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Renewed Foundations.

Renewed Foundations.

This section reviews one of the two the scenarios. The next section reviews the other: Pushing the Edge. The grounds from this these scenarios emerge is reviewed in the preceding section. The consequences of these scenarios is examined in Chapter 3.

The section discusses the scenario in two sections. The first gives and overview of the outcomes from it. The second discusses the path that created this outcome.

Figure 1: the movement of the three major blocks.

The figure shows the transitions that occur in this scenario. Events move from the layout that we may suppose to be true for the industrial world of today to a new pattern, created by the interplay of forces that have shaped events. The two worlds are very different. What has happened?

The underpinnings of Figure 1 are, of course, developed in the first section in this chapter. It contrasts two central uncertainties. As societies, we can make choices in ways which continue to reflect a 'representative', rather elite approach to the issues, or we can move to processes which are much more complex, many-layered and plural.

Independently of this, our commercial activities may be shaped by purely 'business' events, or these could be driven chiefly by social and regulatory forces. The factors that will be central to the purely 'business' model are all of the forces which drive and resist competitive erosion, including innovation and other forms of renewal. By contrast, the complex jigsaw of consumer and legal requirements, regulatory change and general 'fit' with social needs also define much of the rationale of business.

Different kinds of activity - start up businesses and routine public sector management - fall into different parts of the figure, and do so differently where societies vary amongst each other. Figure 1 shows one particular outcome, however, where the ranges occupied by society, public structures and commerce are considerably different, both from each other and from the values found today. Today's position is shown on the left of the figure. This layout corresponds to the scenario, Renewed Foundations, as this exists in 2020. The section which follows describes this snapshot in more detail. The closing section describes how this came about, and points to the situation of individual nations in this scenario.


Society has become more plural and more inclined to take choices at the micro-level. It is fierce in its defence of its liberties and rights, strong in its pursuit of individual options and identity. Commerce has, as a consequence, put far more emphasis on co-habitation with both the society which host it and the regulations which enable and control what it can do. Where it pursues new things, it does so in a close regulatory embrace, acting largely through large - if specialised - organisations which manage the process of technology exploitation in the least alarming manner possible.

These are major shifts. People have taken control of their lives to such a degree that all is bent before their actions. The greatest change in position, however, is the shift in stance and action amongst the public institutions. These have begun a process of managed regeneration which leads to unprecedented change. The seeds of change are sown by public capability and public discontent, itself generated by commercial and institutional failure in the middle of the scenario period. This is discussed in the section which follows. The process of change starts from a focal group of smaller countries, where it is already partly in place by 2000, and spreads quickly as it is seen to work.

What characterises this change in public institutions? Essentially, their adaptation to a world of huge complexity. There are three main forces that have to be brought together. One is the degree to which systems and interests span political boundaries. The second is the sheer weight of capability that exists outside of the state. The third, a legacy of the period of discontent around 2010, is the network of activism and focused debate that has emerged around any topic of importance, and many of little absolute significance but great public weight.

These three factors require public institutions to 'right size' themselves. The extended discourse and consultation around each node in the network of issues creates a framework of discourse, and it is the manipulation of this - of framing what would serve as an answer to the issue, of what constitute the key questions and imperatives - that political figures must address. Failure to achieve closure results in the withdrawal of trust and the paralysis of the process.

The consequence is an immensely complicated structure. Oversight requires the full IT and knowledge-managing capability of the times. Keeping the entire structure on track is a major task, and one of the key activities of what remains of central government. It is, however, a deeply democratic process, and an expert one. Processes run in their correct time frame, and sensible voices prove themselves through the course of their contribution to public affairs. (There is more on how this process works in the section which follows.)

A highly 'unboxed' population lives its life in transit through many domains of ordering in this structure. A person can be a member of many affiliations and activities, and put on many identities in the course of a day. In each of these, they will act in ways which impinge on the overall decision process: in what they buy, in what they choose, in what they say when consulted and in what they assert when displeased. Businesses and the public sector have made it their concern to have extremely sensitive antennae for such nuances, and such choices and assertions are assiduously collected, collated, acted upon.

