One could argue that this concept of technological waves impedes our understanding rather than improving it. It breaks the history of the current technological revolution into separate episodes rather than revealing a continuity essentially fueled by two general-purpose technologies: computing and networks. It insists on the technological dimension rather than on the political and economic ones—and this at a time when technologists are failing us on both those fronts. It distorts our view of the world by making us focus on technological devices rather than on the humans who use them.

It doesn’t help that the world of technology is populated by, well, technologists. For some reason, this particular population rarely appears as humanity’s best friend. There’s the fascination for the assumed perfection of machines as opposed to humans. There’s the unease in human relationships that contributes so much to the cliché of nerds stuck to their screens rather than speaking to other people. There are the weird fantasies around the singularity and becoming immortal. And there’s the eye-popping absence of women, with its dire consequences.

A good way to refocus the conversation is to to use the concept of the “multitude” that Henri Verdier and I borrowed from Italian post-marxist philosopher Antonio Negri when we wrote our book L’Âge de la multitude back in 2012. We came up with this concept when trying to position the book and its core thesis. Because we wanted simple ideas to explain the digital economy (in our case, to the French elite and general public), we were looking for a polarizing view of what technology is all about. And we came up with the following, simple idea: “Now there’s more power outside than inside organizations”.

What exactly is the nature of that outside power? For Henri and me, today’s power is vested in this mighty “multitude”—the billions of individuals who are now equipped with powerful computing devices and connected with one another through networks. And it inspires a lesson in strategy and management that every corporate executive needs to keep in mind: the businesses that succeed in the digital economy are the ones that realize how power has been redistributed outside of their organizations. The winners are not the companies who use the most technology. Rather, they are the companies that best use technology to harness human power, which in turn fuels growth and generates profits.

Of course the world didn’t wait for Henri and I to develop the idea of the networked multitude. Before us, there were Don Tapscott’s “Wikinomics”, Shoshana Zuboff’s “Distributed Capitalism”, and the more widely used “Web 2.0” crafted by Tim O’Reilly and Dale Dougherty. While most people—including policymakers and journalists—like to talk about robots and software, many others realize that value creation is mostly about the many humans that computing and networks have so greatly empowered.

Indeed every single technological wave that’s been sweeping forward during the past 20 years can be reinterpreted in terms of how it contributes to the ever-increasing power of the multitude. Web-based applications and cloud computing consisted in pooling the computing power provided to billions of Internet users. Smartphones made it possible for these users to be connected most of the time rather than only when they were sitting at a desk. Big data was the result of the multitude using applications at an even larger scale. Now artificial intelligence makes it possible to store the power of the multitude so as to use it later by running well-trained algorithms. And finally crypto protocols provide us with a way to incentivize the multitude in contributing to network effects. Overall, it all revolves around ubiquitous computing and networks—and it’s all about the power of the humans more than that of technology.

Realizing the centrality of the (human) multitude in the economy won’t solve all the problems the current transition is bringing about. But as detailed in my most recent book Hedge, which is about inventing a new Safety Net for the current Entrepreneurial Age, embracing this narrative is a step in the right direction. It’s not only that the concept of the multitude provides technologists with a clear explanation of what their own work is about. It also helps us realize how we create value in the new techno-economic paradigm and the new social and political challenges we now need to tackle.

Indeed the constant pressure on wages and the downward quality of jobs has but one explanation: the unprecedented power of customers is weighing almost exclusively on the shoulders of workers. Customers are able to use computing and networks and organize as a multitude to bargain with corporations whereas workers are still constrained by the legacy rules that govern the workplace. Likewise, the widespread instability of the Entrepreneurial Age can be explained by the many ups and downs of large network-driven consumer markets, on which the multitude calls the shots in its very unpredictable and erratic way. Never before have both private and public companies been able to lose their assets in such a short amount of time, as we’ve seen in the examples of MySpace and Yahoo disappearing into oblivion, or Uber sounding the retreat in China and southeast Asia.

We cannot solve these problems until we realize that they are dominated by a human dimension rather than a technological one. It’s time to take a step back and accept that it’s the multitude—we humans—that drives the economy, not the latest technological breakthrough performed by scientists in a research lab or the most advanced software architecture deployed by engineers in a garage.

Indeed the power of the multitude is to the Entrepreneurial Age what mass production was to the Fordist age: both a blessing (because it fuels economic growth) and a curse (because it comes with adverse consequences). That is what must become the basis of our too-long-awaited effort at institutional innovation: understanding the power of the multitude is the starting point for making our Entrepreneurial Age more sustainable and inclusive.

About the author:

Nicolas Colin is Co Founder & Director, the Family, an investment firm based in London, Paris, and Berlin. and author of Hedge: A Greater Safety Net for the Entrepreneurial Age

This article is one in a series related to the 10th Global Peter Drucker Forum, with the theme management. the human dimension, taking place on November 29 & 30, 2018 in Vienna, Austria #GPDF18

This article first appeared in LinkedIn Pulse

For part of the 20th century, employees were the clear winners of that corporate game. In the industries most emblematic of the Fordist economy, workers were served by institutions that helped them to better defend their interests. Through collective bargaining, they could demand better terms. And thanks to the social state, which made workers less dependent on their employers, they could also exit the negotiations if they didn’t turn out in their favor.

