‘Three Horizons: The Patterning of Hope’ by Bill Sharpe is a tremendous book for anyone who works on profound change. Below I hope I can give you a flavour of it, and why I was inspired. My key takeaway: rather than aiming for distant, definitive visions, we would be better to act from a shared awareness of the future potential in this present moment. Continue reading
Tim Jackson and Robin Webster had written a short report called Limits Revisited for the launch, which considered the limits to growth debate some 44 years after the original Club of Rome report. It has three ways that limits to growth is relevant to today.
1. Resource constraints. The original argument is that, as resources are used up, there is ever-extra effort to get hold of what you need, which has a lower quality anyway. You find yourself over-allocating productive resources to getting more resources, rather than into new or different resources. Economic collapse comes when you can no longer get at the quality resources you need at a level of effort you can sustain. The report talks of oil and minerals.
I’ve always found this an under-whelming argument, and still do. Fundamentally, yes, the Earth is not an infinite source. But this is the sort of threat that our current system should be able to respond to, though doubtless with much pain for incumbent companies and dependent countries. Past oil shocks have been because producers wanted to constrain supply deliberately or we were constrained by refining capacity, not running out of oil. Rising prices pushed people to use more efficiently (e.g. shift in car sizes), invest in expanding processing capacity, invent ways of extracting previously too-hard sources (e.g. shale gas), look elsewhere (e.g. the Arctic), or find substitutes (e.g. move to solar). The Simon-Ehrlich Wager shows we cope.
Also, thinking in terms of traction, this is a non-starter. Some people have been saying “we’ll run out of X material in Y years” for decades, and have a record of being wrong. The original Limits to Growth Report wasn’t guilty of that, and said these effects start in 50-100 years time. But I think this angle, for better or worse, is discredited.
2.Planetary boundaries. We cannot treat the Earth as an infinite sink. We’ll run out of the ability to deal with pollution and waste before we run out of stuff to turn into pollution or waste. The key example is the greenhouse gas effect. We’re releasing more greenhouse gases than the climate can handle. Result: temperature rises and, potentially, runaway climate change.
For me, this is the scary one because there are no price signals until the impacts hit the economy, by which time it is too late. My memory of the 30 year update of the original Club of Rome report, has soil erosion as the key cause of collapse. The increase in food production uses the soil faster than it can regenerate, and pollution erodes it even further. This fundamentally reduces the scale and quality of food production possible, and so reduces the scale and complexity of global civilisation that is possible.
3. Secular stagnation. This did not feature in the original report, and has come to prominence from mainstream economics in the last few years. One part of this says that growth since the 1990s relied on borrowing, which popped so spectacularly in 2007. Another part says that in the past there were General Purpose Technologies (GPTs) like steam, electricity and internal combustion engine, which increased labour productivity and therefore growth. These have run their course and there are no new ones to replace them. That’s why labour productivity has been going downing the US and UK, why wages stagnated, why people had to borrow to increase their standard of living. The emerging technologies might even decouple economic activity from jobs, which then undermines a broad mass of people having wages with which to buy stuff. We may be going ‘post-growth’.
This where I think there is juice. I was at a Cabinet Office event last year on the Future of Productivity. The all-powerful Treasury is worried about where productivity is going to come from, are most Western governments. So, addressing this challenge at least stands a chance of being heard, while the other two just bounce off people’s cognitive frames (regardless of evidence that the planet is not an infinite source or sink).
There are two explanations in play. The lesser, but still useful, is that we’re measuring the wrong thing. GDP is calculated from the financial value of transactions in the formal economy. Famously it misses the informal (like childcare) or things that aren’t in prices, like environmental externalities. That hasn’t mattered too much to policy makers in the past.
But many emerging technologies have near-zero marginal cost, which means the financial value of formal transactions is basically nil even though they are helping people live their lives. Once you put up your solar panel, you don’t pay the sun for its rays. When you have fun on-line you pay very little (especially if you are the product, meaning the company is getting value from the data about you) compared to the off-line activity you would have been doing 20 years ago (think YouTube vs cinema trip). So, GDP is under-stating the welfare from new technologies.
