the process moving to the right direction and synchronized at all levels of society and globally. Individual knowledge and creativity are the key production values and the engines of economic growth in Human-Centric Knowledge Society. So the increased productivity of an individual person - "an enterprise of one" i.e., knowledge worker - should be the driving force for Knowledge Society model globally. It is important to realize that knowledge differs from all other means of production. And that it can most probably provide new opportunities, also for developing countries!

Disclaimer

The information views and options expressed in this paper constitute solely authors' views and opinions on the subject of "Evolution towards Human-Centric Knowledge Society. Can Societies Learn from Global Corporations" and do not represent in any way Nokia's official corporate views and opinions. The authors have made every attempt to ensure that the information contained in this research paper has been obtained from reliable sources. Nokia is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this paper is provided "as is" with no guarantee by Nokia of completeness, accuracy, timeless or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Nokia, its related partnerships or corporations, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this research paper or for any consequential, special or similar damages, even if advised of the possibility of such damages.

From Industrial Age to Knowledge Age

Globalization, Information and Communication Technology (ICT) and the Information Revolution have played strong roles in transforming the Industrial Age to today's Information/Knowledge Age. This transformation - from hierarchical modes to network-based ones - is currently ongoing in all levels of society (Figure 1). The principles of operation modes are changing so fundamentally that it can be called a paradigm shift. In addition to corporations, societies and their institutions are forced to redesign their visions, strategies, operation modes as well as basic values and beliefs according to the needs of Knowledge Age - ultimately around human knowledge of individual workers and citizens. No field of society can survive as an isolated and disconnected "island", operating still in industrial mode.

Figure 1: To Network-based Mode of Knowledge Society.

In the Knowledge Economy the primary production tool and resource will be human knowledge. This means that the generation and exploitation of human knowledge comes to play a predominant role in all production and service activities, not just in those classified as high-tech or knowledge intensive ones. There will be a shift of focus from societies driven by hierarchical organizations and institutions to societies driven more by professional communities and networks and individual knowledge workers. This is a shift that puts the owner of the knowledge asset - creative knowledge worker and citizen - in the center of society. The social, economic, political and technological challenge will be to establish an enabling environment for increasing the sustainable productivity and creativity of this emerging group of knowledge workers - the basis of new economic growth.

Drivers and Trends to Human-Centric Knowledge Society

Main drivers and trends towards Human-Centric Knowledge Society are: Person Centric Complexity, Human Compatibility Challenge, Technological Convergences, Value Systems Evolution (especially in knowledge industries) (Figure 2):

Figure 2: Drivers and trends to Human-Centric Knowledge Society

Human Compatibility Challenge and Person-centric Complexity

Human Compatibility is a conceptual term describing the compatibility and balance between human adaptability and external complexities. Human adaptability is largely the result of the human internal strengths including learning speed, memory capacity and mental capability. In addition to these, there are personal preferences, mindsets and feelings that influence our interaction with the surrounding world. Increasing external complexities cause challenges to human adaptability. There are differences between people in absorption of the external complexity. However there exist today clear signs of imbalance between the external complexity and human adaptability. Our mind processes will not be able to cope with the overload of digital information, explosion of personal content, fragmentation of content and services, as well as use of growing number of different kinds of devices. In addition to these, new, virtual, social networks are causing overload of asynchronous communication, and consequently accelerating the need for personal privacy.

New technology breaks time and place constraints giving people new degrees of freedom to interact any time any place. The sense of virtuality is new to the human mind and being on-line has rapidly increased the pace of our everyday life and caused confusion in our lives by technologically enabling the overlapping of our daily roles and contexts (e.g., from private to professional and vice versa several times a day). What is, however, missing, is that there today exist no good solutions that would meet this need of change in a smooth and seamless way. New person-centric solutions are needed to better fulfilling this need.

Technological convergences

Many of the current human compatibility challenges have been founded on the ongoing technology convergences: digital (content) and IP (Internet Protocol) convergence. These convergences have enabled solutions functioning across different technology domains (IT, Media/Broadcast, Mobile and Proximity). End-users have got the possibility to access content, applications and services via different domains. There are clear reasons for this end-user driven technology development. However, at the same time, these technology convergences are creating a very interesting paradox to individuals. On one hand, they are opening a needed access to information and content globally as well as enabling effective communication, knowledge sharing and collaboration between varieties of global social networks. On the other hand, these technology convergences will provide individuals with huge amounts of meaningless, fragmented information with ever accelerating speed. From the human point of view, this presents a major challenge for managing the increasing complexity and pace of daily life. There definitely will be a need for a new approach - more human driven technology development, or even new human driven convergence - on top of the existing technology ones.

