Schlagwort-Archive: Economic

After is before

Distance is a term that feels more like the distance between Earth and Sagittarius A (26,5000 light years) than the distance between Beijing and Duisburg. Via communication networks we are connected to every point on earth in almost real time. Since 1970, the number of passengers on global flights has increased more than tenfold to over 4 million per year. Today, people commute an hour to work on short-haul flights or by ICE or local transport. In other words, we are far-reaching connected across borders that once felt as inaccessible as the moon today. In such a world, political borders seem anachronistic. Viruses spread around the globe in a short period of time across frontiers. Neither vigorous slogans nor border closures prevent the common fate. And when one wave is over, another one comes. Because after is before.

A look at possible risks should blow the horn of dystopia and make us feel insecure, but rather remind us that in the future we will have to deal with such effects differently, as we can no longer afford further shutdowns.

  • Natural risks
    Global risks are rarely expected in nature and are considered to be locally manageable – in principle. The current virus crisis shows us that these critical situations do not respect borders or are limited to certain cultures. The present responses from experts and politicians are focused on short-term goals. Decisions are not based on possible collateral damage, nor do they consider their long-term effects – above all not the human lives that will be harmed additionally due to the measures.
    And what happens if next one of the mega volcanoes erupts and the global climate topples in a very short time? Or if a tsunami floods one of the world’s economic centers and the economy collapses in the aftermath? And anyone, who believes that we can protect ourselves against all eventualities should first of all be aware of the required efforts.
  • Political risks
    One of the effects of natural disasters will be political dangers. The societal systems will become unstable due to the dissatisfaction of the population. When panic already breaks out due to toilet paper the question arises, what we do, when things get really serious, when there is nothing left to eat and drink because the logistics channels that have been put in place no longer work and local suppliers can no longer compete with other countries. In an economy of scarcity, the black market emerges first and foremost, in which only the wealthy can afford the prices. In an effort to maintain control, the state will also use the current technical possibilities that we already know from China. And the political forces that want the revolution will feel strengthened by the shift to a surveillance state, which will lead to more and more terrorist attacks from left and right. However, the same applies as always: Be aware what you wish for. Over the past ten years, politicians and the electorate have prepared the ground for what is coming.
  • Technological risks
    A very sharp sword of Damocles is our information and communication infrastructure. No one has yet found the one switch to stop the worldwide web. However, there is an increasing number of malwares that attack all levels of IT. In addition, natural disasters could have corresponding effects – e.g. a solar storm or meteorite impact. The consequences of a collapse are unimaginable. Emergency generators do not help in these cases. There is nothing today that does not depend on the Internet: Waterworks, energy grids, hospitals, mobility, logistics of any kind, production of goods and food, communications, or the public authorities. A collapse of the Internet will take us back to Middle Ages. Without this nervous system, all cars, trains, pumps, elevators and so on will come to a standstill within a very short period of time. There is no way to communicate anymore – except for the runners, who walk from one place to another.
  • Economic risks
    In contrast to the above risks, the economic are easier to cope with – except for those who benefit from a flourishing economy – bankers, economic officials, investors. In the regions that have nothing to gain from the current economy not much will change the precarious existence in Africa, South America and large parts of Asia. Their supply is even more secure than in the world’s agglomerations, which can no longer be supplied. In the remaining regions, the price increases will lead to a change in consumer behavior. Currency fluctuations can be compensated by national or regional consumption. The cutbacks will regulate driving behavior and energy consumption. There are many examples from the past for dealing with shopping lines and empty shelves. Work, working hours, management styles and anybody else who wants to get rid of the bureaucratic ballast today will become naturally agile. In the end, the economy is part of the problem rather than its systemic solution – austerity measures in all areas of life, outsourcing to places with the cheapest labor and, in the absence of short-term profits, the de-economization of entire regions.

Bottom line: A virus is currently rampant, which threatens the elderly in particular. In the interest of their lives, the economy is being stopped by politicians. Everyone is looking at the stock indices and is now looking forward to rising share prices again, as if this were of benefit for employees and the self-employed. Nobody reports the damages, even to human lives, that are created by the shutdowns. The functioning part of the health care system is not the result of foresighted policy, but only possible through personal commitment and some difficult decisions of many, truly systemically important service providers in the hospitals and in everyday supply. The aftershock prepared by this control madness is unimaginable. And what has not yet been addressed at all is the question of what comes next. What do we learn from the current crisis management?

  • Solving a single problem without considering unwanted side effects threatens all. A holistic assessment of the situation is mandatory.
  • Federalist societies have reacted clumsily. Closing the borders of Germany or Europe oversees the fact that certain crises cannot be stopped by this. Not to mention European cohesion, which I hope will not be destroyed with this nationalism.
  • Politicians refer to experts in order to decide. Shouldn’t a task force of experts temporarily be given overall control?
  • The population obviously needs a strong hand to rule with prohibitions and closures, otherwise the individuals will continue unteachable as before. It remains to be seen how these extended powers will be brought back to normality.
  • In any case, a crisis leads to bad consequences and needs an evaluation and prioritization of all damages. The media and politicians should put their business model back for the moment and not creating even more insecurity in the population.

Not every country can afford the luxury of closing the shop. And we won’t be able to afford it again any time soon either. Hence: after is before.

