- Email: [email protected]
Will small become beautiful?
Futures 32 (2000) 79–89 www.elsevier.com/locate/futures
Will small become beautiful? Ted Fuller
*
Foresight Research Centre, Durham University Business School, Mill Hill Lane, Durham DH1 3LB, UK
Abstract How is it possible for individuals and small groups of people, who share particular values or identity, to prosper through their legitimate economic activities with the rest of the world? How does this benefit society and meet some of the imperatives of humanity at the start of the 21st Century? This paper argues that we need to help people in the small business community assess and develop in a positive way the consequences of their actions on themselves and on society. The purpose of the whole enterprise of research is to inform the future, not to explain the past. The entrepreneurial activity is seen as a reflexive shaping of the world and the small firm as a vehicle for economic adaptation. Entrepreneurship is a praxis of knowing and doing, of anticipating and acting, and it is exactly here where foresight becomes alive. Critically requiring the engagement and involvement the people who have an identifiable stake in the future being created. One paradox is that as one seeks to improve the salience and benefit of technology to the (small business) community in particular, this activity itself becomes a discourse of technological determinism. Each step, each shift in the path of activity, has social consequences and will require governance. We are all stakeholders in this. 2000 Elsevier Science Ltd. All rights reserved.
1. Introduction, a starting point The morning after is associated in my mind with the words ‘never again’. Hangovers are caused by excess intake of toxins inherent in substances that bring a sense of well being in the short term. ‘Never again’ implicates one’s own responsibilities, things that one has, or should have had, some control over. How has our pursuit of well being caused us to suffer on the Morning After? Well, how big a picture do you want to look at? The answers come readily in terms of inhumanity in the name
* Tel.: +44-191-374-2258; fax: +44-191-374-3748. E-mail address: [email protected] (E.C. Fuller) 0016-3287/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 0 1 6 - 3 2 8 7 ( 9 9 ) 0 0 0 6 8 - 3
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of national or personal progress, pollution in the name quality of life, emasculation in the name of faith et cetera. However, this article does not take the moral high ground so naively as this. I am grounded in where I am and what I can do. Our hangover is that we are employed. We have given up the responsibility for making our own future. Where I am is a practising academic member of a University Business School. What I know about is small business, technology and, increasingly, basic foresight. What I can do is to teach, to research to publish and to talk with practitioners and policy makers. I am not great at any of these, but things do happen sometimes. If I have a passion, it is about small business. I have run small businesses all my life, some I own, some are run within larger organisations. None are hugely profitable or successful, it is a way of life, and it brings value to the lives of others. My work is fundamentally about learning. I learn continuously, I try to uncover and add new knowledge to what is known. I try to help others to learn from this and for themselves. The way in which I do this work, and what I chose to be engaged with stems from my interests and values. These are what I promote in my work. How are my own interests and my environment shaping my agenda? Firstly, the business domain. The population of businesses is made up mainly of very small enterprises, less than ten people working together. As the few large organisations, less than 2% of the business population each employing more than 500 people, account for about 60% of GDP, the power structure is apparent. I am on the side of the small firm. For me the small firm is synonymous with personal freedom and choice, and with creativity and diversity. These are important values though they can have hazardous consequences. Futurists reading this chapter will be aware of the major trends in the environment, for example, the ecological imperatives and global business and communications. It is of significance to me how small enterprises will thrive in the environment in which they find themselves. For example, the power of computers and global communications are part of the environment, but the impact on the morphology of the small business population is unpredictable. The changing patterns of this population need to be understood by the actors within it and those who depend upon it. Society depends upon small enterprises. This leads me to the other domain that shapes my agenda, that of theory. If you want to understand how things are, then I consider it necessary to look beyond what you can experience. Theory is intangible but provides an explanation of what is experienced. My current (fallible) perspective is of a natural world that exists without human social and psychological reconstruction, i.e. it is real, however it is the constructions that society places on the world that give us the meaning that guides everyday practice. I am of course influenced in this perspective by critical realism [1]. I am also influenced in my conceptions of the dynamics of the world by the literature on complexity. This world is complex, by which I mean that it is an everchanging landscape brought about by the inter-relationships between things, both natural and social. Within this are discernible patterns, but the future shape of these can never be known. There are two other building blocks in the creation of this current perspective.
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The first is the value of looking ahead in non-trivial ways and the second is the need for principles upon which to base actions resulting from expectations about the future. Given the unpredictability of events and the fallibility of our knowledge, each of these is impossible to be certain of, but each we operate every single day. I cannot produce blinding insights with respect to these, expect perhaps for myself as I learn from others. This is the basic conception I use to make sense of notions of foresight or even forecasting, they are activities and models of thinking that help us to learn about our assumptions and identify the limits of our knowledge, both personal and cumulative. This then is my starting point, this is the baggage I bring to an agenda for the 21st Century—a very grand notion leading one to make all kinds of pompous statements. I shall resist this, though the reader may spot one or two slips. The key questions are: How is it possible for individuals and small groups of people, who share particular values or identity, to prosper through their legitimate economic activities with the rest of the world? How does this benefit society and meet some of the imperatives of humanity at the start of the 21st Century? To this question I bring the notions of foresight as a learning method, complexity as a way of understanding dynamics, and issues such as sustainable development and the information society as contemporary discourses in which to situate the sense-making process of change. My agenda concerns one cornerstone of human activity; work. In particular the way in which work is organised as a creative and valuable activity, rather than a punishment. The context of work I address is small business. Small business is a particular context of working and a context of the exchange of the fruits of human endeavour. For many people it is more than this, it is a way of life.