Value systems evolution

As part of the shift from Industrial Age to Knowledge Age, there will be changes in value systems as well. In this context a special interest should be drawn on the ongoing value system evolution, which is happening among the emerging core industries of knowledge society - communication, information management and e-learning. In the first phase of evolution, which has been going on for a while now, the above industries operate separately, focusing each on content-driven and access/delivery approach in the value system. The "king" of the phase is content provider. In the second phase, started a few years ago, the main objective is to provide customized and integrated services and by that approach and focus increase the performance of their customers, i.e., end-users. This phase has strengthened the role of content and service brokers in the value system. In the third phase of evolution the role of end-users themselves will probably change dramatically, this due to the ever-growing needs for person-centric solutions as discussed earlier. This growing need acts as the major driving force, and will ultimately lead to new weightings and positions in the value system. People will be playing a major role in the emerging new business value system - they will for their part become the new "kings" of the value chain! This will be enabled by new advanced tools for user content creation, context-based communication, collaboration and learning/reasoning. In this third phase the ultimate objective is to create more sustainable, human-centric value system. That will successfully integrate the major parts of the communication, information management and e-learning - at a person level.

Key Paradoxes and Principles in Knowledge Society

Key Paradoxes

Need to manage in parallel:

… External complexity and rapid pace of change

… Efficiency/performance and creativity/innovations

… Large scale and agility

… Information and communication overload and new ways to produce/receive information

… Increasing number of new technical devices and easiness in use of them (usability and interoperability)

… Always-on accessibility/presence and privacy.

Key Principles

Role of knowledge

… Knowledge always begins and ends as personal. Knowledge is nonhierarchical. Knowledge work is also "unisex", because it can be done equally well by both sexes (Drucker, 2002).

… Key knowledge is scattered, and new knowledge is created through intensive communication and collaboration in human networks.

… Knowledge Society uses a network model. The smallest unit (node) of this network is the individual.

… Individual Knowledge is the key production value and the engine for economic growth. Creation, delivery and sale of individual knowledge are the essence for economic success.

… Knowledge differs from all other means of production in that it cannot be inherited. It has to be acquired anew by every individual, and everyone starts out with the same total ignorance (Drucker, 2002).

Managing complexity and chaos calls for self-organized systems

… Top down decision-making is too slow to manage complexity of the existing environment. There is a need for self-organized communities at all levels of Knowledge Society. It is only this bottom-up approach that enables a rapid response and meets the needs for future challenges of knowledge sensing, creation and decision-making. Ultimately, self-organized systems are the basis of a sustainable knowledge ecology.

Productivity of individual knowledge workers

… "To increase the productivity of knowledge work and knowledge workers is the most important contribution management needs to make in the 21^st Century." The productivity of Knowledge Workers (KWs) today, however, is in its infancy (Drucker, 2002). Existing methods for increasing organizational productivity (based on organisational/systemic performance and efficiency) are not enough to meet an individual knowledge worker's needs any more. A new, person-centric approach is needed to increase the productivity of individual knowledge worker from both efficiency/effectiveness and innovation point of views. In addition, new and appropriate ways to measure the value of the intangible results of knowledge work are needed.

… Complexity, rapid pace of change and uncertainty has created demand for new skills and abilities for knowledge workers productivity.

New forms to create and manage knowledge

… ICT technologies have decreased the physical costs of communications. They have changed how knowledge is managed.

… A major part of new knowledge is created in working environments by human communication networks and learning by doing - instead of formal education and training. Close linkages between education, research, innovation and working life are important.

… Traditional training and education solve only a part of a person's competence development. Learning alone (self-study) is also too slow in knowledge societies. We need new ways to collaborate, share and utilize others knowledge and learn from peers daily. Also learning and teaching requires new methods, environments, tools, competences and timing.

… Technology is not the answer for everything. We need to find the right balance between technology and human driven approaches. A big part of human knowledge is tacit, and therefore difficult to transfer via information networks or even through formal education. There is still a need for face-to-face communication especially in the process of innovation. Shared values and trust - at all levels - are critical determinants for successful knowledge creation and reflection, especially in innovative tasks.

… Knowledge becomes rapidly obsolete and knowledge also rapidly deteriorates unless it is used constantly.

… Knowledge concentration and informal environments are important for the creation of new knowledge. A major part of new knowledge is created in global centers of excellence.

