Rising to the Challenge of Our Uncertain World
Wharton School Publishing, 2006, 342 pp., ISBN 9-780131-855205-4
Kelly is the CEO of Global Business Network, a futures and scenario strategy consultancy. He weaves together seven "dynamic tensions" that will reshape life on the planet in the coming decades. In addition to describing conflicting forces, he describes three potential scenarios. The book is dense with information, much of it apparently gleaned from a broad assortment of very interesting looking books.
Powerful Times was written to help more people understand the present and better anticipate the future, to make better sense of our times. His analyses seem plausible and the scenarios possible. However there is little evidence that sufficient strength of will and character exists to overcome the most difficult issues facing mankind.
Ch 1. History Unleashed
"Much of what we take for granted today, based on centuries of experience and history, might be in the process of unraveling." (2) The Western sense of entitlement, that our models should prevail in the world is in for a harsh reality check as non-Western nations emerge as true powers. (3)
We live in a connected and interdependent world. "Our greatest challenges--terrorism, environmental problems, infectious diseases--observe no borders. "The concept and importance of the nation state will be challenged. (3)
New powers are emerging who may refuse to play by our rules. Some of the rules of the global economics will come under attack, for example in the arena of intellectual property rights. (5)
Science is now confronting us with moral dilemmas that will require global dialogue and systemic thinking. (6)
Our mental maps affect both our judgments and even what we see in our accelerating world. Our maps act as filters that help us make sense but also inhibit our ability to perceive and understand what is happening. They are highly resistant to change. And wherever our maps are wrong, our judgments will be wrong. (9) One aspect of our modern maps is either/or thinking and increasingly we will need both/and thinking. (10)
Convictions underlying the book:
1) The world has never been certain but it has never been more uncertain.
2) Much of the uncertainty is visible but there are also less apparent fundamental dynamics at work.
3) The changes are both complex and contradictory.
4) We are at a threshold.
5) No one entity can solve our problems. Every decision and action taken everywhere will, in accumulation, shape our future. (13-14)
The four sections of the book are
£ What's Happening?
£ What If?: Challenges and Changes Ahead
£ What's Next?: Scenarios for the Next Decade
£ So What?" Acting in an Age of Transformation
We must look beyond the "right way of thinking" and the easy certainties, from "either/or" to "both/and" thinking, and see that the world is moving toward both poles of dynamic tensions. (17-20)
The seven dynamics:
Clarity and Craziness; Secular and Sacred; Power and Vulnerability; Technology Acceleration and Pushback; Intangible and Physical; Prosperity and Decline, People and Planet
Chap 2. Clarity and Craziness
We will be more knowledgeable, and have more insight, about the world, institutions, and global issues. We will also experience growing fear and confusion fueled by the tools of connectivity. (21)
Everything that provides clarity creates craziness - profound misinterpretation and misjudgment. Information overload makes it difficult to discern the nuggets within the noise. (35) Massive information creates "compelling evidence" for every possible interpretation and perspective. Conspiracy theories thrive. Devastating rumors persist. (36-9) Especially in politics, sophisticated techniques for shaping opinion abound. (39) Events are subject to interpretation or subversion to support a particular view. (41) Website scams proliferate. We can expect a radical increase in "suspicion, misinformation, disinformation, misinterpretation, conspiracy theories, and fraud." In addition, companies will have to pay much greater attention to trust because anything they do may become open for public scrutiny. (42) Trust has never been more critical -- or more threatened. (43)
Chap 3. Secular and Sacred
Tension will grow between the secular models of society, governance, business and economics of modernity and the increasingly sacred worldviews of billions of people across the plant. Fundamentalist movements are gaining muscle on most continents. (45)
Science is driven by quantification and measurement but not everything that counts can be counted. (51) Materialism is growing but not making people happier. (52) Religion is growing in American public and civic life. (53) Pentecostalism in growing. Fundamentalism is growing in all three monotheistic religions as well as Hinduism, Buddhism, and the Sikh religion. (55) Fundamentalism is a fear response to a sense of threat against the survival of a religious belief system, for example in response to modernity and a coercive secularism. (56) It is very easy to imagine Islamic fundamentalism, one of the most significant challenges, getting worse before it gets better. (57) Neo-spirituality, embracing inclusiveness, holism, and tolerance are growing. (62) The sacred-secular tension seems set to be am important source of political and social strife in the coming decade. (64)
Chap 4. Power and Vulnerability
The U.S. will have to balance its military supremacy (hard power) with diplomacy (soft power). The world will be increasingly vulnerable to terrorism, organized crime, diseases, and other global threats. (65)
After the cold war, market economics seemed to be the winner, but there is increasing reliance on military power to shape the future. It is the "American empire" in all but name. The challenge to deploy strength wisely without sowing seeds of its own defeat is today's great question. (67)
Future wars will feature unconventional weapons used by networks against targets and ideologies. How well can the military adapt and how useful will conventional military dominance become? (71) Can the U.S. maintain domestic support for military intervention in zones of chaos? Will other nations support it? Will diplomacy be effective as Europe believes? Will more muscle be needed as the U.S. believes? Will they be able to work together? (72-4)
U.S. power is also a source of vulnerability. Powerful systems have weak spots and little figures with powerful technologies can exploit them. We also feel more vulnerable because of our perception of risk and because we spend much effort on past problems and not enough imagination on future possibilities. (76-79) Lawlessness -- illegal drug trade, arms trafficking, intellectual piracy, money laundering, human traffic -- is increasing in scale and complexity. (79-80) New diseases continue to arise and they can spread rapidly. Likewise computer viruses are likely to continue to proliferate and cause more damage, becoming a tool for crime. (81-83)
Chap 5. Technology Acceleration and Pushback
We can expect advances in computing, biotechnology and nanotechnology and the synergism among them. Progress will be challenged by those who fear ultimate and perhaps unintended consequences. (85)
Biotechnology is poised to transform medical science and our future, but not without significant ethical dilemmas. Biomimicry, technology that apes biology, holds great promise. Human enhancement is coming rapidly. Research is well underway in the military. And there is enormous demand for everything from sports to cosmetics. Resistance will continue to grow from anxieties about our safety and humanity, about unknown risks, the possibility of technologies falling into irresponsible hands, and whole new categories of accidents and abuses. With knowledge so broadly and rapidly available, we can imagine genetic backyard experiments! Global regulation of these issues will be more problematic.
