MANIFESTO
DIGITAL REFORM OF THE ECONOMIC SCIENCE
THE PAN-EUROPEAN FOURTH INDUSTRIAL REVOLUTION (INDUSTRY 4.0) CONCEPT WOULD HAVE A GREATER POTENTIAL FOR SUCCESS IF IT INCORPORATED A DIGITAL REFORM OF THE ECONOMIC SCIENCE
22nd SEPTEMBER 2019
The proposed Digital Reform of the Economic Science 1 Digital Reform of the Economic Science (DRES) is a new concept, coined by the authors of this Manifesto. We are convinced that unless
such a reform is launched, the Pan-European Industry 4.0 idea will be considerably less successful. refers to the process of creating, developing and widespread study – both theoretical and applied – of the functional programming constructs of a new generation of digital technologies for managerial modelling of the economy of mechanical engineering enterprises. A six-month course of study, both theoretical and applied, of the functional programming constructs of this new type of software would help acquire a new kind of knowledge and understanding of the economic management of the mechanical engineering enterprise. An understanding that would compare much more favourably to that acquired after a full course in economics at any leading university both in terms of validity as well as in terms of practicability for the real industrial world.
The idea of Digital Reform of the Economic Science is based on seven disregarded evident facts and one little-known fact.
[1] Digital Reform of the Economic Science (DRES) is a new concept, coined by the authors of this Manifesto. We are convinced that unless
such a reform is launched, the Pan-European Industry 4.0 idea will be considerably less successful
For any sensible person it is perfectly clear that today the Economic science has gained universal acclaim as a science which can and must create, develop, and disseminate knowledge for systemic understanding and hence systemic insightful management of the development of industrial capital (including human capital) in the global world space and time. In this respect, the Economic science holds a complete monopoly and therefore has key cognitive responsibility to attain decent and fair future for the nations of the modern world.
This fact provides sufficient ground to support the truthfulness of the idea that the Economic science is a leading science of paramount importance for the political governance of the nations’ future over the course of Industry 4.0, also known as “The Second Machine Age”.
It is perfectly clear that today the mechanical engineering industry represents the basis for the operation and development of all other industries.
It is enough to imagine our modern global world with no machinery – no household appliances such as cookers, fridges, washing machines, air conditioners, etc.; no transport vehicles such as cars, trains, airplanes, and so on; no agricultural machinery; no textile industry or food industry machinery; no medical machinery; no smartphones or computers; no machines whatsoever.
If some unknown force suddenly wiped out all machines in our contemporary world, this would lead to a devastating calamity comparable to a nuclear war.
The above facts determine the top and leading position of the mechanical engineering industry among all other industries.
Тhe mechanical engineering industry comprises numerous mechanical engineering enterprises which provide machines and spare parts to all industries as well as household machinery. The entire global collection of mechanical engineering enterprises can be compared to the global population. Each individual person is unique, but the blueprint of the human body is the same and can be understood through the study of anatomy and physiology. The same holds true for all mechanical engineering enterprises – they are all unique, however the makeup of each one can be grasped through the knowledge of a model which describes its principal setup and functioning as a systemic object and subject.
In this sense, just as the understanding of the anatomical and physiological design of the human body
is a fundamental scientific knowledge of medicine, so too the understanding of a universal model of a mechanical engineering enterprise provides the fundamental scientific knowledge of economy.
A universal economic model for the purposes of machine manufacturers does exist. It is widely known as ‘double-entry bookkeeping’ and was conceived more than 500 (five hundred) years ago by an Italian monk by the name of Luca Pacioli. This model has been invaluable to date, yet as early as the last decades of the 19th century it was found to suffer from great shortcomings with respect to managing the effectiveness of the industrial economy (specifically, the effectiveness of industrial labour) in the context of the Industrial Revolution. Practical necessity gave rise to three waves in engineering aiming to remedy some of these shortcomings.
The first engineering wave of development dates back to the 1890s up to the 1920s. It involves the generation, development, and dissemination of a knowledge of operational enterprise process modelling. This wave is associated with the names of the US engineers Henry Robinson Towne and Frederick Winslow Taylor.
The second engineering wave of development of the fundamental knowledge of economy covers the 1930s, 40s and 50s. It involves the generation, development, and dissemination of a knowledge of production management focused on quality. It is associated with the names of the US engineers Walter Andrew Shewhart, William Edwards Deming and Joseph Moses Juran.
