Hi Mark, great point, though they are fairly different issues. Economics looks at the flow of (primarily financial) value across society. Accounting is a way of measuring flow of money in a company.

Back in the ’90s I spent a lot of time on non-financial accounting/ reporting and then decided it would take decades for substantive change, which is turning out to be true. However the nub of the issue in accounting is improved information for investors and managers and thus better allocation of capital and other resources.

It doesn’t change the economy if a company accounts differently for how it works. It just enables it to manage itself better. A good manager implicitly understands the value of ‘human capital’ even if she doesn’t have the accounting to support it.

So yes we do need better accounting to help organisations work more effectively. Even with a quite different economic structure (e.g. highly modular and distributed) accounting principles work OK.

What we do need – and I wouldn’t necessarily call this ‘accounting’ – are ways of measuring value creation across distributed groups. If we can work out how to allocate rewards from collaborative endeavors, this will enable a far richer economy with more distributed value creation. Though in this case the accounting is still a measure, distinct from the economic structure.

G’day Ross, I think Steve would agree he’s making a different point, I was only thinking in terms of presentation. Steve’s underlying theme, like yours, is that creating value is fundamentally different now and organisations aren’t adapting. What you describe as modular, he describes as iterative, and where you refer to individuals creating value, he refers to self-organising teams working with only one focus – delighting the customer. This replaces the notion of creating shareholder value, and I think both of you are looking at organisations as being neither top down, or bottom up, but outside in, where work and innovation is driven by customers and stakeholders,

Good luck with the presentations.

Thanks Annalie! I’ll be working on developing this story over the next while…

Thanks Geoff! Good piece. Stephen is making a different and complementary point to mine. The perspective he brings is entirely valid, but does not – to my mind – address the quite different structure of value creation that actually applies across all three economies that he describes. I will muse a bit more on integrating his points with those of shifts in underlying economic structure.

Cheers, geoff