Innovation
In 1798 Thomas Malthus forecast that the world would run short of food. He based this prediction on the fact that there was limited agricultural land in the world and so food supply would fail to rise as rapidly as population. Changes in technology and agricultural production prevented this from happening.
Across the world today different societies are at different points of economic evolution. From the pre-modern ‘third word’ that exists at subsistence levels. Through the recently industrialised developing world, to the developed world that is staring the digital revolution in the face and wondering what it means. All of these societies are now interlinked, economically, socially, and environmentally. Like the generation that ushered in the modern world, this generation is yet to comprehend what the next world will be.
In the last 50 years we have seen many innovations, particularly in ICT (information and communication technology). Advances highlighted by personal computers, mobile phones and the internet. They have been life changing and they have also changed our societies. They have been changes made without a moral compass in that they have been driven by commercial interests and personal choice rather than a pursuit of a better life or better society. They have in turn been divisive in that they have separate the haves from the have nots; the rich from the poor, the young from the old; and the individual from the world around them. They are reminiscent of the social challenges unleashed in the 1920’s by the advent of the mechanical age. Back then the world took a decade to find a way forward, and half a century to implement it.
A number of the challenges of the digital age have already been outlined: The internet has made it possible to connect with other people all over the world at any time. At the same time we have never been more disconnected from our real neighbours. It is a potentially dangerous combination. Individuals are assessing their personal values with like-minded individuals rather than the broader community. This is fertile ground for extreme views and anti-social behaviour; this is evident in the rise of child-pornography, terrorism and rape culture. These are significant social challenges.
Economically the biggest challenge is the change the digital age will have on employment. Today the retail industry employs the most people. The next largest employment group are knowledge workers. The digital age is accelerating toward a tipping point in both of these industries.
The retail industry is being transformed in two ways; firstly the nature of what people are buying is changing. Increasingly we are buying fewer things and more experiences, fewer products and more services. The second way it is being transformed is the way we are buying these things is changing from in person to online. This combination substantially reduces the need for physical retail stores and the staff that work in them. Like the mechanical revolution in the 1920’s this change is also creating new jobs. However just as the horseman did not become a mechanic, the shop assistant is unlikely to become a web designer.
The knowledge industry faces a challenge of a different sort. We are moving from a world based on intelligence (an individual’s knowledge and ability) to one based on extelligence[1] (collective knowledge and ability). It is evident in the way children use Google to find information and see no value in ‘knowing’ things they can readily look up. It is evident in the increasing reliance on devices to tell us things, such as how to get from here to there, rather than working them out for ourselves.
The education industry has been the creator and benefactor of the growing knowledge industry, however it is increasingly apparent that it is preparing its students for yesterday’s world. Like the entertainment industry faced with mass media, it is being presented with both a threat and an opportunity. The opportunity is for the ‘best’ to be accessible to far more students, creating incredible economies of scale. The threat is that the rest will be overlooked as the audience turns their attention to the few stars on the big stage, rather than the many lecturers that currently occupy the front of lecture theatres all over the world.
There is no doubt that innovation will continue to change the world. The question is, what is it changing the world into? Few could have predicted the changes in behaviour that the smart-phone has generated in less than a decade. What history has taught us is that big changes are predicted early and arrive late. At the turn of the millennium the dot.com boom was based on forecasts of a new world order in which the internet revolutionised various industries. Those forecasts have taken a while to come true, but some of the icons of the retail landscape of 20 years ago are already endangered, with music stores and video rental stores being the most obvious examples. Newspapers are struggling and postal services the world over are in decline as email replaces snail mail.
There is nothing new in any of this. We no longer have blacksmiths, candle-makers, town criers, carriage makers, scullery maids, chimney sweeps, switchboard operators and many other occupations that were common place a few generations ago. There were few if any brain surgeons, professional sports players or IT specialists a century ago. The future of employment will include many occupations that do not exist today. The challenge we face as a society is how we meaningfully redeploy people to new occupations that add to our collective quality of life.
Recap
- Reward for effort – innovation creates more reward for less effort
- Value is relative – today’s occupations may not be valued tomorrow
- Trade requires difference in value – what we value changes what we trade
- Money is a catalyst – wealth needs to circulate to be effective
- Trade creates economic ecosystems – economic ecosystems are human creations and need to be tended to (like farms and gardens)
- Economic measurements are incomplete – economic measurements do not take into account individual risk.
[1] Footnote:
Extelligence is a term coined by Ian Stewart and Jack Cohen in their 1997 book Figments of Reality. They define it as all the cultural capital that is available to us in the form of tribal legends, folklore, nursery rhymes, books, videotapes, CD-ROMs, etc.
They contrast extelligence with intelligence (by which they mean the knowledge and cognitive processes within the brain). Further, they regard the ‘complicity’ of extelligence and intelligence as fundamental to the development of consciousness in both evolutionary terms for the species, and also for the individual. ‘Complicity’ is a composite of complexity and simplicity and Cohen and Stewart use it to express the close and interdependent relationship between knowledge-inside-one’s-head and knowledge-outside-one’s-head that one can readily access.