Also, people pay a lot of attention to labour productivity, but almost none to resource productivity. In the past that might have made sense. Going forward, we have many people but not enough planet. So attention needs to shift.
Reforming GDP has been the least successful change effort in recent times. Everyone knows its at best partial, if not downright misleading. The standard sustainability-related arguments have had no impact. Perhaps the productivity crisis – which governments do care about – gives a chance to augment GDP.
The second – and much more important – explanation for the productivity crisis: it’s exactly what you would expect if we are the trough before new technologies are properly taken up. I have to thank the European Futures Observatory for this insight. An established order has grown around the established technologies, including physical infrastructure, skills and schooling, regulation and more. So moving from one GPT to another is painful. You have to dis-assemble lots of how stuff gets done economically and socially before then be able to reassemble around the new GPT. These cycles are known as Krondatiev waves and have been much studied by Carlotta Perez.
If this is true, then the way to solve the productivity crisis is by shifting to the new technologies, especially around digital and renewables. For instance, on energy we keep building a grid for a small number of large generators. That model has had several decades of learning effects; any improvements are incremental at best. We won’t get the full benefits of solar until we we build for a large number of small generators. Because it’s new, it has decades of improvements to come. But it requires incumbents shifting their production basis, or getting out of the way. Frankly, they find it easier to lobby government for the status quo.
That’s not to say digital revolution is a straight win. There’s lots of difficult questions – how to have worthwhile jobs to what does it do to our identities – which I’ve written about elsewhere. Given that its inevitable (try putting that genie back in the lamp) we need to answer those questions, and we need to surf it to a sustainable future.
So, there’s a tantalising prospect that solving the productivity puzzle might tickle the Treasury’s fancy, and require a shift to a sustainable socio-technological basis.
But there there are worries too.
Will it get lost in defining terms? Part of the evening was spent saying how people didn’t like the presentational effect of the term ‘de-growth’ but that some sort of reducing the scale of some sectors was necessary. I liked what Kate Raworth said: we need to move going for growth, with a side-effect of whether people thrive or not, to focusing on people thriving, whether or we’re growing or not. It’s important to find a framing that will speak to where people are starting from. I worry about the need of some (not, I think the secretariat of the APPG) for purity.
How will it get credibility beyond the usual suspects? There are lots of fixed positions on growth. To caricature only slightly: environmentalist say its always bad; economists say its always good. A lot of pro-sustainability folk saying that sustainability is important may be satisfying but it will have no effect. So, the APPG will need to reach beyond the usual suspects. Can it bring in the best and interesting business voices? What about influential commentators? The FT’s Martin Wolf was been important in broadcasting the Stern Review. In his new book about the recent financial crisis he says he “lacked the imagination to anticipate a meltdown of the Western financial system” and praises heterodox economists for getting it more right than the mainstream.
Are we trapped? The final worry is not about the APPG, but about our global situation. Through the debate two things became clear:
- There is no path forward which has growth as we’ve known it within planetary boundaries
- There is no path forward for the required de-growth within the politics we have.
Basically, we’re trapped into a civilisation-degrading pattern at a global scale which will take a massive crisis before we act with the urgency and scale required. That is frightening, and depressing, prospect.
The mere existence of Group is a sign that we’re realising we’re in this trap. The Group might be able to spread understanding and acceptance amongst a crucial audience: MPs and senior policy-makers. That is a very worthwhile thing to do. And there is so much more that we must be doing too.
This is the text of the talk I gave at Forum for the Future regular energy drinks. My brief was to describe how digital innovation will have a profound and destructive effect on society and our environment in 10 minutes. It’s one part of my sabbatical effort to understand how we can surf the digital revolution. Here goes.
Let’s start with the bold claim. If we are on track for sustainable future in 10 years time it will be because we have figured out how to surf the digital revolution.