2. Why ‘small’ business? Consider a central social organising concept, that of exchange. The theory of exchange lies deep in many cultures. We exchange our labour for money, we barter goods, we exchange our time for some reward, we exchange gifts, and more. The morphology or landscape of exchange-world is contoured by desires, by ownership, by customs, by power. The relative or perceived value of an exchange is a complicated construction. Exchange is ‘fair’ if there is some sense of equity in what is gained and what is given up in an exchange. The pursuit of fair exchange is a cultural myth. Power enables us to gain without equitable exchange. What mechanism enables the individual or small group to exchange the value of their endeavours? For the individual, there is a contract of employment. Or there is the individual transaction, a day’s labour, or the purchase of an artefact or produce. The concept of a ‘business’ provides an identity for ongoing exchanges and collaboration between people. This concept has been enshrined in law in many countries. At some point in their history, businesses became a structure for the exchange of value created by one or a few individuals. Today, the concept of business is much wider than this, and in particular the concepts of publicly owned corporate business, whose identity is highly complicated and multi-faceted, and revolves around market
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power and financial capital. However, this central concept is still highly relevant to understanding the social significance of small business. A classic article in the Harvard Business Review [2] pointed out that “A small business is not a big business”. In historical terms, it would be more accurate to say that a big business is not a small business, and it is only because of the rise of the corporate enterprise that we have had to re-title the firm as a ‘small’ business. In many cultures employment is the norm, one is expected to be employed. When we are not employed by someone else then that status has to be signalled for example as self-employed. Thus despite a role of historic significance, small business is a relatively powerless, marginal and often derided institution. There is a close analogy between the small business in the economic domain and the individual in the social domain. By this I mean that small firms are the ‘individuals’ in the economic domain, relative to ‘collective powers’ of organised labour or corporately organised capital, in the same way that the individual is relative to collective political power of institutes of governance. The term ‘owner managed business’ is used synonymously with the term small business, and more accurately. Often of course the very small business is no more than an individual going about his or her life in order to earn a living, so the analogy is even more accurate. The concepts of economic and social domains are themselves a social construction. People’s lives constantly encompass both domains simultaneously. The small business is both economic and social in legitimacy. How can people enact their societal responsibilities to ‘exchange’ the fruits of their talents in society and feel empowered to do so? Doing business as a small firm is one important way and there are other analogous enterprising activities that spill out from the economic domain into the social. The institute of the small firm is a vital part of society. Acting enterprisingly is to shape the future in new ways. Some acts may be hazardous, but in general, smallness of scale reduces the chance of serious damage from hazardous behaviour. I will only briefly rehearse the arguments for small business because the rhetoric is quite well known. They provide employment, they are ‘flexible’, i.e. they come and go as the economy changes, they can be the medium for the growth of much larger enterprises (Microsoft was small once etc. etc.). Larger business and other corporate institutions depend on small businesses. Small business is part of the socio-economic ecology in many different ways. It does not exist outside of this ecology even when not directly engaged. One can hardly do business in a small way without calling upon some feature of corporatism. If they are such a settled part of the landscape, are they worth attention? Are they under threat as a species? If anything they are growing in numbers and political significance world-wide. There is no clear explanation for this. There is a large amount of rhetoric, and self-fulfilling models of what constitutes corporate efficiency, giving rise to subcontracting, supply chains etc. What is the explanation for a rise in their numbers and significance world-wide? Perhaps they are a symptom of a continued separation of labour and capital, with labour being structured as small firms and capital being protected through cultural leadership by brands and relatively ungoverned financial power? This is a simplistic explanation, though may be partially true, one only has to observe the rise in self-employed consultants in the computing
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industry and their constant flow from one corporate to another. The reason why I give them my attention is partly idealistic, my belief in the importance of a vehicle for structuring the exchange of value, and partly for their role in the development of society. One way in which I understand the role of small business in society is through the lens of complexity theory. Specifically, the ideas of agency, of emergence and of dynamical systemic structures. Complexity is an epistemological breakthrough. Although the sense of complexity comes from metaphor and model, rather than direct empirical description, it is a way of contemplating dynamical inter-reacting phenomena in the abstract. My reading of complexity theory leads to an (hopefully) insightful paradox. It is that agency, the ability to reflexively shape one’s response to the environment, and hence the environment itself, creates structures that are unintended or unanticipated by the act of agency. No one member of a rain forest’s ecology intends to create such an ecology. No one human member of society sets out to create the society that we experience. Thus our reflexive actions continually create change. This invokes change in others. Complexity theory also suggests the emergence of layered structures, to conserve energy or information. Thus an explanation for international capital markets is an energy conserving structure in the capital system. This would not be everyone’s interpretation, in fact I am not sure if I would recognise it myself. Such structures are not static; they are dynamical or ever-changing. Complexity is, as Mitchel Waldrop [3] put it, at the “edge of order and chaos”. What is the motor for this dynamism? The central object in complex adaptive systems is the adaptive agent. My reading of complexity in the business context, puts entrepreneurial activity as this central reflexive activity and the small firm as a vehicle for economic adaptation. If entrepreneurial behaviour is structured within the small firm and these small firms are structurally significant to the socio-economic domain, then I would suggest that small firms underpin global economic structures. The emergence of novelty, the adaptation to change, the structural dynamic come from human agency. Enterprise is a label we give to human efforts to create progress. In the economic domain this is entrepreneurship. We also find the discourse of entrepreneurship appearing in other fields, in particular the ideas of social entrepreneurs, motivated by non-financial goals. Cultural systems can affect the role, effectiveness and quality of the small businesses and their contribution to society. There is an open question with regard to enterprising activity, which is the nature of the organisational form in which it takes place. Put simply, there are many different forms of small enterprise, and their characteristic is continuously evolving. So although this question can be answered by inspection, it should remain as a problematic as such forms change as the landscape changes. This brings us to the next element of this essay, the contemplation of the changing landscape and what that might bring.
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3. Why ‘foresight’?
