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No future : how to embrace complexity and win / 2

Deuxième partie de l’excellent article de Riel Miller*, dans le cadre du rapport annuel de l’Observatoire pour les Marchés Extérieurs et du Département Innovation, Universités et Entreprises (Gouvernement de Catalogne).

Applying Futures Literacy to the crisis

Current economic events are frightening and painful for many people and companies. What seemed fairly certain and predictable only a year or two ago now seems uncertain and obscure. It is commonplace to hear that the current crisis makes it impossible to continue with “business-as-usual”. Everywhere people are saying it is time to change, time to adapt to a new world, that old solutions will not work.

Yet, almost in the same breath decision makers are demanding that every choice reduce uncertainty. After all the say, everything is so uncertain already, don’t add to a bad situation. So the decision-making rule is: “don’t do anything that will increase the already excessive uncertainty.” Choose initiatives that have a solid track record of working effectively, of being predictable and tested.

This is today’s paradox. In the face of greater uncertainty there is greater insistence on predictable, quantifiable, low risk choices – in order to offset uncertainty. Unfortunately if the first premise is right then looking for “tried and true” solutions is simply a way to make even bigger mistakes. False certainty is worse than no certainty. And yet, if we look around us many of us are convinced that the world is changing. Part of this is, as is only natural, the “hubris of the now”.  Our sincere belief that this moment in time is the most __________ (fill in the blank): fastest, biggest, most complicated, most overloaded, most dangerous, the most Madoff, etc..

Still, as the analyses presented by Carlota Perez or Doug Griffin (see this volume) point out, there are significant, historically specific changes taking place that distinguish the current conjuncture from the preceding period. And the financial crisis, rather than being just an aberration of bad morals and bad regulation, is indicative of systemic changes in the underlying structure of our economies and societies.  From this perspective we are living a moment when the swirling clouds of evolutionary complexity part, offering a glimpse of a landscape where three features stand out and what needs to be done becomes clear. It is time to embrace experimentalism.[1] To do so requires Futures Literacy, the capacity to look at the present in its full complexity and indeterminacy without losing sight of what to do, which choices make sense now.

To get to a Futures Literate approach to decision-making we need to get past some of the scapegoats and distractions of deterministic thinking.  One of the biggest current impediments to more open thinking is a yearning for the certainty of “solutions that work” and the desire to eliminate any sources of uncertainty. A prominent example of a yearning for more certainty/less uncertainty is the desire to “fix the financial system.” This is almost a “shoot the messenger” type reaction.

Certainly the “crisis” and the current collapse in the credibility of people’s assumptions about the future is partly due to errors by regulators and investors, including trusting people without scruples.  But the real error is the way people think about the future.  They wanted to believe that continued globalization and the advent of a “flat world” assured us never-ending prosperity. They wanted to believe in immortality, that systems do not decay, become detached from the conditions for resilience, decline to become marginal or disappear altogether as new emergent systems are born and begin to take pride of place.  In our success we came to believe in the possibility and virtues of resilience. That we could ensure eternal life by accurately anticipating the future (prediction) and adapt in advance to any threat or dysfunction, thereby consistently and perpetually avoiding the dangers of “over shooting” or breakdown.

What is happening at the moment, the very real and painful feeling of abrupt discontinuity, fears of deindustrialization and that somehow the rules of the game are being rewritten, is not because of a conspiracy or incompetence or a sudden increase in the prevalence of turpitude amongst people who happen to be alive at the moment. Such explanations are for people who are looking for scapegoats, someone to blame so that the search for certainty does not have to end just the story that carries the burden.  This is not to argue for a view that exonerates individual actors or groups of actors of responsibility, rather it is to reposition responsibility within the more modest confines of the limited power of volition and explicit collective choices.

In other words it turns out that in the kind of hyper-complex evolutionary system we currently are in breakdowns happen. It’s normal and actually, looking at the long-run, “healthy” from the point of view of broad system resilience.  We live in industrial systems, rooted in private property, market transactions rule of law and modest elite reshuffling through elections – that regularly generate a disconnect between the financial system (playing the Darwinian role of reallocating investment) and the rest of the value creating system (output of utility) (again see Carlotta Perez). Without getting into why this happens, the evidence that it has happened is fairly overwhelming, particularly at the moment.

