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Drivers of the century

Published by under News,Politics / Management categories on April 3, 2009

kayak at lake´s border; sunrise over mountains at lake´s horizon Outsights 21 Drivers for the 21st CenturyTM, develops a programme of leading edge ideas and insights into the Future, supported by rigorous horizon scanning and futures research, over several years work in most continents, cultures and sectors, and through pioneering work such as leading the Sigma Scan, the UK Government’s future scan to 2050.

Please find in which follows the introduction of key drivers:

War, terrorism and insecurity.

Two great uncertainties of future war are who will be fighting and how they will fight. Some experts fear the worst – customised viruses, induced paranoia or obliterated memory. The last few decades have seen the civilianisation of conflict, as intrastate wars decrease and conflict within internal boundaries – such as Rwanda and Sudan – grow in number and size.

What changes are we likely to expect in the future? Robots are expected to play a substantial role in fighting wars in the future. There is speculation that the US has already sent robot spies disguised as moths to Pakistan and the UK’s Ministry of Defence cites the possibility of ‘super humans’ with greater strength and sensory perceptions. War tests the boundaries of imagination and potential outcomes may seem far-fetched. Yet, if they transpire, all aspects of our lives will be affected.

Layers of power

Layers of power can be viewed as a triangle of governance: Governments, companies and the third sector at each apex, and the individual in the middle. There are early indicators that this is in flux. New financial players – private (hedge funds, private equity) and public (sovereign wealth funds) – are exerting influence locally and internationally. One prediction suggests that sovereign wealth funds would exceed the US economy by 2015.

In addition, the line between private and public continues to blur e.g. in the UK, a third of all public services are now delivered by the private and voluntary sectors. On both sides of the nation state, supra-regional and local government grows in importance. Devolved local power might extend to independence in Scotland and elsewhere. But super-blocs have obstacles to overcome, as witnessed by the EU. New Philanthropists are adopting entrepreneurial methods to address societies’ big issues. Some see this power as something less attractive with a new “superclass”, making traditional governments obsolete.

New ways of connecting – social networking – are also empowering the individual. Will there be a decline in the role for national governments? Not if you consider one of their oldest manifestations of power – tax. The average tax burden in the OECD is 36.2%, 10.4% higher than it was in 1965.

Economic and financial stability

The financial crisis is challenging the  free market model and laissez-faire capitalism ascendant since the 1980s. The US Congress $700 billion intervention in the financial sector is almost the same percentage of GDP invested in the post WW2 Marshall Aid plan. The UK Government’s £500 billion banking bailout is fast turning into further nationalisation (which began with Northern Rock). How can we set the turbulent short term against coherent views of the future?

Socialisation of risk.
The UK plan facilitates government intervention in two ways: it has put in place measures for banks that are solvent but possibly illiquid; and where solvency may also be an issue it has looked to recapitalisation of banks or nationalisation. By exchanging the money at risk in return for part or whole ownership, UK taxpayers share in the risk/reward – a socialisation of risk that would otherwise be solely borne by depositors and investors. Penalising savers when at a time of trying to overcome the excesses of an overspend culture would be counterproductive. Whilst executive bonuses are relatively small in terms of the real money at stake, policies to limit excesses do represent a big move to address issues of equality in society.

Towards a new model?

One European head of state has reportedly said: “Some people are trying to see this as a failure of Western values, of capitalism overall. When I met African leaders … some of them said to me, ‘Maybe we should follow the Chinese model instead, authoritarianism seems to work for them.'”

Earlier this year in the Future of the Global Economy to 2030, we entertained a future scenario with more government control in the market over resource allocation – consistent with the government intervention in markets today. Whilst we concluded that the market economy was not going to be replaced by central planning, this increased control over resource allocation is not too dissimilar from the model of capitalism pursued by China.

The current situation owes a great deal to the imbalances in the global economy between the US and China. The same is true for the UK: the past two years have seen personal debt exceed GDP. With the US and UK models looking shaky, is it possible that the mighty US will ask the IMF for a conditional loan?

Though the current crisis makes other models look more appealing, we should not underestimate the ability of the West’s model to repair itself. The smooth ascent of China should not be taken for granted. There is also no consensus that more regulation in the financial sector is the solution, an issue at the heart of the Congressional debate on the US rescue package. After the tough lessons learnt from the Sarbanes-Oxley reaction to Enron, a heavy regulatory response does not always make for a competitive solution.

Long term possibilities

If we are heading towards a scenario where there is more State control of the markets, at what level will this be – national or international? Central banks have already demonstrated a renewed appetite to work together in times of crisis by coordinating an interest rate cut. Increased international cooperation may result in long-term benefits. Economist Nicholas Stern certainly thinks so. The concerted global effort to tackle this financial turbulence could also be used for other global challenges like resource availability and climate change. The skeleton in the closet is the alternative beggar thy neighbour protectionist reaction of the 1930s.