A brief scan of the history of Futures Studies leads me to a (probably ill-formed) conclusion that when it has been exercised institutionally, it has been largely in the domains of urban planning and political science. In each case deterministic political power was central, and the role of Future Studies was to improve the accuracy of decisions, that affected many people’s lives. This is in contrast to the environmental movement that has colonised futures studies as a way of changing or critiquing contemporary perspectives. Now it is business, particularly corporate, global, business that is a major institutional factor in everyone’s lives. Do they need foresight? They say so for the reason that the times are unpredictable and rapidly changing, and therefore the ability to anticipate change is a vital part of strategy and maintaining ‘competitive advantage’. The management textbooks are full of ‘scenario planning’. I would say so because businesses, large and small are fundamentally implicated in people’s lives. The footprint of corporate and business activities in society is large. Their sustainability is integrated with the nature of social welfare. The effects of their decisions are much wider and longer lasting than their horizon in which they actually evaluate that decision. The notion of foresight is a lure, if by foresight we mean the ability to see the future. For we know that we cannot, but paradoxically nearly everything we do anticipates the future. To be able to anticipate the effects of one’s actions on the future is to have a theory of how one’s actions are interdependent with the actions of others. To practice foresight is to make huge, often impossible, demands on theory. One’s expectations about the future are as weak or as strong as the theory one applies. This is dangerous but necessary ground. It puts theory into an operational role, although it is often not developed from the operational, complex, grounds in which it needs to be applied, but from non-complex abstractions. In the cold light of morning, isn’t this strange thing called foresight, these scenarios, this environmental scanning, or these Delphi surveys, just another articulation of our hopeless desires for control of our future? Do I really want to part of a mass deception? If that is what foresight is, then of course I do not. But what deflates self-deception, what reduces illusions of certainty? Evidence, and critical appraisal of assumptions, the challenging of dogma, the robust testing of theory, the critique of axiomatic language. In short, the enterprise of intellectual rigour and research. The whole enterprise of research is, for me, to inform the future, not to explain the past. This is the challenge and the meaning of foresight in an academic sense. It is in the praxis of knowing and doing, of anticipating and acting, that foresight becomes alive. Foresight is, for me, a method of interpretation, a method of learning. If I can say what an action means for the future of its dependencies, then I am using foresight. To promote foresight is to promote insight arrived at through close inspection and critique of available evidence and experience, and the creation of alternatives by the actors themselves, leading to commitment to these alternatives. An example of the process [4] that a method of foresight might encompass is:
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1. Problem identification by critiquing the present, both in terms of actions and underlying reasons. 2. Understanding new models of world or new salience of features, this is a creative and synthetic activity, effectively theory building or proposition building. 3. Creation of mental models (associated with above), new perspectives, big picture. This is the personal and societal discourse of new modes, structures, institutions or concepts to create novel perspectives. 4. Creation of personal commitment and responsibility, this is personal and cultural internalising of underlying values and goals associated with alternative perspectives. Critically, this method requires the engagement and involvement of the stakeholders, the people who have an identifiable stake in the future being created and some power to change or influence that future. Thus is my agenda steadily being formed. One thing that is to be done is to engage business in processes of foresight, to examine their impact on society. Why will these stakeholders engage in processes of foresight? Why will stakeholders contemplate the role, value and promotion of owner managed businesses? The reasons are to be found in the present day imperatives. Two such imperatives, I have already touched on them briefly, are technology and the environment in which we live. These are enduring imperatives, though are manifest differently in each generation. The information society and sustainable development are typical zeitgeist issues, both important and capable of changing the course of society in unpredictable ways. I have a particular personal interest and research record in information and communications technology (ICT) and small firms. There are many stakeholders in these domains, and each has their own agenda.
4. What is to be done? My personal agenda for action emerges (painfully slowly) from this analysis. It is to help people in the business community assess and develop in a positive way the consequences of their actions on themselves and on society. The means I will use for this will be to: 1. Promote small enterprise and foresight in the business community 2. Assist people and organisations to increase their competence in enterprise and foresight 3. Identify and critique trajectories of small enterprise and technology In doing so, a number of other actions are necessary. I do not think that I am yet able to recognise what these are but they include: 앫 The use of foresight as a critical learning method with respect to experience, theory and policy
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앫 Monitoring and critique of new technologies, seeking to identify their empowering and emasculating properties particularly with respect to people’s own enterprises 앫 Understand and develop the value of foresight and enterprise for society 앫 Develop a better understanding of the nature and relevance of ‘complexity’ 앫 Contribute to the science of social research in relation to the above domains This is indeed a mighty grand and pompous sounding set of goals, way beyond anything I have actually achieved to date I am sure. Thus to level a little, let us consider some of the real issues presented in attempting these feats (even with the aid of a safety net, called a University). The first test must be to question whether I have any idea what the consequences of my actions are on myself and on society. As a generalisation this is not possible to answer, but it is possible to answer in specific cases. Personally speaking it sounds like fun just so long as I do not try to do everything at once. That was what time was invented for, to stop everything from happening at once. Disturbingly, for such a major part of the economy, support for research and education that relates to small business is relatively low, compared to that of the corporate and scientific domain. Only a few weeks ago a colleague commented that “Business Schools should not have small business on the curriculum, they should only have Entrepreneurship”. During a short debate at a recent small business academic conference in which I participated, the main difference emerging between entrepreneurship courses and small business courses was the fee charged! Of course, in this respect I am fortunate, in that my own University has established a Foundation for SME development independently of the Business School. While this causes a discomforting dilemma for centring my academic work, it provides an excellent platform for the linkage between theoretical development and every day doing. The actors themselves, the owners of small business, are predisposed to doing things, to action, rather than to the reflective stance associated with academic analysis and learning. My response to this is to engage with actors as part of research and learning, but engaging with people who are not predisposed to your mission and for whom every second counts, is always difficult. However, the point is that enterprising behaviour exercises foresight. Schumpeter talks of entrepreneurs having “the capacity of seeing things in a way which afterwards proves to be true, even if it cannot be established at the moment” [5, p. 85]. The stakeholders, the corporates and government who are interdependent with owner-managed businesses, are interested in the future of small firms, but in highly instrumental ways and from their own perspectives. For example, technology suppliers want to know how to ‘segment’ the small business market, not how to develop its robustness. These and other issues present operational challenges to improving an understanding, and progress in, small business as a social institution. The obstacle is present thinking; models of policy or market practice or daily routines grounded in experience. In many senses present thinking is both an obstacle and a reality check on notions of progress. This is found in all Futures activity and is part of an evolutionary process of social learning. There are more fundamental contradictions in my proposals. Firstly, to say that