The third engineering wave covers the 1970s, 80s and 90s. It involves the generation, development, and dissemination of a knowledge of computer-integrated modelling of the sales, manufacturing, and manufacturing supply processes.
The key concepts for this knowledge are MRP I (Material Requirements Planning) and MRP II (Manufacturing Resource Planning). MRP I refers to a knowledge of computer-integrated modelling of the processes of sales, manufacturing, and supplies to manufacturing, without taking into account the production capacity of the enterprise. MRP II refers to the same type of knowledge, however considering production capacity.
The third engineering wave of development of the fundamental scientific knowledge of economy stems from the work of two IBM engineers – Joseph Orlicky and Oliver Wight.
In the early 1990s, Gartner employees introduced the concept of ERP (Enterprise Resource Planning) as a vision of the forthcoming development of the MRP systems. They claimed that the ERP systems were a new generation of MRP systems integrating a set of specialised enterprise software applications for digital modelling of the management of finance, human resources, distribution, manufacturing, supply chain, services, etc. ERP tools (both MRP systems and business applications) should share a common digital process and database.
The approach of integrating many and diverse business applications to the classic MRP system has ensured the exceptional market success of the current ERP software (worth over 500 billion US dollars per year). However, as regards the functional constructs of all modern ERP systems, this approach significantly moves away from the cognitive universalism underpinning the functional constructs of any pure application-free MRP system. This hinders the development of this type of systems as an indispensable means of addressing the major flaws of the fundamental scientific knowledge of economy.
A closer look at the current fundamental scientific knowledge of economy will show that it comprises numerous and conceptually different elements that are unrelated in terms of content. For instance:
(1) a knowledge of accounting modelling, (2) a knowledge of productivity and quality management, (3) a knowledge of planning and control, (4) a knowledge of human resources (HR) management, (5) a knowledge of change management, (6) a knowledge of project management, (7) a knowledge of crisis management, (8) a knowledge of business modelling, among many other.
It is clear that these elements do not form a robust and solid foundation for the Economic science in the form of a systemic universal model of a mechanical engineering enterprise, unlike the foundation (in the form of a systemic anatomical and physiological design of the human body) laid in medicine — from the very start of the Renaissance.
This means that, in our digital information technology era, the fundamental scientific knowledge of economy has only evolved to the level of medieval scholasticism in comparison to the fundamental scientific knowledge of medicine.
The above is the result of two major flaws intrinsic to the fundamental scientific knowledge of economy the way it is widely taught today:
First major flaw:
The fundamental knowledge of economy does not provide a comprehensive and clear view of the principal setup and functioning of the enterprise as a systemic object. Just as medieval medicine could not provide a systemic explanation of the human anatomy and physiology, so is the modern Economic science incapable of providing a systemic explanation of the “anatomy” and “physiology” of the mechanical engineering enterprise..
Second major flaw:
The fundamental scientific knowledge of economy does not provide an understanding of the principal setup and functioning of the mechanical engineering enterprise as a systemic subject.
In other words, the Economic science does not provide any systemic knowledge of the nature and meaning of collective and therefore of individual professional responsibility for sustaining the operation of a mechanical engineering enterprise.
These flaws keep the fundamental scientific knowledge in a state of utter informative helplessness in the context of one significant economic and political informational deficiency: the deficiency of quality scientific understanding of the strategic development management of the public research and educational systems.
This deficiency underlies the omnipresent incapacity of the European social scientific and political elites to develop and implement truly effective strategies for ensuring national security by devising and implementing strategies that would encourage the fulfilment of the physically available potential of the workforce within their countries while promoting spirituality of work. These should be concise and comprehensible strategies, instilling reasonable faith and hope for the fair and decent economic future of these nations in the future global world.
The omnipresent incapacity of the European socio-scientific and political elites is manifested in the comparison of the development of the workforce potential within the mechanical engineering technologies sector of the USA and the EU together, compared to that of China.

The technological labour force parity between the West and China as seen in late 2015 might have been slightly exaggerated; however, the exaggeration is in favour of the West. In all fairness, with its workforce potential in mechanical engineering technologies, China is already far ahead.
If this process – as unpleasant as it is for the whole European world, and particularly for Western Europe – does not happen to lead to a world war in the coming years, by the end of 2030 the early 21st century positions will have swapped.
In line with the theory of “knowledge economy” and its inherent idea of deindustrialisation, for more than two decades now the European world has unwisely been cutting down the reproduction, in terms of both quantity and natural quality, of its mechanical engineering human capital. At the same time, it has been producing on a mass scale a range of social scientific professionals, especially professional economists.
