[The author was an internet pioneer and serial entrepreneur in his home country of Belgium, where he created an intranet/extranet company (E-Com, sold to Alcatel), and a cyber-marketing agency (KyberCo, sold to Virtuology). He was also editor-in-chief of the digital magazine Wave, knowledge manager for British Petroleum, and eBusiness Strategy director for the country's largest telecommunications company (Belgacom). He has co-produced a 3-hour TV documentary, TechnoCalyps, on the metaphysics of technology. In 2002, he moved to the mountains of Northern Thailand, and created a global cyber-collective, the Foundation for Peer to Peer Alternatives, to study and promote the new forms of peer production, governance, and property. He blogs about such social change dynamics at http://blog.p2pfoundation.net.] 

The internet has an under appreciated quality, which is that it enables the global coordination of small teams[i], which means that the peer to peer logic of small teams can operate on a global scale. The amount of capital needed to start an internet company has gone down dramatically, and many networked micro agencies[ii] are arising, operating with a minimal amount of capital. Since knowledge workers operate with their own means of production, i.e. their brains and their computers, they are in a different structural position from factory workers needing to sell their labour to capital owners. For knowledge workers, capital becomes not an a priori condition for innovation, but rather an a posteriori necessity in case of rapid viral adoption of their innovations. Google, Bittorrent, YouTube did not need large amounts of capital for their invention, but only for their deployment after massive adoption. And even this necessity is predicated on their choice for centralized networks of servers, and could be largely bypassed through a strategy of user-capitalized distributed networks. As Cory Doctorow summarizes: “Computers are machines for copying data. A good computer is one that copies well, quickly and cheaply. The internet is a machine for moving copies of data around. When the internet works well, it copies data quickly and cheaply.”[iii]  

In a world increasingly dominated by this universal machine, it makes less and less sense to use a proprietary intellectual logic. Far from promoting innovation, increasingly restrictive IP goes against the grain of the logic of non-rival goods: not only do you not lose its enjoyment by sharing, but it actually increases in value through network effects. Knowledge that is available in a commons can be endlessly improved without permission. In such a context, IP, and the artificial scarcities it creates, becomes the key obstacle to a further growth of social cooperation and an explosion in innovation.  

This means that innovation is therefore becoming social, an emergent property of the network of already always-connected knowledge workers, and not just a property of internal R&D departments or individual entrepreneurs. Organizational edge competencies[iv], namely the ability to insert one self in participatory networks, start to trump core competencies. The monopoly of capital in terms of access to centralized production machinery, and in terms of organizational skills, is eroding. This is not only happening in the sphere of immaterial production, but also in the sphere of material production where the combined developments around desktop manufacturing[v], rapid tooling and manufacturing[vi], personal fabricators[vii] and multi-purpose machinery[viii] are replicating in the physical world, what has already happened with the computer - a dramatic lowering of the threshold of investment that leads to a transformation from centralized and decentralized logics to distributed logics. This has to be coupled with the increasing ecological crisis (global warming) and the depletion of natural resources which will eventually mean an end to the era of cheap energy, and to the profoundly anti-natural tendency to operate with an infinite growth machine in a finite material environment. To put it rather bluntly, the continued operation of an infinite growth machine in a limited environment is both a physical and logical impossibility. In a few decades time, we will therefore need to dramatically reverse the current ill-logic, i.e. a mistaken belief in material infinity with artificial scarcities in the immaterial world, into its opposite - a ‘natural capitalism’[ix] that respects limits, coupled with a universe of free sharing in the immaterial world.  

As this logic has started to emerge, we have seen the emergence of a new mode of production based on non-proprietary open designs[x], such as the open source software world, budding open design communities in the sphere of hardware, and new business models. One is the sphere of individual and collective sharing of cultural expression - the Web 2.0 model whereby it is the participants that create the (use) value, but are supported by proprietary platforms that enable that sharing to take place, in exchange for the selling of the aggregated attention to the advertising market. Think Google, YouTube and eBay as companies that are capturing the value created by communities of sharing and exchange.  

The other model is the commons-oriented peer production[xi], as in Linux and Wikipedia, where the community is self-organized under peer governance models[xii], creates non-profit foundations to manage the collaborative infrastructure, and finally gives rise to an ecology of businesses that create scarcities around the commons (for instance, Red Hat and IBM around Linux) which in turn support the commons[xiii] from which they create their wealth. Finally, in the crowd sourcing[xiv] model, it is the companies themselves which mobilize participation under their own frameworks and control, but nevertheless have to compose with the logic of connected communities.  

Any company which adopts co-creation[xv] and can link up with participatory processes, using open[xvi] and free raw material as input, and a commons-oriented licence as output[xvii], will have competitive advantages as compared to companies that remain closed to outside participation. And companies that use proprietary strategies, and hence cannot access communities that ameliorate their products, will tend to lose out from the for-benefit structures that can draw on such community-enhanced development. Think Britannica vs. Wikipedia to see how such competition plays out, and how the latter has completely eclipsed the former.  

All the above - the emergence of peer production, governance and property as a third mode of producing value, which is not only post-capitalist in its logic of sharing and the creation of commons, but is also embedded in the market - is happening on a worldwide scale. This is particularly so in the Western countries who combine a greater relative social weight of knowledge workers, together with a sophisticated understanding of the benefits of participation by the new “netarchical”[xviii] capitalist  platform owners.  

Historically, though new modes of production and social organization have always started in the dominant countries, it is the countries at the margin which could gain more, and therefore effect the revolutions by making the new modes dominant[xix]. Developing countries have both - relatively less knowledge workers, but also huge reserves of unemployed knowledge workers - who may be frustrated, and often engaged in destructive activities such as computer cracking. What if the policy makers understood that they could empower and enable the direct social production of value and that such individuals could engage in socially constructive projects, for which they would be recognized, and which may lead to the self-creation of new business niches?  In other words, the analogy of the state as parent will have to be transformed to a vision of the Partner State , and public authorities would create the infrastructure necessary for more social innovation to occur. This could not only motivate new layers of people for social collaboration, but would in its wake create an ecology of businesses that can draw on such knowledge commons and open designs. It is my contention that developing countries will make much more relative gains from adopting such practices, than the already privileged western countries.  

In a world which will soon face a dramatic series of serious ecological crises, with dwindling natural resources, what we can envisage as a new model is the co-existence of global-local open design communities operating through the internet, combined with local production capacities,  a ‘built-only’ capitalism that respects natural limits[xx]. Such a model would combine the advantages of an open cultural sphere of cooperation, based on a relaxation of restrictive IP legislations and a large abandonment of the technological undermining of internet technologies through DRM[xxi], with a peer-informed but market-based system to manage scarce natural resources.  

Countries like India and China are now living the capitalist dream (of course some others would call it a nightmare), oblivious to the fact that we are already consuming two planets, and that parity with the Western lifestyle would demand four planets. Preparing for these coming limits, they would do well to develop policies that can draw from the new forms of social innovation, which are creating dramatic gains and positive externalizations from social cooperation, and can also contribute to thriving market ecologies.