It's clear that our economy is undergoing a dramatic and often wrenching shift from its Industrial Age assumptions and operating plans. But what isn't clear is what the emerging Information Age Economy will look like, and what it will mean for our lives - and for the planet. It isn't clear for a simple reason: we are standing on the operating manual!

That operating manual is called nature. Its pages are open for all to learn from - if only we have the wisdom and humility to understand - and preserve - it.

This change is worth the effort. Nature's examples can guide us to an information-based economy of both complexity and efficiency far beyond what we have achieved. It will be an economy marked more by cooperation than competition, an economy in which we create value more from information than material. In so doing, we can create more jobs, more opportunities worldwide, while simultaneously reducing the unsustainable burdens today's economy places on the planet.

I call this emerging economy The Natural Economy.

The Natural Economy will based firmly on the more than 4 billion years of wisdom accumulated by nature. It will be based on a set of principles as old as the planet, and as contemporary as tomorrow's headlines. These five principles can be found in the humble terrarium, which deserves a place of honor on each executive's desk:

• fertilize growth of the new with decay of the old.
• temper competition with cooperation.
• use feedback for continuous change.
• be economical.
• and, most important, create value and growth from information more than from material.

I will describe each of these attributes briefly, then dwell more extensively on The Natural Economy's most important attribute, its reliance on information rather than material to create value and economic growth.

First, the terrarium shows us Natural Economy companies can use waste from decay of the old to fertilize growth of the new.

As in nature, wastes will not accumulate in such volume and such toxicity to permanently contaminate the air, land and water. Manufacturers will use their own worn out products as raw material for new ones. Already, car makers including BMW and Chrysler "design for disassembly," reducing the number of fasteners, substituting a single molded piece for many components, making them easier to take apart and recycle (and, I might add, to assemble and repair, as well). Some car companies now take back and recycle selected models themselves. Xerox now routinely reuses some durable parts. IBM used design for disassembly in its PS/2 E.

And, for those wastes that do remain, Molten Metal Technology has shown we can transform wastes to resources. Its new Catalytic Extraction process reduces hazardous wastes to the pure elements from which they were made, allowing their reuse or even resale.

Someday, as more products are totally solid state and will be replaced more because they are no longer state-of-the-art than because they wear out, I foresee an environmentally-sound, global, integrated production and distribution system as a keystone of the Natural Economy. Instead of planned obsolescence, we will buy totally modular products. We will upgrade them a component at a time, instead of buying an entirely new system. That new component will be shipped in a durable, return-postage paid container. We will install the upgrade ourselves, then return the older, but still usable component to the factory. After refurbishing, the manufacturer will package it as part of a low-cost starter system. Over time, the components will cascade from one user to another, perhaps ending up donated to an inner-city school or start-up company in a developing nation.

Once the return/refurbish/reuse/recycle infrastructure is in place and products are redesigned to capitalize on it, everyone will benefit. Instead of being landfilled or burned, products will remain in use. Manufacturers will build a loyal network of global users, and create new revenue streams. People and companies who might otherwise not afford these products will become part of the system.

The Natural Economy may go even farther, switching to the so-called " intelligent product system," proposed in Germany. Under that system, we wouldn't own products at all, but simply license them from their manufacturers. Companies would retain lifetime responsibility for their products, including their eventual reuse or disposal. That would give manufacturers an additional incentive to improve products' durability and eliminate hazardous materials.

The terrarium's second lesson is that cooperation will temper competition among Natural Economy corporations. Everything will be interrelated and interdependent.

Of course, nature is full of life-or-death competition. However, field studies now show Darwinian survival of the fittest was over-rated: nature has more examples of cooperation, from the hydrologic cycle found even in my terrarium to the symbiosis between algae and fungi in lichen.