Behind this bold claim is the idea that digital technologies are a general-purpose technology. To quote McAffee and Brynjolfsson, they will do for mental power walk the steam engine did from muscle power. We can expect the impacts to be as profound. And the Industrial Revolution had some consequences! We moved from farms to factories, stagecoaches to locomotives, local time to timetables, villagers knowing each other to towns and cities of strangers. All this illustrates how social change and technological revolutions go hand in.
But it is still difficult to grasp what that means for us now. So, let’s imagine again my life in say 2020.
I wake early and my phone has registered disturbed sleep. It tells my yoga app and my health insurer. Over breakfast I reward my son who has had a good end of term report with Amazon’s points. He wants to spend them on the force re-re-awakens.
Citymapper tells me that my commute is disrupted so I don’t work in a local cafe. I paid in ‘Brocks’, the local currency in Brockley South East London that I earned from my solar surplus into the local electricity grid. I commute in on the Elizabeth line what used to be called crossrail.
My first meeting is assessing the work that has come back from researchers. We put a request out to our crowd, and people have sent back their findings. They get paid a little bit for effort but more if we like the insight and decide to use it. Just before lunch my phone tells me an old friend is now by and we have and impromptu get-together.
In the background lots of things happening that I don’t need to take any part in. My home concierge is turning devices on off to get the cheapest energy. Someone borrows our lawnmower and pays in ‘Brocks’. My digital assistant is dealing with my emails; I only see the ones that I’ve taught it I really need to see.
In the evening there are leaving drinks for some back-office staff. I taken either home driven by an unhappy former black cabbie.
All this illustrates a couple of points:
– My life will rely on digital
– People will be paid based on how well they work with robots (to quote Kevin Kelly)
– Individuals with more exposed and, paradoxically, have more power
– It will support an exhilarating energy revolution, Through local small groups and smart buildings
– There will be alternative models: the access economy; the sharing economy; the circular economy; the gig economy; the local economy.
– Life will be faster more automated and more bespoke
There are two great hopes of digital revolution:
– The productivity gains will mean we can meet all material needs.
– Because we can meet nonmaterial means in nonmaterial ways, we will need less stuff to have more fun and we can come back within planetary boundaries
But alongside those hopes come some big fears:
– How will people have worthwhile work?
– How will people get value from data about themselves?
– How will we address the ‘winner-takes-all’ dynamic that is driven faster by the ’network effect’ of digital technologies?
– What will be the institutions in a digitally-enabled world that are worthy of our trust?
– How will we evolve our selves to always-connected, ever-accelerating lives?
More fears can be devised and there is much we cannot know. We can know is the digital will have a profound effect on society and our environment – and so on our lives. Because networks are at it’s heart, digital technologies hold out the promise of us organising like a living system (which I think is crucial to a sustainable future – see here). If we can do that then we could have a society where people can choose how they live within planetary boundaries.
Getting this to happen will be tough. It will require us to come up with new institutions new regulations new values in fact a whole new political. But we must.
Because if we are on track for sustainable future in 10 years time it will be because we haven’t figured out how to surf the digital revolution.
So, I’ve just started my sabbatical. I have three months ‘off’ — which I have chosen to be three months exploring how we can create systemic change in business for a sustainable future. This week has been about setting myself up. I’ve been trying to figure out what I want to achieve. When it finishes on Mon 16 May, how could I tell if I have had a good sabbatical?
The first evidence of a good sabbatical are the outputs associated with the different lenses I have: climate change, digital revolution, innovation policy, enabling business narrative and political economy (my meaning: the way we organise ourselves in society — the interplay of economics, law, politics and more that set the operating context for individuals and organisations, and are expressions of dominant beliefs in society).
On ‘bending the curve on climate change’ my hypothesis is that the ways we try to re-organise ourselves in the near-future to urgently address climate change are likely to become the vehicles we then use to address other sustainability challenges (like delivering the Sustainable Development Goals). For instance, much of the analysis of The Paris Agreement says that the surprisingly-ambitious outcome (working towards 1.5C) came from new forms in the negotiation process: Chinese appreciation of the impact of climate change; business-NGO-government high ambition clubs; a move from the negative framing of ‘burden-sharing’ to a more positive one of opportunity; and so on. Imagine if these continue, and start to be applied to other global, diffuse challenges like inequality.