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small business is an important institution in the overall economic domain might be to accept status quo, the centrality and necessity of large business, of corporatism as somehow a natural outcome of capitalism. But small businesses exist where there are no large businesses. Secondly, small businesses are an historic construction, so is such baggage the best start to forward thinking? It is important to leave aside present day constructions, and work on the basic reasons—the structures within which individuals can practice enterprise, to enjoy the freedom to create and exchange value in society. Thirdly, is not free enterprise the cause of so much of the difficulties of consumerism and over-consumption? This is a paradox that needs to be analysed in a cultural dimension. There are moral implications attached to individualistic actions, both of consumers and those that feed consumption. One small business does not create global moral hazard, but aggregate actions of a population of small businesses can. Fourthly, as employers, small business have a mixed record. If they were so good, wouldn’t everyone want to own one or work in one? There are good ones and bad ones. Small enterprise cannot be properly understood outside the social and cultural context, including ethical norms. There are similar obstacles and contradictions with respect to foresighting. To say that one is promoting a better way of anticipating the future, when the future cannot be predicted is a sleight of hand. To anticipate a future is in some way to ‘predict’ its possibility, not its certainty. Our actions are based on anticipations we feel are real, i.e. have a real possibility. So to promote as non-predictive ideas that clearly are predictive, and therefore almost certain to be wrong, is a contradiction. However, in this case, I would argue that the contradiction is plausible because however it is labelled, we do continuously anticipate the future and in effect predict it, while recognising the inaccuracy and lack of certainty of such predictions. The contradiction is based on people’s expectations. Perhaps as we are informed by critical theory, the sense of what is possible with regard to linkage between present actions and future consequences becomes more resonant with our experience. The more that a forwards view becomes a critique of the present and past, the more it defeats itself. How can we take a forward view that has no sense of being arrived at from the present? How does critique give necessary grounds for a forward view, how do we know one view is any better than another is? Well, this is the point of critique. It is not that one is offering the alternative to a flawed present, it is that through the process of examining trajectories and alternative futures one is implicitly examining present assumptions. To make this explicit is, in my view, a valuable step forwards. One underlying premise of foresight is that forward views are certainly no more robust than present views, are perhaps less robust, but are essential. So, finally to the subject of tracking the technological trajectories of small enterprises. It is quite difficult to identify the diversity of change and the rate of change for both theoretical and practical reasons. The theoretical problem is that the diversity is created in an ongoing and cumulative process, often known only to the creators. The practical problem is one of scale and adequacy of assessment, though no more than any other research domain. It requires collaboration between researchers. While there is an ethos of academic collegiality and patronage for research that allows for open publication, this will remain possible. Alas, this is not
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always possible. However, these are mere practical problems. What are the contradictions? As one assesses the overall impacts of technology, and seeks to improve its salience and benefit to the (small business) community in particular, this activity itself becomes a discourse of technological determinism. Has technology actually caused progress in humankind? Who benefits from this technology? One feels this activity is somehow accepting an inevitable technological infrastructure, with increasing intrusion in every day life. It is important to show it for what it is, in its many dimensions. People who own small businesses are smart people. They have to be to survive. Small firms are quite slow to respond to technological changes, i.e. slower than the suppliers would like. The harnessing of science into the every day lives of people is open to collective social regulation and is shaped by the cumulative individual actions of individuals. In other words, the way that small businesses innovate with technology will shape the technology, but only as much as the owners of that technology enable them. Each step, each shift in the path of activity, has social consequences and will require governance. We are all stakeholders in this.
5. Conclusion The way that individuals can take responsibility for their own efforts, and collaborate with like-minded people in economic endeavour has largely been taken out of their hands by the social imperative of employment and the cultural and structural dominance of large organisations. Yet the basic need for a mechanism for personal enterprise remains. Indeed, the so called ‘small business’ in its various guises is a renewed phenomena in a more globally wired and complex economy. However the landscape is different from when all firms were small firms. This significant economic and social phenomena is part of our future, and the more we understand its significance, the more we can improve its social sustainability. The more we encourage people to take responsibility for their own future, the more diversity of enterprises will emerge. Business, both large and small has a major impact on our lives and is the context for global interchange, culturally and economically. The impact on society that business has is wider and deeper than its managers take account of in their pragmatic managerial processes. The consequences of their actions fall outside their planning horizons. This is true of their relationship with small firms, with technology, with the environment, with society and with whole national cultures. If they are to contemplate their influence, whether desired or not, they need to enact critical assessments using wider models. One methodology for this is foresight, which starts by critical assessments of the present and encourages a wider search for salience. Individuals and organisations will be more fit for their de facto social role with improved foresight competence. The landscape for business in society is ever changing, though two key enduring issues are the impact of available technologies and quality of life of stakeholders. The present discourse is of the information age and sustainable development. The
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way in which people will be able to exchange their endeavours, and the impact on society, with regard to these, and other forces, is a vital building block for our futures. Observation, critique and explanation can help society maintain a sense of purpose, anticipate dangers and improve the human condition. It would be nice to think I can help, so that is what I will try to do.
References [1] Bhaskar R. A realist theory of science. Brighton: Harvester Press, 1978. [2] Welsh JA, White JF. A small business is not a big business. Harvard Business Review 1981;59:18–32. [3] Waldrop M. Complexity: the emerging science at the edge of order and chaos. Harmondsworth: Penguin, 1992. [4] Tilley F, Fuller EC. Foresighting methods and their role in researching small firms and sustainability Futures 2000; 32, in press. [5] Schumpeter JA. The theory of economic development. Cambridge: Cambridge University Press, 1934.