Chap 6. Intangible and Physical Economies
Services, experiences, and relationships are becoming more valuable. At the same time, the physical infrastructure in many parts of the world is increasingly stressed and must be rebuilt. We must avoid catastrophic consequences associated with infrastructure failures, most importantly, water. (105)
Value is increasingly found in services, knowledge, and experience, and rather than durable goods. Tourism is the world's largest employer. Increasingly, every piece of work observed by a customer is an act of theatre. Information "feeds and speeds competitive pressures, forces up the pace of innovation cycles, forces down the half-life of many goods and services, and leads to rapid commoditization of even the most intelligent products." Businesses must continually become more nimble. (119)
Infrastructure poses serious problems in regard to basic physical systems such as roads, air traffic, and power grids. Maintenance of aging structures is an ongoing challenge. In many parts of the world the infrastructure must be built almost from scratch. Beijing hosts 1.3 million migrant construction workers. China faces an energy shortfall. Water is the biggest challenge.
Chap 7. Prosperity and Decline
Millions will have opportunity for new prosperity but absolute decline may be expected in areas of the world blighted by conflict, corruption, disease, and environmental catastrophe. Many in developing countries will be much more aware of their relative poverty. (131)
Five hundred years ago wealth was much more evenly distributed. The wealth gap between rich and poor countries was 72:1 by 1973. Nevertheless, many of the poorer parts of the world have been progressing, some quite rapidly. Those that integrate into the global economy more slowly fare worse. The most significant growth rates include China and India. We can expect the large low-income countries (like Brazil) to have as much economic clout as the U.S., Japan, and Europe in a few decades. China may become the world's largest economy by 2040.
A number of countries may invent their own rules. Brazil broke the patents on HIV/AIDS drugs and made their own cheaper versions, cutting the AIDS death rate half. China may choose to ignore international models and develop its own rules. With China's increasing economy, some of their standards could become global. There are 4 billion people at the bottom of the pyramid and businesses may become sensitive to their market for lost cost goods
A quarter of the world's people live on less than a dollar a day. Decline in these areas is often due to poverty, disease, drought, famine, ethnic rivalry, ongoing conflict, and poor governance. The AIDS crisis now exceeds the worst-case scenarios of a decade ago. Systemic effects will last for generations. Half of all developing countries score less than 3 out of a 'clean' score of 10 on the corruption scale. Countries like Nigeria, Bangladesh, and Haiti are among the worst. Human misery and chronic economic underperformance will continue.
Traditionally powerful European economies may weaken due to demographic shifts and immigration. German may have on worker for every pensioner by 2020. Painful declines in the U.S. economy are likely. Areas of extreme poverty can't be ignored. Global poverty is more and more in line with self-interest.
Chap 8. People and Planet
"The planet does not belong to us but we belong to it, and it will survive and change no matter what we do, while the opposite may not be true." (153) The planet is under considerable stress because of our numbers and economic growth. The rate of population growth will slow down and perhaps even reverse. The birth rate is falling globally.