So, I want to know more about:
– what features of a new political economy are emerging in order to address climate change?
– how could we nurture them, so they are stronger and more effective?
– what might the long-term consequences be, especially constraining our ability to address other important (but less urgent) challenges?
Also, as part of that I’d like to see what happens when I try to help a fabulous institution to act. I’m chairing a panel on the 17 March where various luminaries from across the university will be exploring the role of a university like Cambridge in the societal transformations required to bend the curve on climate. I’m seeing the university as a microcosm of the bigger picture. At the least, I’d like to know more about the barriers to prominent institutions playing a role that matches their potential with the scale of the problem, on the presumption that this will be useful data for others. Even better would be helping move the university forward at least a little how it helps society to address climate change.
When it comes to surfing the digital revolution to a sustainable future my hypothesis is that it is not possible to put the genie back in the bottle, that positive social, environmental and economic impacts are very possible, but will not just ‘magically’ appear. Instead we must be proactive in getting the best from the profound changes that come alongside the technological revolution. I have some handle on the hopes and fears (which will come out in an article in Forum’s annual compendium called The Long View in March). Less clear to me is what you would do to be proactive. What institutions, regulations, etiquettes, incentives and more would you use? How could you experiment with them starting now?
So, the output I’m going for here is a ‘concept note’ of what that programme of experimenting might look like, alongside more connections that can provide the insight into that concept note, and would be interested in using the analysis.
The output on pro-sustainability innovation policy is in many ways more straightforward. A friend of mine is a senior politician (not in the UK, and I’m not sure yet if I can say who). He has asked for an input into their manifesto. So, I’m going to be writing a report which is ready to use by at least that person, and I hope by other policy-makers plus others who are interested in fostering pro-sustainability innovation. My instinct — and we’ll see how true this is — is that many of the recommendations will also be applicable to large businesses, investors, technology transfer firms and more.
The enabling business narrative is a bit more uncertain because it depends on others. At the least I want to have a map of the different ‘narratives’ that are currently in plan (such as Volans’ Breakthrough Capitalism, or Alex Steffen’s Bottleneck Decade, or Forum-BSR-Shine’s Net Positive Project). Better would be to see if there is some coordination and connection between many of the different players to provide more coherence. But that means others wanting to play, which isn’t in my control.
The final lens — creating the political economy we need — is where the ends is the means and vice-a-versa. Given that I’m saying ‘political economy’ is the way we organise ourselves then how I go about my sabbatical is itself an expression of the potential political economy.
So, the second evidence of a good sabbatical, alongside these outputs, is that I have experimented with being the change I wish to see in the world. I want to try ways of creating those outputs that are the pre-cursors of the political economy we need. My starting point there — which I want to share soon — has already been well-articulated, I think, in ‘Embracing Complexity’. In one sentence the mindset is systemic, allows for emergence and therefore acting with and through others with a proactive attitude to change and learning.
The third and final evidence of a good sabbatical is that more change is happening. The outputs are being used (even if to say “not that, but this”). There are the first signs of impact One person reading, thinking, talking, connecting, writing is not enough — any more than 70 people. The impact will come being a catalyst with and for others.
Which leads to my invitation. If you are interested in any part of this — if you have insights, want to do something, are already doing something relevant, know someone I should connect with, have a suggested piece of reading, whatever — then do get in touch.
If you have better ideas on what I should achieve in the next 3 months then let me know. I’d love to help you, in our attempts to create a sustainable future.
Here’s a talk I gave to some University of Bath MBA students on Friday 22 March 2013.
- Sustainability issues are affecting your business
- Doing nothing presents real risks
- Acting now opens exciting opportunities
- Leading businesses are acting on 2 fronts:
- Shaping the context for a brighter future
- Innovating to win on that path
I illustrate this with some recent work:
- Developing strategy at AkzoNobel (I blogged about that here)
- Innovating with Sony
- Embedding change with O2
- Shaping the system with Nike
Today I was asked for a metaphor to describe the state of the world in 2050. My answer: walking a tightrope over a ravine.