Will small become beautiful? Ted Fuller
*
Foresight Research Centre, Durham University Business School, Mill Hill Lane, Durham DH1 3LB, UK
Abstract How is it possible for individuals and small groups of people, who share particular values or identity, to prosper through their legitimate economic activities with the rest of the world? How does this benefit society and meet some of the imperatives of humanity at the start of the 21st Century? This paper argues that we need to help people in the small business community assess and develop in a positive way the consequences of their actions on themselves and on society. The purpose of the whole enterprise of research is to inform the future, not to explain the past. The entrepreneurial activity is seen as a reflexive shaping of the world and the small firm as a vehicle for economic adaptation. Entrepreneurship is a praxis of knowing and doing, of anticipating and acting, and it is exactly here where foresight becomes alive. Critically requiring the engagement and involvement the people who have an identifiable stake in the future being created. One paradox is that as one seeks to improve the salience and benefit of technology to the (small business) community in particular, this activity itself becomes a discourse of technological determinism. Each step, each shift in the path of activity, has social consequences and will require governance. We are all stakeholders in this. 2000 Elsevier Science Ltd. All rights reserved.
1. Introduction, a starting point The morning after is associated in my mind with the words ‘never again’. Hangovers are caused by excess intake of toxins inherent in substances that bring a sense of well being in the short term. ‘Never again’ implicates one’s own responsibilities, things that one has, or should have had, some control over. How has our pursuit of well being caused us to suffer on the Morning After? Well, how big a picture do you want to look at? The answers come readily in terms of inhumanity in the name
* Tel.: +44-191-374-2258; fax: +44-191-374-3748. E-mail address: [email protected] (E.C. Fuller) 0016-3287/00/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 0 1 6 - 3 2 8 7 ( 9 9 ) 0 0 0 6 8 - 3
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of national or personal progress, pollution in the name quality of life, emasculation in the name of faith et cetera. However, this article does not take the moral high ground so naively as this. I am grounded in where I am and what I can do. Our hangover is that we are employed. We have given up the responsibility for making our own future. Where I am is a practising academic member of a University Business School. What I know about is small business, technology and, increasingly, basic foresight. What I can do is to teach, to research to publish and to talk with practitioners and policy makers. I am not great at any of these, but things do happen sometimes. If I have a passion, it is about small business. I have run small businesses all my life, some I own, some are run within larger organisations. None are hugely profitable or successful, it is a way of life, and it brings value to the lives of others. My work is fundamentally about learning. I learn continuously, I try to uncover and add new knowledge to what is known. I try to help others to learn from this and for themselves. The way in which I do this work, and what I chose to be engaged with stems from my interests and values. These are what I promote in my work. How are my own interests and my environment shaping my agenda? Firstly, the business domain. The population of businesses is made up mainly of very small enterprises, less than ten people working together. As the few large organisations, less than 2% of the business population each employing more than 500 people, account for about 60% of GDP, the power structure is apparent. I am on the side of the small firm. For me the small firm is synonymous with personal freedom and choice, and with creativity and diversity. These are important values though they can have hazardous consequences. Futurists reading this chapter will be aware of the major trends in the environment, for example, the ecological imperatives and global business and communications. It is of significance to me how small enterprises will thrive in the environment in which they find themselves. For example, the power of computers and global communications are part of the environment, but the impact on the morphology of the small business population is unpredictable. The changing patterns of this population need to be understood by the actors within it and those who depend upon it. Society depends upon small enterprises. This leads me to the other domain that shapes my agenda, that of theory. If you want to understand how things are, then I consider it necessary to look beyond what you can experience. Theory is intangible but provides an explanation of what is experienced. My current (fallible) perspective is of a natural world that exists without human social and psychological reconstruction, i.e. it is real, however it is the constructions that society places on the world that give us the meaning that guides everyday practice. I am of course influenced in this perspective by critical realism [1]. I am also influenced in my conceptions of the dynamics of the world by the literature on complexity. This world is complex, by which I mean that it is an everchanging landscape brought about by the inter-relationships between things, both natural and social. Within this are discernible patterns, but the future shape of these can never be known. There are two other building blocks in the creation of this current perspective.
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The first is the value of looking ahead in non-trivial ways and the second is the need for principles upon which to base actions resulting from expectations about the future. Given the unpredictability of events and the fallibility of our knowledge, each of these is impossible to be certain of, but each we operate every single day. I cannot produce blinding insights with respect to these, expect perhaps for myself as I learn from others. This is the basic conception I use to make sense of notions of foresight or even forecasting, they are activities and models of thinking that help us to learn about our assumptions and identify the limits of our knowledge, both personal and cumulative. This then is my starting point, this is the baggage I bring to an agenda for the 21st Century—a very grand notion leading one to make all kinds of pompous statements. I shall resist this, though the reader may spot one or two slips. The key questions are: How is it possible for individuals and small groups of people, who share particular values or identity, to prosper through their legitimate economic activities with the rest of the world? How does this benefit society and meet some of the imperatives of humanity at the start of the 21st Century? To this question I bring the notions of foresight as a learning method, complexity as a way of understanding dynamics, and issues such as sustainable development and the information society as contemporary discourses in which to situate the sense-making process of change. My agenda concerns one cornerstone of human activity; work. In particular the way in which work is organised as a creative and valuable activity, rather than a punishment. The context of work I address is small business. Small business is a particular context of working and a context of the exchange of the fruits of human endeavour. For many people it is more than this, it is a way of life.