This is all the more unwise, because it is the finest European youths who become professional economists. After four, five or more years of study at leading universities, these people can write brilliant theoretical essays on economy but none of them can actually give a decent explanation of the objective meaning of the term “economy”. They are even less capable of explaining a perfectly clear construct – the universal setup of a mechanical engineering enterprise as an object and a subject.
It turns out that the European educational system has been turned into a machine for intellectual and professional distortion of its most valuable human resources. It sounds absurd, but this is a fact. A fact which presents a grave issue for the future of the European world.
Today’s digital information technology market offers a wide range of different ERP systems. Alongside these, there is a similar in nature wide range of technology parks, engaged in designing and subsequently developing these ERP systems.
The process of designing and developing ERP systems involves the employees acquiring specific as well as general knowledge of the systemic setup and functioning of various types of enterprises, including mechanical engineering enterprises.
Through this process every employee possessing the intellectual capacity to independently generate such knowledge would inevitably be able to describe the nature of a mechanical engineering enterprise using the following three common projections:
First common projection:
Every mechanical engineering enterprise is a subject which in turn belongs to a set of subjects all of which – in their capacity as customers and/or suppliers of mechanical engineering products and/or services – collectively make up a logical fragment of the global mechanical engineering industry.
Second common projection:
Every mechanical engineering enterprise is a systemic object which comprises a set of objects defined as capital assets, some of which owned, others attracted.
Third common projection:
Every mechanical engineering enterprise exists in its capacity as a systemically and continuously realised object by retaining and re-allocating (altering) its capital assets through the coördinated operation of five technological systems:
(1) (1) Sales system; (2) Manufacturing system; (3) Supplies system; (4) Financing system; (5) System for implementation of the enterprise technological environment.
If these three personal conclusions are analysed thoroughly on a technology park level, and are then employed as a study foundation in order to design the functional constructs of a new type of ERP systems – „di-innovative ERP“ systems2„Di-innovative” ERP system – a new concept coined by the authors of this Manifesto. Di-innovative refers to the quality of being innovative on two levels. This is an ERP system which on the first level , updates the user’s knowledge of the principal setup and functioning of the enterprise, and on the second level, serves the purposes of human capital development management and selection of a technological élite – people who ensure the development of the enterprise's innovative potential., this would mark a return, on a new and higher level, of this category of digital systems to the cognitive universalism inherent to their historical origin. This type of systems should have no more or less than seven functional subsystems, ordered and defined as follows:
- “Objects” functional subsystem;
- “Subjects” functional subsystem;
- “Functional technological subsystem for implementation of the enterprise technological environment.
- “Sales” functional subsystem;
- “Manufacturing” functional subsystem;
- “Supplies” functional subsystem;
- “Finances” functional subsystem.
These seven functional subsystems are just a first step in building the working constructs of this new type of ERP systems. It is of key importance that these ERP systems incorporate a functional knowledge of managerial modelling of the professional development of people who can perceive the enterprise as a systemic object and subject, and on this basis, be actively responsible for introducing innovative changes to its development. Incorporating such knowledge would turn this new type of ERP systems into the most effective feasible solution to the conundrum of the current unfavourable development of the human capital in the European mechanical engineering industry. This is due to the fact that several months of study, both theoretical and applied, of the functional constructs of such a digital system would help acquire an understanding of the mechanical engineering enterprise economy which compares much more favourably to that acquired after 4 or 5 years of meticulous study of microeconomics at any leading specialized university, both in terms of validity as well as in terms of practicability for the real industrial world.
All that is needed, is for these digital systems to be studied on a mass scale.
Naturally, questions arise:
What is the condition of the technology parks currently engaged in the design of a prototype of a “di-innovative” ERP system? Has any of these parks made a major breakthrough in designing such a prototype?
This leads us to one little-known fact.
[1] "Di-innovative” ERP system – a new concept coined by the authors of this Manifesto. Di-innovative refers to the quality of being innovative on two levels. This is an ERP system which on the first level , updates the user’s knowledge of the principal setup and functioning of the enterprise, and on the second level, serves the purposes of human capital development management and selection of a technological élite – people who ensure the development of the enterprise's innovative potential.
This Bulgarian technology park, which achieved great success in creating and developing a di-innovative ERP system, was called IDEUM Base by its co-founders. IDEUM is the Bulgarian acronym for the phrase Industrial spiritually unifying managerial modelling („Индустриално Духовно Единяващо Управленско Моделиране“).
