There are two parts to my model. First, the context - the backdrop for how all business will be conducted in the 21st Century.

Then, the strategic imperatives needed to succeed in this changing business environment.

So, let me begin by identifying 3 vital, enduring forces - the legacy of the last century - forces that will help define, and shape the business landscape - over the first half of the 21st Century. . . or for the duration of your business lifetimes.

The first powerful force, is the concept of FREE ENTERPRISE.

Free enterprise will continue, as the value creation engine of the 21st Century. Let me draw a distinction between Free Enterprise and Capitalism, a very important distinction. (Praise Capitalism. . . ) Lenin was proven right: capitalism died (explain) - (capital as the choke point)

So let's define Free Enterprise: "The free movement of capital and other resources - in the most efficient and effective way to produce value - (and thus wealth)."

There is one caveat, however. Free enterprise needs a level playing field. With all the scandals - Enron, Tyco, Worldcom, Adelphia, Arthur Anderson, and sadly so much more - we have lots of practical ethical, and moral issues to settle.

Media, NGOs and governments will need to be critical players in the free enterprise process. For governments in particular - that will be the vital role of referees and enforcers, but not participants, in the game of business. As participants, governments mess up. Protectionism, is a good example.

About the future - global free enterprise will adjust, change, improve, and thrive. But governments, NGOs and media - must be vigilant, in keeping a level playing field.

The Second Force: The greatest business revolution of the last 50 years - you haven't even read a thing about. The paradigm shift, from a global economy driven by excess demand, to a global economy defined by -- excess supply.

Until now, all of us businessmen and women - operated in an excess demand world. The history of the modern, excess-demand era, starts with the conclusion of the Second World War, here in the U.S. (PAG explain

So now, what motivated the move, from excess demand, to excess supply? The barriers to entry in any profitable businesses have been mostly eradicated:

• Capital/Money - now cheap/ubiquitous
• Raw Materials (from agriculture . . .)
• Manufacturing Capacity Technological Insulation/the Technology Revolution Human Capital (PAG - explain each point)

The net result:

• Commoditization - the cancer of 21st Century business. (Explain: products look alike . . . except for price.)
• Ferocious price competition (McDonald's, example)
• And the resultant lower prices/margins/profits

As a consequence of the shift from excess demand, to excess supply, the ten-thousand-year war between providers, and consumers, is finally over.

And consumers have been declared the decisive victors.

Importantly, many of the lessons that brought success in the excess demand world, no longer apply. In fact, many of the old rules are counter- productive, negative.