2. Why ‘small’ business? Consider a central social organising concept, that of exchange. The theory of exchange lies deep in many cultures. We exchange our labour for money, we barter goods, we exchange our time for some reward, we exchange gifts, and more. The morphology or landscape of exchange-world is contoured by desires, by ownership, by customs, by power. The relative or perceived value of an exchange is a complicated construction. Exchange is ‘fair’ if there is some sense of equity in what is gained and what is given up in an exchange. The pursuit of fair exchange is a cultural myth. Power enables us to gain without equitable exchange. What mechanism enables the individual or small group to exchange the value of their endeavours? For the individual, there is a contract of employment. Or there is the individual transaction, a day’s labour, or the purchase of an artefact or produce. The concept of a ‘business’ provides an identity for ongoing exchanges and collaboration between people. This concept has been enshrined in law in many countries. At some point in their history, businesses became a structure for the exchange of value created by one or a few individuals. Today, the concept of business is much wider than this, and in particular the concepts of publicly owned corporate business, whose identity is highly complicated and multi-faceted, and revolves around market
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power and financial capital. However, this central concept is still highly relevant to understanding the social significance of small business. A classic article in the Harvard Business Review [2] pointed out that “A small business is not a big business”. In historical terms, it would be more accurate to say that a big business is not a small business, and it is only because of the rise of the corporate enterprise that we have had to re-title the firm as a ‘small’ business. In many cultures employment is the norm, one is expected to be employed. When we are not employed by someone else then that status has to be signalled for example as self-employed. Thus despite a role of historic significance, small business is a relatively powerless, marginal and often derided institution. There is a close analogy between the small business in the economic domain and the individual in the social domain. By this I mean that small firms are the ‘individuals’ in the economic domain, relative to ‘collective powers’ of organised labour or corporately organised capital, in the same way that the individual is relative to collective political power of institutes of governance. The term ‘owner managed business’ is used synonymously with the term small business, and more accurately. Often of course the very small business is no more than an individual going about his or her life in order to earn a living, so the analogy is even more accurate. The concepts of economic and social domains are themselves a social construction. People’s lives constantly encompass both domains simultaneously. The small business is both economic and social in legitimacy. How can people enact their societal responsibilities to ‘exchange’ the fruits of their talents in society and feel empowered to do so? Doing business as a small firm is one important way and there are other analogous enterprising activities that spill out from the economic domain into the social. The institute of the small firm is a vital part of society. Acting enterprisingly is to shape the future in new ways. Some acts may be hazardous, but in general, smallness of scale reduces the chance of serious damage from hazardous behaviour. I will only briefly rehearse the arguments for small business because the rhetoric is quite well known. They provide employment, they are ‘flexible’, i.e. they come and go as the economy changes, they can be the medium for the growth of much larger enterprises (Microsoft was small once etc. etc.). Larger business and other corporate institutions depend on small businesses. Small business is part of the socio-economic ecology in many different ways. It does not exist outside of this ecology even when not directly engaged. One can hardly do business in a small way without calling upon some feature of corporatism. If they are such a settled part of the landscape, are they worth attention? Are they under threat as a species? If anything they are growing in numbers and political significance world-wide. There is no clear explanation for this. There is a large amount of rhetoric, and self-fulfilling models of what constitutes corporate efficiency, giving rise to subcontracting, supply chains etc. What is the explanation for a rise in their numbers and significance world-wide? Perhaps they are a symptom of a continued separation of labour and capital, with labour being structured as small firms and capital being protected through cultural leadership by brands and relatively ungoverned financial power? This is a simplistic explanation, though may be partially true, one only has to observe the rise in self-employed consultants in the computing
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industry and their constant flow from one corporate to another. The reason why I give them my attention is partly idealistic, my belief in the importance of a vehicle for structuring the exchange of value, and partly for their role in the development of society. One way in which I understand the role of small business in society is through the lens of complexity theory. Specifically, the ideas of agency, of emergence and of dynamical systemic structures. Complexity is an epistemological breakthrough. Although the sense of complexity comes from metaphor and model, rather than direct empirical description, it is a way of contemplating dynamical inter-reacting phenomena in the abstract. My reading of complexity theory leads to an (hopefully) insightful paradox. It is that agency, the ability to reflexively shape one’s response to the environment, and hence the environment itself, creates structures that are unintended or unanticipated by the act of agency. No one member of a rain forest’s ecology intends to create such an ecology. No one human member of society sets out to create the society that we experience. Thus our reflexive actions continually create change. This invokes change in others. Complexity theory also suggests the emergence of layered structures, to conserve energy or information. Thus an explanation for international capital markets is an energy conserving structure in the capital system. This would not be everyone’s interpretation, in fact I am not sure if I would recognise it myself. Such structures are not static; they are dynamical or ever-changing. Complexity is, as Mitchel Waldrop [3] put it, at the “edge of order and chaos”. What is the motor for this dynamism? The central object in complex adaptive systems is the adaptive agent. My reading of complexity in the business context, puts entrepreneurial activity as this central reflexive activity and the small firm as a vehicle for economic adaptation. If entrepreneurial behaviour is structured within the small firm and these small firms are structurally significant to the socio-economic domain, then I would suggest that small firms underpin global economic structures. The emergence of novelty, the adaptation to change, the structural dynamic come from human agency. Enterprise is a label we give to human efforts to create progress. In the economic domain this is entrepreneurship. We also find the discourse of entrepreneurship appearing in other fields, in particular the ideas of social entrepreneurs, motivated by non-financial goals. Cultural systems can affect the role, effectiveness and quality of the small businesses and their contribution to society. There is an open question with regard to enterprising activity, which is the nature of the organisational form in which it takes place. Put simply, there are many different forms of small enterprise, and their characteristic is continuously evolving. So although this question can be answered by inspection, it should remain as a problematic as such forms change as the landscape changes. This brings us to the next element of this essay, the contemplation of the changing landscape and what that might bring.
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3. Why ‘foresight’?