… Knowledge workers are highly mobile within their specialist area; meaning they are more committed to their expertise area than any single organization (Drucker, 2002).

… Access (fixed or mobile) to information can increase efficiency but only access to competence (people) can enable use of important tacit knowledge - relevant for new innovations. Relevant knowledge has to be put in a form in which it can be taught, which means it has to become publicly and universally accessible. This makes Knowledge Society a highly mobile one (Drucker, 2002).

… The increasing trend of outsourcing in enterprises will accelerate the creation of new micro/nano enterprises and their supporting ecosystems.

Balance between work and private life

… Major part of knowledge workers is increasingly suffering from burnout caused by the pressure of work: tight time schedules and inappropriate working environments (Drucker, 2002). The pace and intensity of knowledge/creative work has a significant impact on quality of life. Long-term, sustainable productivity of creative knowledge work calls for appropriate working conditions including opportunities and time for continuous recreation and self-development.

Same principles needed at all levels of knowledge society

… Successful development of Human-Centric Knowledge Society calls for shared key principles and synchronized implementation at all levels of society and globally.

Role of Knowledge Workers Increasing

Forty years ago the number of people doing knowledge and service work was less than 1/3 of the workforce. Today, the amount of knowledge workers (KWs) account for over 3/4 of the workforce in developed countries (Drucker, 1993). Even the number of people doing creative work has exploded during recent years. Those in creative occupations--from engineers and designers to artists, from writers to higher-end planners, analysts, managers, and other creative professionals - now comprise more than 30 percent of the total workforce in developed countries. The growth is big when we compare to the same volumes in 1900 (10 %) and in 1980 (20 %) (Drucker, 1993). Knowledge workers (KW) are not simply the holders of specialized knowledge. When the requirements change rapidly, they must sense and respond to unstructured knowledge and create and produce new structured knowledge and ideas. KWs are expected to make decisions in their own specialist area. Knowledge workers see themselves as "professionals" rather than "employees" and see their "ranking" as seniors and juniors rather than that of positions such as bosses and subordinates (Drucker, 2002). A growing number of people who make knowledge work for organizations will not be full-time employees but part-timers, temporaries, consultants or contractors. They may not be even employees of organization but the ones of an outsourcing contractor(s).

The real key to driving the economy forward and completing our emergent creative system doesn't lie in financial incentives alone but in summoning innovation from human creativity (Florida, 2003). Wealth-creating potential is tied up in intangible assets that include the knowledge of the workforce. Valuing assets becomes harder, and they are increasingly mobile. The new, big challenge facing the emerging society is to increase the productivity of knowledge work. So far the focus of increasing productivity has been efficiency and effectiveness on an organizational or system-level. In the future, the focus in increasing productivity of knowledge work will extend more to individual knowledge worker level, including creativity outputs and their measurement methods. Creative professionals are a big, specific class of KWs. They want to exercise their creativity in building something to experience the whole cycle of having ideas, putting them into action and seeing the rewards (Florida, 2002). They want to take control of their own lives, their time and the kinds of work they will choose according to their respected new values. Organizations and societies should see the value for increasing the intrinsic motivations of creative professionals and allow them to nurture and express their creativity.

Know and Know-nots

Knowledge/information gaps are more than just gaps in the ability to access to global information or the capacity/bandwidth of information infrastructure or a shortage of personal computers. The gaps are social, economic, and institutional ones - including knowledge and educational levels, as well as the challenges of rapidly updating information and knowledge. As discussed earlier the digital and technology revolution has changed many factors in competence development. The performance and productivity of knowledge work relies heavily on suitable tools, processes, social networking and supporting workplaces as well as culture and values. But even the best conditions cannot guarantee good results in knowledge intensive and creative work. The high intrinsic motivation added with skills for sensing opportunities, separating meaningful knowledge and information from background "noise" and being able to create totally new (novel) innovations is considered often more as personal ability of human being than a taught skill. If we can create proper conditions - e.g., universal access to global information and knowledge sources - that might open new big opportunities for new innovations and wealthiness also in developing countries. Especially creativity based economic growth can bring new potentials also to developing countries, because knowledge differs from all other means of production in that it cannot be inherited or bequeathed. It has to be acquired anew by every individual, and everyone starts out with the same total ignorance (Drucker, 2002)!

Evolution to Human-Centric Knowledge Society

Based on the identified drivers, trends, principles and experiences, a following evolution process to Human Centric Knowledge Society is introduced below (Figure 3). This APC (Access, Performance, Creativity) evolution model is phased as follows:

Figure 3: APC-Evolution to Human-Centric Knowledge Society.