Some of these systems of governance run through a society, enabling it as they do so. They may offer traditional services, such as transport, education and energy, for example, or public health. Increasingly, however, these also offer integration services, whereby 'local' solutions are embedded in wider frameworks of analysis and decision-taking. Stand-alone structures - particularly those associated with central government - do little else.

Others systems seek differentiation. This may occur in respect of a physical location as, for example, local government strives to attract appropriate investment and to induce equivalent skills to settle. They may also be without location, as with the representation of interests, firms or 'alternative' public services, but may also seek differentiation. These may do this because they are competing for different markets or the approval or patronage of different segments of the population. The consequence of the drive to satisfy and to compete is that these become highly differentiated. They also become intensely networked, interacting with all of the other interests that impinge on them.

The industrial nations have invented a structure which is less monolithic than any previous form of governance. It is intensely integrated and highly democratic, where many of the voices of the 'demos' are remote from the location in which choice is exercised. What counts is coherence, appropriateness, the approval of others and track record in delivering all of these.

Public opinion is shaped by debate, and thus shapes choices. Elected authority is responsible for delivery and for processes which harvest public input. It is also responsible for the resolution of process logjams and for raising the game where complex systems are crushing minority voices, or pursuing the blind alleys of local optima. Above all, however, it is the task of elected authority to translate what is emerging from the bottom-up processes already described into statute law, both in the sense of repealing or modifying inadequate laws and in the creation of the new.

The task of doing this should not, however, be confused with the task of saying what should be done. This lies firmly with the subsidiary processes, and the power which central authority has over this is confined to the definition of the consultative and strategic processes which the various agencies should follow, and the criteria which their performance should meet. In this, monetary and fiscal disciplines remain one deeply important thread that runs throughout the network, and debate around the allocation of public assets remains a key feature of public life. The debate is, however, conducted at many levels and by all voices competent to influence their peers.

How this 'looks' to a tourist visiting an industrial nation is little different from today. There are government buildings, parliaments and elected representatives. Public sanitation is assured by government inspectors and hospitals provide health care. What has changed is less visible: it is that the 'higher brain functions' of the nation have integrated around knowledge, information technology, the habits of choice and of discourse. A glance at the information infrastructure would reveal massive change, however, in that an oceanic, vastly complex framework of debate, analysis, entertainment, propaganda, membership, guidance and education exists to meet whatever need an individual may have of it. The transparency of institutions and their processes would be apparent from this perspective. The opportunity and invitation to interact would be clear. The sobered tourist might conclude that the traditional patterns remain in the physical world, but that all has changed in the 'infosphere', where the growth and action is focused.

Relations with the rest of the world begin to change sharply by 2010. The industrial nations become increasing 'hands on' in their relationships, particularly with the poor nations. Middle income nations form close and lasting commercial partnerships, where the management of knowledge and its exploitation lies at the heart of the interchanges. There is substantial net migration in both directions: into the industrial nations in order to cope with demographic shifts. Out from these nations in order to provide lower cost care for the elderly: Europe may set up facilities in North Africa, for example. Environmental improvements are a significant feature of this world, and international institutions develop in order to cope with the issues which this entails. Parallel links develop to achieve international financial stability and to handle new issues raised by intensely developed levels of trade, and not least the trade in information and intellectual property. Concerns about security and policing and the use of dangerous technologies will be strong and at least partially addressed. Substantial parts of the world will not yet benefit from this organised coupling together, but several billion people will be living in a harmonised environment in which equality remains a future dream, but where paths to it have at least been laid.