A brief scan of the history of Futures Studies leads me to a (probably ill-formed) conclusion that when it has been exercised institutionally, it has been largely in the domains of urban planning and political science. In each case deterministic political power was central, and the role of Future Studies was to improve the accuracy of decisions, that affected many people’s lives. This is in contrast to the environmental movement that has colonised futures studies as a way of changing or critiquing contemporary perspectives. Now it is business, particularly corporate, global, business that is a major institutional factor in everyone’s lives. Do they need foresight? They say so for the reason that the times are unpredictable and rapidly changing, and therefore the ability to anticipate change is a vital part of strategy and maintaining ‘competitive advantage’. The management textbooks are full of ‘scenario planning’. I would say so because businesses, large and small are fundamentally implicated in people’s lives. The footprint of corporate and business activities in society is large. Their sustainability is integrated with the nature of social welfare. The effects of their decisions are much wider and longer lasting than their horizon in which they actually evaluate that decision. The notion of foresight is a lure, if by foresight we mean the ability to see the future. For we know that we cannot, but paradoxically nearly everything we do anticipates the future. To be able to anticipate the effects of one’s actions on the future is to have a theory of how one’s actions are interdependent with the actions of others. To practice foresight is to make huge, often impossible, demands on theory. One’s expectations about the future are as weak or as strong as the theory one applies. This is dangerous but necessary ground. It puts theory into an operational role, although it is often not developed from the operational, complex, grounds in which it needs to be applied, but from non-complex abstractions. In the cold light of morning, isn’t this strange thing called foresight, these scenarios, this environmental scanning, or these Delphi surveys, just another articulation of our hopeless desires for control of our future? Do I really want to part of a mass deception? If that is what foresight is, then of course I do not. But what deflates self-deception, what reduces illusions of certainty? Evidence, and critical appraisal of assumptions, the challenging of dogma, the robust testing of theory, the critique of axiomatic language. In short, the enterprise of intellectual rigour and research. The whole enterprise of research is, for me, to inform the future, not to explain the past. This is the challenge and the meaning of foresight in an academic sense. It is in the praxis of knowing and doing, of anticipating and acting, that foresight becomes alive. Foresight is, for me, a method of interpretation, a method of learning. If I can say what an action means for the future of its dependencies, then I am using foresight. To promote foresight is to promote insight arrived at through close inspection and critique of available evidence and experience, and the creation of alternatives by the actors themselves, leading to commitment to these alternatives. An example of the process [4] that a method of foresight might encompass is:
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1. Problem identification by critiquing the present, both in terms of actions and underlying reasons. 2. Understanding new models of world or new salience of features, this is a creative and synthetic activity, effectively theory building or proposition building. 3. Creation of mental models (associated with above), new perspectives, big picture. This is the personal and societal discourse of new modes, structures, institutions or concepts to create novel perspectives. 4. Creation of personal commitment and responsibility, this is personal and cultural internalising of underlying values and goals associated with alternative perspectives. Critically, this method requires the engagement and involvement of the stakeholders, the people who have an identifiable stake in the future being created and some power to change or influence that future. Thus is my agenda steadily being formed. One thing that is to be done is to engage business in processes of foresight, to examine their impact on society. Why will these stakeholders engage in processes of foresight? Why will stakeholders contemplate the role, value and promotion of owner managed businesses? The reasons are to be found in the present day imperatives. Two such imperatives, I have already touched on them briefly, are technology and the environment in which we live. These are enduring imperatives, though are manifest differently in each generation. The information society and sustainable development are typical zeitgeist issues, both important and capable of changing the course of society in unpredictable ways. I have a particular personal interest and research record in information and communications technology (ICT) and small firms. There are many stakeholders in these domains, and each has their own agenda.
4. What is to be done? My personal agenda for action emerges (painfully slowly) from this analysis. It is to help people in the business community assess and develop in a positive way the consequences of their actions on themselves and on society. The means I will use for this will be to: 1. Promote small enterprise and foresight in the business community 2. Assist people and organisations to increase their competence in enterprise and foresight 3. Identify and critique trajectories of small enterprise and technology In doing so, a number of other actions are necessary. I do not think that I am yet able to recognise what these are but they include: 앫 The use of foresight as a critical learning method with respect to experience, theory and policy
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앫 Monitoring and critique of new technologies, seeking to identify their empowering and emasculating properties particularly with respect to people’s own enterprises 앫 Understand and develop the value of foresight and enterprise for society 앫 Develop a better understanding of the nature and relevance of ‘complexity’ 앫 Contribute to the science of social research in relation to the above domains This is indeed a mighty grand and pompous sounding set of goals, way beyond anything I have actually achieved to date I am sure. Thus to level a little, let us consider some of the real issues presented in attempting these feats (even with the aid of a safety net, called a University). The first test must be to question whether I have any idea what the consequences of my actions are on myself and on society. As a generalisation this is not possible to answer, but it is possible to answer in specific cases. Personally speaking it sounds like fun just so long as I do not try to do everything at once. That was what time was invented for, to stop everything from happening at once. Disturbingly, for such a major part of the economy, support for research and education that relates to small business is relatively low, compared to that of the corporate and scientific domain. Only a few weeks ago a colleague commented that “Business Schools should not have small business on the curriculum, they should only have Entrepreneurship”. During a short debate at a recent small business academic conference in which I participated, the main difference emerging between entrepreneurship courses and small business courses was the fee charged! Of course, in this respect I am fortunate, in that my own University has established a Foundation for SME development independently of the Business School. While this causes a discomforting dilemma for centring my academic work, it provides an excellent platform for the linkage between theoretical development and every day doing. The actors themselves, the owners of small business, are predisposed to doing things, to action, rather than to the reflective stance associated with academic analysis and learning. My response to this is to engage with actors as part of research and learning, but engaging with people who are not predisposed to your mission and for whom every second counts, is always difficult. However, the point is that enterprising behaviour exercises foresight. Schumpeter talks of entrepreneurs having “the capacity of seeing things in a way which afterwards proves to be true, even if it cannot be established at the moment” [5, p. 85]. The stakeholders, the corporates and government who are interdependent with owner-managed businesses, are interested in the future of small firms, but in highly instrumental ways and from their own perspectives. For example, technology suppliers want to know how to ‘segment’ the small business market, not how to develop its robustness. These and other issues present operational challenges to improving an understanding, and progress in, small business as a social institution. The obstacle is present thinking; models of policy or market practice or daily routines grounded in experience. In many senses present thinking is both an obstacle and a reality check on notions of progress. This is found in all Futures activity and is part of an evolutionary process of social learning. There are more fundamental contradictions in my proposals. Firstly, to say that
