This post was first published in March 2016.
After an intense week of electioneering and ‘EU gossip’, here a few thoughts.
I like to start with hard facts.
Consider then, that the United Kingdom has a land mass of 242,495 km². The European continent is 10.18 million km². So, by size, the United Kingdom is just under 2.4% of Europe’s total land mass.
In terms of trade, 44% of UK exports were sold in Europe last year.
The amount of goods and services we sell to the EU is roughly 18 times greater than our proportionate size to Europe. In 2016, that was £240 billion out of our total of £550 billion exports.
Yes, here in the UK, we persist in thinking about splendid isolation. We dream about the glories of Britain as a standalone island.
If we rely simply on the maths, on the basis of these figures we might expect to be 18 times worse off if we leave the EU. Everyone can decide for themselves where the power base will be in those negotiations. I’m not going to make any comment here.
What is important to me is how we frame economics in a networked age.
It doesn’t seem there is a common understanding in place regarding how today’s global economic landscape can best be described. For some people, the digital economy and the emergence of algorithms and AI is characterized as a Fourth Industrial Revolution.
What seems obvious is the way we describe it, even metaphorically, is likely to frame our response. And so, for this reason, I want to argue here that I think describing the times we’re living in today as ‘industrial’ anything, is dangerous.
I think we are in a rage against the machines currently of some sort. When I observe the viscerally sphincter-tightening and restrictive response of pining for when things were ‘great again’ or when the UK was a mighty island, I think some of it’s a reaction to the vulnerability people are feeling and describe in the context of today’s uncertain, complex and ambiguous economic and political operating environments. A new, ‘VUCA’ world.
We can blame politicians, and maybe also machines for that. Uncertainty seems to be building generally. It would be naïve not to acknowledge that in part it’s building due to the emerging supremacy of algorithmic programming at humans’ expense. Humans cannot react as fast to events as algorithms can. They contain as much information or knowledge.
Machines can do that better today, because they are networked. That is, after all, what the internet gave us.
So why do we not apply that networked thinking to the rest of the way we live today? Logically, that’s what we should do if we wish to acclimatise to a machine-driven landscape; not by being more industrial, because that can be automated, by being more networked.
One reason might be because good governance in a networked age is really hard. Boundaries are blurry. Both sides have to win, but trust is difficult to establish and very often in short supply.
Our connected world has come together, but we haven’t figured the implications of being connected, being wired, and all the things that are different now.
Industrial models are hierarchical, elites at the top, winner takes all. They’re ‘jfdi’ cultures, not particularly consensual, and success comes from an alpha male mindset, ‘I win:you lose’ thinking. None of this is stuff we verbalize too well out loud.
To use a phrase, ‘we just get on with the job in front of us’. The underlying dynamic of this, however, is that market success comes from market share; the size of one’s slice of the pie.
This mindset only works for so long. Economic inequality is driving the risk of commercial stagnation. Networks create compound value, and now I think much smarter networked strategies need to surface.
To go back to the UK as an example, the UK, it can flourish independently no matter how small it is as part of a thriving network by redrawing the way it develops, specifically by how it develops networked capability, thinking across disciplines, and working at intersections. Maybe geographic boundaries are less relevant today and good governance can be conducted and applied through blockchain technology. The point is, there are options.
To ignore the basic dynamic value that exists within networks is foolish. If we frame our economic landscape today as industrial – no matter if it’s a third, fourth or fifth iteration of industry – it locks us into an old and obsolescent past and ways of thinking.
It locks out the creative capability human beings can bring to innovation when ‘industry’ becomes automated.
Size matters, and it matters not, simultaneously. What is crucial is understanding border control in new and more nuanced forms. This is the task of leaders today.
Estonia and the EU are both toying with the idea of e-residency. For any region, large or small, strategic development from here on in will be more powerful and effective if it involves this digital, virtual component – of like-mindedness operating across borders, the compound value of networks and in developing them, and of valuing difference and capitalizing on it.
When the world is uncertain, strong networks thrive. It’s also something the ‘no man is an island’ axiom encapsulates. Small regions need networks. Good border and boundary governance is part of healthy networked thinking too.
I think Brexit is a contemporary existential discussion about isolation and connection.
And Brexit is about those two fundamental things – isolation and connection – and how we deal with them in a networked age, as much as it is about economics, people, their capabilities and their quality of life.
Clocks can’t be turned back, things can never be the same again, and that is a loss.
But I think we have more options if we break out from being land-locked by old thinking, and consider, with partners and allies, how we move forward and design an effective, networked future.