Book Summary Preview : THE BASELINE REVOLUTION

The Big Idea
There is a serious need to rethink old methods of reporting, particularly accounting-based methods which are used for important decision-making processes of a company. Accounting-based reporting was developed for a former era with other priorities. To serve management and the economic community, it needs to be complemented with or gradually replaced by reporting and measurement systems that meet the needs and match the realities of today.

A Time of Dramatic Change
The world is in a period of profound and broad change. The simultaneous onset of economic, social and technological forces in our time now show consequences that are far-reaching. They affect almost all aspects of human life, including business and the economy.

A Mania has Passed – an Era has Just Begun
The world is at the beginning of an era that will change much of what we have taken for granted in society, in the economy, and in the way we run countries and companies. Peter Drucker calls it “The Next Society.” We believe this new society is already well on its way. In a wider context, it could be called “the fourth world order.” Since we will limit our focus to the new aspects of business and the economy, we will modestly call this new era “The Fourth Economy.”

The Four Economies
The second economy was an improvement over the first economy in that it provided a certain degree of stability and reliability in basic supplies, such as food and clothing. Wealth in the second economy was created through earth-based processes. To be rich was to own land. Meanwhile, the third economy added machinery, mainly for manufacturing and transportation. Wealth in the third was made largely through manufacturing processes. Being rich meant owning factories, machinery and capital. Now, the fourth economy takes mind-based processes to previously unimaginable levels of strength, power and speed. This adds up to a tremendous potential for productivity increases in mind-based processes, increasingly significant in “pure” fourth economy companies. Wealth is created in the fourth economy through mind-based processes, exchange of ideas and know-how.

The fourth economy, based on ideas and mind processes is already here. Two thirds or more of US jobs are in moving and processing ideas, one third or less are in moving and processing material.

A Convergence of Sources and Forces
Each one of the new sources and forces of change is huge in itself. The impact is raised greatly through the convergence of so many of them at one time. The beginning of the 21st century is the focus spot for a burning glass of hot issues, together causing a blast of change. Some of them:

New Science and Technologies. The fourth economy is a high-tech economy – with a very broad technology base, including but certainly not limited to, information technology. . . . . . . . . .