The question as part of a new international research project conducted by the Foundation for Facilitating Research and Social Forecasting of the Post-Crisis World on “Vision 2050: A New Political and Economic Map of the World”. The organisation was established in Moscow in early 2009, at the initiative of several well-known (says the website) Russian public and professional organizations, including the Public Opinion Foundation, Stock Market Development Centre, the non-commercial partnership Business Solidarity and others. I was approached via LinkedIn and did it as my variant on Tim Smit‘s dictum to do one request in three – it might stimulating, it might help make connections, what’s the harm? (See also ‘often creating change is about creating options’ in an earlier post.)
The questions themselves were stimulating, if a little too much relying ‘choose your top three’ for my liking. The questions also made me reflect on the difference in biases between myself and the Russian organisations – nuclear weapons had a higher prominence than I would have guessed, a curiosity into markets vs state planning, and there were requests for thoughts on post-Soviet states which I couldn’t get close to answering.
Then there was question three:
3. Please suggest a metaphor to describe the state of the world in 2050.
Which gave me a long pause for thought, before I wrote:
Walking the tightrope across a ravine
–pessimism of the intellect: we will have 9 billion people to feed in a world deeply affected by climate change, and increased resource demands. We will miss many opportunities to create a sustainable future.
–optimism of the will: we will have mobilized vast financial resources, capability and potential of global society to address crises as they occur
–result: walking on a tightrope, where one false step things come crashing down, but if we get across then world society can become safer again.
Three things to unpack from this metaphor:
-“I’m a pessimist because of intelligence, but an optimist because of will.” is a quote from Italian communist Antonio Gramsci. Noted geographer Mike Davis uses at the end of his brilliant essay “Who Will Build The Ark?“, which explores the Anthropocene, the term in geology for our modern period, when the biggest influence on ecosystems is human society.
–what I like about my metaphor: implies the future is of our making; brings in the uncertainty; and plays off the normal eco-doom with a faith in progress.
–what I don’t like: cross the ravine makes it seem like a sharp end to normality, then tricky period, then shar transition to new normal when we’re more likely to experience a series of juddering crises and then, optimistically, a gradual improvement and return to resilience.
All of which begs the question: what metaphor would you use to describe the state of the world in 2050?
Last Forum co-hosted Jeremy Rifkin as he launched his new book, The Third Industrial Revolution, in the UK. Rifkin paints a grand narrative of human history, with the next phase a revolution to a distribute energy system run like the internet. Much of the content was intriguing, but the overall effect wasn’t strangely dis-empowering. I left realising that I didn’t have a credible way to use his insights because they were too certain.
A few months ago the grapevine said that a truly startling book was on its way. Jeremy Rifkin had finished the Third Industrial Revolution. It proposes that each industrial revolution is a coming together of new energy and new communications technologies, which replace the old order with new economic activity – plus evokes a new, expanded consciousness. The first industrial revolution in the 19th century was steam plus printing (and heightened literacy) for mass production; in the 20th century electricity plus the telephone and television produced mass consumption. Now renewable energy sources and the digital technologies were already combining to produce an ‘energy internet’. This revolution is changing the nature of power, in his words from ‘vertical’ to ‘lateral’. The greater connectivity will change people’s sense of empathy to create a biosphere-wide consciousness (building on his previous book The Empathic Civilisation). An intriguing grand narrative; I wondered what was in the detail.
Through Forum I got galley copies of the book and tried to read it. Now I like big themed-books; my shelves groan with their weight. But I confess I struggled to get through the foreword of this one. He claimed two things that just made me put the book down: the EU is making lightning fast progress on the Third Industrial Revolution; and it was doing so because he was advising so many leaders. The first claim just didn’t match my experience. If second is true, how come I hadn’t come across this jargon or Rifkin more? Why haven’t I heard about it from newspapers, journals and lots of other people?
