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Three Top Experts' Opinion on Project Economy


Author:     Source: PMR

The following are three leading experts' opinions on the Project Economy, which becomes a hot topic. 

Michel Thiry:

What is the Project Economy?

There is a lot of talk these days about the “Project Economy” as if it had just been discovered and is a new thing; in fact, the project economy is as old as mankind. When cavemen organised a hunt, it was a project, and even better, an agile project; when pyramids, the great wall of China or cathedrals were built they were all part of a project economy.

Until the industrial revolution in the mid-nineteenth century, everything was managed as a project, and it was also agile. Tradespeople and craftspeople typically built whole products from scratch, communities got together to help their neighbours; there was very little division of labour, except for large ruler-driven projects like castles, places of worship or roads. Before the mid-nineteenth century, the team’s work on the project was fully integrated with the ultimate purpose of the undertaking.

At the beginning of the industrial revolution, social economists like Frederic Taylor developed what is now known as “industrial engineering” and “scientific management”, applying engineering principles to the work done on the factory floor. The main contribution of Taylorism, and later Fordism, was to focus on the product, relying on the “manager” to link the project outputs with the expected outcomes while the “worker” performed discrete, well-defined tasks, unconcerned with outcomes. The whole approach is based on segregation of work and control.

This is the approach that has driven our economy for the last century. These principles have driven what is taught in business schools, it has also driven the process-based “modern project management” school of thought. Although Taylor’s intentions were good and promoted the betterment of the workers’ condition, the practical result was that of a mindless approach to work. The concept behind the project economy seems to be the refocusing of the project on benefits and value-driven work but, as for Taylorism, we should be careful on how it is applied in practice.

The PMI defines the Project Economy as “one in which people have the skills and capabilities they need to turn ideas into reality. It is where organizations deliver value to stakeholders through successful completion of projects, delivery of products, and alignment to value streams.” This definition aligns with organizational agility concepts, where organizations must adapt quickly to continuously changing circumstances, and it argues that the best way to achieve this is through projects.

As I have stated above, the concept of a Project Economy is not something new, but its application in today’s VUCA (Volatile, Uncertain, Complex and Ambiguous) world requires a new kind of approach; one that includes more reliance on digital technology, an acknowledgment of social responsibility and a good degree of pragmatism (or a practical sense). The key to its sustained success is to reflect on the lessons from scientific management and not to lose sight of its objectives, which is to create value for all the stakeholders, not just the few that dominate the current economic model.

Reinhard Wagner
The term “Project Economy” was used in the 1990s in Germany for describing the project management system WITHIN one company (German DIN Standard), later the term was rather used for describing the macro-economic view of "a majority of work is being done in form of projects". Key was in 2007 a projection (Deutsche Bank Research) of the German economy to move towards a "project economy", because companies focus on core competences and need to collaborate, this collaboration is done in form of projects. Nowadays we see it in an even wider context, speaking about a "project society", which covers all sectors, including the economy, but going beyond, thus public sector, private and not-for-profit sectors... In essence, project economy covers the projectification in the business area, but is limited to this sector, there are other sectors with a more dynamic development regarding projectification, which you can see nicely during the Corona crisis. Best regards Reinhard

Thomas Walenta
PE will lead to more security for society, about the future. It will do that by 1. enabling organizations to run more of their activities as projects and with that adapting to changing circumstances 2. providing individuals from 5-75 and teams with the competencies to look calmly into the future and jointly tackle challenges 3. Thus enhancing resilience, the ability to survive, of people and organizations - which is also the goal of evolution

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