Global rift in the 21st century: fast versus slow Gloval Viewpoints

January 10, 1991|By Alvin Toffler and Heidi Toffler

LOS ANGELES — IN THE NEXT millennium, the great danger for humanity will not be the conflict between East and West, or even between North and South. It will be the decoupling of the fast world from the slow world.

As time itself has become a critical factor of production, the wealth gap has grown rapidly between societies whose accelerative economies are driven by knowledge and advanced technology and those societies whose economies are mired in traditional agriculture or bureaucratic smokestack industry.

Economic processes in "third wave" knowledge-driven societies are accelerating, while those in "first wave" agricultural societies and "second wave" industrial societies are lagging or stagnating. This gap in relative speed is widening.

Time itself is a key force driving us apart. Because of the new information technologies, the old adage "Time is money" is now obsolete. In the new accelerated system of wealth creation, it is being superseded by a new hidden law of economics: No longer is time just money. Each unit of saved time is now actually worth more money than the last unit. The faster economic processes work, the more wealth is created in the same period with the same or even fewer resources.

The bar code on a pack of cigarettes, the computer in the Federal Express truck, the scanner at the supermarket checkout counter, robots with remote sensors on the assembly line, the electronic transfer of capital -- all presage a 21st century economy that will operate at nearly real-time, or instantaneous, speeds.

The feedback loop between producer and consumer is nearly immediate. Thus, overnight mail companies can locate your package by computer anywhere at any time. Fickle fashion trends can be changed many times a year while keeping inventories low. For example, Haggar Apparel of Dallas is now able to restock its 2,500 retail customers with slacks every three days instead of every seven weeks, as it once did.

This new system of wealth creation consists of an expanding global network of markets, banks, production centers and laboratories in instant communication with one another, constantly exchanging huge flows of data and knowledge.

To be decoupled from this fast economy is to be excluded from the future.

If the poorer regions of the planet, from the Third World to the post-communist East, continue to build economies based on cheap labor, raw materials or clunky smokestack production, the future will pass them by.

Indeed, because of the acceleration of production, cheap labor is becoming expensive. Ford Motor Co. recently brought a truck manufacturing plant back from Brazil to the U.S. because, despite the low labor costs, it took six months to manufacture a truck in Brazil compared to only 45 days in the U.S.

Similarly, a children's sleepwear designer based in Pennsylvania recently decided against manufacturing clothes in China because, despite paying the world's lowest wages, the Chinese ability to meet delivery deadlines is unreliable. The designer delivers hundreds of thousands of units of clothing to JC Penny, K-Mart and Sears, but if delivery is late by even one day the retailers refuse to accept the shipment. That is because one week small children want bunnies on their pajamas, and the next week they want bears.

Consumer tastes, on which volume sales depend, change too rapidly to rely on China's slow and unreliable production.

But it is not only fashion that changes swiftly. So do high-technology products, from microchips to laser tools.

As the new system of wealth-creation spreads, labor costs shrink dramatically. In some advanced industries today, labor costs represent only 10 percent of the total cost of production. Far greater savings can be found through better technology, faster information flows and streamlined organization than by squeezing workers. Low-wage muscle is no longer much of a competitive advantage in the emerging world economy.

The slow tempo of decision-making in such places as China and the Soviet Union is also a reason for the collapse of many joint-ventures. The endless negotiations and glacial pace of the bureaucratic chain of economic command kill deals regularly between fast and slow partners.

The slow world's raw materials are also devalued by accelerated production, which relies more on inputs of scientific innovation, knowledge and organization than energy or other natural resources.

To take but one example, in the future superconductivity will radically reduce the need for energy by reducing losses during transmission. In fact, the experience of Japan's high-speed economy has already made this point clearly. In 1984, Japan consumed only 60 percent of the raw material required for the same volume of industrial output in 1973.

If catatonic agrarian societies and stagnant smokestack societies are to avoid perpetuating their misery, they have to revolutionize their concepts of development.

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