So, I went into the lecture at UCL with questions about Rifkin’s credibility as a change agent. His lecture almost overcame those questions. He gave a number of cities which are putting in place the 5 pillars he says are necessary to catalyse the Third Industrial Revolution:
- Shifting to renewable energy (‘generate’)
- Converting all buildings into power plants (‘collect’)
- Hydrogen and other energy storage technology (‘store’)
- Smart Grid Technology (‘the nervous system’)
- Plug-in, electric, hybrid, and fuel cell-based transportation (‘convert’)
There’s much to like in these pillars: they feel rounded and feed-off each other. Rifkin claimed that when they happened together there would be a continent-wide roll-out “like WiFi”. It is, he said, a practical plan. There are questions about the details of each – all buildings? really? – but Paul Ekins had the bigger questions. Do all 5 pillars need to happen at once? Rifkin: yes. But Rifkin didn’t have the missing link: what is the plan to make the 5 pillars happen?
Rifkin himself says that the revolution will challenge the status quo. From personal experience, I would say that today’s energy companies can only really think in terms of a huge power station pushing power out at lots of users; they cannot get their heads (or assets or skills) around a distributed energy system. They will resist the 5 pillars a great deal. Without a plan to get the 5 pillars to happen, it is difficult to claim the Third Industrial Revolution is practical. Put it another way, it is like NASA saying their practical Mars plan starts with “When we get to Mars we will…”. But, how did you get to Mars?
A number of people asked variants of ‘how to do create all the pillars simultaneousness?’ from the floor. His answers were reiterated (or rather, repeated and repeated) the grand narrative that leads to the Third Industrial Revolution. Lots of intriguing insights into the history of civilisation. Just no useful hand holds for a change agent scaling the cliff-face. I didn’t hear no strong tactical or strategic pointers on how to deal with the incumbent energy companies. Do we try to bring them into the new system? Ignore them? Appeal to their emerging global consciousness? Legislate against them?
Rifkin’s answers the second type of question – ‘what about x counter-trend?’ – were also revealing. The examples were sort of squashed under the steam-roller of the inevitability of our changing consciousness.
Now, there is no doubting that we in the UK have a much broader sense of who we care for today than 60-odd years ago. Chamberlain could come back from Munich in 1938 and say that Czechoslovakia was a small country, far away. For a host of reasons – cheap long-distance communications being one – we didn’t treat Sri Lanka or other Asian countries like that when the Indian Ocean tsunami hit in 2004. But anyone who glances through the Daily Mail knows there is a strong current in our culture of saying we should empathise only with those like us, nearby.
Also, the new energy-communications nexus is having paradoxical effects on power. Knowledge is widely distributed, but we are using centralised ‘gates’ like Google and Facebook. As the internet goes into The Cloud, it is simultaneously spreading access to information and narrowing control of the infrastructure. And so on. The broad brush stroke of an emerging global consciousness is like saying Americans are more can-do than the English. There’s a grain of truth but it doesn’t really help you very much day-to-day.
Ultimately, I found that Rifkin’s certainty in his own grand narrative was too much. Let’s imagine he had presented the success in those cities as experiments that proved a distributed energy system was feasible at the city-level and, gosh darn-it, maybe beyond. let’s go find out. Well, I could have responded to that, seen my role in that, had something to contribute to that (through my actions and even adding to the thinking on how to make it happen). But he didn’t do present in that way . Instead he implied the Third Industrial Revolution was inevitable – so why do I need to do anything? – and the only way of understanding all of history.
I hope that something akin to the Third Industrial Revolution happens. If it happens, perhaps Rifkin will be credited. But I suspect such a change will happen because many different people do many things. On Tuesday (and in the book) Rifkin had the chance to help those people understand their role in a Third Industrial Revolution, and feel part of a movement. His certainty in his own ideas gave me no way to be involved, and grated against my experiences.
Ironically, given his enthusiasm for lateral power and the prominence he gives to empathy, I felt dis-empowered by his top-down style. An opportunity missed.