The Post Pandemic Designs Understanding the Great Remobilization with Mark Esposito, PhD

The Post Pandemic Designs Understanding the Great Remobilization with Mark Esposito, PhD

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Hello, everyone, and welcome to day two of our virtual alumni weekend 2021. My name is Jill Felicio, and I'm the director of advancement here at DCE. And I am delighted to welcome you to our faculty keynote presentation-- the post pandemic designs, understanding the great remobilization with Dr. mark Esposito. Now as we get underway, I have just a couple of housekeeping notes. Please feel free to use the chat box throughout the presentation to say hello or to react or chime in. And use the Q&A box for any questions that you wish to pose during today's recorded presentation.

Now it is my honor and absolute thrill to introduce Dr. Mark Esposito. Mark is an internationally acclaimed thought leader in matters relating to the fourth revolution and many changes and opportunities that technology will bring to a variety of industries. He is the co-founder and Chief Learning Officer at Nexus Frontier Tech, an AI scale up firm dedicated to help businesses become more efficient and competitive by introducing the latest data management science. In 2016, he was named one of the 30 most prominent business thinkers in the world by Thinkers 50. He is a global expert of the World Economic Forum and an advisor to national governments.

You may have had the good fortune to take his Harvard Extension School courses-- Economic Strategy and Competitiveness, or the Management of Technology, the Global AI Economy, or one of his Harvard professional development programs the newest of which premieres in just days-- Understanding the Fintech Markets and the Power of Blockchain. Now in addition to his Harvard teaching, Mark has appointments at the University of Cambridge, Arizona State University's Thunderbird School of Global Management, Hult International Business school and IE Business School. He holds fellowships with the Social Progress Imperative and with the Global Federation of Competitiveness Councils in Washington DC.

He is a non-resident fellow at the Mohammed bin Rashid school of government in Dubai, as well as a research associate for the University College London watching technologies. Now Mark is the author or co-author of several bestsellers, including Understanding How the Future Unfolds: Using Drive to Harness the Power of Today's Megatrends, which he presented about four years ago here at alumni weekend, and his most recent book, The AI Republic: Building the Nexus Between Humans and Intelligent Automation. He will give you a sneak peek on a really exciting upcoming book as well. So without further ado, please join me in warmly welcoming Dr. Mark Esposito. Thank you so much, Jill. I hope you can hear me fine.

And quite the honor after four years to be back in the setting. This time, it's a slightly different setting than when we were doing this in Cambridge, but to some extent it's a setting that equally honors the ingenuity of making sure that life could continue during this quite exceptional period of our history. Quite happy to spend some time with you today, to first of all engage with the Harvard community. And that's most likely the main driving force for me, to be able to spend some time today on the Sunday with a community of thinkers and doers, many of which I've been honored to see in my classrooms. And I follow their endeavors on social media, and wonderful to see how much difference we really bring into this world.

The second main conversation is to bring you up to speed with some of the work and research that I've been running in the last few months. The pandemic was naturally a shock, but every shock provides an opportunity for, I think, a deeper reflection-- whether we are operating on an assumption that we are comfortable with, or whether this assumption have to change. And likely, we all feel right now that something has profoundly shifted somewhere. And I'll try to give you a journey, where that thinking from my perspective has gone in terms of trying to define, and equally decipher, the signals that take us towards the future. And thirdly, is to bring a more concrete example of work that is now shaping up.

As I was sharing with the Harvard team prior to this, my next work-- together with two phenomenal colleagues, Olaf Groth from University of Berkeley, Haas, and Terence Tse, ESCP Europe and the Hult-- is now in its "baking" stage. We're currently collecting the primary data, and it will be published next year by MIT University Press. So I will spend a significant part of my conversation sharing with you the and the outline of where we currently are with the work. And also try to go within the reach of the topic of today, is trying to understand the post-pandemic designs. As you will understand, the engagement and the questions coming from you is the part that I look to forward the most.

This is, one, because it's you that really brought me here, the opportunity for me to have a chance to engage again with a wonderful community. And second, it is the kind of conversation we're going to have today that will equally shape the dialogue following forward. Not only the dialogue that happens in so privileged circle, like the one we are right now, but it's also inspiring the public debate we'll need to have on some of the most pressing challenges that we will face ahead of us. I always say to all of my students when I'm teaching at Harvard, that we are often entangle in the assumption that we have already seen some of the events that are currently happening in, some form of comparable format, back in the past. And we tend to resort to historical information or hindsight to determine how do we solve those challenges. Truth to be told, every single day we're going through our life, it sets, to some extent, a record, a "first timer" of some kind of.

It's either the day with most people on Earth, and every day of our life for the foreseeable 30 to 40 years likely will be that. It's either the first time where we've seen a degree of technology exponentiality that is growing at even faster pace, or it is the number of data we're really capable of generating in this hyperconnected world. So no matter where you're really are looking at this, different from before, we truly are experiencing a record heating period of history. And I always remind myself this is a wonderful time to be alive.

Let me take you a little bit more into a structured conversation. My plan, if you want-- if you agree with me-- is to take you through a bit of a journey that is combined both by the research side, and a bit of the storytelling. And then at one point in time, where I feel the bulk has been shared with you, I will ask Jill to come back and help me moderate some of the questions that I'm looking forward to receiving from your side.

So in the good style, like I've been doing throughout the semester, let me share the screen with you, and take you through-- a little bit through a journey that I would like to share with you today. So "The Great Remobilization " is where we're going to today. It's our first major answer to the running title about the post-pandemic designs, and the subtitle that we have in our book is called "Designing a smarter world." This is because we believe that we can institutionally, on a global level, rethink about the foundations and the tenets upon which we're really building our global economy.

