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Business leaders and CIOs must understand how a new breed of social capitalists will exploit technology to disrupt their industry segments, according to Gartner.

social capital

As the gap between the rich and the poor in developed economies grows, money, wealth and power are becoming increasingly concentrated in the hands of a small number of individuals — the "one percent" — while the other "99 percent" is increasingly using social media to collaborate, campaign and agitate against perceived inequities, leaving many management teams feeling under threat. 


"While capitalism won't collapse, there are fundamental changes under way as it morphs to a new form that is more in tune with the technology and attitudes of the 21st century," says  Nigel Rayner, research vice president at Gartner. "The coming capitalist era is that of the Facebook generation, in which the values and behaviors that pervade the Internet and social media will also be adopted by innovative and disruptive businesses. With half the world's population under the age of 25, this may happen sooner than many think."

Major shifts that will occur as capitalism goes social:

  • Businesses will move away from the hierarchical command-and-control model to a more democratic and meritocratic model. Employees will be judged (and granted decision rights) on the basis of their impact on and value to the community, rather than on job title, age or social background.
  • Businesses will adopt a more open approach to decision making, allowing anyone in the organization, and also people outside the organization, to have input into the decision-making process. Goals and objectives will be set by socializing strategic aims with employees, shareholders and communities of interest.

  • Social and mobile technologies will be used to build and manage two-way relationships between businesses and all their communities of interest. This use of technology will go way beyond the one-way, outward-looking, limited use of social media today. It really will bring the 99 percent inside the walls of the enterprise to become part of the organization.


"These changes won't impact all industries and businesses in the same way. Some will use them to create incremental business opportunities, but others may find their business model directly threatened, because they are seen by the 99 percent as the worst cases of exploitative business practices," adds Rayner. "However, some innovative organizations will use capitalism going social to create new business models and disrupt their industries."  Gartner calls these businesses "social capitalists." Not every enterprise can follow a social capitalist model, but those that can will be the most admired companies in the next 10 years. Business and IT leaders must understand the impact of these changes on their industries and organizations, and ensure that their business and IT plans have the appropriate focus on social media technologies. They should also identify whether management practices need to change to make the best use of these investments.

A key aspect of capitalism going social will be the use of social and mobile technologies by business to change the way it interacts with the 99 percent, bringing them inside the four walls of the enterprise to become part of the organization's processes, rather than keeping it at arm's length.  Social technologies are also central to improving employee engagement and rebuilding employee trust, but only if they are deployed with the intention of enhancing open communication and employee participation in decision making. This approach is based on the premise that engaged, motivated and empowered employees will deliver better customer service and value.

"Capitalism going social is a reflection of the wider societal changes that are happening in the 21st century. These changes cannot be ignored, although their impact will vary by industry and organization. IT and business leaders must identify how soon their industries and companies will be affected by these changes," notes Rayner. "Ideally they should seek out a senior executive in the organization that faces the greatest threat from capitalism going social who will be a strong ally. Once this person is on board, they should use the IT department to trial social technologies, and use the results of these experiments to advocate wider adoption across the organization."


----Gartner

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