THINKERS50: DON TAPSCOTT
EMBRACE THE SECOND
ERA OF THE INTERNET
March 2017
Perspective on the letter by
Jacob Høeg Madsen
Partner
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THINKERS50: DON TAPSCOTT
Emprace the second era of the internet
Kromann Reumert is a partner of Thinkers50 European Business Forum, which brings together the
world’s most sought-after business thinkers to a two-day conference. As part of the conference some of
the greatest business thinkers have written essays called “Letters to the CEOs” containing recommendations to the CEOs around the world based on the latest trends in the business world.
Adaptation is key
As partner, Kromann Reumert get to publish a number of these letters and will share our perspective on the matters. Read more about
our partnership with Thinkers50 on page 4.
The Nordic countries are well-known for their willingness to accept
and adapt to new technologies more swiftly than most other countries. Traditionally, CEOs of Nordic companies have practised a more
flat hierarchy management style, which may prove to be a strength
and make the transformation into the modern age of management
smoother. CEOs of Nordic-based companies should take advantage of
this to test new technologies and innovative business models in their
home market and, if successful, take them global.
Perspective on Don
Tapscott’s letter to the CEOs
In his letter to the CEOs, Don Tapscott focuses on the exciting promises offered by blockchain and other fascinating new technologies.
However, there are those who fear that the number of jobs eliminated
as a result of the technological development will not be balanced by
the number of new jobs being created and the more efficient use of
people’s capital due to the elimination of various intermediaries.
Impact on legal aspects
The new societal paradigm predicted by Don Tapscott will of course
also fundamentally challenge the existing legal framework, which will
need to adapt to reflect the new ways of doing business. By way of
example, part of what fascinates tech savvies about the public blockchain is the anonymity offered by the private and public keys used to
validate entries into the ledger, but the very same anonymity frustrates
lawyers and lawmakers keen to ensure compliance with KYC and AML
requirements.
The art of embracing new technology
Regardless of where one stands in this discussion, we believe the current movement of digitisation to be so powerful that it is unstoppable
(see our Insight on Fintech – the new black or genuinely a game changer). It is going to transform our economy and society in such a profound way that any CEO must dedicate sufficient time and energy to
understand the new technologies, form a strategy on how to embrace
them and design a business model focused on how to best utilise the
new technologies will transform as a result of the new technologies.
It is not only the law that needs to adapt to the new technology, but
also the lawyers. As smart contracts (operating on Ethereum or other
public blockchains) gain traction, lawyers will need to consider learning some of the programming languages typically used to code smart
contracts.
Everybody wishes to reap the benefits of being a first mover, but many
fear the implications of investing heavily in a technology that may not
end up being the preferred. As always, timing is everything, and even
if a CEO has identified the right technology and strategy, his/her efforts may prove futile if the customers are not ready to embrace the
new technology.
Like other advisors, lawyers need to be attuned to the new developments in order to furnish CEOs and their business with value-adding
advice. At Kromann Reumert, we are very mindful of that, which is
why we have long prided ourselves of having a strong IT and technology law practice and why we were the first Danish law firm to form
an industry practice group focused on Fintech.
Jacob Høeg Madsen
Partner, Kromann Reumert
www.kromannreumert.com/bliv-klogere
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from using it for our own benefit but often undermining our privacy.
They are sometimes unreliable and often slow. They exclude 2 billion
people who don’t have enough money to justify a bank account. Most
problematic, they are capturing the benefits of the digital age asymmetrically – and today.
What if there were an Internet of value, a globally distributed, highly
secure platform, ledger, or database where we could store and exchange value without powerful intermediaries? That’s what blockchain technology offers us. Collective self-interest, hard-coded into
this new native digital medium for value, ensures the safety, reliability,
and trustworthiness of commerce online. That’s why we call it the Trust
Protocol. It presents countless opportunities to blow centralized models to bits—models like the corporation, a pillar of modern capitalism,
along with its management canon.
Letter to the CEOs - from Don Tapscott
Embrace the Second Era
of the Internet
It turns out every business, institution, government, and individual can
benefit in profound ways. With the rise of a global peer-to-peer platform for identity, trust, reputation and transactions, CEOs will be able
to re-engineer deep structures of the firm, for innovation and shared
value creation. We’re talking about building 21st century companies
that look more like networks rather than the vertically integrated hierarchies of the industrial age. CEOs in the financial services industry
know that blocichain provides an historic threat and opportunity, and
executives in other industries will soon follow.
Dear CEO
For the last century, academics and business leaders have shaped the
practice of modern management. The main theories, tenets, and behaviors of managers have worked well overall in building corporations
– largely hierarchical, insular, and horizontally- or vertically-integrated.
Until now. The blockchain technology underlying cryptocurrencies
such as Bitcoin will effect profound changes in the nature of firms:
how they are funded and managed, how they create value, and how
they perform basic functions like marketing and accounting. In some
cases, software will replace management altogether.