The last two years, they have not only definitely generated significant scar in our memory, in terms of understanding what the global pandemic is capable of doing when we have an interconnected system that are non-linear by design and multiplicative. The other thing that we have equally acquired is a clear understanding that some of the foundation upon which we were standing, they were quite fragile, and they have really not been able to undergo the pressure of the last few months. But where are we moving forward is equally quite a difficult answer to provide. It's always like if you were crossing to different kinds of landscapes, and right now we were on a suspended bridge, we tend to be impacted by wind coming, change of weather, maybe a storm.

And when you're moving from one landscape to the other on a suspended bridge, the ground underneath your feet doesn't really feel very safe. This is pretty much a number of different analogies or metaphors to tell you that this increasing unsettling feeling that our ground is shifting is not just perceptive, it's truly the fact that we are changing tenants. Now history does not repeat itself, it does rhyme; but the reason why I tell you that is that this is not the first time that society has found itself dealing with this degree of disruption. Or more than disruption, we should call it discontinuity.

It happened prior to the World War II. Following the Great Depression, 1929, was a period of history where we had profoundly impacted the way that the middle class was rising up, and the level of inequality that we were having lead to exasperation a system, to a point in which World War II actually imploded later, at the end of the '30s. At the end of World War II, we redefined the role of the North Atlantic Alliance by having free market and democracy as the two main tenets that were really thriving and driving the growth models.

This is the time where the United States became the hegemon, in many ways, of that world order. We had a similar unsettling period at the end of the '70s, when we're having the energy crisis, the crisis with Iran, when for the first time, we started to understand from a finance perspective, we could borrow money we didn't have. We started to unpack resources from gold, and we started to define money out of money. By doing this, we kind of borrowed from the future, and we open up to a series of finance-- that finance. It was bypassing equity financing that revolutionized the financial industry, and opened up to a global society that culminated with the fall of the Berlin Wall in '89. And hopefully opened up to a world that was, to some extent, waiting to be impacted by a global story.

We're now facing again a quite historical moment where the intersection is kind of shaping towards a new structure and new foundations. This time, we have a much more global experience of the challenge, and we should remember-- remind ourselves-- we are just at the very beginning of that. In some instances, we kind of have the feeling that we're going back to a sense of normalcy, because maybe we can remove a mask or maybe because we get vaccinated, or maybe because we can travel. But we should equally remember that some country will see the first dose of the vaccine administered only early 2023, especially the country within the COVAX alliance. So it'll take us some years before we can start feeling that this period of history is behind us, and we can really build-- or focus on the reconstruction. So that's kind of the story and the philosophy around "The Great Remobilization."

I'm not doing this effort by myself. This is a poster, is not yet the cover. We're using this soon for social media, but you will see now a preview. Terence Tse and Olaf Groth and myself, we're getting our hearts and minds towards this topic. And I hope if you follow the work we're doing on our social channels, you'll be informed when more and more of these events will actually be unfolding. We plan on having a number of different events running in the next few months, up to a point where we'll be able to announce the launch day of the book sometime next year.

I hope that next summer we'll be able to celebrate the launch of the work. So let's start. Let's get our conversation going. Let's get our thinking going. Help me. I will help you see that the structure of what we're currently doing, and you'll help me understand at a deeper level where this conversation should go as soon as we start doing the Q&A.

Here is the first part of the conversation. We're dealing with tectonic shifts. We really are, in the analogy of tectonic shifts, looking at shift of our plate of the Earth. They're creating entirely different landscapes. So we're really interested in understanding, from the collision, what is really coming out. There's multiple different hypotheses, you might have heard a lot about the "new normal" story.

There's nothing really too sexy about the new normal. It's a quite, I think, conventional thinking, that once you're disrupting a system a new one is emerging. What we probably should start feeling a bit more comfortable is, number one, introducing the plural to that, so we can talk about new normals. But as one of my friends, who is the editor of HBR Italy, Enrico, calls it, he calls it "never normals."

And I guess that's probably more where I would put my thinking this moment, is imagining it'll take us some time before this entire new form of value that will be redefined by the new structure will eventually shape up to become normalized. So for the period of time, thinking about never normal, I think, is a quite safe assumption. In the book, so you can see a little bit about where we are, we're spend spending the first part of our work on the tectonic shift, and really looking at how did we get where we are. Then we start having some of the discontinuities that we'll take you through. We're looking at scientific scrambles, we're looking at the technocracies. We'll see how governments are changing.

We'll see Asia accelerated, and the West becoming anemic right now, for a number of different reasons. But it's quite inevitable to see that the needle has been moving historically, since several years, towards the East. And the success of the Asian economy to put this pandemic under control has provided them with a level of triumphism that is something we should really accept. The race to reconstruction-- unique opportunity we really have to start thinking again about the institution of government, distribution of public health, the institution off of education.

How do we teach kids in school? How do we define, for example, the role of government via the fiscal? How do we think about immigration? These are some of the conversations that we'll actually have an opportunity to rethink. Most of the story and the narrative that we have these days, that were shaped in the wake of the '50s and the '60s, and some of the story even earlier. All of my economics students know that when we talk about GDP, we're referring to Simon Kuznets, which was a Harvard economist who introduced GDP for the first time in 1934. But the work was mainly measuring the growth in the United States from 1929 to 1932.

When you see or read about GDP today, remember GDP is roughly 87 years old. That's pretty much a number, right? Now, we'll start looking more and more about the role of technology, and how virtual versus physical will have to reconcile and strike a balance. We'll start feeling the ethical boundary that the data deluge is generating. What is our life today? Nothing else than a series of data sets that somebody has, and that somebody can share. And how do we think about replicability and replication of information to the point in which, in theoretical terms, data could be shared infinitely. It's not like a physical commodity or a physical good, that if I give it to you I don't have it anymore.