… Phase 1: Access- and Content- centric Information Society

Building foundation: establishing access to (global) information and content

… Phase 2: Performance- and Service-centric Information Society

Building customized services that are enabling the increasing performance (efficiency and effectiveness) of work

… Phase 3: Creativity- and Person-centric Knowledge Society

Improving individuals' quality of life, creativity/innovativeness and productivity

In the first evolution phase the focus of development is more on establishing the foundation based on the content driven and access/delivery approach. The king of the value system in this phase is often the content provider. In the second phase the objective will be to establish customized services and increase the performance in all sectors and levels of work life. This will provide a key role for content and service brokers in the value system. One of the key discontinuities from the first to the second phase is the modularization of content that enables better-customized and faster services. In both of the first two phases individuals are considered more as "passive" end users of services and content. In the third phase the role of end user will change dramatically. Throughout the technological discontinues (communication and collaboration, context-dependence, creation tools) users will adopt a totally new position in the value system. He/she will become the driver for the new business value system - and "the king" of the value chain. This will be enabled by the new advanced tools for user content and ideas creation, new context-based communication and collaboration environment, personal knowledge management, and advanced learning/reasoning tools. In this third phase the ultimate objective will be to increase the quality of human life, new knowledge creation and individual productivity.

Phase 1: Access and Content Centric Information Society

Establishing universal access to (global) information and content is the first phase and the foundation towards Human Centric Knowledge Society and Economy. The digital revolution and digital content convergence have created the opportunity for millions of people to have real-time access to huge amount of global information and contact networks (Kautto-Koivula, 1999). Yet, evidence shows growing polarization in some countries. Gaps are increasing between the rich and the poor, the healthy and the sick, the skilled and the unskilled workers, the educated and the uneducated employees, and between people who are technologically advanced and those who are not. This all is leading to a widening gulf not just between countries and regions of the world but also between segments of societies within nations. A lack of engagement with the global economy has caused these countries to miss the benefits of knowledge diffusion that comes from global information sources, and formal and informal contacts. There is strong correlation between a country's GDP (Gross Domestic Product) and the level of development of its information infrastructure, which is a basic competitive requirement at all society levels: from country levels down to the individuals themselves.

Phase 2: Performance- and Service-Centric Information Society

Governance of Societal Knowledge in the Knowledge Age. Can Societies Learn from Global Corporations?

In order to provide an attractive market for investment, governments need to develop their own, "new" operational mode, management principles, way of working, horizontal methods of co-operation, internal efficiency as well as regulatory frameworks that support dynamic competition and open access to networks. How is this done? What are the models for society governance in the Information/Knowledge Age? How are flexibility, efficiency and competitiveness developed? Are there many similarities with the changes made in the operation principles of the private sector? Can governments learn something from the development and experiences of global corporations?

A Way of Management in Global Corporations (Kautto-Koivula, 1999)

Global competition has forced corporations to become familiar with the challenges of a network-based and knowledge-intensive economy. Experience shows that working in a network-and knowledge-based society requires totally new operation principles and management principles and policies. Hierarchical industrial modes are too slow for the fast changing environments of knowledge-based society.

The key operational principles of a high-tech global corporation are (Figure 4):

• A shared vision and strategic intent position the company in global competition and give it dynamism for new opportunities.
• An open and supportive culture, shared values and mental models create a good basis for employee satisfaction and continuous innovation of new products and solutions.
• A flexible strategic architecture and operation mode mean fewer organizational levels, less bureaucracy, network-based working models, and a balance between global-local, centralized-decentralized efforts. Understanding the fast changing environments and future challenges in competition is necessary, as is anticipating and fulfilling customer's needs.
• Efficiency and high quality in internal operations are important and require the development and implementation of company-wide core processes across various functions (R&D, Sales, Marketing, production, support). The structure of core processes should be built in modular fashion in order to achieve the required flexibility for the needs of rapidly changing external environment.

Figure 4: Key operational principles of a high-tech global corporation.

Need to Balance Long-term Creativity and Innovation and Short-term Excellence in Execution

In the knowledge- and innovation-driven world, it is essential to find a way to move away from the traditional ways of operating that hamper proactive knowledge flow and innovation to new systems as well as leadership and management principles. External complexity and rapid pace of change call for simultaneous actions: on the one hand it is the leadership for knowledge and innovation, and on the other hand managing "the efficiency operation machine". This is a complex management challenge, calling for two different types of dynamics and areas of excellence.