For many years, the existence of IDEUM Base had not been disclosed publicly, until May 2018 when it was announced via a dedicated website. Ironically, the end of the confidentiality phase preceded only by a couple of months the end of the fully-fledged existence of IDEUM Base: in the summer of 2018, it suspended activity for an indefinite period. The website is still live – a “memorial” evidencing the remarkable breakthrough of IDEUM Base but also a final message to all people and entities who can perceive the enormous social and economic potential of the piece of digital technology that we, the authors of this Manifesto, have defined as a “di-innovative” ERP system.
Yet, how could an informal Bulgarian technology park design independently a digital prototype which could potentially be the key to solving an essential social and economic issue of the European world?
The answer to this question can be found in the 20 years of history of IDEUM Base.
IDEUM Base was founded in early 1998 as an operative Bulgarian technology park for strategic innovation in the area of fundamental scientific knowledge of economy, when two small Bulgarian companies agreed to co-develop a unique IT solution for industrial enterprise and system management.
One of the companies had its roots in one of the most successful software engineering schools in Bulgaria in the mid-1990s. The company employed three gold medal winners from international programming competitions. Working jointly with four other software engineers, they were involved in completing software development contracts for insurance companies, commercial enterprises, and banks.
The other company was a special venture. It brought together the ideas of two mathematicians and two mechanical engineers with somewhat unconventional interests and a talent for studying the practical efficiency of the scientific knowledge of enterprise economic management. They were well aware of the two major flaws of the fundamental scientific knowledge of industrial economy managerial modelling, and believed in designing an IT solution which could be a bearer of a new-quality knowledge – one which provides an explanation for, builds upon and materially replaces the current scientific knowledge of the managerial modelling of mechanical engineering enterprises, as the main building blocks of any developed national economy.
The above concept was enthusiastically embraced by the software developers and led to the decision to merge the two companies. The concept of such an IT solution became a shared strategic goal underpinning the 20 years of operation of IDEUM Base.
In pursuit of this goal, the first 14 years after the establishment of the technology park saw three stages of cognitive advancement.
The first stage covered the period from early 1998 to the end of 2001.
During this period, IDEUM Base built a cognition platform designed to provide an understanding and perception of the mechanical engineering enterprise as a systemic object. Subsequently, based on this platform, the first version of the IT solution for modelling of the enterprise as a systemic object was designed and launched. This first cognition platform was called Industrial Cross.
The second stage covered the following four years – from early 2002 to late 2005.
During this period, the IDEUM Base developed a second cognition platform dealing with the meaning, essence and hierarchy of knowledge prerequisite to the existence of the enterprise as a systemic subject. On this basis, a second version of the IT solution for managerial modelling of the mechanical engineering enterprise as a systemic object and subject was developed and rolled out for use in scientific research. This second cognition platform was called Industrial Cognitive Tree.
The third stage covered the following six years – from early 2006 to late 2011.
During this third stage, IDEUM Base designed its third cognition platform. It supplemented and deepened the understanding of the enterprise as a systemic subject. Based on this platform, the third version of the IT solution for managerial modelling of the enterprise as a systemic object with a systematically implemented subjecthood was developed and rolled out for use in scientific research. This third cognition platform was called Subjecthood Implementation System.
During these 14 years, IDEUM Base continuously carried out solid research in academic matters, management consulting, and enterprise software only to find out that the two major flaws had not been resolved. This research also showed that the second version of the IT solution of IDEUM Base was key to addressing the first major flaw of the fundamental scientific knowledge of economy, while the third version would help address the second one.
This third version clearly integrates the understanding needed to create accurate and clear job descriptions. However, it cannot be ascertained if this IT solution is indeed a bearer of the effective practical knowledge necessary to build and develop an innovative technological élite – this requires challenging experimental studies.
Setting up of the prerequisite conditions and then carrying out the experimental studies of the third version of IDEUM’s IT solution as a bearer of knowledge necessary to build and develop a technological élite became priorities in IDEUM Base’s operation over the following six years.
At the end of 2013, the prerequisites were set up to carry out experimental studies of IDEUM Base’s IT solution as a bearer of knowledge necessary to build and develop a technological élite capable of designing and developing high-tech industrial systems, with a clear comprehension and full understanding. The study was carried out between the beginning of 2014 and the autumn of 2015. Its findings surpassed all expectations.