So a conversation about what does protection identity sovereignty means in digital times is another part of the conversation we're having. And then the idea about technology pervading in our life to a point in which, today, no company is not a technology company. Regardless if you're merely a bakery, or you're actually even a street vendor. Because in the moment in which you're using WhatsApp to get your order, or you're having your payment through Square or Visa or Mastercard, or in the moment in which you're having an online program to run your inventory. The moment you're having just an app, you're shifting lots of your value creation, or this value proposition, to technology solution. You might not call yourself a data company, but you are, de facto, a technology company.

And how do we deal with the fact that we became a technology driven society? That's another story that we'll have to redefine rules of engagement, as I mentioned before, the ethical boundaries. And finally, the last part of our book will try to understand, more and more, how do we remaster the world, and do we have a roadmap? At the end of the day, we-- the three of us, Olaf, Terence, and I-- we teach in business schools, so we tend to be constantly tempted by the idea of having frameworks and maybe conceptual models. Something that we can teach, we can do exactly the programs, we can do keynotes, and something that we can hope our students or attendees replicate. It might be a bias, because it might not necessarily have the level of intellectual depth required in such a long term project, which is rethinking the world ahead of us.

But definitely emphasis on actionability and how do we make a very heuristic base is necessary for us to get a sense about the world we're really going to build. So briefly, ladies and gentlemen, this is where the project, "The Great Remobilization," goes. It is a work in progress, as I was sharing with the team who organized the event before.

We're interviewing several people that are helping us to get to a level of depth, or a level of interdisciplinarity, that we can't reach by ourselves. And what I want to share with you today is some of our very initial reflection. We've just scratched the surface of a conversation that likely will continue to happen wholly within the time we have to write the book, but very likely it will happen the moment the book is published. We'll engage with the public about this, and we'll learn more things then what we can actually imagine right now.

So it kind of starts also for me today. It's the first official time where I'm presenting to such an esteemed audience the work we're currently running on. So let me try to get you a bit into the story. So how do we get there? We started to really see that the globalism or globalization, the way we have been celebrating, at least in some parts of the world, has not necessarily taken us where we want it to.

I think there is a story to be told that is twofold. The first side of the story is, wow, globalization has lifted millions of people out of poverty. It's been the greatest form of capitalism we have ever seen in history. On the other hand, globalization has created more inequality than ever in history.

In other words, the level of lifting people up from poverty does not necessarily generate automatic distribution that can be even enough for people to feel that lifting up is enough. It's not enough. We lift them up in extreme poverty and we give them access to things like healthcare and basic needs. But it looks like the moment that they enter the workforce, we have been flattening social mobility to the point in which the aspiration of many people to improve their life tends to be almost sandboxed, if not trapped. Let me give you some estimates.

Roughly 80% of people in the United States will not see a change in their social status throughout their entire life, no matter how hard they work. A job, two jobs, three jobs-- their social position will not change. Why? Because mobility is quite flat these days. So for the majority of their lifetime, no matter how hard they work, they'll hardly move themselves to the next level. Very different from the Golden Time-- the 1950s, '60s, '70s-- where we even coined the concept of the American Dream. And the American Dream, if you remember-- working hard will rehabilitate anybody to the upper sense of fulfillment, whatever that meant.

It could be individual, spiritual, collective. It was a feeling that we are, to some extent, defining in the opportunities in our life. And remember the conversation our offspring-- thinking that our children would, to some extent, be able to take us to the next level.

Well unfortunately today, the generation that we currently see rising-- starting from the Millennial to Generation Zed, or Z-- their best chance is in their parents networks. And this is so sad because it shows that for the first time in modern history, we are having diminishing opportunity for generation that don't have the same chances that their parents. So this is not necessarily written in stone. We can change this, but what we want to see up front is to understanding that the system as has been designed does not necessarily contemplate the opportunity for people to be lifted up to a point in which they can actually really see even distribution of opportunity. So from soaring inequality, to of course the challenges that a growth model that has been heavily factoring in environmental externalities, and growing anxiety/ the rise of significant worries about mental health, is really showing the system as we have seen it before starts to be, not wholly limping, but is generating significant hiccups.

I have a slide to show you this. This is to show you a little bit more about the challenges we currently see. You notice, in terms of the globalization lifting people out of poverty, it's been a phenomenal journey. Nothing has ever done the same. On the other hand, you start noticing that in parts of the world where we had a significant set out from social welfare, or where we had enough prosperity to expect most of the population being well taken care, we start to see rising chances for population to be trapped into a level of economic distribution that doesn't have any mobility, as I mentioned before.

So globalization-- many benefits, but equally has been not necessarily working the same way as we expected. And to attach it to another conversation, it has created a sense of disenfranchisement in the United States. We felt it a lot in the last few years, and the sense that we were merely divisive and divided.

We were connected to some extent, but we were not necessarily convergent. And I think this sense of connected but not convergent is a quite important part of the journey that I would like you to keep in mind. That said, the feeling that our social experiment, the United States, was coming to a shortcoming has been reflected in other parts of the world in which much more, I would say, parochial and localized events have been giving space to nationalistic movements and some form of populistic movements that have exacerbated the radical opinions the public opinion might have had.

Let me rephrase it slightly different. When we disenfranchise millions of people by capping or curtailing the opportunity they have to acquire social mobility, when people start feeling that there is nothing more they can look forward to, because no matter how hard they work, nothing really changes, they start to radicalize more and more. This is an interesting story. It's captured by sociologist called Overton that was able to introduce the Overton window, which was a quite interesting idea where public opinion, regardless of what we think, swings towards the left-- at the worst, the right-- depending on circumstances.