Linking small companies into "virtual corporations," such as ones already in the Italian clothing, New Hampshire electronics, and Ohio cabinet-making industries, will become commonplace. Strategic alliances among rivals, such as the Power PC one linking IBM and Apple with Motorola, will proliferate. We may have more "industrial ecosystems," such as the one in Kalundborg, a Danish industrial community, where industry consciously imitates a natural ecosystem's web of interdependency. To cite only a few examples, its coal-fired power plant not only provides electricity, but also uses its waste heat to heat 3,500 homes, allowing shutdown of their oil furnaces. The waste heat also heats a fish farming operation. Some of the power plant steam also runs process machinery at a pharmaceutical plant, whose sludge is neutralized and sold as fertilizer.

The humble terrarium's third lesson about tomorrow's Natural Economy is the virtue of building in feedback loops for continuous adjustment.

The terrarium, the ultimate closed system, couldn't sustain itself without the hydrologic cycle, which constantly adjusts to changing conditions. Why not in corporations as well? Circular thinking is alien to the American tradition. Historically, we have plunged straight ahead, or created complex pyramidal management structures. Today, those forms lead to worker alienation, fail to factor in customers and other stakeholders, and make continuous improvement difficult.

Instead, some organizations are following nature's lead, abandoning conventional hierarchical, linear management for charts resembling a spider web or even the solar system, involving all stakeholders on a continuous basis, and fostering continual, incremental change. For example, when Hans Keller managed New York's Penta Hotel, he dramatically cut costs while increasing morale, using a circular (not flattened!) organizational chart he said was inspired by the atom's structure.

Fourth, the terrarium teaches us that the Natural Economy corporation will, above all, be economical

Nature is the harshest of test laboratories. While dinosaurs are now found only in museums and Jurassic Park, their more efficient contemporaries, the cockroaches, still roam the world's kitchens. Mother Nature manufactures plants and animals the efficient way, one atom at a time. Within a decade, we may be able to do the same through nanotechnology, manufacturing machines atom-by-atom, using only the smallest amount of raw materials - perhaps even the carbon from ground-up scrap tires - producing machines so small they could be injected in your blood stream.

Finally, and most important, the Natural Economy will create value and growth from information more than from material.

Here, the analogy between our terrarium and the economy is between the DNA that is the common element in all life worldwide and the digital information that is the common element in the global Information Age. If there was ever an argument for humility on our part, it is the sobering realization that we share about 90% of our DNA with lowly a bacterium, and 99% of our DNA with chimps. In fact, a lily contains about 100 times as much DNA as a human!

Yet, while we share the same basic DNA, evolution has spawned an infinite variation of combinations of that DNA, not only differentiating species, but also us from our parents and our children. The result is the increasing richness and diversity of life on earth. Similarly, economist Kenneth Bolding says information is the only resource that expands.

Information's ability to expand is a crucial distinction as we attempt to build a sustainable economy that meets today's needs without jeopardizing the prospects of future generations. During the Industrial Economy, most economic growth came from making things. Manufacturing required using non-renewable resources, often in profligate ways. Equally important, the Industrial Economy was a zero-sum one. Every pound of iron ore that you converted into an electric can opener was a pound that was no longer available to me. Inevitably, there would be winners and losers as the result.

Today, by contrast, we have the technology to create wealth not from stuff, but from information, and to do so on a global basis. Just yesterday, the papers reported that a fifth company wants to circle the globe with satellites, allowing worldwide communication from mobile phones, using digital technology. Look ma, no strings! Like the DNA in living beings, digital information is the universal code that will link us worldwide despite all of our language differences, and yet, paradoxically, allow and encourage a proliferation of new forms of information. As radical as the transformations it has already created, when digital technology is ubiquitous, it will change our economy even more, with benefits for people and the planet.

We will enjoy a new era of cooperation and team work, both within companies and the economy as a whole. I call this "slime mold management," because of its resemblance to slime mold, a social organization of single-celled amoeba on the forest floor who come together and assume complementary roles for their mutual survival, without instructions from a boss.

The old hierarchical approach and tight control of information by management will give way.

As Meg Wheatley wrote in Leadership and the New Science, "every employee has energy to contribute; in a field-filled space, there are no unimportant players."

