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A NEW ROLE FOR THE BANKS IN THE EUROPE OF THE FUTURE

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Title: A NEW ROLE FOR THE BANKS IN THE EUROPE OF THE FUTURE


1
A NEW ROLE FOR THE BANKS IN THE EUROPE OF THE
FUTURE
  • Marc LUYCKX GHISI
  • Dean of Cotrugli Business Academy
  • Former member of the EU Forward Studies Unit

2
CHAPTER 1EU ECONOMY IN A TIME OF DEEP
TRANSFORMATION
3
P. Drucker Transformation
  • Every few hundred years in Western History there
    occurs a sharp transformation.
  • Within a few short decades, society rearranges
    itself its worldview (paradigm), its basic
    values, its social and political structures, its
    arts, its key institutions.
  • Fifty years later there is a new world.
  • Peter DRUCKER Post Capitalist Society.
    Butterworth Heinemann, 1993, 2001, p.1.

4
One of the most fundamental shifts
  • We are living through one of the most
    fundamental shifts in History a change in the
    actual belief structure of Western Society. No
    economics, political or military power can
    compare with the power of a change of mind. By
    deliberately changing their images of reality,
    people are changing the world.
  • Willis HARMAN Stanford Research Institute
    (1997), Founder of the World Business Academy

5
Transformations five levels
  • Humanity is in danger of collective death
  • End of the Patriarchal values (CCC)
  • End of modernity---Transmodernity post secular,
    flat, tolerant, new level of responsibility and
    consciousness.
  • Knowledge society as a turbo of change
  • Crisis of all institutions. EU the First
    transmodern structure worldwide...

6
Transition to Transmodern
Death ?
7
NEW POLITICS AND NEW ECONOMY ARE THERE...
  • We have at our disposal, a new political
    structure (transmodern) which is the EU. But
    unfortunately we still continue to consider EU
    with modern eyes...
  • We have a new economy in our hands (Lisbon
    strategy), but we tend to consider it with
    industrial eyes...

8
CONSEQUENCE POLITICAL CHOICES (I)
  • EU should be presented as the 1 Transmodern
    political project of the XXI century.
  • Politicians should dear to say that we are like
    at the beginning of a political Renaissance...
  • They should call people to reflect worldwide on
    the new sustainable structures of the future in
    the Knowledge economy. (Lisbon Strategy !)

9
CONSEQUENCE ECONOMIC CHOICES (I)
  • Politicians and economist should have the courage
    to say that we are not anymore in the industrial
    capitalist period. (max 50)
  • We are already (50) in the knowledge economy
    which is post capitalist (Drucker).
  • But nobody dears to say the truth to the
    citizens. Although they know it ....
    subconsciously.

10
CONSEQUENCE ECONOMIC CHOICES (II)
  • And this knowldege economy (Lisbon Strategy of
    the EU 2000-2010), has to be oriented towards
    sutainability and social inclusion. (Goteborg and
    Barcelona Summits)
  • A debate with the citizens is needed and urgent.
  • But this presupposes that the economists and
    politicians understand the transition from the
    free trade industrial vision to a new
    knowledge economy approach.

11
CHAPTER 2WHAT IS KNOWLEDGE ECONOMICS?(Level
4! )
12
DEFINITIONS
  • Data what is on the web, unorganised
  • Information is already sorted by google.
    Overabundance.
  • Knowledge is digested by human brain.
  • Human brain and networks are the NEW TOOLS of
    PRODUCTION
  • Wisdom, Knowledge are rare. Not enough.

13
A NEW WORLD...
  1. New tool of production human brain
  2. New CEO Enabling creativity and sharing, Caring
    for humans new human-centered management
  3. New value creation process adding K to K.
  4. New Trade from Free Trade to Free Sharing
  5. New measurements qualitative intangibles
  6. New strategy beyond war win-win not win-loose
  7. New definition of Progress qualitative
  8. Beyond patenting towards Open Source
  9. Beyond pyramids towards networks
  10. Capitalizing on cultural capital gender capital

14
TWO SCENARIOS
  • Post industrial -capitalist Vision human capital
  • Human centeredness
  • Real Respect
  • Machine at service
  • Keeping the industrial vision machinepatent
  • Manipulation of Human Mind
  • Engineering of Human Mind
  • Machine is First

15
1. NEW TOOL OF PRODUCTION
  • The tool of production is not anymore machine
    technol.
  • It is human brain Networks sharing knowledge in
    order to create new K.
  • This new tool of production is more important
    than capital and technol.
  • Hence Post capitalist society!