When it swings towards extreme left or extreme right, that's kind of regardless, it radicalizes. When anybody running for office is capable of tapping on the pulse of the Overton window, it's very likely to be a nationalistic movement that tries to see national interests as being determinant for a political spectrum. We have seen this in the United States with the previous administration. We've seen this in Mexico and Brazil.

We've been seeing this in some part of Italy. We saw this with the National Front in France. We saw this with the Brexit vote, was to some extent a form of self-determination. We see this right now in Hungary, we have been seeing this with the candidate running in Austria. So in many parts of the world where we're not expecting necessarily the Overton window to swing significantly, we have been noticing radicalization.

And one way for you to see this, in perspective, is that it's partially determined by the fact that the global structure is no longer fulfilling the different ramification of societal fabric, It's actually alienating it. And this is an area where we'll have to work hard to make sure that we're not necessarily incurring into the creation of new monsters. We already had enough. Now where do we go from here? From the conversation about how the global structure is now suffering, we move into the part two, that id you remember, is one of the longest ones in our work. It's the idea of the discontinuities. Where are the discontinuities coming from? Well, there's a few things I need to tell you first.

It's kind of easy to come to the conclusion that we have been discontinued by COVID, in many ways. But when you go in a little bit deeper into that, you realize that-- and you might have heard this several times-- COVID does not really discontinue on its own, it has accelerated it. Because it was an echo chamber, it has magnified and it has amplified, but it hasn't on its own discontinued. And where this becomes particularly relevant is to start looking at some of the trends that we find naturally attributed to COVID, but when you look at the trend itself, you realize that the trend happen as a byproduct of a degree of fragmentation that was already happening pre-COVID. And if you want to understand more about it, these slides will do the job for you.

These are some of the pre-COVID fractured globalization. This is a strategy from a friend of mine, Sanjeev Khagram, who is the Dean at Arizona State, who has presented this. And I found it so fascinating that I love to present it to you as well.

Here is an interesting story about trends that started pre-COVID, and likely will continue through 2035. This is a degree of discontinuity not that was triggered by COVID, it was simply catalyzed through COVID. But these were trends that would have happened nonetheless. What we don't know is how long it would have taken for the trajectory to fulfill itself, but very likely these are some of the trends that we had started to see already with inklings prior to 2020. I have already touched upon the waves of exclusions. I mentioned it before as soaring inequality.

We equally mentioned the fact that we went into a connected world, but a divergent one. That lack of convergence was reflected in, I would say, shambles within the international community. More doubts that were merely cast upon the multilateral institutions, such as the UN and the WHO, for example; a feeling that the global order was under some form of attack or siege; and it wasn't really finding its own narrative back, right. Still to this day, I don't find even if clearly the Western countries are now engaged in a dialogue that is much more convergent and collaborative than one year before. I still find that the set up seems to suggest that some degree of localization and regionalization is prevailing. I think it's induced partially by the lack of mobility that we have comparably to the past, but it's also, I think, rapidly determined by production and supply chains.

Most of our supply chain got heavily impacted by the first few months of the pandemic, and many organizations and countries then started to rebalance their portfolio. So now we have much more local produced products that are getting into our markets, reducing the dependence that we have from the global trade, let's say, routes. And that is reinforcing that the regionalization at any level.

We have a conversation on the climate that is not leaving us alone, it's actually going to continue in the next few years. We're just at the very beginning of what we can call a climate instability. How do we address this, can only happen with-- let me count it right-- three way forwards. The first one is finally giving up on this idea that climate change doesn't exist, because that didn't really generate, other than ideology they have fractured the debate even more.

I think we should graduate this idea to the higher level, in which it's becoming an overarching concept that we're not necessarily defeating just because of narrative and dialectics. Once we get there, and we understand that climate change is a universal challenge and it's not politicizable, we're moving into the idea that if we operate in terms of climate adaptation and climate mitigation, we're really going-- not necessarily to change too much of the course of action-- but we're going to change the course of action our economic geography. The challenge with the environment change-- and it's not the environment itself, because in natural systems, entropy rules. It's more about the fact that our economic geography is being designed with the expectation of the climate be normalized. So how do we rethink about adapting the economic geography? Either we start understanding that a degree of volatility and larger spread of performance are becoming part of a normal distribution. How do we start reacting in-- reacting in not necessarily the right way-- but responding to climate instability in a way in which we are rethinking the infrastructure we actually have.

Now it seems to be more wannabee than anything else. The good news is that in the last couple of years, when we started to invest heavily into climate adaptation and climate restoration, we are generating roughly $7 trillion of global GDP that is coming from this. So finally we have found, I think, a nice pocket where we have created an economic and social and environmental synergy that is not necessarily looking at the climate as a trade off, but it's looking at the climate as an opportunity to renew the economic infrastructure. And so when you're hearing and things about alternative energy, or the New Deal has they call it-- right, the Green New Deal-- don't look at the politics around that.

Look at the fact that renewiing the infrastructure, in light of what it will likely be, a refurbishing of the way we're running [INAUDIBLE] infrastructure, it is a form of climate restoration and climate mitigation, because it means that we are redesigning processes around much more adaptive, less volatile climate. And the restoration and mitigation might eventually slow down some of the most, I would say, dangerous trends which could lead to scale of magnitudes of challenges that we're not prepared. Last thing I want to say on this, I don't want to extend it more than necessary-- I've been telling this in every single class, and I'll do the same now as we have in this gathering. I always tell myself the Covid-19, it is climate change 1.0. Thinking that there is no correlation between the climate instability and infectious disease, it is really living in La La Land, right. And as I don't want to live in La La Land in this part of my life, because I think the opportunities are larger in living in a much more construed format than in an illusional part, I really want to make sure that I say that also to you.