Similarly, Natural Economy companies will be synergistic.

Like the flocks of geese who extend their range dramatically because of the lift each member shares by flying in formation, we will accomplish more and be happier by working in teams. The universal digital language will facilitate this teamwork. It will free us of the boundaries of time and place, to put together virtual teams, linked by computer networks. In perhaps the most dramatic example to date of this approach, the design team who created the IBM PS/2 E met face-to-face for the first time only hours before they were to demonstrate the new model at Comdex. They had worked at their regular offices in facilities from Scotland to New York to Florida to Japan, coordinating their work via IBM's PROFS network.

The bottom line?

They put together the designed-for-disassembly prototype in the project manager's hotel room using a Swiss Army Knife, then the next morning won the Comdex Best of Show award.

Cooperation among companies will also increase.

Similar to the symbiosis between fungi and plants' rootsystems, without which both die, Natural Economy companies will realize that they can and must tolerate ambiguity: compete with another firm in one context, and collaborate with it in another. Again, digital information will allow this seamless integration of differing companies, such as the Southeast Manufacturing Technology Center's "virtual factory" in South Carolina. Small manufacturers can use its computer-controlled machine tools by sending instructions over a computer network linking the companies. They will make sophisticated products without the overhead and environmental impact of building their own factories.

As Meg Wheatley points out, the information-based Natural Economy will overcome the Second Law of Thermodynamics, which brings conventional, closed systems' growth into a halt because their energy dissipates to entropy.

Natural Economy companies will constantly import "free" energy - information - from the environment and export entropy. They will defy conventional wisdom by continually renewing themselves and creating new wealth without consuming more natural resources. It is, as theorist/entrepreneur Paul Zane Pilzer says, economic alchemy, and everyone will win - including the environment.

• fertilize growth of the new with decay of the old
• temper competition with cooperation
• use feedback for continuous change.
• be economical
• create value and growth from information more than from material

- Five principles to build a profitable and environmentally sound economy upon, which we can observe in the terrarium, and in nature at large - if we only open our eyes. And that brings me to my last point.

Humility!

The only way we can access nature's handbook to the new economy is if we fundamentally change our relationship to nature. For too long, businesses have seen nature as something apart from us, as a resource to use, with little regard for how that will deny resources to our grandchildren and create wastes that poison life. Instead, if we are to ever realize the benefits of the Natural Economy, we must once again regard nature as our tribal forbearers did: with awe and wonder, and the realization that we too are part of nature.

As Meg Wheatley put it, "Interconnectivity is now understood as a basic law in our universe. A supernova explosion birthed every element in our bodies. The molecules of blood in our bodies are identical to the chlorophyll in green plants save for an atom of iron substituting for an atom of magnesium. The gravity that has me sitting in my chair is also moving planets and galaxies in the farthest distance of the universe, one trillion galaxies away. Spend ten minutes in a room with others and you are all breathing in one another's water vapor - breathe deeply and you are inhaling at least one molecule of air that Jesus breathed on earth, or Mary or Mohammed or Abigail Adams." No doubt about it: nature doesn't exist apart from us, to serve our needs. We are nature, and will rise or fall with her. We don't have the luxury of time in deciding to fundamentally change our relationship to nature if we hope to benefit from the Natural Economy.

Just remember the calophyllum lanigerum tree.

Researchers in Malaysia found that the twigs from this rain forest tree contained a compound that stopped growth of one HIV strain. Elated, they returned to the rain forest for more, only to find that clearcutting had eradicated the species. Who knows how many other miracles that could enrich our lives will be lost unless businesses become defenders of reauthorization of the Endangered Species Act, and unless we learn to tread lightly on the earth.

Today, we have a unique opportunity to bring our economy into harmony with nature.

Instead of mining its minerals, by observing nature sympathetically we can mine ideas instead. Tomorrow, this new model of economy as natural system can finally bring about an information-based, global, interdependent economy with opportunity for all that prospers specifically because of environmental protection, not despite it.

© W. David Stephenson, 1993 --reproduce with attribution