1) Consequently, continuous sensing of the external world for opportunities and threats for creativity and innovation; and

2) Optimizing the scale and efficiency in the execution; i.e., flexible process-bound ways of executing things effectively and efficiently.

Outsourcing Non-Core Operations and Services

Today the trend is that service work that is not based on an organization's core competences will be contracted out of the organizations in many cases. This particularly applies to operational and supportive work, such as field and maintenance work, basic financial, human resources, information management and production work (first phase of outsourcing). There is already evidence that in future this kind of "outsourcing" will however be expanded also to higher and more strategic operations such as R&D work (emerging second phase of outsourcing?). Driving forces behind outsourcing are the need to increase flexibility in resource as well to increase the productivity and quality of selected services. Organizations want to concentrate on their core tasks and competencies and outsource the rest of activities.

Are There Societal Core Processes?

There is a big need to reform the management of knowledge - including the processes of education, research and innovation - at the individual, organizational and societal levels. The development of this kind of societal core processes would be arguable for similarities found from the concept of corporation core processes: the need for network-based operation, challenges in horizontal communication, inefficiency in administration, the development of new digital services, and their experiences in the modular-process-bound ways of executing things effectively and efficiently. The core processes serve as building up a common language and working methods. In addition, they assist individuals as seeing and understanding their own roles as a part of bigger picture of core processes. Private sector knows already that digital services should not be developed into old operation processes. Using the analogy, the societal core processes in the field of knowledge management could be (Figure 5):

… Strategy and Planning Process: e.g., creation of visions and strategic intent for goals and focus of national core competences,

… Development Process: e.g., reform of education, virtual schools and services,

… Operative Delivery Process: e.g., operations for society knowledge management, education services,

… Support Functions Process: e.g., legislation (regulation), funding, information management and information infrastructure.

One of the societal core operations is the management of societal knowledge through the chain of public education, research and innovation.

Figure 5: Society Governance and Core processes?

Main Operations for Societal knowledge Management (Kautto-Koivula, 1999)

Societal knowledge management in the Industrial Age was very institution oriented - focused education, research, administrative, and corporate institutions. We need new approaches and concepts - a new mindset. One solution is to use an analogy taken from the concepts of organizational knowledge management. In the Industrial Age societal knowledge management consisted only two main operations: those who construct and create knowledge (education and research), and those who apply and exploit knowledge (mainly working life). In the Knowledge Age we need more operations involving investigation of knowledge needs and making knowledge easily available (Figure 6).

1. Investigate Knowledge Needs

In a knowledge-based society, the requirements for working skills and knowledge change very fast. We need new ways to investigate environmental requirements and experiences and from that basis focus and direct resources, and establish the main goals of public education and research in order to balance better the demand and supply for skills and knowledge. This calls for new ways of communication and knowledge intensive cooperation between working world and the public sector.

2. Constructing Knowledge

Digital revolution demands educational reform. The operation mode, content, methods, role of teacher, learning/teaching environments of the whole education chain have to be developed to respond more flexibly and proactively to the needs of knowledge economy. This means a new way of networking among educational institutions as well as with working life.

Figure 6: Main operations for Societal Knowledge Management (Kautto-Koivula, 1999)

3. Creating New Knowledge

Fruitful conditions for knowledge creation are face-to-face communication, informal environments, concentration and variety of knowledge, and a cross-disciplinary approach. A major part of new scientific knowledge and innovations are created in global and national centers of excellence. The key knowledge accumulation experience is learning by doing in everyday tasks, in human networks. In the Knowledge Age globalization and virtual communities change the way for creating new knowledge. A big part of created knowledge is tacit, and therefore not easily transferable to colleagues, new employees and students without face-to-face communication or more systematic knowledge sharing.

4. Making Existing Knowledge and Information Available

The Internet and intranets today serve a common environment for information and knowledge access, sources and services. In spite of fine search engines, a lot of challenges exist, e.g., information overload and the difficulty of quickly finding needed, meaningful information and knowledge. There is a need to find methods to better navigate in information networks. This could be done by analyzing, organizing and mapping existing information and knowledge assets and by producing metalevel information, information about information, taxonomies. The ongoing development around semantic web is a good example of the right step to this direction.

5. Realization of Knowledge -- Innovation System

A national innovation system is a channel connecting those who create, apply and exploit new knowledge. In a knowledge society, innovations systems are based heavily on national, regional and global networking and value-chain modeling. Challenges are how small and medium size enterprises and institutional research centers can be supported in developing their operation mode and skills to adopt the new working methods of the Knowledge Age. This requires the globalization of national and regional research centers, support for establishing new value chains and motivation for organizational and individual innovations. In addition to technical innovations, social innovations will become important in the future.