The key question is how to restore the systemic attributes we care about?  Here I don’t think it is asking the financial folks to become more self-aware, humble and prescient. Let them continue to be predators, playing their profit hunting role, as aggressively as they can – including going after speculative, tail-chasing bubble activity when they can’t find anything else better to eat.  This obsessive exuberance serves us well – on the one hand it means that many projects that would never be tried or explored in a more sober, controlled system actually get funding to do wild and experimental things (anyone want to live in a system that can pre-emptively control excess and risk, that doesn’t allow evolutionary change?); and on the other hand it sends a signal that the way in which utility and profit were produced in the past no longer interests the carnivores – a critical signal of the need to change the allocation of power.

Not surprisingly such changes in the allocation of power do not happen through benevolent prescience. Those in power cling to it, often viciously. The allocation of power in our societies is not changed consciously by bankers but unconsciously as they seek greener pastures and over-extend their backward looking capabilities to detect and cull in a new and emergent systemic context. The shift to a different way of organizing wealth creation is a broad process, one that has up until now occurred mostly inadvertently and with massive amounts of horrific destruction. I’m not saying that anything is inevitable – the future of hyper-complex evolutionary system is unknowable and fundamentally indeterminate – but don’t blame the bankers or ask them to turn into lambs.

Let them continue to hunt, but in new jungles. Simply closing off (regulating) the old hunting grounds such as the legal pyramid scheme they constructed in order to chase securitized-triple A financial instruments just puts them on a diet.  The challenge is bigger and more society wide, how to open up new fields of value creation – along with the rules, institutions, organizations, business models, etc. that go along with this kind of change. That is the challenge to volition. It is a challenge to our imaginations, to discover another future in the present than the future we once saw in the past.

The traces of emergence are around us but blame and nostalgia won’t provide us with the insights to act now on the potential of the present. It is a common event in the history of firms and sectors that eventually they get drawn away, initially by innovation and the good profits that go with it, to a point where the core role of what they produce is forgotten. There are famous examples of firms and indeed even whole nations that lose sight of the essential, focusing on doing things that end up being peripheral and ultimately non-resilient.  This is the great danger, as IBM’s Lou Gerstner explained, of success.

Applying Futures Literacy to the “real economy”

So, now that the financial system is for most people a failure, what about the everyday economic and social realities? When each of us wakes up and starts about our own day, the “real economy” is still there. This is the continuity of human activity that creates wealth in the form of useful output. It is important, very important and not easy in these queasy days at the end of the industrial era, to admit that wealth creating activity includes not just the familiar physical objects that come off automobile assembly lines or the “white collar” services offered by Wall Street brokerages but also the “unique creation” that defines peer production, experience market events, “do-it-yourself” craft, and co-produced relationships arising in fluid networked communities.

What we see in the world around us today is shaped profoundly by what we think will continue to be in the future. Included in our anticipatory assumptions are things we just take for granted as being part of the future, like jobs will be important, companies will be the main way of organizing economic activity, schools and universities will be the key source of knowledge, nations will compete, identity will be given to you, society’s values and standards will become more lax because of greater tolerance and diversity, older communities will be poorer communities, and bureaucracy will always be with us.

Now, taking a page out of the foresight methods discussed above, what if we imagine a different future, how does our perspective on the present change? Very briefly here are seven challenges to conventional wisdom if we imagined the future – as a story, not something that is probable or even desirable – in the radically different configuration of what I have called elsewhere the Learning Intensive Society.

First, if “banal creativity” becomes the predominant source of intangible value-added in an economy dominated by “unique creation” then what matters for further productivity gains is not the extent of increases in the technocratic skills of the population but rather their ability (capacity) to refine their own tastes.  This implies that the dominant classroom model of teaching, with its industrial era behavioural patterning (passivity, obedience), needs to be reduced to a minimum – especially for youth.  The pre-eminence of the refinement of taste in the context of unique creation also implies that there is no need to continue with the race to push ever more people up the traditional industrial era hierarchy of skills.

Second, following on from the predominance of unique creation, industrial ways of organising production, including the firm, give way to much more spontaneous networks of “pro-sumers”.   A collapse of the divide between supply and demand could significantly reduce the organisational advantages of the administrative firm; but only if we can imagine new institutions and cultures that can sustain the necessary transparency, trust, ease-of-payment, diversity of contractual relationships, and new forms of property rights.

