From communism to capitalism and virtually every kind of socio-economic system of organization in-between there has been the same underlining principle, that only formal closed institutions could coordinate social systems and generate value at scale. However, today with the major changes in technology and society that are underway, this assumption can no longer be said to be valid. With information technology, the genie is out of the bottle and this institutional monopoly on large-scale coordination is over. The institutional model of closed organization that has served us well for many a century is today being stretched and undermined by the emerging new reality of a globalized interconnected information economy, the Wild Wild West of the 21st century where everything appears up for grabs in this brave new world of connectivity.
Both information technology and globalization are creating ever larger "spaces" in our societies and economies where traditional forms of organization are proving incapable of operating and creating an environment of open, unregulated, self-organizing systems. As more and more of our everyday life moves online, from shopping to education to dating and entertainment we increasingly find ourselves in this new unregulated world where formal organizations and the regulation they provide is becoming increasingly compromised and limited in scope.
As the author Thomas Friedman put it in a recent article: "a critical mass of our lives and work had shifted away from the terrestrial world to a realm known as 'cyberspace.' That is to say, a critical mass of our interactions had moved to a realm where we’re all connected but no one’s in charge. After all, there are no stoplights in cyberspace, no police officers walking the beat, no courts, no judges, no God who smites evil and rewards good.” Day by day, connection by connection we are entering a brave new world of open organizations that are flourishing and creating wholly new modalities for organizing physical assets and social relationships. We see this in open source projects, in the rise of social networks, and in open online platform markets that are increasingly orchestrating larger and larger amounts of the physical assets in our economies.
But information technology is only partly to blame for the rise of connectivity and the changes afoot. The process of globalization can also be identified as an ongoing challenge to closed structures of social organization. Globalization and multiculturalism have revealed many of the limitations to the closed systems of organization we developed during the Industrial Age, particularly the concept of the nation-state as based upon a single homogenous cultural group.