A strategic approach to governance of societal knowledge (Kautto-Koivula, 1999)

Knowledge and competence do not transform automatically into economic growth, new jobs, and welfare. They must also be strategically directed and managed. The best results can be achieved if public education, research and development have a common vision and strategy regarding core competencies and knowledge in society. This would require a continuous (annual) strategy process. Other sectors that need to be defined on the strategic level are strategic architecture, main responsibilities, operating principles, coordination and control, rewarding and management of proper conditions for the operations. Strategic societal governance should give through its vision and strategy processes the main goals for operations as well as the creation of proper conditions (Figure 7).

Figure 7: Governance of Societal Knowledge

Creating Proper Conditions

The relevant preconditions for effective and successful management of societal knowledge are the supportive operational modes, organization structures, management principles, societal core processes, information infrastructure and assets and services, resource allocation, people, culture, existing knowledge networks, and competence profiles. A new societal operating mode should be flexible and fast in order to react to changes in the environment. This is possible only through flatter organizations and decentralized decision making. A common vision and strategic intent increase purpose and commitment for working towards common goals. In addition, they lead to increasing amount of proactive horizontal communication. This is still supported by common, modularized, core processes, which build up a common language and working methods and are an easier way for individuals to understand the role of their job as a part of fully serving the customer.

Example: Phase 2 - Information Society Strategy of Finland

There was already in 1998 a widespread feeling that Finnish society must be developed on the basis of people's needs (SITRA, 1998). According to the national vision, information society opportunities are developed and applied in an exemplary, versatile and sustainable manner to improve the quality of life, competence, international competitiveness and interaction of the Finnish society. The aims of the development of the Finnish information society include wider goals: competence, social cohesion, democracy, culture, quality of life, competitiveness, employment and sustainable development. The strategic outlines emphasize joint responsibility and innovation in the society as a whole. It is not only important to develop and exploit knowledge, services and technology but also to renew old operating modes that play a major role. Finland should utilize the potential provided by the information society in meeting and supporting the people's needs. At the same time, this opens new windows to international business opportunities. The strategic outlines were (Figure 8):

Figure 8: Strategic outlines of Finnish Information Society (SITRA, 1998)

1. Finland as a pioneer of the development of an information society with humane and sustainable growth characteristics,

2. Development, commercialization and exploitation of easy-to-use and secure electronic services and contents,

3. Development and management of the knowledge at the level of the individual, the community and the society,

4. Development of a network economy model and its application in working life and business,

5. Renewal of the modes of operation and service processes in the public sector,

6. Ensuring balanced regional and local level development of the information society.

Innovative development and application of information and communications technology and infrastructures, and the assessment of their respective impacts were considered important. More detailed description of Finnish Information Society strategy can be found at; http://194.100.30.11/tietoyhteiskunta//suomi/st6f.htm

Phase 3: Creative and Person-centric Knowledge Society

Challenges of Existing Economic Growth and Operation Mode

The ability to increase the operational performance of business does not any more guarantee success in global competition. Instead, the increasing role of creativity and innovativeness as well as more person-centric sustainable productivity of knowledge workers - including balance of work and life - will bring new challenges for existing global enterprises and in future as to societies. The improved performance of organizations in phase two required big changes in the organizational strategic and operational processes. It did not, however, need more than minor changes in the structure of the organization. Increasing the role of innovativeness as well as more productivity of knowledge workers will, however, demand fundamental changes in the structure of organization. It will even require a totally new organization (Drucker, 2002) - new organization structure and new ways of doing things.

The fundamental challenges the new Knowledge Economy presents to traditional companies (Doz et al, 2001) are:

… Global spread is no longer a distinctive competitive advantage and a single national market no longer leads in most industries,

… Valuable knowledge is increasingly scattered and valuable knowledge is sophisticated and sticky.

These challenges will, at the same also open up new opportunities: new sources of differentiation, new opportunities to unlock global consumers' latent needs, new ways to create unique advantages and instant global reach and scale. Building of future metanational corporation requires three distinct capabilities (Doz et al, 2001):

1) Sensing: identifying and accessing new competencies, innovative technologies, and lead market knowledge,

2) Mobilizing: integrated scattered capabilities and emerging market opportunities to pioneer new products and services,

3) Operations: optimizing the size and configuration of operations for efficiency, flexibility and financial discipline.