Spreading the wealth around was sustained by a positive feedback loop: the workers’ bargaining power led to higher wages which, in turn, led to more tax revenue to bankroll the social state and improve the workers’ bargaining power even more. That institutional grip seemed designed to extract wealth from greedy shareholders and complacent executives, redistributing it to the many, sustaining mass consumption and growing the middle class in the process. The wealth-creating power of corporations was thus harnessed to serve sustainable and inclusive economic growth.

In those industries where employees had the upper hand, the difficult collective bargaining discussions didn’t prevent management from becoming a solid ally of the workers. A common corporate culture united executives and employees in their devotion to assembling affordable products for the masses. It was a time, as Rick Perlstein wrote, when industrial corporations had “the willingness to stake [themselves] to the long term for the sake of building something enduring”.

That corporate contract ended in the 1970s. Radical changes imposed on the world economy from that period onward had a profound impact on the corporate balance of power. Burdened with higher energy prices, corporations had to take measures to restore profitability. Confronted with unprecedented competition from abroad, they had to improve efficiency in their value chain, enrolling legions of business consultants to help them achieve what Walter Kiechel III calls “Greater Taylorism”. Above all, the financial sector became more globalized. As the economic playground got bigger, depth and liquidity increased exponentially on financial markets, making room for larger pools of capital, bigger bets, and higher volatility. Capital that was both more mobile and more concentrated could now exert pressure on corporations and obtain higher returns over shorter periods.

Interestingly enough, executives (the most opportunistic of the four corporate participants) always tend to align with the dominant party. Thus those executives’ priorities help us see who has the upper hand. From the 1980s, shareholders regained that upper hand as they sealed an alliance with stock options-incentivized executives now determined to maximize shareholder value. The losers of this round were the workers, whose unions were losing most of their clout, and the consumers, who were made to submit to the power of large corporations. Capital flowed to the corporations that best succeeded at weakening the positions of employees (who had to accept lower wages) and customers (who had to pay higher prices for lower-quality products).

Today, some signs suggest that the digital economy is perpetuating a version of the contract that greatly favors shareholders over others. Workers, in particular, seem weaker than ever, even though they no longer work for the corporations themselves—they’re either contractors under pressure or working on-demand through algorithm-ruled platforms. Furthermore, as technology augments workers’ skills, qualifications are less critical: more people can deliver a technology-driven high quality service without much preliminary training (for instance when real-time geolocation spares a driver knowing the map of the city by heart). This surely means more opportunities for the unemployed, but it also leads to more competition on the job market; in turn, this helps employers bring wages down. Overall, the digital economy does not help workers regain negotiating power. Rather, it seems to be plunging them into a new precariat.

Yet the digital economy has also shifted the overall balance of corporate power in another way, as the customers—the fourth, long quiet party at the corporate table—are finally rising. We’re already seeing signs of that. Shareholders, for one, have to give up short-term gains as technology companies don’t pay dividends, let alone make profits. Another even clearer sign is the behavior and discourses of tech executives, who are now more obsessed with providing their customers with an exceptional experience than creating shareholder value.

The reason for the unprecedented alignment between executives and customers is specific to the digital economy. As software is eating the world, the multitude of Internet users has become the source of powerful network effects that play a key role in tech companies’ performance and help them “deliver the highest quality with the highest scale”. In other words, Internet users don’t only pay a price in exchange for a finished product anymore. They also play a critical role in creating value within the corporate supply chain. Thus in the digital age, corporations have no choice but to reward those customers with an unprecedented consumer surplus.

The rise of the customers as the dominant corporate party should be taken into account in any musings on today’s social compact. The main balance of power is no longer between the shareholders and the employees, with the executives as an arbiter and the customers as passive spectators. Instead the customers have become the strongest and most active party.

The utopian vision in the tech world is that that huge consumer surplus obtained by empowered customers will be enough to give rise to a new middle class: we won’t earn more (far from it), but everything will be cheaper. In a more realistic scenario, the customers will bargain with the shareholders and executives at the expense of the employees, thus continuing Charles Fishman’s infamous “Walmart Effect” of a population fighting against itself for a share of the pie—for we are all both consumers and workers.

More optimistically, a new form of union will rise from the ashes of the labor movement to bargain directly with the customers and establish the terms of a social compact where, like during the post-war boom, the many are more powerful than the few. The recent victories on the minimum wage front in the US were obtained through an alliance between workers and consumers. For the first time in over three decades, workers seem to be regaining some of their long-lost influence, with household incomes now growing at the fastest rate ever. Will it prove a hollow victory or does it foreshadow the terms of a new corporate contract for the digital age?

About the author:

Nicolas Colin is a co-founder & partner of TheFamily, an investment firm based in London, Paris, and Berlin. He’s also an adjunct professor in business strategy at Université Paris-Dauphine in Paris.