Time of radical change

In everyday life we benefit from the facts we know and for which we have developed a repertoire of behaviors. Depending on our disposition, changes unsettle us more or less. In order not to be too surprised by upcoming events, we try to foresee the future and prepare ourselves for it. For this purpose, we consider correcting variables that we otherwise perceive rather randomly. This foresight establishes connections that consist of smallest influences. These ideas suggest accuracy due to their fine granularity. However, there are times when the changes are not only visible in the subtleties, but in the major upheavals. If then many far-reaching transformations happen at the same time, we are in a time of radical change.

We now seem to have arrived in such a time. Therefore we take a brief look at the PEST effects, wherein simultaneous changes become visible.

  • Political effects
    The virtualization of the world has made political borders disappear. The delimitation is no longer between left and right, but between extremes and normals or between different religions or between cultures. The old motto is simple: We are right, the others are wrong. From any point in the world, it takes one click into a region, where completely different rules and laws apply. The view through the window of the screen feels actually harmless, since you still seem to be in your own legal sphere. So you can order something abroad, but as soon as the delivery crosses the border, your national laws apply. As a result, certain goods are no longer allowed or additional customs duties are incurred. In addition, between countries and within regulated economic zones, other regulations are applied which can only be understood by experts. Although such rules affect everyone, they are negotiated and adopted behind closed doors, as TTIP has shown (thanks to Trump, negotiations should pause at the moment). Besides the economy, politics has far-reaching authorities, which are justified by nothing more than an election. As long as the power blocks of the world are in competition with each other, autocrats can question and terminate the agreements at any time. What is needed is a recognized, contemporary, global coordination center.
  • Economic effects
    Since the photo Earthrise that was taken by William Anders on December 24, 1968, we should be aware that we live in a finite system. Such a closed system cannot grow without supplying energy from its environment or another system. And yet today, decision-makers are still trying to exploit other countries by levying taxes, influencing exchange rates or playing all kinds of restrictions as trumps. The national pride that is abused for it, which drives the population into competition with the rest of the world, endangers peace and revives old conflicts. If economic success is based on the loss of others, decision-makers should be aware that there are no others in ONE world. This means that the monetary system gets unified, the distribution of labor and income ensures the survival of all, and that the reasons for making business are rearranged. Growth is not a real goal for a closed system, but viability.
  • Socio-cultural effects
    The world has become more comprehensible and accessible. At the same time, this proximity creates a new diversity with often contradictory perspectives. The forces that dominated world affairs for a long time have gradually shifted towards the emerging regions of Asia and Africa. A simple example is the new Silk Road, which is in the process of replacing the established routes of the economy. It enables China to globally position its well-educated people, who are held together by a value system that has been proven over thousands of years and who are equipped with a historically founded self-confidence. This upheaval, which has been visible for years, is shifting the focus from the Atlantic to the Pacific, replacing the fabric of the last seventy years. The societies that have been exploited for centuries for the benefit of the old world are breaking away from old habits and swinging the pendulum towards the south and east. We are experiencing the first socio-cultural effects with the increasing revival of the nation and the hysterical measures to seal oneself off with trade barriers to the outside. The existing rules no longer apply and the new ones will be made elsewhere. Companies, NPOs and NGOs as well as global institutions have to reorient themselves.
  • Technological effects
    Forty years after the introduction of the PC, information technology (IT) has permeated all areas. Simultaneously, a network was created that allows us to be connected to any point on earth with a single click – as long as the required electricity and access to the network are available. The current wave of digital transformation is nothing more than an additional attempt to increase the importance of IT – Big Data, Artificial Intelligence, Augmented Intelligence, Automation, Robotics, 3D Printing, etc. Whereas in the past it was lamented that the workforce was forced to work under inhumane conditions, today the same groups complain that automation in the production of goods and services robs them of their livelihoods. The new designs are too concerned with the tools, instead of creating holistic solutions, which continue to provide people with opportunities to make a living. Virtualization, i.e. the representation of the material world in the computer, creates completely new possibilities for doing business. Above all, easy access to markets for everyone, wherever they are, needs a new understanding of work. Old skills are replaced by previously little-known ones – from executing an activity to monitoring; from processing knowledge to generating it; from evaluating data to interpreting it. This upheaval affects everybody. The skills and abilities need to be re-educated so that everyone can be involved in this upheaval.

Bottom line: We don’t need fine-tuned measuring points to recognize that we are in a time of upheaval that is turning everything upside down. The large upheavals are visible to the naked eye. The new division of the world no longer suits the given societies. The computer and networking make the foundations of the old economic activity obsolete. This changes the way the economy operates and the masses of workers are worried about how they will earn their money tomorrow. At the same time, politicians get stuck in the dilemma of global or national politics, which makes the right wings to lure out from behind the stove. The Every-man-for-himself will evoke the danger of international conflicts, which can even destroy the idyll of the Western world. The First World War brought weapons of mass destruction. The Second World War brought nukes. The Third World War is probably happening for a while in virtuality – who would believe that only Russia uses computers to destabilize? What else does it take to notice the upheaval? This means for ALL participants that they have to deal with these changes. Companies that currently have no answers to these radical changes and do not actively prepare for them, act irresponsibly. New approaches are needed for politics, economics, society, and the use of technology.
Now  I S  the time of radical change.