The Internet today connects billions of people around the world, and
certainly it’s great for communicating and collaborating online. But
because it’s built for moving and storing information, and not value, it
has done little to change the corporation and the nature of business.
When you send information to someone, like an email, word document, or PDF you’re really sending a copy not the original. It’s OK (and
indeed advantageous) for people to print a copy of their Powerpoint
file, but not OK to print, say money, stocks, Intellectual property or
music. So with the Internet of information we have to rely on powerful intermediaries to establish trust. Banks, governments, and even
social media companies like Facebook all do the work of establishing
our identity and helping us own and transfer assets and settle the
transactions.
New business models are emerging everywhere. The “disruptors” like
Uber and AirBnb, may well be disrupted themselves. Most so-called
sharing economy companies are really service aggregators. They aggregate the willingness of suppliers to sell their excess capacity (cars,
equipment, vacant rooms, handyman skills) through a centralized platform and then resell them to users, all while collecting valuable data
for further commercial exploitation. Blockchain technology provides
suppliers of these services a means to collaborate that delivers a greater
share of the value to them. Just about everything UBER does could be
Overall they do a pretty good job – but there are limitations. They
use centralized servers, which can be hacked. They take a piece of
the value for performing this service – say 10 percent to send some
money internationally. They capture our data, not just preventing us
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About the author
done by smart agents on a blockchain. The blockchain’s trust protocol
allows for cooperatives, or autonomous associations, to be formed
and controlled by people who come together to meet common needs.
All revenues for services, except for overhead, would go to members,
who also control the platform and make decisions.
Don Tapscott
Don Tapscott is author of a number of bestselling books. They include
Paradigm Shift (1992); The Digital Economy (1996); Growing Up Digital (1998); Digital Capital (2000); The Naked Corporation (2003);
Grown Up Digital (2008) and The Blockchain Revolution (2016). He is
a Thinkers50 ranked thinker.
As firms become more like networks, management will change too
and smart CEOs will lead this change. How do you effectively manage talent outside your boundaries? Triple entry accounting will eliminate the audit function and enable first to have real-time accounting. Does your CFO understand that? Supply chains will be based on
blockchains. Customers will scan your products to find the blockchainenabled providence of everything you make.
About Kromann Reumerts partnership with
Thinkers50
Blockchain may eliminate many of the biggest problems of management. The Distributed Autonomous Organization launched in 2016
had no employees at all. It was smart software based on the Ethereum
blockchain. This DAO raised 160 million in a crowdfunding campaign.
The problem of “moral hazard” was eliminated because the software
specified that the organization was forced to act in the interests of its
shareholders. The grand experiment ultimately failed due to a flaw in
it’s smart contract systems, but the lessons are rich.
Since 2001, Thinkers50 has selected the 50 most influential management thinkers in the world - “the Oscars of management thinking”.
This year, Thinkers50 adds the conference “Thinkers50 European Business Forum”.
The European conference, which will be held in Odense, brings together the world’s greatest management thinkers and business people
for the “Davos of Business Thinking”. Outside Europe, annual meetings are held in New York, Abu Dhabi and Qingdao in China.
Increasingly CEOs understand that business cannot succeed in a world
that’s failing. Perhaps the biggest opportunity in the Second Era of the
Internet is to free us from the grip of a troubling prosperity paradox.
The economy is growing but fewer people are benefiting. This problem is behind the social unrest, extremism, populism, demagoguery
and worse – from Brexit to Donald Trump – that is plaguing modern
economies. Rather than trying to solve the problem of growing social inequality through redistribution alone, we can change the way
wealth – and opportunity – is predistributed in the first place, as people everywhere, from farmers to musicians, can use this technology to
share more fully in the wealth they create.
Kromann Reumert participates as a conference partner. Arne Møllin
Ottosen, Managing Partner at Kromann Reumert says:
“Kromann Reumert’s most important task is to be a trusted advisor
for our clients, and one of our fundamental values is commercial insight. By constantly expanding our knowledge, we seek to improve
our understanding of the client’s business and ensure that our services
add value. We give priority to knowledge sharing and invest heavily in
staff development and in our unique Learning Center where we share
knowledge with clients and other stakeholders. Thinkers50 and European Business Forum focus on knowledge sharing, so it is natural for
us to seek to get a high-profile event like this to Denmark.”
The most important challenge facing the CEO in the mid 1990s was
the early Internet. Once again the technology genie has escaped from
the bottle, this time with bigger force and implications. Are you preparing your company?
Don Tapscott
KROMANN REUMERT
Kromann Reumert’s vision is “We set the standard”. Good is not enough - we want to be the best. We provide value-adding solutions and advice
with full involvement and commitment. We get there by focusing on quality, business know-how, spirited teamwork, and credibility.
We are Denmark’s leading law firm, and our offices are located in Copenhagen, Aarhus and London.
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