Third, the traditional notion of competition that sees multiple suppliers of a fairly similar product vying to sell to a large number of consumers on the basis of quality/price falls by the wayside since unique products no longer fit this model.  This also has implications for two related industrial era notions – the GNP definition of wealth which aggregated the transactions across the supply-demand divide and competition between nations (treated in a sense as firms).  The shift to an economy dominated by network based co-production and much more direct transaction/cooperation relationships opens up greater scope for mixing of monetary and non-monetary exchange.  It also connects up to a much more personal universe of things and services but also, perhaps more importantly, it opens up the potential to organise work for life instead of the industrial era’s adaptation of life for work.  Which connects to the next point.

Fourth, one of the basic driving forces of the evolutionary processes (that include failure and extinction) that give rise to transition scale changes is the search for identity in the context of freedom, hence it is not the provision of security but the building of capacity that is crucial for avoiding fundamentalisms.  Capacity emerges from experience, by doing rather than being told.  Situations where people engage in learning by doing is dominant.  But this means that there are a lot of experiments.  And if there are experiments there will be failures.  Which leads to the next challenge to conventional wisdom.

Fifth, ex-ante industrial planning (administration/bureaucracy) approaches to managing both the perception and probability that a negative risk turns into reality become a source of failure. Just the opposite of what we believe now – that planning is the way to avoid failure and that failure should be avoided at all costs.  In the context of much denser, more spontaneous and dynamic networks diversification as well as a general move away from choices that create path dependency are sufficiently risk reducing to allow for reliance on “more risky” just-in-time experimentation. It is more dangerous to avoid experimentation and the failures that come with it than to suppress risk and seek to avoid failure.

Sixth, sustainability depends on improving the capacity for self-organising systems to function.  This works because, as already mentioned, we can imagine major breakthroughs in the institutions and cultures that underpin transparency and trust.  Adherence to basic common values is a more stringent requirement, internalized constraint rather than externally imposed (policing). While at the same time new ways of identifying and sharing much more fluid and varied collective realities (network standards) means that governance systems have a greater capacity to clarify the nature and temporality of both conflicts and imaginative solutions.  Forms of governance function on the basis of experimentation not administration and rest on a greater underlying capacity throughout society to make decisions; a sort of literacy for the post-industrial world.

Seven, last but not least, taking all of the preceding points together could mean that changes in the overall age profile of a population (typically referred to as aging) is NOT a problem at all.  People with more experience of refining their own taste, constructing their own identities, networking their work to fit their lives, will be simply better at creating the kind of wealth that defines a Learning Intensive Society.  This means that contrary to today’s expectations the richest society are the ones with the highest average age.

Fin de la seconde partie.

Pour revenir à la première partie, cliquez ici.

Pour lire la troisième partie, cliquez ici.

Published in: OME (2009), Annual Report 2009 – Reglobalisation: Underlying transformations and new opportunities in a post-crisis world. Foresight Observatory for International Markets (OME), ACC1O, Department of Innovation, Universitites and Enterprise (Government of Catalonia),  2009.

*Riel Miller est un spécialiste de la réflexion stratégique à long terme. Depuis plus de 20 ans, son travail se concentre sur l’évaluation et la conduite de la transformation socio-économique des secteurs privé et public. Il figure parmi les meilleurs praticiens des méthodes de scénarios et a développé des « scénarios stratégiques hybrides » un peu partout dans le monde. Son travail traite de nombreux sujets comme le futur des services publics, de l’éducation, de l’Internet, de l’identité, de l’information et des technologies, de la société de la connaissance ou de la finance.

Il conçoit et implémente la scénarisation de processus qui révèlent des hypothèses sous-jacentes dans les politiques actuelles mais également le potentiel qu’elles contiennent souvent de manière insoupçonnée. Utilisant une approche qu’il nomme « rigueur imaginative», il aide à la construction de nouvelles décisions qui permettent rendre possible et d’augmenter progressivement le rôle de l’innovation dans le développement des organisations.

Des défis spécifiques du secteur public comme le futur des finances des institutions jusqu’à des défis plus sociétaux comme le futur de la globalisation dans la société de la connaissance, Riel fournit une expérience riche et un réseau international étendu qui ont bâti la solidité et la créativité de sa réputation.



[1] This text is adapted from an article by the author, published in Optimum Online, http://www.optimumonline.ca/article.phtml?id=332, and Ethical Markets, http://www.ethicalmarkets.com/2009/01/30/to-experiment-or-not-to-experiment-–-that-is-the-question/

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