That if we are capable of seeing the relationship between COVID and the climate instability, we are going to understand what climate change is really all about rather, than just a more tip of the iceberg idea about the rising temperatures that for many people did not convert into any sense of urgency. Moving very fast on the rest-- technology innovation, we'll talk more about it today, is how quickly do we see technology rapidly changing the way we are, and how technology is equally becoming a proxy to the antidote that we want to develop. And things like the global economy moving into low growth. This was a problem that we had since 2007-2008, when the financial crisis hit us so hard that some industries simply never recovered. They were simply becoming insolvent. And this sense of low growth has been going on for quite some time.

Working population that's becoming older, the big gap between aging country and young countries. This is something that's been starting already before. Back in the 2017 books with Terrence on the drive and the megatrends, we were already noticing that the gap between old country and young country was becoming so ridiculously large, that likely immigration would be inevitable. And also drop of productivity and challenges to the social welfare systems inevitable as well. And bear in mind, just for you to have a point of reference, social security in the United States was introduced when average age was 63. And so we went a long way for from when average was 63, to average age now that is close to 79, 80.

So interesting that as our life expectancies improve, the social system did not necessarily improve with the same speed, neither with the same degree of proportionality. So likely in the years to come, we'll see some of this either under significant impact, or under the opportunity to be deeply reform, because it's necessary. And then finally, and since we are within an educational setting and you all went through your Harvard degrees, skill sets, right? What kind of skills are we going to really build for the future, considering that degrees are important, but they are insufficient to deal with some of these required skills gap that we really want to achieve. So this is to give you a bit of a sense of where into this continuity we're trying to move our conversation. Then we go a little bit deeper into some more specific.

I will really just go briefly on that, making sure that I'll start thinking about moving my conversation to where eventually I'll stop, and then get some of your questions running, right. That's really, as I told before, what I've been looking forward the most. So here is, again, some of the possible scientific scramble that we see as a level of discontinuity on one side. We really see, more and more, the contrast between entertainment and enlightenment. We are, to really understanding, which way, we're simply looking at the tail of the distribution of scientific discoveries, and how much of this is mainly the very beginning.

It's that of an era that is unprecedented. I have to say, it is quite miraculous to see what we were able to achieve with the vaccines. Not everybody knows that the same technology used for vaccine is being the same one deployed for research on Cancer prediction, right. So definitely funding the research in the right amount makes things happen. But is this the end of a tail, or is this the beginning of an entirely different sense of how science is? We don't know yet, we definitely think that scientific communities these days, they feel as well on the suspended bridge.

It looks like COVID has been not only an echo chamber, in their case, but truly it's like an incubator. And we see this defined in two different scenarios, and depending also where we are, likely we'll see different kind of outputs. From here, we'll move into Despots vs. Democrats. I think we already have seen this rising, I mentioned it before when I was talking about radicalized public opinion.

But give space to a certain kind of political figures to be on the spotlight, and eventually elected, we do suffer. Our democracies today are under significant attack. For once, because in many countries, the agency of democracy is no longer directly from citizens to public figures, but parties and lobby have become an intermediary that is likely generating the principal agent relationship that was once-upon-a-time determined by constituents and politicians. In many parts of the world, in Democratic systems, politicians are becoming elites.

There's a number of different cases where political figures they tend to be affluent. Now it's a very different profile of what we used to have back in time, had we have much more of a calibrated public servant. We also have the problem that is the solution to these despots, or more authoritative countries, we don't have the answer. We do see now a variety of options in which the fact of being a Democratic composition doesn't guarantee any more what we thought it was within, I would say, the norms, or the normative discourse of a society. So rethinking election, rethinking who do we select.

Rethinking, in the United States, the two party system. Whether we are, to some extent, lacking competition, right, in that sense, and thinking about whether we can give space to new ideas to eventually be represented and elected for. Whether it's about understanding technocracy versus political figures, in which you want to have a government that is equally building on competence.

What likely happens in many Asian economies where governments attendants, or government public servants, they tend to be very competitive in what they do, because they are heavily invested from an educational perspective, but equally on how much becoming a public servant becomes a form of pride. So I think there is a space for this, which is rethinking about the act of democracy something that is particularly important. On this, just because it's within the Harvard community, those of you who know me, you know that I've been working also with Professor Michael Porter in Harvard Business School. Actually, that's how I started. And the interesting part of that-- and Porter wrote this wonderful book with Katherine Gehl on the dangers of politics.

And we interviewed Katherine for our book, and it's so interesting how much she was vocal about the fact that today Washington doesn't necessarily serve the needs of the country in the same way we would expect from a country like the United States. And the challenge is not necessarily the politician in Washington, it's how Washington was able to estrange itself from the fabric of the country. You can argue exactly the same for the Silicon Valley, which represent probably the opposite of spectrum, in terms of the private sector. It's so estranged from the rest of the country as well. So clearly, this conversation needs to find a way to strike a balance where we want to imagine a Democratic exercise that is not necessarily going to build increasing gaps, but is going to generate that degree of diversity required for public debate. To see the society when it has something in common is a much better society, rather than a society in which only very few individual, they have benefits that they can access, and compare that to the rest of the population.

To this extent Professor Michael Sandel from the Kennedy has done a wonderful work around the commodification of the economy, and determining should everything be up for a price? Because he argues that in a democracy, regardless of rich or poor people, if we have a sense of common life, that's what defines it when we go and vote. That regardless of our economic position, we do have a sense of what our society is all about. But if we make everything up for a commodity, or commodification, what happens is that we are so alienating the perception of reality, and we're going to be really having people living in different bubbles.

And this is where I think democracies suffered the most. I'll try to move a little bit faster. This is where in the discontinuity we're going into Asia accelerated. We kind of feel America is becoming anemic, but so is the West.