16
2 NEW CEO FUNCTION
  • Old CEO command, control, capture
  • New CEO
  • enables the creativity of his human capital
    tool of Production
  • Enables and creates networks around his team.
    Cannot control networks!
  • Care for the intangible assets brand

17
2. CEO AND NEW MANAGEMENT
  • Human capital is central because it is the NEW
    tool of production Please come back!
  • Thus Management shifts 180 towards human
    centeredness more creativity-centred, gender
    culture centred.

18
3. NEW VALUE CREATION PROCES
  • INDUSTRIAL SOC.
  • Add value to object
  • From steel to car !
  • Tool is Machine
  • Humans are cost
  • Management is machine-centered
  • Machine is central
  • KNOWLEDGE SOC.
  • Create new K
  • From data, info to K
  • Tool is Human brain in Networks
  • Humans are capital
  • Management is Human-centered
  • Machine is at service

19
4. BEYOND TRADE (I)
  • If I exchange an object against money, I loose
    the object. This is trade I win and I loose.
    Win-Loose logic
  • If I exchange knowledge, I do not loose my
    knowledge. I win and you win. I am not trading
    anymore. I share. This is a win-win logic of
    sharing.

20
4. BEYOND TRADE (II)
  • INDUSTRIAL SOC.
  • Free trade of objects
  • Industrial structure
  • Pyramids
  • Unemployment
  • Pollution
  • Quantitative growth
  • KNOWLEDGE SOC.
  • Free sharing of knowl.
  • Post-industrial-capitalist.
  • Network value creation
  • Self-creation of my job
  • Immetrialization of prod.
  • Qualitaitve growth

21
5. A NEW SYSTEM OF MEASUREMENTS
  • Intangible assets is a new concept invented
    by Karl Erik SVEIBY (Sweden)
  • They are becoming more and more important in the
    knowledge society
  • IF EU economy is 45 in the knowledge eonomy,
    intangibles account for 45 !.

22
5. A NEW SYSTEM OF MEASURE. INTANGIBLE ASSETS
(I)
  • Intangibles assets
  • Know how,
  • Reputation,
  • Trust in the company,
  • Structure of the company,
  • Strategy (balanced scorecards)
  • Relations with personnel,
  • Relations with clients,

23
5. A NEW SYSTEM OF MEASURE. INTANGIBLE ASSETS
(II)
  • Relation with civil society
  • Relation to environment
  • Relation to our collective Future and
    sustainability
  • But also quality of the Networks

24
5. MEASURING INTANGIBLE ASSETS ?
  • Stock exchange measurements are still looking at
    financial tangible assets (quantitative) but
    they increasingly look at intangible assets
    (qualitative).
  • Today a company is measured more and more by its
    intangible assets.
  • Example Mens Wear USA. World Business
    Academy, Spirit in Business.
  • See also Neskey www.neskey.com

25
5. Intangible indicators grow
26
5. GROWING IMPORTANCE OF INTANGIBLE ASSETS (II)
27
6. NEW BUSINESS STRATEGY/ WIN-WIN
  • Old business strategy is warlike. Battlefield
    images are frequent. Patriarchal values dominate
    win-loose
  • New business strategy much less violent,
    competition through collaboration is the new
    motto.
  • There could be a conflict between 2 visions of
    competition inside the EU, and the Commission...
  • Knowledge behaves like love! Capital NOT !

28
7. NEW DEFINTION OF PROGRESS
  • The industrial modern defintion of progress is
    quantitative. More is better.
  • This defintion is UNSUSTAINABLE
  • The knowledge society implies a qualitative
    defintion of progress.
  • Good new this allows a reorientation of our
    societies towards sustainability!!

