Oliver Fiechter

Fiechter’s beliefs are strongly influenced by constructionist philosophies, particularly Heinz von Foerster’s work on self-organizing systems. Fiechter’s core interests lie in the relationships and social exchanges that take place while the needs of the stakeholders within the system are being satisfied. In 2008 Fiechter founded the ISG Institute in St. Gallen, a Swiss-based think-tank known for developing methodology and tools (based on empirical research) that enable companies to measure and report on “soft factors” and individual preferences such as values, ideals, psychological motivations and attitudes of customers, employees, management and other stakeholders. The methodologies see companies as complex social organizations; and thus integrate intangible nonfinancial assets with traditional financial assets in valuation analysis. Companies can therefore measure and report (in real time) how soft factors impact financial performance. PricewaterhouseCoopers (PwC) and Ernst & Young (EY), have adopted Fiechter’s tools as part of their client solutions. The ‘Hidden Champion 3.0 Award’ of the Austrian Ministry of Commerce is based on this methodology (see Hidden Champions). In 2009, the Swiss economist and winner of the Swiss Innovation Prize (1983) Prof. Dr. Cuno Pümpin partnered with the ISG Institute. The collaboration proved that management makes more sound and objective decisions when implementing ISG-methodology (including qualitative and quantitative facts).

Fiechter’s belief in the “Stakeholder Value Management” approach (versus the “Financial Value Management”) is the basis for his Economy 3.0 philosophy. In the Economy 3.0 the purpose of a company or organization is to produce value for every stakeholder involved—customers, employees, shareholders, suppliers, local communities, even the society at large. In contrast, the “Shareholder Value Movement” focuses solely on maximizing profits and maximizing the value of a company for certain stakeholders. In Fiechter’s opinion, the Shareholder Value movement contributed substantially to the 2008 world financial crisis. He believes that the shareholder value movement has reached its limits and that advancing communication technologies, digitalization and the emergence of peer-to-peer networks can shift the balance of power towards individuals. He foresees a new economic order wherein networks of clients and stakeholders collaborate and co-create for the betterment of society.

1. Economy’s objective is the satisfaction of our needs.

20. The network helps us to better reflect about us and our needs by means of a dialog with others. 21. The network helps to bring our needs in line with the companies’ value propositions.

Economy 3.0 is a new economic system that is described in the book ‘We are the Economy!’ by Oliver Fiechter. In cooperation with tech entrepreneurs, politicians and artists, Oliver Fiechter had developed 33 theses which later constituted the basis of that book. In order to understand Economy 3.0, one needs to understand the economic systems that preceded it, as well as the key differences between Economies 1.0, 2.0 and 3.0.

Instead of calling it Economy 4.0, ‘We are the Economy!’ refers to the economy following Economy 3.0 as Synchronomy. Synchronomy is a neologism made up of synchronization and economy. This new system overcomes the logic of scarcity; it is replaced by the logic of abundance. The tangible needs are already satisfied; the system is entirely devoted to the intangible. Enterprises only exist as synchronization platforms where people who produce certain benefits and people who want to receive those benefits meet and form ‘communities’. A community dissolves, once the particular need is satisfied. In Synchronomy, the features of the markets that are characteristic in Economy 3.0 – virtuality, transparency and reciprocity – gain importance. Dematerialization continues, the principle of exchange and ‘interaction instead of transaction’ are in the foreground. Hierarchies are replaced by networks. There is a complete decentralization of the structure, development and management of enterprises; they are fully in the hands of the stakeholders. Instead of having executives, communities rely on direct communication and swarm intelligence.

For the Carlo Foundation, by the Liechtenstein government, he developed a rating approach for the sustainable rating and valuation of financial products. On behalf of the Austrian Chamber of Commerce, he developed the hidden champion 3.0 award, which rates export-oriented companies according to the rating criteria of the economy 3.0. Fiechter has been involved with his project Peerworld of the Clinton Global Initiative since 2016.