Four trends will drive change:
1) the growing imbalance between the number and age of people in the developing and developed world
2) a shift in the direction (from south to north) and growth of human migration
3) the worldwide migration to urban areas
4) the possibility of the planet reaching a tipping point. (156)
Falling birth rates and extended lives are increasing the elderly in developed countries. 99% of all population growth in the next 40 years will be in developing nations, predominantly in the poorest nations. Energy consumption is now accelerating in the developing world. Massive resource usage and environmental damage will accompany rapid development. The need to conserve resources and maintain the environment grows more difficult and puts more pressure on governments and corporations to change energy sources and patterns. Nuclear power is again becoming more attractive. Some scientists think that "climate change is the most severe problem that we are facing today, more serious even than the threat of terrorism." (173)
"But while climate change is largely the result of human handiwork, it is not entirely so. The planet is also an actor in this play, reading its own script. Big temperature swings are not new to the planet. In fact, scientists are now learning that they happen more frequently (and suddenly) than previously suspected." (174) "Looking forward, it is very likely that parts of the Earth will undergo periods of very abrupt climate change." (175)
Section 2. What If?: Changing for the Challenges Ahead
"All the dynamic tensions will combine in myriad ways to generate increasing geopolitical tensions, security challenges, and new risks." (183) In particular we will see significant new developments in the realm of governance and the realm of innovation. Two chapters deal with these issues.
Chap 9. Governance
"The current world order cannot take us through these powerful times and will undoubtedly evolve considerably in the decade ahead." Global governance is gaining increased attention -- not a centralized world government, but changing organization of life on the planet. (191) We are too dependent on the nation-state concept. And global issues do not conform to national boundaries. They cannot be solved by national governments which are primarily focused on protecting the power of the nation-state.
Possible future models may include "empowered networks that include nongovernmental actors; the use of electronic forums to reach out to many thousands of people globally; the gradual evolution, by stakeholders, of new, shared standards; and the use of connective and transparent technologies to encourage changes in the behavior of important contributors to complex problems." (198) Perhaps an apparently disorganized phenomenon will emerge---a connected, active, global citizenry that will increasingly enforce its will. (199) "The decline of interest in national politics is paralleled by the rise of involvement in movements that seek to mobilize opinion on a worldwide basis on issues that nation-states have regarded as marginal to their own agendas." You might call it a worldwide civic movement. (199)
Chap 10. Innovation
Watch for innovation "addressing the unmet needs of the 4 billion people still ill-served by the global economy, creating more sustainable solutions, and improving approaches and technologies for education and learning." (201)
Innovations from the developing world might soon enough not simply undercut Western technology but transcend it, creating new benchmarks for the entire world." (206)
Section 3. What's Next?: Scenarios for the Next Decade
"The status quo cannot deal adequately with these powerful times: we must not only prepare for, but hope for, an imminent era of transformation in global affairs." (220)
There are two critical uncertainties. 1) "Will the most effective sources of leadership, innovation, and change be primarily centralized and 'top down' or decentralized and 'bottom up?'" First century Christianity was 'bottom up.' The Church of Rome is 'top down.' If the center holds, "Will the United States exert more or less influence globally?"
Chap 11. Three Snapshots of the Future
The author describes three possible scenarios:
£ Emergence -- if the new leadership is bottom up,
£ The New American Century -- if the center holds and the U.S. grows in world influence
£ Patchwork Powers --if the center holds but the U.S. declines in influence
In The New American Century, the U.S. employs diplomacy, might, and market-driven incentives to transform the global order. The downside is that issues that can't be resolved by military or markets may be ignored and these include major issues such as equity, health, water access, and environmental sustainability.
Patchwork Powers is a future in which "geopolitical and economic power and influence are distributed and shared between many different international bodies, geographical regions, and nation-states, where influence is projected through a complex and sometimes confusing patchwork of alliances and treaties. It is a spaghetti-like world…." (234) China, Europe, and the U.S. may collaborate, compete, and align in different domains. The world may be increasingly vulnerable to terrorism and crime, and problems associated with "failing states."
Emergence represents a future wherein change and coherence (of a sort) come from the bottom up. Influence moves toward highly interconnected and nimble networks of focused, smaller-scale players. "Entrepreneurs, small businesses, and 'open-source' production networks prove more flexible--and often more effective--than larger, conventional structured corporations." The world is increasingly being reshaped by People and Passion. (239) Lawlessness may reach unprecedented levels. Terrorist attack, synthetic viruses, and more failing states create greater danger. (A summary of these three scenarios is given in a chart on p. 244.)
Section 4. So What?: Acting in an Era of Transformation
Chap 12. Creating Our Future
We will have to learn to adapt to radically different realities. Increased business scrutiny is inevitable and it will put greater pressure on corporations to demonstrate responsibility for social and moral concerns. This may lead more of them to doing the 'right thing.' Global businesses will also need to forge stronger links to local communities. Businesses may recognize the real value of their personnel and provide a little slack to provide social interaction, increase commitment, and generate new ideas. The focus on growth may be supplemented by a focus on long term survival. "The development of new, effective, and creative approaches to attracting and instructing our people must move up the business agenda from 'nice to have' to 'critical success factor.' Corporations will also acknowledge a growing human hunger for meaning and fulfillment in their work.
"We must expand our sense of 'we' in our new global civilization. Of all the changes that we are experiencing during this turbulent era, one of the most significant is certainly the interconnectedness and interdependence of every part of the world." (262)
Two important shifts must occur. We must believe the scale of the issues confronting us before it is too late. We must match our new global reality with a new global empathy. (263-64)
The text is followed by 30 pages of end notes, 35 pages of worksheets to reflect on how the book relates to your organization, and an index.
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