Meta-Capitalism - Hardcover

In Opinion

If the authors of the new book "MetaCapitalism" are correct, the world will undergo a business revolution before 2003.

Companies will become more effective and efficient by decreasing their capital expenses and increasing the number of functions they outsource. And the value of the global market could increase tenfold, from $20 trillion this year to as high as $200 trillion within 10 years.

Sounds pretty good, huh?

Unfortunately, that growth isn′t gratis.

A company can′t just utilize the Internet; it must immerse itself in it. Or as PricewaterhouseCoopers CEO James J. Schiro says in the book′s foreword, "Companies must either adapt or perish."

B–to–B the key

Authors Grady Means and David Schneider,consultants for PricewaterhouseCoopers,
present their case concisely, though the ever–present charts and graphs detract from the readability, which is average to begin with.

But their message comes across. The companies who embraced the Net five years ago by anticipating the b–to–b concept lead their sectors.

In light of this, it′s no wonder that the authors express approval for companies like Cisco (CSCO) and Nortel (NT), which are well on their way to containing their businesses within the scope of the Internet. That is, they are reducing their capital expenses (such as factories, equipment and personnel) and increasing their presence and reliance on the Web.

More surprisingly, traditionally capital–heavy companies like General Electric (GE), Honeywell International (HON) and Wal–Mart (WMT) have begun allocating available resources toward creating a larger Internet presence.

The authors call this transformation away from a reliance on physical capital and toward more flexibility in the supply chain "MetaCapitalism."

But Means and Schneider readily admit, "The more compatible the existing business model with the emerging b–to–b e–business model, the less the organization must change to succeed in the "New Economy".

Read: If your competitors are far from conducting their companies entirely online, you might have more time than the strict two–year period offered by "MetaCapitalism."

Playing catch up

But the opposite is also true: In many industries, the laggards must now play an exhausting game of catch up.

What must they do? The authors say: Utilize the Internet by outsourcing departments not directly related to the product (accounting, human resources, customer service) or by moving those departments online; create a single information system that ties together each division of the company with customers and suppliers; concentrate on establishing your brand; and stop relying on physical capital.

And if you bathroom soap dispenser manufacturers think this book wasn′t written for you, surprise. Means and Schneider say you better get in the game, too. Because once your competitors create a b–to–b division or exchange that tackles the supply chain and fills its orders faster, it′s probably too late.

However difficult it might be for a factory or retail store to alter the way it′s been organized for 50 years or more, the companies who are really going to have a hard time meeting Means and Schneider′s extreme schedule are the foreign manufacturing
companies.

According to the authors, the United States is well on its way to being prepared for "the e–commerce revolution," but Germany, Japan, China, Indonesia and Malaysia will have a difficult transition to the new model.

In short, it will be much easier for the largest and most flexible of the b–to–b companies to dominate in the next several years. All others better start running.

Candice McFarland is a copy editor at UpsideToday. If you would like to submit a letter to the editor regarding this story, email online@upside.com.

"...Important issues and a valuable starting point..." ( Long Range Planning, Vol. 34, 2001)

A fundamental transformation of the business model is under way, to which the central precept of Darwinism applies: Companies must either adapt or perish. The book you have in your hands digs beneath the breathless anecdotes about instant success and explosive wealth creation to discover a truth that is at once exhilarating and sobering.

The authors identify an emerging economic framework to which they give the name Metacapitalism. They expect the world wide business economy to configure and behave in entirely new ways-an astonishing prediction. More astonishing still is their contention that businesses have only the narrowest window of opportunity to remake themselves -at most, a few years, and those years are now upon us.

Some companies are already embracing the e-business revolution and assuming leadership roles in the New Economy. Their instructive and inspiring stories are told here. Other companies - particularly those in traditional heavy industry - have yet to fully leverage the enormous possibilities of Internet-enabled business. But the authors leave no room for doubt that they too must accept the new paradigm, because e-business will transform every industrial sector.

While the clock is ticking for every business, the message of this book is exciting and optimistic. It foresees a world in which the business-to-business e-business revolution will sweep ever corner of the economy, where the supply chain will be dramatically streamlined, where tremendous efficiencies will be attainable, and where world-wide capital market value will explode.

The opportunities for companies with the financial means and human and intellectual capital are manifest. The key is to know how to leverage those assets in time to ride the wave into the e-business future. No mere exercise in futurism, this book is a survival guide for the New Economy, an invaluable road map of the digital landscape.

I urge business leaders, entrepreneurs, educators, legislators, and public officials to absorb its chief findings. The transformation of the global economy will have profound social and political implications. MetaCapitalism will literally change our world. I invite you to read on and discover how.

James J Shiro CEO PricewaterhouseCoopers