Is it likely that the model of capitalism in 20 years will look the same? The possible shifts in ownership of the (not-so) commanding heights of capital, whether from overseas acquisitions or from governments’ re-owning their private sectors, may be the first sign of a significant shift from the free markets pursued for the past 30 years.

Is this the shock that triggers alternative futures? Alongside the dramatic fall of the Berlin Wall and the Soviet Union, the end of Apartheid and 9/11, the present crisis has made more people think about what the future holds, and to abandon the idea that the unexpected cannot happen.

Climate change.

Climate change may be one of the most complex and fundamental drivers of future change. Not only are we seeing changes in the climate itself – the opening up of the Northwest Passage, local floods and droughts – it is exacerbating the rapidly emerging food crisis.

Australia’s worst drought in 100 years has halved its wheat crop. An unusually cold year has damaged Ukraine’s crops. Booming Chinese demand has pushed up prices while severe droughts have cut its own wheat production. In search of clean fuel, farmers have converted to biofuel crops, with at least one third of the US maize crop going to ethanol in 2006 even though some biofuels are dirtier than fossil fuels.

Longer run, however, warming may allow Siberia and Northern Canada to become the new bread baskets of the world. The race for minerals and energy in the North Pole has already begun. While global carbon emission negotiations slowly edge forward, businesses, cities, citizens, regional governments and geo-engineers are rushing ahead. Examples of the green innovation range from carbon neutral cities such as China’s Dongtan Eco-city, to the more radical technology solutions such as carbon absorbing synthetic trees.

Science and society.

The human brain, one of science’s last frontiers is becoming demystified. At MIT’s Neuroengineering and Neuromedia Lab, scientists are working on how to change our brains, with enormous implications for treating neural conditions, but we could also use these advances to make people happy, or even to make people dance. More than half of employers in the UK will not hire someone with a known mental disorder, while 80% think this to be ‘a risk’ for a customer-facing role. Perhaps attitudes and perception of risk will change as neural conditions become more treatable through greater control of our brains.

As more advances are developed, there are increasing ethical landmines associated with violations of privacy. Law courts are now enjoying better evidence through mind reading technology, and there is increasing potential to use technology to predict criminal behaviour. For the workplace, computers are being developed that respond to users’ thoughts of frustration – too much work, too little work, or boredom. In times of economic hardship, could technology like this ever be justified to increase productivity? If these technologies do deliver, HR professionals will be among those navigating these ethical landmines of neuroscience. How to retain and attract talent could be radically different; will the brain scan be the next psychometric test?

Space.

What lies beyond the earth has been on our consciousness for centuries. in 1634 Johannes Kepler wrote about man’s journey to the moon in his novel Somnium – a journey now becoming reality for the public with Richard Branson’s Virgin Galactic and NASA’s plans to contract a commercial firm to ferry cargo and people to the Space station before the end of the year. People may also be able to take an elevator to Space, made up of 22,000 miles of cables.

The journey shows potential too, of going farther and faster: future technologuy could enable a round trip to Mars in five hours. Princeton astrophysicist Richard Gott III envisages that the colonisation of Mars could be a very real possibility and in 600 years, there could be eight million people living on the planet, with humans migrating to Space to ensure survival.

However, Space means so much more than our flights of fancy.Will there be a new race for Space as China and India join the game? Is the expected US dependence on Russian spacecrafts to reach its own space station a potential dispute or a measure of the need for global cooperation outside our planet? There is also concern that the American Space spying programme breaches privacy laws. Space could also play a great role in development by means of satellite communications for health as well as disaster management.

Science futures.

Groundbreaking developments are likely to come from converging scientific disciplines: biotechnology, nanotechnology and advanced materials, safety and security technologies, robotics, neuroscience and ICT.

Inventor and futurist Ray Kurzweil argues that we will see more scientific and technological change in the next 30 years than we have in the last four centuries. Indeed, by 2040, we are likely to have quantum computing – computers potentially trillions of times faster than today. By 2030, we can expect articificial intelligence to match the human brain. In the next decade, we could develop complex organs patches that could repair damaged pieces of the heart or other organs. Within the next five years, Toyota expects to put human-assisting robots on the market. In a few months we are likely to herald the creation of artificial life in the form of an organism. These developments may well surpass the revolutions in IT and genetics: is Kurzweil being too conservative?

Original source, 21 Drivers for the 21st CenturyTM by Outsights , is licensed under a Creative Commons Attribution-Non-Commercial-Share Alike 2.0 UK: England & Wales License.


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