Business Book Of The Week: Wake-up call to a new century of happy days

Living on Thin Air

By Charles Leadbeater.

(Viking pounds 17.99)

THE RECENT stock market flotation of Freeserve, a "thin air" stock if ever there was one, makes this book highly topical. The so-called "new economy" is the flavour of this end-of-millennium year.

Charles Leadbeater believes we are entering the 21st century with institutions and attitudes designed for the 19th. The new "dematerialised" economy will consist largely of ideas, information and know-how. As an example he cites Delia Smith who makes more money from writing recipes (ideas and information) than those who actually cook the food (physical stuff).

His book is a wake-up call to businesses, individuals and government because, he says, if we don't redesign our lives and our institutions we will throw away the opportunity his new kind of world will give us, the opportunity to create a society that is innovative, humane and inclusive. As it is, because we haven't changed enough, most of us feel our economic lives are out of control and insecure, while we watch some creaming the riches and others worrying about their next meal.

Should we believe him? Is the new knowledge economy going to be so very different or is it more froth than substance, more relevant to the likes of Leadbeater, and myself, who live independent lives conjuring products and services out of thin air? Will the lives of the other 80 per cent of us be affected? More mail may come from e-mail than from the Royal Mail, but is it that different?

I can now order up my groceries from my laptop and have them delivered - but so did my parents in rural Ireland 50 years ago, only they used the telephone. may decimate the bookstores but people will still be putting individual books into bags, albeit in warehouses, not bookshops. Is the Internet anything more than a gigantic Yellow Pages/mail order/Post Office? There will still be nurses nursing, won't there, and teachers teaching, and lorry drivers carrying all those groceries and books?

Yes and no, Leadbeater might reply. First, the Royal Mail, if it exists at all, may not bother to deliver letters, once computers become an essential household accessory. Those nurses, too, as well as the drivers and teachers, will have to upgrade their skills and restock their knowledge banks if they are to keep pace with the needs of the people they cater to; they will have to take more responsibility for their careers, welfare and pensions.

Governments will have to find new ways of collecting taxes when so many of our transactions will go through thin air and when more of us, even the nurses, are in effect self-employed.

Organisations will be more like webs or networks, organised around a mix of projects; no longer will they be homes for our working lives nor will it make sense to think of them as owned by their shareholders. It will be a world of contracts, credentials and open books, essential if we are going to trust those we work with, and trust will be critical if anything is going to get done in this more loosely coupled world.

As with previous technological revolutions, says Leadbeater, it may take 30 years for this information revolution to have its full effects but that doesn't give us much time. Education, for instance, seems to need a generation for changes to work through the system.

The book is full of exciting ideas for the ways things could change - Welfare Mutuals for instance, where we subscribe to co-operative associations to take care of our pensions and, maybe, other needs when governments finally accept they cannot pay enough from the reduced tax base. We will, argues Leadbeater, have to begin to think like bits of California where they rejoice in radical innovation and have a culture of dissent, dispute, disrespect and diversity, held together by a shared love of the future and its possibilities.

The book is a seductively easy read. Leadbeater's writing has been honed by years as a journalist and he salts his argument with examples from around the world and inventive concepts such as Dianomics. At times he seems over- impressed with California's Silicon Valley, which rides waves of business innovation but might not be everyone's first place to raise a family.

You could also argue he is too concerned with information technology and has ignored another potent ingredient of the new economy - demography. Rich nations live longer and breed less. At current rates of reproduction there will only be some 5 million native Italians in Italy at the end of the next century and most of them will be over 50. Who will fill that empty space if the Italians don't change their ways?

Leadbeater may not turn out to be right in every detail but his book is a fascinating introduction to the excitements and challenges of what lies ahead. In spite of the glowing tributes from some of the high priests of New Labour that adorn its cover, it is not a political tract.It is more important than that. As its author says, it is not offering an alternative to the Third Way but about a different destination altogether. It is a book for everyone, for parents and teachers as much as for executives and politicians. It is an essentially optimistic book.

It is not impossible that we might be able to build a better world, if we care enough and start soon enough.

The reviewer describes himself as a social philosopher, and writes books about the future of work and society. His latest is `The Hungry Spirit'