This calls for simultaneous actions: successful balancing between long-term creativity and innovativeness and short-term efficiency of operations. It is essential to find new ways to boost proactive knowledge flow and innovation - to new type systems as well as leadership and management principles in terms of knowledge and innovation.

Knowledge is increasingly dispersed around the world, where people themselves will become knowledge nodes. Knowledge tends to flow through social networks and within communities. Social networks are typically local, strong and weak ties, important for sharing tacit knowledge, through trust-based relationships. Trust is the key element of knowledge creation and sharing at all levels of the Knowledge Society. ICT and emerging new technologies (e.g., peer-to-peer) can complement but not replace the importance of face-to-face contacts in innovation.

In the private sector, the venture capital industry provided a new avenue for bringing research ideas to market and employing bright people. The combination of these factors has been potent: The high-tech companies spun out from just one university, MIT, would now constitute a nation with the 24th-largest GDP in the world (Florida, 2003). There is already evidence that the sustained outpouring of human creative activity, in every form imaginable, is the source for successful growth in future (Florida, 2003).

Creativity - Emerging Source of New economic Growth

According to many new growth theories (Free World Academy, 2003; Cortright, 2001) creativity is the main driver for economic development. Creativity will replace scarcity of resources as a new paradigm in economics. It is argued that the classic model of growth theories are already outdated: the description of the factors of production such as labor and capital is a legacy of the former centuries. To keep our economy vital, the behavior that fundamentally needs to be rewarded, recognized and supported is not only money-making but creative activity. Developing a vision for expanding opportunities for creative work is the great untapped political opportunity for both parties in the new century. It is also an economic imperative (Florida, 2003). However, there are challenges to manage this creativity. Creative work cannot be tailored like routine work in old factory or office, for several reasons (Florida, 2002):

… Creative work is not repetitive. Creative work requires enormous concentration. Creative thinking is hard to turn on and off.

… Creativity goes inside people's heads, and you literally cannot see it happening nor tailor it.

… Creative people tend to rebel at efforts to manage them overly systematically (difficult-to-manage, highly independent-minded persons).

… Creative knowledge workers do not respond to financial incentives, orders, or negative sanctions the way blue-collars do.

… The key to motivating creative people is to treat them as "de facto volunteers."

In the Creative Economy, time is the only nonrenewable resource. The three big factors driving this economy along with the need of creativity (Florida, 2002): 1) prevalence of change, 2) need for flexibility and 3) importance of speed. A few countries are already staking their competing positions in the creative economy (Florida 2003). Ireland is now the world's second-leading exporter of software, while Finland, with Nokia, is a world leader in cell phones. Japanese auto firms were first to put hybrid and fuel-cell cars on the street. India and Indonesia are emerging powers in such high-tech fields as software and biomedicine. In a creativity-driven economy, leads are tenuous and even small players can quickly come to the fore (Florida, 2003). There are already activities ongoing towards developing creativity strategies on national level, e.g., in Finland (Arkio, 2003). Some good strategies exist already: e.g., Creative Economy in the U.S. State of Iowa (Swenson, 2003).

What Governments and Private Corporations Can Do to Prepare for Human-Centric Knowledge Society

First steps could be to develop new societal visions, strategies and policies for the challenges presented by knowledge based economy, including the following objectives:

Phase 1: Access and Content-centric Information Society

… A backbone information infrastructure that supports public education, research, and innovation

… Equal access for citizens to the information infrastructure, to key national/global information/knowledge sources and services

Phase 2: Performance- and Service-centric Information Society

Develop a new operating mode for societal knowledge management

… Develop principles and plan for education reform and availability of societal information/knowledge

… Develop societal core processes learning from the concepts and experiences of corporate core processes ---> efficiency and effectiveness

… Co-operate in business life and public education and research

… Provide basic information society skills to all citizens

Phase 3: Creativity and Person-centric Knowledge Society

… Develop vision, strategic intent and development plan for expanding opportunities of creativity/innovation at work and private life. This is the great untapped political opportunity for all parties in the new century: society, public and private organizations/institutions, communities, individuals, and citizens

… Improve the individuals' quality of life, creativity/innovativeness and productivity

… Establish supportive conditions and environments for the micro/nano enterprises and knowledge workers - the smallest nodes of knowledge economy.

New Opportunities for Developing Countries

Global corporations and investments have so far been "following the highest competences." But, access to information and competences (people), advanced societal knowledge management, and the new emerging creative economy will all create new kinds of opportunities to countries and organizations that have traditionally not been considered as leading, high-competence countries. It is important to remember that knowledge is different from all other means of production - it cannot be inherited or bequeathed but has to be acquired anew by every individual, and everyone starts out with the same total ignorance (Drucker, 2002).