Aggregate economic growth rates in this scenario are on a par with those of history, but are somewhat lower in the industrial nations which are slow to renew their institutions and which have particular demographic concerns. Large nations, and those with a conservative culture (and with traditionally centralised institutions) do particularly badly. Japan does not do well in this scenario, and neither, for related reasons does Italy, France or Germany. The US and Britain are slow to grasp the new imperatives, but able to make the transition. Smaller, 'rationalist' nations - such as Scandinavia, Denmark, the Netherlands, Canada and Australia - are ahead of the game. The middle income partnership nations do well, whilst stand-alone countries with demographic issues to face - for example, China - have major problems. What they must modernise to become is not what they want to be.

Paths to 2020.

The period around 2010 is not a happy one. After the exuberance of the Nineties, the performance of the US and other industrial stock markets have been compared to that of Japan a decade earlier. Instabilities in the finances of the developing nations have developed in train with this disappointing performance, as investors first sought and then withdrew from promised potential. Many who expected private pensions are not being paid. State funding of welfare is curtailed, and states are borrowing heavily from an otherwise soft capital market. Taxes on individuals are creeping up in almost every nation in order to meet this. Many nations have a large, disaffected elderly population. The younger members of society are not looking forward to supporting them in perpetuity.

The problem that lies behind this depression is twofold. The 'old' economy is in trouble. In some areas, a flood of low cost goods emanating from the low wage areas have commoditised whole industries. Process innovations that are made to heighten efficiency seem to be exported very swiftly.

The 'new' industries are, however, failing to deliver on their promise. The pace of change is such that new products do not last in the marketplace long enough to adequately repay their development cost. Firms cannot stand back from such investment, however, for the 'do nothing' option would be a recipe for swift extinction. An innovative treadmill generates a massive product flow, and incidentally take all firms into what the public see as alarming areas, whilst also - in some crucial cases - cutting corners whilst they do so. There are some deeply worrying incidents involving inadequately contained biological technologies and in complex software. In general, however, the products themselves work, but consumer uptake is disappointing. One key reason for this is a pervasive lack of trust.

The second, and perhaps critical, source of failure comes from the public sector. States are consuming in the order of half of all added value, and directing four-fifths of this into welfare. The squeeze lessens investment in high-end products for public sector organisations and services. The 'new' economy suffers accordingly. Whatever can be is out-sourced to low wage areas - or migrant workers - in order to save money.

In general, a ceaseless drive for increased productivity throws the least able into direct wage competition with low wage areas. Few low skilled workers re-deploy well as care workers, however, where inflows of migrant 'carers' creates comment. There is political agitation to reduce these interactions. Some of this blames the outside world for internal difficulties.

An elderly population views all of this with alarm. Their assets are not growing, state-funded systems of age care are evidently failing and politicians seem able to do nothing about this. Companies seem unable to find their way out of the impasse, yet they engage in frightening activities, many of them doing so in the poor nations, away from regulatory oversight. Activism growth through networks and across nations, demanding action.

It is, however, clearly the case that some nations are doing rather well for themselves. Despite modest demographic problems, these are building their economies from skilled people doing skilled jobs, operating in collaboration across all manner of boundaries. It is noted that in order to manage these activities, great care is taken of which toes are trodden on, on who is to be consulted, on building a network of interaction which 'gets it right' before action is taken.

This approach plays poorly with the nations which have evolved a more confrontational, impersonal or pragmatic style, and is something of a distraction when seen from nations with weak political institutions and a heavy burden of age. Nevertheless, economic figures show that this approach is proving highly effective in meeting the problems of the times. The central skill is to make use of national and affiliated intellectual resource, rather than to imprison it in silos and to take an exclusive approach to decision-taking. Indeed, profound links are noted to the parallel success of knowledge management techniques in some parts of commerce.

In such technologies, exceptionally complex ideas and processes are woven together and made accessible. The steps involved in the all-important business of 'getting it right' in a complex and discriminating world are set into and organising framework. It is seen that the paradigm can be - and indeed, in these leader nations, has been - lifted entire and placed into the public domain. Closer inspection shows that great strides in this direction have already been made, to great effect, even in the refractory nations. Areas such as medicine and social care, where many minds have to deploy on complex cases with great efficiency, have already benefited from this form of knowledge-based integration.

