Trust is low today in government, banks, the financial sector in general, education, and many other established institutions.
Institutional decay
Institutions are organizations, customs and norms of behavior that mediate between individuals and society. They are mechanisms of social order, asserting rules that are designed to govern how we act. Who designs them? Other humans, who have a vested interest in being the ones who govern. Institutions exist to limit what sociologists call “agency” – the principle that autonomous beings (that would be us) are capable of acting and making decisions by themselves.
Once established, institutions tend to become frozen and locked, because their designers prefer to maintain the status quo of governing others, rather than keep up with the innovation and change that goes on beyond their boundaries.
Education Is An Example Of Institutional Decay
Education provides us with one example of institutional decay. University education in the US is centuries old, and compulsory state education is over 100 years old. Generations have grown up with the experience of the K-12 government propaganda mill, and, for those who attended college or university, with the idea that cramming for 4 years of exam passing would provide a lifetime revenue stream from preferred employment.
The current generation is finding that these institutional arrangements are no longer adequate. Compulsory state K-12 education is gradually giving way to private options, because the established institution lets down its customers by delivering a poor service that doesn’t fit the modern world. University education is being eroded by both online learning and by alternative educational suppliers. Customers are using market data in re-thinking the economic benefits that a 4-year degree is supposed to confer.
The institutional structure is eroding at an even more fundamental level. Customers are questioning how education is supposed to work. Lifelong learning is assessed as a better strategy for accumulating knowledge and skills in a rapidly and constantly changing economic environment. Knowledge-on-demand is a solution that technology is now making available: if you don’t know, and you need the knowledge immediately, find it on Google or YouTube. These new behaviors undermine the institutional status quo.
Educational Technology Creates A New Institution
Technology is fundamental to these new learning strategies. Technology makes them possible, and customer preference makes them grow and advance. In a sense, technology is the new institution. Remote digital learning platforms, interactive educational software, and on-demand content are the delivery vehicles, and the umbrella educational technology platform is the institution. As the old institution decays, technology advances, responding to the changing needs and preferences of education consumers.
New Norms Of Behavior
The norm of behavior that directed us to “get a high school diploma and a college degree to advance in the workforce” gave rise to our current educational institutions and an institutionalized pathway for most of us. “A career is upward progress on the rungs of the corporate / professional hierarchical ladder” is a norm giving rise to institutionalized jobs, training and assessment. The new norm may be something like “make yourself as uniquely useful as you can as a collaborator with other knowledgeable actors” and may result in institutionalized education, institutionalized professions, and institutionalized jobs withering away to be replaced with totally new forms.
Traditional Retailing As A Decaying Institution
As a parallel, we can think of traditional retailing as an institution. Retailing certainly qualifies in terms of being a bundle of organizations, customs, norms and beliefs. The behavioral norm required that consumers leave their locations to travel to the retail store or mall, where they followed prescribed pathways to shop the inventory and offerings, with a checkout line as the final punctuation. Considerable time and effort was required to participate.
Again, consumers are re-thinking how retail works for them. Technology has provided an alternative that works better for many of them in many circumstances. Online shopping at home or in the office, at any time of the day, with a broader selection, direct delivery, easy returns and sharp prices combine to provide a set of norms of behavior that represent a new and preferred institution.
Institutional Entrepreneurship
When institutions begin to fail their constituents, that’s when decay sets in. When incumbents within the institutions resist change, they stimulate those constituents to search for alternatives. With today’s new technologies, it is easier for constituents to pursue alternatives and easier and quicker for new institutions to emerge. We can call it institutional entrepreneurship: the imagining and emergence of alternatives to status quo institutions and their rapid accumulation of a critical mass of users and supporters. With more and more use case experiments by more and more individuals, the faster the new institutions emerge and solidify.
An Institutional Revolution
We’ll quickly see accelerated institutional entrepreneurship in banking, in healthcare, in politics – with alternatives to democracy – and in government, with distributed options to the current smothering centralization. Technological advances will be the fuel for an institutional revolution.