Economy 2.0 is not just about survival anymore; its participants are longing for material wealth. An increase in efficiency leads to more supply, which brings supply and demand into alignment and therefore increases the power of the consumer. The average size of enterprises increases – which is one of the reasons for increased efficiency – and enterprise management is concentrated in the hands of a few. Furthermore, the realization of the ego becomes the driving force of the system; the individual wants to be unique. Since the needs of the customers are more or less equal, whether or not a need can be satisfied depends on the financial possibilities of the individual. In this economy, success is assessed through profit, respectively the lack thereof.

“The imperative of Economy 3.0 is called intellectualization, this means that a community is to empower its members to reflexive thinking and acting.” In Economy 3.0, the third sector – the service sector – dominates. There is an abundance of physical and material goods, which is why the exchange of intangibles in order to increase intangible prosperity becomes the primary focus of the system. The demand for efficiency and size is replaced by a demand for creativity and empathy. Intangible needs are highly individual and cannot be satisfied through mass production. In order to fulfill a customer need, an enterprise needs to know what exactly the need is and how it can be fulfilled. The gap between producer and consumer shrinks; the consumer turns into a co-producer. New forms of relationships between organizations and stakeholders are required, the interaction becomes more important than the transaction. Digitalization leads to a new kind of knowledge society because the internet makes it possible for everyone to contribute and access knowledge.

Corporate management in Economy 3.0 works according to the principles of self-organization. The metaphor of the swarm can be used to explain these principles. “Swarms function without central control, solely by the cooperation of individual agents that interact loyally with each other and are equal to each other.” A swarm forms, whenever a group of people pursues the same task. Successful swarms require a commitment to self-organization, indirect cooperation, access to a wide variety of knowledge and it has to be able to adapt to changing environmental conditions. Since there is no one giving instructions, tools like knowledge competitions – where different approaches are compared and assessed – need to be used to increase the quality of decisions.

With his book published in 2012, he describes an economic philosophy of ‘Economy 3.0’ as a principle of need satisfaction and a new way of working together that reflects this fundamental change. Economy 3.0 is an economy that is decentrally controlled by people. Put simply, Economy 1.0 can be described as agriculture. The Economy 2.0 is the industrial society and Economy 3.0 is the service society. Each economy level includes shares of the others. The significant difference is this: Economy 2.0 was about eliminating scarcity. In Economics 3.0, the goal is to deal with the abundance. Fiechter has the vision of a future global economic and social order, defined by a transparent digital barter society, based on reciprocity, equality, and cooperation instead of competition. Based on the ‘Economy 3.0’ theory Fiechter invented a management-, strategy- and controlling-methodology for human-centered corporate management. Furthermore Fiechter is the founder of the ISG Institute in St. Gallen and General Director of M&H Equity AG, an private equity investement company that operates internationally and with a unique methodology that can identify risks and potentials in companies based on the soft factors.

Oliver Fiechter (born April 30, 1972) is a Swiss economic philosopher, digital business model innovatonist, management visionaire, entrepreneur, and author of the books, We Are The Economy! (2012) and Rise of the Digital Tribal Society (2016).

Fiechter was born in Buenos Aires, Argentina on April 30, 1972. He is the son of Beat Fiechter, Ursula Fiechter. He has a sister Natalia born 1976. In the early eighties, Fiechter and his family fled Argentina because of the threat by the Argentinian putschists. The family returned to Switzerland. Integrating into Swiss schooling and culture was difficult for Fiechter, and he began to distrust authorities categorically. Fiechter’s negative experiences with institutionalized education influenced his interest in Adaptive Learning, as stated in his book; We Are The Economy! (2012). In it, Fiechter advocates individualized lifelong learning that “develops constructive critical thinking and individual development.” Fiechter is opposed to factory-like, mass training without regard for the individual. He states that in order to adapt to the changing digitalization of the world, education will have to shift away from standardization and towards fostering individual creativity and innovation.