We see that our ideas are not necessarily becoming any more the driving forces, but from the ecosystem to the innovation hubs, more and more is happening through the rise of the Asian economy. And we cannot deny the conversation around China, and what will China be. Will China become the new hegemon, will they become a new financial hegemon? Will they start to create an alternative system of reference? Will they engage? Will they simply become a form of polarization that will be only regionally relevant? Will they be integrated? These are questions we don't really know. As a matter of fact though, if the conversation on China has always been relevant, it will be even more relevant in the future, as this part of the world is rapidly becoming the most significant part of the world from any possible indication, right. And it's not GDP that it will be just an easy win for them to eventually overcome or outperform, it's how much of the value of the economy-- through infrastructure, investment, and trade-- is shifting by the day, right, in this side of the world. So this is something that, again, it's like animating the conversation we're having on in which way we think that geopolitics will actually emerge.

We have this impression that we are about to see an entirely different rise of geopolitical spectrum where we're going to have a lot of really different players, regardless of their physical size. Where we're going to have less dependence on a central system that was nicely encapsulated by what the Western heritage was capable of bringing forward. We see this more and more, I would say, as partially sclerotic, scattering now on the territory multiple small player really playing a significant role. These are still part of our conversation that we are trying to shape in our work, but we really think that in the post-pandemic designs, rethinking the role of Asia will be critical for us to really honor how this part of the world is now, by any form of macro indicator, leading the way forward. Now this is just to give you a little bit more of a sense of where this is going.

I have few more slides before I get into a point where I feel comfortable in wrapping this up and getting the question flowing. Again, conversation about race to reconstruction, do we see engorging pockets of wealth, or do we actually start understanding investment in a very different way. We believe that the financial system will be heavily impacted by the reflection we're going to have right now on not only the inequality, but on currencies, on how cryptos have impacted the thinking around what is an alternative form of money. We're sharing with the Harvard team that, with the Harvard professional program, we're launching together with Terrence our next executive course, actually in two weeks time.

And it's a fintech and blockchain, and understanding that these two sets of technologies, which are to some extent intimately interwoven, they are going to reframe the conversation on financial value. It's quite a fascinating story, truth be told. Because once we're understanding this, from financial players to fintech, versus techfin versus banks, all the way down to players that are going to refine trade, the storage of value-- this is a conversation that will very likely change our understanding of money.

I'm going to share something with you that I think is quite interesting, in terms of rethinking about the original purpose. Money was created as the highest form of trust. Because if I could not necessarily be happy with a barter, I would simply trust that the nominal value of your money, regardless of who you are, would be the same, that I would accept as such, and the nominal value of my money will be equally accepted by you in the same way. So suddenly money became in society a form of exchange of trust, and this was a really noble idea in the first place.

What money became in the last few years was truly a sense of disenfranchisement that was alienating so many different players in the world. Crypto has rethought the concept of trust in a way that, regardless of the volatility-- which is by design, because of the limited supply of cryptos. And the fact that in some cases-- for example, Bitcoin-- there is a clear tension that is defined by the fact that you have the proof of work that is competitive, right, different from other kinds of cryptocurrency. But the idea that this is a system that has an implicit tension, doesn't necessarily make it a moral system, but it makes it, from a social perspective, one of the most significant social experiment ever had in history. Because I could actually say, immaterial currency with no intrinsic value and no backing up by any government, if you trust that, we have a market. And we did trust it.

That shows you that the lack of trust that we find in the centralized structure was redirected towards structure that decentralized ones. And so I think from a perspective of trust, we are going to see ahead of us a rethinking of money 5.0, to call it with a number that is becoming popular in the everyday conversation. From the race to reconstruction, the conversation about virtual versus locally, I think this is something that we'll have to understand how do we think of convergence in a way in which we're not thinking about it as either or, but we're really looking at the opportunity of using online infrastructure to really empower the major businesses that might simply reach and scale globally.

It's not about saying because there's online, it cannot be face-to-face. And that conversation is now because we are in early stages of a moment in which the online became a proxy for presence in the absence of physical world. Over time, I think we'll normalize this better.

But balancing the virtual world with the physical, it will be critical for redefining the rule of engagement in any part of society, especially the productive ones. And moving into the data deluge, this is an area where I'm personally writing probably most of my, let's call it public pieces, or pieces that are designed to go into really high visibility outlets. We have to rethink about the governance framework, how do we rethink privacy and personal privacy models? What is the value of information, and how does my life become nothing more than part of an algorithm? That's a story that I think we'll have to redefine. Where does my liberty get, to some extent, defined, but equally violated in many ways? How do we make sure that the technology companies or the data companies are generating value, not solely extracting value.

Because when you are having a ratio of extractive value versus [INAUDIBLE] value in favor of the technology companies, you kind of start shifting more and more into a significant amount of information power that later on is becoming political and economic power. And we have already seen this as a lot, especially in the last couple of years when the Stock Exchange was skyrocketing, and it was celebrated. He wasn't reflecting that on the ground, people weren't getting any better.

We have seen today with the platformization of the economy, one of the most significant market inefficiency that we can think of. So how do we normalize the fact the market should reflect the essence of the global economy, not necessarily the interests of a niche of organizations that regardless of the condition on the ground, will continue to grow because their economic model is designed to grow exponentially since they're quite light in assets? Some of these are conversation that we'll have to rethink, as cybersecurity is becoming quite big, the idea of surveillance. Where is the border between-- the demarcation line-- between a contact tracing app that is keeping us safe, versus those information being used for commercial terms? Again, these questions that many times, they pop up in my classes. They tend to be part of conversation that are required. And in this post pandemic design idea, which is an overrunning and overarching story, we'll have to start answering those questions.

