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PRAGUE — Five years have passed since the terrorist attacks on New York and Washington of September 2001, yet it seems that policymakers have learned little about how terrorist cells operate, and what their weaknesses are. The Bush administration still uses the phrase “war on terror” and behaves as though it really is a war, the ordinary kind where one government fights another.

After five years of military exertions, strategies based on targeting a united aggressor have only made the situation worse. It is time to understand the new, emerging model of conflict.

In order to make the “war” paradigm fit, the Bush administration alludes to al-Qaida as a centrally directed enemy. In fact, there is now no master planner or funder of terrorist activities. The Madrid, London, and Bali attacks, as well as several thwarted operations in the United States and Britain, were all characterized by their dispersed organization. Independently generated plots emerged and used ad hoc resources, often within the target country.

Those small operations also lacked a common internal design. Terrorist motivations differ from cell to cell, even from person to person. Individuals can be involved for profit and power, or for political and religious reasons, while others participate for hate or thrills. Moreover, there are vast differences in terms of risks, rewards, and imperatives as one moves up the organizational chain, or jumps from cell to cell. Conventional military models are geared to decapitate something that, in this case, has no head.

The characteristics of this new structure have already been studied in a very different context. Terrorism is a violent version of an “agile virtual enterprise.” A virtual enterprise is any small group that self-assembles into an organization that is just large enough to accomplish the collective intention.

Virtual enterprises are unusually innovative, and, in the business sector, they are possibly the only system that can build a one-off product well. A conspicuous example already exists in the movie production industry. In fact, they are probably the commercial model of the future.

The benefits of virtual enterprises stem from their lightness over stability. At present, most of the price of any product supports the huge, inefficient organization that assembled it. Nearly all the creativity and problem solving occurs in small companies and is later “integrated” by mega-corporations, which have an expensive and vulnerable infrastructure, and keep most of the profit.

This model is the current basis of the business world, just as centralization has also been the favored defense strategy. When you buy a car from General Motors, 80 cents from each dollar goes to GM, which mostly only manages itself. The small suppliers actually provide you with 80 percent of the value and innovation but only receive 20 percent of the reward.

Ironically, extensive research into alternative models was funded through the U.S. Department of Defense, which, as the world’s largest buyer of complex machinery, wanted better, cheaper and more tailored goods. The research noted the conditions and triggers needed to facilitate the self-assembly of small opportunistic groups and enable them to act like large companies. Unfortunately, the research program was canceled before its findings could be applied in the business world, almost certainly because it threatened large companies.

It is often forgotten that U.S. Defense Secretary Donald Rumsfeld emerged from a comfortable retirement to reorganize the American military into a smaller, more agile force, using some of these same insights. But the planning for the Iraq invasion, in which Rumsfeld advocated the use of fewer troops than advised, suggests a poor understanding of distributed systems. While the forces were deployed for a flexible entry and withdrawal, the Bush administration ended up using them for an old-fashioned occupation.

Terrorists have been better at capitalizing on models of distributed operation. Scores of texts are appearing in the Muslim world on jihadi strategic studies. The best known in the West is “The Management of Savagery,” but only because it was translated and made public.

These books (and the trends they indicate) are becoming less dogmatic and increasingly sophisticated in the adoption of modern management techniques. Their research surely includes the young science of virtual enterprise management: how to nurture and support self-organizing cells.

Perhaps the first lesson for Western policymakers is that virtual enterprises run on a culture of trust. Some kinds of trust can be based on an artificial notion of “not us” rather than on real values and direct experience. That is why the Bush administration’s actions actually strengthen the virtual terrorist enterprise dynamic. Bush’s “us and them” rhetoric clearly defines an “other” and positions it as a cohesive enemy. His “war” approach is making it easier for Islamist terrorists to view the West as an equally united and malevolent force.

In the future, the virtual enterprise model will shape how business is conducted, wars will be fought and probably how government services will be administered. It promises to decouple the management of finance from that of production, implying faster innovation and economic growth. However, if Western governments do not develop a deep understanding of how these structures operate, they stand no chance of combating the agile terrorist enterprise.

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