This last study, which was indeed the climax of the experimental work of IDEUM Base, along with all previous experimental studies, supported the fundamental concept of IDEUM Base – it is possible to design IT solutions that are bearers of flawless, new-quality fundamental knowledge for managerial modelling of the enterprise economy. Having proved this, IDEUM Base had fully realised its raison d'être; this gave rise to various ideas about its future development and marked the beginning of the end of the Bulgarian technology park named by its founders IDEUM Base.
For one reason or another, this unique Bulgarian technology park, which for many years operated quietly and modestly yet extremely hard, arduously, and consistently, discontinued its operations in the middle of 2018 unnoticed by the public. Still, it had not existed in vain. Its legacy to the Bulgarian people, and thus to all European nations, is an invaluable engineering knowledge of designing and developing “di-innovative” ERP systems as a key tool in addressing the issues related to the unfavourable development of the European human capital.
The legacy of IDEUM Base brings an important question to the attention of the Bulgarian and European media, scientific, political and industry elites:
Is it worth the effort to bring this Bulgarian technology park back to life in the form of a leading research and development unit of an organisational system tasked to carry out a digital reform of the Economic science, which is to greatly increase the potential of success, as regards human capital, of the Pan-European Industry 4.0 concept 3The Pan-European concept of Industry 4.0 was introduced in a book published in the middle of the second decade of 21st century called The Fourth Industrial Revolution. The author of the book was the German mechanical engineer Klaus Schwab, Founder and Executive Chairman of the World Economic Forum based in Switzerland.
[1] The Pan-European concept of Industry 4.0 was introduced in a book published in the middle of the second decade of 21st century called The Fourth Industrial Revolution. The author of the book was the German mechanical engineer Klaus Schwab, Founder and Executive Chairman of the World Economic Forum based in Switzerland.
The growth of Industry 4.0, also referred to as “The Second Machine Age”, needs and requires from the professional scientific knowledge of industrial economy to be able to back up the process of creating a new-quality human capital. This human capital needs to possess a knowledge of a universal mechanical engineering enterprise model, which considers enterprises as systemic objects and subjects of the common European economy.
This human capital is key to the success of the Industry 4.0 strategy.
This, however, leads to another issue.
The issue boils down to the fact that today’s professional scientific knowledge of industrial economy, having only reached a “medieval” level of development, cannot possibly ensure the formation of a new-quality human capital, crucial to growing Industry 4.0. Unless such capital exists, the Industry 4.0 idea will be considerably less successful in purely practical terms.
We, the authors of this Manifesto, believe that this problem can effectively be addressed only if a Pan-European organisational system designed to launch a Digital Reform of the Economic Science is established and deployed urgently. This should be based on two operational units:
(1) a leading research and development unit; and (2) an organisational unit.
The leading research and development operational unit should be a technology park which has achieved a major breakthrough in creating and developing an engineering understanding of a “di-innovative” ERP system – knowledge which consists of three elements: (a) theory; (b) terminology; and © prototype technology.
Our private research shows that the USA and Germany are also engaged in designing a new type of ERP system – the US project is called ECAM DS and the German one – New ERP. So far, we have no further information about the progress these technology parks have made in designing or developing engineering knowledge of a “di-innovative” ERP system, but even if they have not achieved any considerable success so far, Bulgaria’s success (represented by IDEUM Base) is sufficient evidence that this knowledge can be generated and then developed. What is more, IDEUM Base can be brought back to life should the Bulgarian and Pan-European elites show sincere interest. This interest, however, has to be attracted. An organising operational unit is necessary to continuously draw the attention of the elites to the societal need and the potential to enhance the capital reliability of the process of growing Industry 4.0, in terms of human capital, on the basis of launching a digital reform of the Economic science.
An organising operational unit already exists. It has the form of a foundation incorporated under the name Information Technologies and the Future of Economic Science (ITFES). The core purpose of this foundation is the implementation of a digital reform of the Economic science. Its first and most important step is to set up an international discussion forum, dealing with the matters of Industry 4.0 and the Digital Reform of the Economic science.
Setting up such a forum would not be possible without the meaningful participation of the media, scientific, political, and industry elites. What is more, the forum is just the first step towards launching the Digital Reform of the Economic Science. The next steps will only increase the need for support and involvement of the elites.
This Manifesto is an address to the elites. It was created with the idea that among the elites in the European society, including in Bulgaria, there are many individuals carrying responsibility for the future of their people that possess the intellectual potential necessary to perceive and then meaningfully support the implementation of a Digital Reform of the Economic Science. A reform which will increase the chance of the European nations for a decent technological future in the context of the technological future of the global world.