Also, developing countries may find comparative advantage in global trade and collaboration, if they build up their visions, strategies, and proper conditions for societal knowledge management and ultimately their creative knowledge workers, based on their own identified strengths and core competencies. The evolution to Human-Centric Knowledge Society in several phases may open up new potential opportunities for many developing societies. By finding novel ways to hasten the transformation process from the Industrial Age to the Knowledge Age and e.g., by implementing part of evolution phases in parallel, developing countries could considerably strengthen their positions in global competition and trade.

Conclusions

Transformation from the Industrial Age to Knowledge Age is a knowledge revolution paradigm shift for individuals, organizations and societies. No field of any society or country can survive as an isolated and disconnected "island" operating still in an industrial mode in a long run. In addition to corporations, also societies are forced to redesign their visions, strategies and operation modes around network-based models and human knowledge in order to meet future challenges.

Individual knowledge and creativity are the key production values and the engine of economic growth in Human-Centric Knowledge Society. So the increased productivity of individual person - "an enterprise of one" knowledge worker - should be the driving force when building this new Knowledge Society model globally. It is important to realize that knowledge differs from all other means of production. And that can be a big new opportunity also for developing countries!

The experiences in global corporations have shown that transformation from Industrial Age to Knowledge Age is a demanding and expensive process. So it is important to be able to find shared understanding of the right steps - the key phases of evolution and their relevant focus - to keep the process moving to the right direction and synchronized at all levels of society and globally.

However, we should see the value of the local differentiation through locally rooted knowledge/uniqueness and different natural competencies for opening new opportunities in developing countries. Governments and public sector have important roles in directing the transformation of this paradigm shift. Public-private partnership is essential for success, as well as global shared principles, guidelines and values. It is also important to emphasize in this transformation process the key role of human aspects and needs over the technological and business ones. The right balance between quality of life, competence, creativity and competitiveness is our common objective, challenge, and responsibility in directing sustainable evolution to a Human-Centric Knowledge Society.

We can be sure that a Society of 2030 will be very different from that of today and that will bear little resemblance to that predicted by today's best - selling futurists. It will not be dominated or even shaped by information technology. IT will be important but it will only be one of the several important technologies. The central feature of the Next Society as its predecessors, will be new institutions, new theories, ideologies, and problems (Drucker 2002).

The biggest barrier for new development of Human-Centric Knowledge Society is our Industrial Age mindset!

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Author Biographical Sketch

Kaisa Kautto-Koivula PhD (educ.), Lic.Techn. (Eng.), M.Sc (Eng.), B.Sc. (Eng); Part-time Docent (New Learning Environments), Tampere University, Finland Senior manager, Nokia Ventures Organization, Insight & Foresight P.O. Box 407, FIN-00045 Nokia Group, Finland Tel: +358 71800 800 Mobile: +358 400 403 632 email: kaisa.kautto-koivula@nokia.com

Since 1999 she has been acting as senior manager in Nokia Ventures Organization's Insight & Foresight Unit, based in Helsinki, Finland. Since 1988, she has been responsible for several activities in Nokia Corporation including Knowledge Management, Technology Education and Training. Kaisa Kautto-Koivula started her career as development engineer in industry and as senior research scientist at the Technical Research Centre of Finland where her main interests were Computer Aided Design and Knowledge engineering. She has advised the European Commission, the OECD, the European Roundtable of Industrialists (ERT), the European Roundtable of ICT Industry and the Finnish Government on issues of education and technology policies such as skill requirements, future learning environments, organization and society knowledge management and education and learning services in Information and Knowledge Society.

Marita Huhtaniemi Manager, Nokia Ventures Organization, Insight & Foresight P.O. Box 407, FIN-00045 Nokia Group, Finland Tel: +358 71800 800 Mobile: +358 40 5216 184 email: marita.huhtaniemi@nokia.com

Since 2000 she has been acting as manager in Nokia Ventures Organization's Insight & Foresight Unit, based in Helsinki, Finland. Since 1989, she has been responsible for a variety of activities within Nokia Corporation. Some of the key activities include Account and Relationship Management concept development, global operator business analysis and follow-up, core business process and enabling systems development, strategic and operational human resources process and enabling systems development and lately knowledge management. With Kaisa Kautto-Koivula she has been working closely for several years, mainly in the areas of both corporate and society-level knowledge management and learning. Marita Huhtaniemi has a background of school of economics.