Once the implications of this linkage are understood, the application of these techniques spreads quickly. The successes which are scored are impressive, both in the industrial world and, in some case, beyond. A cadre of several hundred million practitioners develops across the industrial world, inter-linked and sharing a common viewpoint on the world.

This is, however, a world in which relatively few feel that they have a 'place'. Communities have faded. Austere and impersonal systems confront people whenever they touch the public sector, and do so particularly in areas of claimancy and dependency. By contrast, a rich and focused 'alternative' exists in the electronic media, where interest groups and enthusiasms emerge and blossom.

Figure 2: A typology of motivation in an uncertain world.

The figure shows common issues. The horizontal axis asks: are the goals in life clear or no? The vertical axis questions: are the issues acute or chronic? The world of 2010 will place many people on the right of the figure, where the issues which face them are not clear.

Each quadrant has its characteristic issues and styles by which to response to pressures and events. The overwhelming urge of those on the right will, however, be to move leftwards. It is obvious that any such moves requires a source of clarification.

Readers may recall the transition made by populations as they become wealthier and better informed. We showed how the bulk of society move from "traditionalist" through the "bewildered" to become the newly "normative", people who have found themselves a truth that brings order into their lives. The bulge in this group around a national income per capita in the order of US$3-5000 is characterised by religious fundamentalism or traditionalist rejectionism, monolithic totalitarian politics of the left and right, and the like. These are all guides to certainty, routes out of bewilderment.

For more sophisticated populations, of the sort discussed above, the guidelines may be more complex and nuanced, but the desire for them is no less. Some examples of these are to be found in the upper left of Figure 2. The upper left offers entertainment and escapism, but also hobbies and enthusiasms, including politics as a hobby, activism, self-righteousness as a life style and the like. The lower left is, of course, highly desirable, but is attainable only by the wealthy and the renunciate. Nevertheless, the population of 2010 finds in its circumstances and in the mature information infrastructure precisely the structures that it needs to give meaning to lives without much guidance. Here is where you find like-minded friends and colleagues, a purpose in life, a place to shout and targets to shout at, a framework in which to build quiet achievements, to create influence, to expand personal horizons and generally to interact with the world in play.

This transition shows itself strongly in the world of 2010. Mass activism, activism as a hobby and hobby politics grow as an educated cadre vents its frustrations. It finds an ideal structure with which to interact in the network of knowledge managing expertise to which we have already referred.

Firms, and in particular, those selling technologies with the potential to harm and alarm - as well as those with strong brands - find that they must engage, for their survival, with many groups of varying rationales. What was once difficult, therefore, becomes knotted into tangled thickets of the impossible. Complexity management demands delegation, collaboration, networks, knowledge, a systems view, plans, regulatory permissions, mutual consultation. All of this essential equipment, however, creates openings which are exploited by activism.

The clean, rational world of expert knowledge-users is, therefore, increasing required to explain and justify itself. Who it is that is speaking - a firm, an industry, a scientific discipline, a regulator - is usually resolved as a network involving all of these and more. Such a structure has to find its internal balance before engagement.

The groups with which it must interact range from the starkly local to the purely international. Getting permission to act is central to success in a world where veto can block any step in a fragile chain of regulation and legal process. Equally, however, creating an adequate product requires fine tuning against a background of informed feedback, created by just such discourse. The solution, once it is created and made stable, offers tremendous prospects for knowledge utilisation, customer engagement and appropriate regulation. Indeed, this is exactly the linkage that is spotted with what successful nations are beginning to do with their institutions. The two turn out to be two faces of the same entity.

