The Age of Adaptation
GENEVA – The world needs to stop looking backward. Since the 2008
financial crisis, we have wasted far too much energy trying to return to
the days of rapid economic expansion. The flawed assumption that the
post-crisis world's challenges were only temporary has underpinned
policies that have yielded only lackluster recoveries, while failing to
address key problems like high unemployment and rising inequality.
The post-crisis era is over, and the “post-post-crisis world" is upon
us. It is time to adopt a new framework of realistic solutions that
promote shared prosperity within the global economy of today and
tomorrow.
In this new era, economic growth will occur more slowly – but
potentially more sustainably – than it did before the crisis. And
technological change will be its driving force. Indeed, just as the
Industrial Revolution transformed the productive potential of societies
in the nineteenth and twentieth centuries, a new wave of technological
breakthroughs is reshaping economic and even social dynamics today. The
difference is that this revolution's impact will be even greater.
One outstanding feature of this revolution is the scope and scale of
its disruptiveness. The Industrial Revolution occurred relatively
slowly, like long waves in the ocean; though it began in the 1780s, its
impact was not really felt until the 1830s and 1840s. The current
technological revolution, by contrast, hits economies like a tsunami,
with little warning and inexorable force.
The pace of change has been accelerated by the interconnected nature of
today's world. Technological progress is occurring within a complex and
deeply integrated ecosystem, meaning that it simultaneously affects
economic structures, governments, security arrangements, and people's
daily lives.
In order to prepare a country to reap the benefits of rapid,
far-reaching change, policymakers must account for the entirety of the
ecosystem in which it is taking place, ensuring that government,
business, and society all adjust to every shift. In other words,
competing in the twenty-first century economy will require relentless
adaptation.
Nothing is off limits. Every practice and standard will have to be
rethought. Every industry will be at risk of being turned on its head.
The car-sharing service Uber, for example, has not only changed how
people get around; it also appears to be leading a retail revolution in
which goods and services are “Uberized" – customers pay to use them, not
own them.
The manufacturing industry, meanwhile, will be similarly transformed by
3D printing technology. Supply chains will be eliminated or reshaped –
an expectation that the CEO of a major aluminum manufacturer recently
described. He knows that, in order to succeed, firms will have to
anticipate and respond to such trends. Gone are the days of big fish
eating small fish. In the post-post-crisis world, fast fish will
dominate – and slow fish will die.
But the current technological revolution is not just reshaping what we
produce and how we produce it; it is fundamentally reshaping who we are –
our habits, interests, and worldviews. Consider the vast difference
between the way young people and older generations interpret privacy in
the Internet age. It is also extending our lifespans, with one in two babies born today in Switzerland expected to live more than 100 years.
On balance, the impact of technological progress will be positive. But that does not negate the massive challenge it will pose.
For example, job automation will ultimately propel more people toward
higher-paying, more productive employment that is better suited to the
new era of “talentism," when human imagination and innovation, not
capital or natural resources, drive economic growth. But, if workers
fail to acquire the skills to fill these new positions, they will be
left behind.
Government, more than any other sector, can shape the impact of
technological change, ensuring that challenges are addressed and
opportunities are seized. Indeed, it should be at the forefront of such
change, by creating an environment that encourages private-sector
innovation and creativity, while ensuring that citizens are equipped to
compete.
Of course, governments cannot always be ahead of the curve. They will
also have to react and respond to new needs and demands, such as the
expectation that public services meet the same level of high-tech
efficiency and convenience that private companies offer.
Change may be frightening, but it is inevitable. And, in fact, it is an
important source of opportunity to improve our systems, our strategies,
and ourselves. The latest wave of technological change is far from
cresting. We should be excited – and filled with hope – by where it
could take us.
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