These are question that we will need to have, because we cannot surrender determinism from a human perspective by simply automating the process to algorithm and artificial intelligence. So those are areas of the conversation that I think is important to preserve. Moving into-- so the next couple of slides, and this is also where I like to eventually take a bit of a break from me presenting, so that I can get to have your conversation with you-- is more about flexibility or feudalism. It's more about where do we really create a clear set of ecosystem in which we are redefining roles, according to what we think generates value? And this is, again, something we don't know yet. We think that building an ecosystem is a positive mechanism of creating communities of people.

They are sharing interests, and they're not necessarily confined by their own limitations, but they can use technology to reach out. Think about the role of digital nomads, which means that we can now have access to a wonderful digital workforce that doesn't necessarily have to mean that people physically move. In the same way as we're running right now, I hope, a compelling encounter together, without necessarily being in the same place, but by tapping on the global outreach that I would imagine is really touching on different corners of the world. So we have to be extremely careful in redefining ecosystemic rules, and how do we want this to be part of the kind of society we really want to have. That brings me to where I see the opportunities going. So there are a few things that defines the opportunity moving ahead of us.

The first one is recognizing the fact that technology will be an overrunning and underpinning, run at the same time. Technology is not only going to continue to accelerate, but it will create economic value that currently we don't really have. From jumping in productivity, to more trillions of dollars to the GDP, to jobs that currently do not exist but will exist by 2035, to skill sets that will change roughly by 35% in the next four years. Technology is only the very beginning of a journey that is still unknown to us, and it's very difficult for us to even find any formal linear representation towards the prediction. Because if you have an exponential system, no matter how much you try to imagine what it will look like, you have no way to ever define the trajectory. So we're pretty much into the unknown, but knowing for a fact that things that we actually can't control, because much more organically distributed or diffuse like jobs and skill sets, we really are at the very beginning of a transformation that we have never seen, at least in the last 100 years.

In fact, I say 100 years. If you're looking at the jobs in the United States today, and you try to go back 100 years, and you ask yourself the question, how many of these jobs exist in some form in 1921? The answer would be roughly, guys, 50%. It means that for a long period of time, we kept jobs the way they were.

It is just right now that the level of convergence and interoperability of technology makes it possible for the transformational task, and later on jobs, to be so much more rapid that we'll see entire profession being displaced by technology. It means that the displacement will continue. It won't continue the same way.

We have asymmetric distribution of income, therefore a country where people are still cheaper to hire. They'll preserve people rather than machines. But sooner or later, some job will naturally be optimized, and technology does this better than anything else. That said, that optimization should not be considered to be just about the fear of becoming unemployable.

It's more about the fact that that degree of optimization will naturally change the nature of the jobs. If we imagine that we'll all be alive-- touching wood-- by 2035, and 60% of the jobs that we'll have back then do not exist today, it shows you that we are in a creative tension right now, in building jobs we never had before where the integration of technology will hopefully create what we call "singular intelligence." And the level of intelligence where the cognitive job will be integrated by technology and skills, and in the more physical factory floor jobs, will be called "cobotics," where the integration of robotics will integrate tasks and jobs and the factory production.

So again, I hope you see this as an opportunity, rather than something that scares us, because it's really where I think the majority of us will see a significant, I would say, renewal of the jobs market the way we know it so far. My presentation could continue for longer, and I could do that, but I would equally love, first of all, to give you a break from me talking and presenting, and get the opportunity to actually get to know you as well. Questions could really take us busy for the remainder of the time, and then if we're running out of questions, I can always provide you with final reflection on the nature of the work. But my point is not to show you everything that I have prepared for you. My point is to get the conversation started so that we can then make it much more of a custom-based discussion on the things that matters to me, as somebody who is currently working on this project, but more importantly, that matter to you as not only friends of the Harvard community, but the stakeholders and folks that, in some cases, equally were part of my classes.

So Jill, if that's OK, that's also a good excuse for me to take a sip of water. I've stopped my share, I go back to you. I haven't been able to follow anything on the Q&A, but I'll let you help me with that.

Yes, well we have a very active Q&A, Mark, and that was just such an exceptional overview of some of the challenges that we're facing right now. And there are so many questions anchored in several different topics. So a number of them are relative to China and Asia, and I was wondering if you could say just a little bit more about China's Belt and Road Initiative, and perhaps some of the partnerships that COVID has forged for China, say with the rest of Southeast Asia, and how you predict AI factors in, and just say some more about Asia in general and predictions on that hegemony.

Sure, Jill. Thanks very much for this. So a few things that I think is important-- in 2013, President Xi started for the first time to say we should reanimate the Silk Road.

Now in just eight years, the government has been able to prioritize the Belt Road Initiative at a pace we'd never seen before. Now there are two version of this. The first one is actually very factual.

When you're building m you're kind of building the condition for distribution and logistics to actually happen as well. So China is trying to play-- in the same way as we used to play back in the '50s in the United States-- by expanding our interests across the global sphere. They do this with infrastructure because we have to remember that the infrastructure is also critical to trade.

So I think it's quite clear that you're building that level of project, Jill, you're going to really look at some degree of dominance, at least commercially. When you can move stuff so easily from A to B around the world, that's something. Now here is an interesting story about your question on AI.

When you're building logistics, you kind of want to automate that as much as you can, because suddenly it makes it more efficient if I can use technology to make what I currently do. And when we use technology that is integrated, because you can now be-- as I mentioned before-- interruptable, you're collecting data. And that data over time become material for algorithm and machine learning. By the way, this is not even secretive, because the government openly says that China will be the leader in AI by 2030. So I think, just to provide you my own sense-- this is what I think is in the facts. My own feeling on that, I think China is rising up to a level of advocacy that is unequivocal.