Clearly, a host of voices could become a babble, and interaction both a siege and the source of paralysis. The central key is that of process, and the lock, information technology. Processes are created and managed as abstract structures. Interaction with the process a staged one, with steps closing in due time, with all contributory and affected stakeholders being identified and offered a platform in this. The weight of what has been said on what emerges from a given stage depends on a mixture of the reputation of the participant, their constructive engagement and on the evidence and analysis that they table: in short, in their capacity to convince. The assessment of this is handled on a micro-level, by people who for the most part know each other and know the issues.

This is micro-democracy at work. Its expansion offers positive engagement to many and excludes only those with nothing useful to say. It has power, in that the strategic insights which it tables define the options which will be followed. It ties together industry and consumer, state and the private sector, knowledge holders and knowledge users. Most of all, it generates a means to break away from commoditisation, creating a skill pool that only the industrial nations can deploy.

Figure 3: The separation of the key powers in a 'simple' micro-democracy.

As Figure 3 suggests, the 'bottom-up' processes of consultation and strategic refinement are complemented by changes in the 'top down' machinery of national governance.

These structures had, by 2020, been in disregard for several decades. Party politics was increasingly seen as an artifice, not least as people became too complex to bundle into two or three groups. Policy formation was seen as too expert an issue to be left to the spare time of professional election-seekers temporarily out of office. The "branded" approach to parties, whereby policies were ignored in favour of a generic brand and the personality of the leader, floundered on consumer sophistication.

However, national - or multi-level - representation has many necessary tasks to fulfil. It must take what has been developed by bottom-up processes and, where necessary, change statute law or create new law. It must enable regulators, redirect officers of state, set targets and assess success against criteria. It must ensure that the right people are talking to each other, that minorities are not being oppressed and that enthusiasms are not driving choices to local optima. Where enthusiasms cannot agree, it must resolve conflict. These are major and time consuming tasks, and they take most of the time of elected officials in 2020.

The process of full bottom-up integration is, however, by no means complete in every industrial country by 2020. Some nations have taken huge strides, whilst others - still battling demographics and state deficits, still suffering rejectionist fits from their disappointed elderly - have hardly taken the first steps.

It is, however, clear what works. Societies are immensely complex things and need to be tended in their totality, minimally but intelligently, using the best knowledge available. However, knowledge is only one feature of what must be deployed. It is necessary to gain trust, legitimacy and permission to act in a world populated by highly able, articulate citizens. Virtually everyone is connected to whatever aspects of the world or local affairs that pleases them, and many have organisations and agents that seek out what they should know or of which they should be aware. This uses often-extraordinary technology, semi-sentient knowledge engines that match a model that they have evolved of their user to the ocean of information in which they swim.

In retrospect, the problems of the 2010 period consisted of the ostensible issues but, behind these, the incapacity to handle complexity. As social and institutional complexity are inextricably bound to economic growth, increasing economic complexity was inhibits by the inability of the other components to play their part. Gradually, therefore, the already-complex nations have learned how to become more complex. As the entire structure develops, the economy expands in step.

These tools are not directly applicable to less complex societies. Nevertheless, as an elderly population of habitual scrutinizers of events turn their collective eye upon the rest of the world, they are unhappy with what they see. If institutional solutions have to be designed and tended, then where are the equivalent in the poor and industrialising nations? How is the economic heart of the industrial nations - intellectual property - to be protected? How is the environment to be policed? How are shocks and surprises to be prevented? How are dangerous technologies to be managed? The issues of the low skilled and the elderly poor have not gone away, and the residual hostility to migrants and 'stolen jobs' remains in place in many nations.

To habitual internationalists, the happenstance of living on a bit of terrain creates the obligations of stewardship, not the right to thoughtless exploitation, or - indeed - the right plead self-determination so as to evade criticism.

Helpful, but also increasingly directive policies began to take shape in the 2015 period, under the general heading of 'raising the game'. Mentorship and the sharing of best practice amongst administrators, scrutiny and education all proved potent forces when coupled to the economic might of the wealthy world, its technology and its unceasing attention to minutiae. As the path to betterment became clear, however, local interests captured this and began to arbitrage first world opinion. This proved an even more powerful tool for positive change.

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