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small business is an important institution in the overall economic domain might be to accept status quo, the centrality and necessity of large business, of corporatism as somehow a natural outcome of capitalism. But small businesses exist where there are no large businesses. Secondly, small businesses are an historic construction, so is such baggage the best start to forward thinking? It is important to leave aside present day constructions, and work on the basic reasons—the structures within which individuals can practice enterprise, to enjoy the freedom to create and exchange value in society. Thirdly, is not free enterprise the cause of so much of the difficulties of consumerism and over-consumption? This is a paradox that needs to be analysed in a cultural dimension. There are moral implications attached to individualistic actions, both of consumers and those that feed consumption. One small business does not create global moral hazard, but aggregate actions of a population of small businesses can. Fourthly, as employers, small business have a mixed record. If they were so good, wouldn’t everyone want to own one or work in one? There are good ones and bad ones. Small enterprise cannot be properly understood outside the social and cultural context, including ethical norms. There are similar obstacles and contradictions with respect to foresighting. To say that one is promoting a better way of anticipating the future, when the future cannot be predicted is a sleight of hand. To anticipate a future is in some way to ‘predict’ its possibility, not its certainty. Our actions are based on anticipations we feel are real, i.e. have a real possibility. So to promote as non-predictive ideas that clearly are predictive, and therefore almost certain to be wrong, is a contradiction. However, in this case, I would argue that the contradiction is plausible because however it is labelled, we do continuously anticipate the future and in effect predict it, while recognising the inaccuracy and lack of certainty of such predictions. The contradiction is based on people’s expectations. Perhaps as we are informed by critical theory, the sense of what is possible with regard to linkage between present actions and future consequences becomes more resonant with our experience. The more that a forwards view becomes a critique of the present and past, the more it defeats itself. How can we take a forward view that has no sense of being arrived at from the present? How does critique give necessary grounds for a forward view, how do we know one view is any better than another is? Well, this is the point of critique. It is not that one is offering the alternative to a flawed present, it is that through the process of examining trajectories and alternative futures one is implicitly examining present assumptions. To make this explicit is, in my view, a valuable step forwards. One underlying premise of foresight is that forward views are certainly no more robust than present views, are perhaps less robust, but are essential. So, finally to the subject of tracking the technological trajectories of small enterprises. It is quite difficult to identify the diversity of change and the rate of change for both theoretical and practical reasons. The theoretical problem is that the diversity is created in an ongoing and cumulative process, often known only to the creators. The practical problem is one of scale and adequacy of assessment, though no more than any other research domain. It requires collaboration between researchers. While there is an ethos of academic collegiality and patronage for research that allows for open publication, this will remain possible. Alas, this is not
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always possible. However, these are mere practical problems. What are the contradictions? As one assesses the overall impacts of technology, and seeks to improve its salience and benefit to the (small business) community in particular, this activity itself becomes a discourse of technological determinism. Has technology actually caused progress in humankind? Who benefits from this technology? One feels this activity is somehow accepting an inevitable technological infrastructure, with increasing intrusion in every day life. It is important to show it for what it is, in its many dimensions. People who own small businesses are smart people. They have to be to survive. Small firms are quite slow to respond to technological changes, i.e. slower than the suppliers would like. The harnessing of science into the every day lives of people is open to collective social regulation and is shaped by the cumulative individual actions of individuals. In other words, the way that small businesses innovate with technology will shape the technology, but only as much as the owners of that technology enable them. Each step, each shift in the path of activity, has social consequences and will require governance. We are all stakeholders in this.
5. Conclusion The way that individuals can take responsibility for their own efforts, and collaborate with like-minded people in economic endeavour has largely been taken out of their hands by the social imperative of employment and the cultural and structural dominance of large organisations. Yet the basic need for a mechanism for personal enterprise remains. Indeed, the so called ‘small business’ in its various guises is a renewed phenomena in a more globally wired and complex economy. However the landscape is different from when all firms were small firms. This significant economic and social phenomena is part of our future, and the more we understand its significance, the more we can improve its social sustainability. The more we encourage people to take responsibility for their own future, the more diversity of enterprises will emerge. Business, both large and small has a major impact on our lives and is the context for global interchange, culturally and economically. The impact on society that business has is wider and deeper than its managers take account of in their pragmatic managerial processes. The consequences of their actions fall outside their planning horizons. This is true of their relationship with small firms, with technology, with the environment, with society and with whole national cultures. If they are to contemplate their influence, whether desired or not, they need to enact critical assessments using wider models. One methodology for this is foresight, which starts by critical assessments of the present and encourages a wider search for salience. Individuals and organisations will be more fit for their de facto social role with improved foresight competence. The landscape for business in society is ever changing, though two key enduring issues are the impact of available technologies and quality of life of stakeholders. The present discourse is of the information age and sustainable development. The
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way in which people will be able to exchange their endeavours, and the impact on society, with regard to these, and other forces, is a vital building block for our futures. Observation, critique and explanation can help society maintain a sense of purpose, anticipate dangers and improve the human condition. It would be nice to think I can help, so that is what I will try to do.
References [1] Bhaskar R. A realist theory of science. Brighton: Harvester Press, 1978. [2] Welsh JA, White JF. A small business is not a big business. Harvard Business Review 1981;59:18–32. [3] Waldrop M. Complexity: the emerging science at the edge of order and chaos. Harmondsworth: Penguin, 1992. [4] Tilley F, Fuller EC. Foresighting methods and their role in researching small firms and sustainability Futures 2000; 32, in press. [5] Schumpeter JA. The theory of economic development. Cambridge: Cambridge University Press, 1934.