The 'Funky Business' consultants want to poke you

To some extent, the assurances of innovation to shareholders are only mood music and unlikely to be tested one way or the other. The only information that these stakeholders really scrutinise is the quarterly report. The question of whether or not the CEO wears a tie or not is of secondary importance.

That said, capitalism requires productivity growth, which in turn depends upon innovation. Investors can never afford to be too oblivious to new technology.

The promise of innovation to consumers is an equally sensitive issue. Often a veneer will do, but where the product becomes locked into an outdated technological paradigm, the consequences can be drastic – just ask the music industry.

For this reason, the way we consume has changed in a number of important ways, as retailers have exploited the potential of the internet. The creation of new online-only business models removes the inefficiency of running high-street stores, and introduces a far more 'personalised' customer experience.

Which leaves us with the promises made to employees.

There was a period around the turn of the millennium during which predictions were made that the very nature of work was about to change unrecognisably. Hierarchical organisations would be replaced by loose networks of freelancers. Offices were to become play-grounds in which creative entrepreneurs would sell their own human capital.

Books like Funky Business by Jonas Ridderstrale and Kjell Nordstrom, The End of Work by Jeremy Rifkin and Happy Mondays by Richard Reeves proclaimed that business success was now dependent upon a liberated and happy workforce. Managers that misunderstood this would suffer the consequences.

Phenomena such as the growth of teleworking indicate certain changes in the nature of work have indeed materialised. But the Facebook-at-work debate demonstrates that there is a limit to how much innovation this realm of the economy can accommodate. Work must remain work.

"Never trust a hippy"

In Karl Marx’s world-changing analysis, capitalism is defined by the fact that workers produce more value for their employers than they receive in their pay-packet. The difference between the two (‘surplus value’) is what becomes capital.

There can be endless varieties of capitalism, built around any manner of production techniques, creating and satisfying an ever-growing variety of consumer needs, but one thing must remain constant – surplus value must be extracted.

The fact that many employees are technologically blocked from accessing social networking sites shouldn’t surprise us in the least. Contrary to the hippy philosophy of the New Economy prophets, obedience of workers to managers is the defining fact of capitalism. If they want to change that, it will take more than a reinvention of corporate culture.

It takes a particularly intoxicating digital exuberance to believe that new technologies are automatically beneficial to the economy in general or to productivity in particular. Those who believe that social networking sites should be embraced by managers generally fail to acknowledge one glaring fact: a social networking site is not enjoyable in spite of its damage to productivity, but because of it. ®

William Davies is a sociologist and policy analyst. His weblog is at Potlatch.