29
8. BEYOND PATENTING
  • The whole of the industrial production system is
    based on secrecy and patenting. I have this
    technology and you have not. So I win!
  • Information and knowledge always leak
  • In the knowledge economy we will NOT be able to
    maintain secrecy, neither patenting.
  • See generic medecines, I-Pod music etc,.

30
9. BEYOND PYRAMIDS TOWARDS NETWORKS
  • Pyramids are the normal structure of all
    organizaions.
  • But knowledge is created only in networks. This
    is the form that could prevail in the XXIst
    century.
  • Pyramids are all in crisis everywhere. In
    Govenrments, Military, Churches, NGO etc.

31
10. CAPITALIZING ON CULTURAL AND GENDER CAPITAL
  • Paradoxically culture and gender diversity
    becomes important as they feed creativity
  • The knowledge management is thus potentially
    socially inclusive and sustainable
  • The Lisbon strategy wsa thus excellent and
    forward looking.

32
CONCLUSION NEW VALUES
  • Underlying values needed in the industrial
    capitalist society are freedom, initiative,
    ceativity
  • NEW Values are needed
  • Freedom (of sharing) beyond patents...
  • Solidarity, Caring, Respect for the Earth..
  • 360 Transparency
  • Concern for our Common Good and future

33
CHAPTER 2THE BANKS IN THIS KNOWLEDGE ECONOMY
34
EXAMPLE ANZ BANK
  • Australia New Zealand Bank had problems of
    credibility... See http//www.anz.com/aus/values/m
    essage.asp
  • The CEO has embarqued in Corporate Social
    responsibility, Sustainability and Human capital
    enhancement.
  • Meditation has been offered to each empoyee..
  • ANZ has received an award of Spirit in Business
    association...

35
BANKS IN THE KNOWLEDGE ECONOMY I
  • In the Knowledge economy, intangible assets
    (personnel, customers, sustainability, and social
    inclusion...) are becoming 50 of the assets.
  • What distinguishes your Bank from others are
    mainly the intangible assets

36
BANKS IN THE KNOWLEDGE ECONOMY II
  • In the industrial economy Banks were acustomed to
    look only at tangible assets.
  • This is not enough today
  • One must also look at the intangible assets

37
BANKS IN THE KNOWLEDGE ECONOMY III
  • In the industrial economy we were in an offer
    economy Buy my new gadget !
  • In the knowledge economy we are entering into an
    Demand economy.
  • This means that the Banks will be obliged to
    respond the implicit demand of the citizens
    worldwide.

38
BANKS IN THE KNOWLEDGE ECONOMY 4
  • Citizens implicitly demand
  • HUMAN VALUES and friendliness
  • SUSTAINABILITY Is your/our Bank part of the
    problem of part of the solution?
  • SOCIAL INCLUSION Is the Bank helping the poor?
  • WISDOM
  • Citizens want also to spend in an intelligent way
    avoiding the gadgets and stupid spending. Can the
    Bank help?
  • Citizens want to make good and wise
    investments.
  • TRANSPARENCY Is the Bank honest and transparent?

39
CONCLUSION
  • Banks may choose the manipulation scenario
  • If they choose the human centered-sustainable
    path, they should improve
  • Human values with personnel and clients
  • Clear actions for sustainabilty and social
    inclusion
  • Real and efficient help towards WISE investments
  • 360 transparency
  • This is a question of survival.
  • Otherwise other Banks will do it (ANZ ?) and
    invade the EU market with a new image

40
Some good Books
  • Peter DRUCKER Post capitalist society, Harper
    Business, New York, 1993.
  • Verna ALLEE The future of knowledge Elsevier
    Science, 2003, USA.
  • Harvard Business Review on Knowledge management.
    2006. Book with 8 articles.
  • Paul T KIDD (ed.) European visions for the
    Knowledge Age a quest for new horizon in the
    information society Cheshire Henbury, UK, 2007.

41
Good Books (II)
  • Jeremy RIFKIN The European Dream when Europes
    vision of the future is silently eclipsing the
    American dream Penguin 2004.
  • Ray ANDERSON Mid Course correction 1998.
    www.chelseagreen.com (Interface)
  • World Business Academy www.worldbusiness.org
  • Neskey on intangible measurements
    www.neskey.com
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