They want to become a dominating force. I think where this is in a very stark contrast is I don't hear that sense of advocacy coming from the West. If I have to ask myself, what is the vision of the United States, what year-- 2025, 30-- I don't have an answer. I think our silence has been heavily overcompensated by a loud voice, and is followed by a number of different acts that I think is likely going to change the role that the country had-- that China has-- on a global sphere. Where China, though, still lacks is internally.

Their level of inequality and the increasing discontent around the party is dangerous. We should remember that empire was always defeated from inside, never from outside, right. And so that the level of soaring discontent is quite preoccupying. It's actually worrisome. The second thing, China hasn't yet decided whether they want to step up in a global role, but that would imply opening up.

I think we still have, in the West, the possibility of reshaping the debate on what a society in the 21st century should be all about, and what are the intellectual conditions required for us to build, in terms of what are our tenets. So I don't think that the story is only following China as the only exclusive winner. But thinking this is not happening, it would be very naive of us. Absolutely. Now, do you think that the Western countries in particular are more considerate of data privacy and user data rights, and that is where some of their complications around, say, adapting the technology that China has? China's mining data, right, without much respect for privacy. Do you feel that that is something holding back those Western countries? I think it's holding back, and is preventing, and sometimes preempting, the possibility for ecosystem to be established.

I think that what we should remember is that regardless of how protective we are, the data deluge will continue to happen. So rather than thinking about-- and I'm going to use an analogy I'm using in my classes-- breaking Google down into small Google will not change the problem. It's how do you engage Google in a different economic model where there's a different sense of service to society, right. I think in rethinking the role of technology, and data being a byproduct of that, it will be much more important than trying to decrease the exposure to data.

Because if we're using this incremental or decremental mindset, eventually one day will be outnumbered by the evidence. To allow for the conversation to be more about the purpose-- and if you remember, Jill, when companies like Facebook came to life, their idea was to connect people. I remember in 2004, the founder of Google said, if more people around the world can search online, there will be more opportunity for small vendors, businesses, and all of that. There was a social nature in technology company when they started. The social nature, I think, got diluted into a model that is now much more commercial.

Even, I think, the technology companies, they realize they became too large to not be accountable for so many different things. But will that level of engagement be reframed in the right way? I think this is where the conversation might really go. I'm hoping it will be successful, because we need the technology companies in the ecosystems, but we equally need to understand that protecting privacy should never come at the expense of economic opportunity. Absolutely. Yeah.

I mean, that's a big nut to crack. It's pretty big. My goodness. We have a question that is very specific here.

We're talking about the breakdown, or at least a legislative breakup, of big tech companies, and what would that mean as far as impacts on microeconomies, if you have any thoughts on the impact-- On this comment, right? --you don't see coming down the road? Yeah. So I think the breaking down of the large organization is a very intuitive way to say, hey, Google is too big. Facebook is too big. And I think when we see these guys going to Washington and we realize that the guys in Washington, the guys in the Valley, they simply don't understand each other, of course we get worried. I think the challenge is much more about what defines the economic incentives of the technology company, and I'll try to tell you where I think the problem is, Jill. If I say something which is true, and I'm creating engagement through the public, that generates economic opportunity through advertisement, and that's clear.

But if I say something which is not true, I can equally create engagement and I can generate economic opportunity. So truth or untruth in the social media sphere has the same economic value. So we are so prone to multiple alternative truths, just because we can.

I think technology companies, they don't have to fear the idea that in some cases, truth doesn't have two truth, only one. And how do we make sure that is becoming part of their social engagement? In the same way as, I think, food companies. Now they're much more engaged in keeping us healthier, or healthier than before. There was a time where we were feeling the food company were taking the best out of us.

Today, consumers are demanding food company to be transparent about what they put on our tables. I think the same happened for pharmaceutical companies. The level of scrutiny that they go through before drugs get approved, or a person even get a food license to sell food, is a level of scrutiny that is required to create standard to protect both sides.

But technology company today doesn't have the same standards. So I think the impact on the small community might exist, but I think it is much more about making sure that we are creating standards where technology doesn't become exclusive only to a few, but it's becoming portable within, I think, a level of trust that is coming from within the standard we're generating. So it's more about building up that level of standards, so that they can create economic opportunity also for the micro players, before we even thinking about breaking them down or not. Absolutely. Accessible.

Accessible technology. Shifting a little bit to the global South, do you see any sort of discourse happening relative to the international human rights framework? Is it still something that is in the forefront? Yeah, so that's an interesting question. You know it's interesting that in 2020-21, we are more exclusive and intolerant than ever before. And I think this just tells a lot about the fact that when we grew our economies, and we were becoming modern societies or civilizations, we didn't necessarily grew at the same time the social cohesion. So I would say there's a lot of work for us to be done in closing the gap, where we are able to accept minority diversities, but equally understanding that the integration of people in different side of life is really important because it's the kind of renewal of economic infrastructure we want to have.

So I find the conversation to be not where it should be. I actually, personally, find that the engagement right now is quite underwhelming. But I think we should pay attention to the fact that indicators show, that at least in the last few years, we've been moving backwards in terms of inclusion, and we should try to close that gap.

Because when you're closing that gap, you're not only closing what I think is a normal evolution of any society that want to converge, but you equally creating economic opportunities that currently are not happening because of the level of exclusion. And I think, Jill, it should go into rethinking about infrastructure. We're thinking about public school and funding for public schools, which we have so much work to be done that should break down the caste system no matter where we are. So I think is a relevant question, because I think we haven't been doing too well in the last few years. Do you feel like COVID exacerbated that? Yeah, unfortunately. I think if you take an example of homeschooling, right, and then suddenly you find yourself that your kids has to homeschool.

And if you have the access to the internet, and your home is big enough for that, it's a pain. Because you are rethinking about spaces and dynamics, but you don't necessaril

2021-07-17 16:31

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