Much of the current public discussion at all levels of society is about a perceived ‘crisis’ in domains as different as natural resources, ecosystem services, our economy, our financial system and the security of our societies. That is, of course, true if one looks at each of these through disciplinary or sectorial eyes. But from a holistic perspective we see all these, together, as manifestations of one underlying crisis, notably a temporary incapacity of our society to process all the information needed to deal with the dynamics in which it finds itself. The fact that we do not have the answers to deal with all these issues, whether individually or collectively, is due to a lack of knowledge and understanding about the nature of the challenges and the means to deal with them, as well as a lack of sufficient communication and alignment within our societies to take collective action together.
What has driven our socio-environmental system to this point? In their 2009 Nature paper on ‘Planetary Boundaries’, Rockström et al. argue that the current environmental crisis is the result of anthropogenic activities that have driven, and are still driving the Earth system out of balance. But that paper does not address how anthropogenic activities have also driven the human component of the Earth system out of balance. The most striking imbalance that anthropogenic action has created in the societal domain is the huge difference in wealth between rich and poor. In the security community it has raised the question whether this is a social ‘planetary boundary’, and how close we are to transgressing it.
Before answering that question we need to discern the dynamic behind it, and this involves a few paragraphs of theoretical language. In its most basic formulation, humans process matter, energy and information to live. As individuals, they sustain themselves by processing matter and energy, and to avail themselves of these commodities they process information. As information is not subject to the laws of conservation (but the other two are), it is the only one of the three basic commodities that can be shared among individuals. Shared information processing is what keeps a society together – shared knowledge, shared values, shared customs, shared institutions, shared culture. Sharing enables a group of people to meet challenges that exceed the power of single individuals to solve. It thus makes the members of a group ‘better off’ than they would be on their own, and among societies the one that offers more advantages (‘value’) than others will prosper and grow. Ensuring that a society keeps offering such advantages is the role of innovation.
For most of human history, inventions by individuals were only transformed into innovations at the societal level if (a) there was a need felt for them (a problem that they could help solve) and (b) there were enough free energy and matter (‘wealth’) available to implement them. These two conditions severely limited the innovative capacity of ancient societies, and thus the steepness of the value gradient between them and the outside world. We could summarize this by stating that for most of human history innovation was ‘demand-driven’ and ‘energy-constrained’. The pace of societal change was limited by these two factors, and so was the value differential between the society’s ‘insiders’ and ‘outsiders’
But this changed fundamentally from around 1800 with the introduction of ways to massively use fossil energy and the ‘industrial revolution’ it enabled. That change is a fundamental factor in understanding the current sustainability predicament. As the energy constraint was relaxed, the last two centuries have seen a shift from ‘demand-driven’ to ‘supply-driven’ innovation, in which information processing has replaced energy as the main constraint and marketing has enabled innovators to create demand for their products. This has fostered the emergence of education as a fundamental societal need, caused the exponential growth of (and our dependency on) the fossil energy industry, and ultimately the current globalization driven by multinationals and trade. But it has also hugely increased the value and wealth differential between the core and the periphery of the system, and thereby reduced the chances that outsiders become insiders, leading to the perception that the wealth discrepancy may well be the fundamental societal ‘planetary boundary’.
Over time, the dominance of the information constraint has led to the fact that, presently, information, wealth and power are concentrated in a very small elite worldwide. This is due to the fact that those with the most information at hand, and thus the greatest information-processing capacity, have an advantage over others in controlling the trajectory of society, and thus also in extracting energy and matter fro0m the whole system, accumulating wealth. It thus explains much of the (growing) current imbalance between rich and poor in the world, as well as the environmental problems that we are actually facing, which has come to the point that it seems more and more difficult to maintain this extractive system in a stable state.
As wealth differentials reflect differences in information-processing capacity, they are therefore likely to be hugely affected by the information revolution, which is in the process of leveling the information-processing capacity differential. Rather than accumulation, spreading of information is likely to become the main driver of the economy, and the tool to create wealth. This will favor an inversion from the current, predominantly extraction-to-waste economy (in terms of raw materials, but also human capital) that has reached its limits, into an economy of opportunity creation and spreading wealth. Only by increasing the value, education and wealth of the underprivileged can our societies continue to enjoy the high standard of living they currently have.
Currently, we observe two seemingly contradictory trends – a leveling off of wealth disparities between nations, as the BRICS countries become wealthier, and at the same time a steepening of the wealth disparities within countries. This is the statistical effect of the rich becoming richer in the developing countries, while within these, as well as in the developed countries, the contrast between rich and poor becomes starker. The ‘opportunity economy’ needs to, and will, tackle that growing disparity by spreading information and thus reducing the steepness of the information gradient, and the wealth gradient with it.
We can distinguish two main kinds of processes that work in this direction. The first enable the development of local knowledge, or the expansion of local wealth creation, whereas the second aim for direct information transfer from the developed to the developing world.
Examples of the first abound, and have been spreading for fifty years under the impact of NGO’s that quickly saw that providing local populations in poor countries with western knowledge or infrastructure often did not have as immediate an effect as helping local populations use their existing talents. Developing the local recycling economies of the developing world is a good example. These use materials such as empty oil drums and crates, used tires and the like to create pipelines, furniture and baskets. They are a fundamental part of the local economy, providing jobs, spreading or accumulating knowledge, and reducing waste. Giving them access to world markets has been one way to promote them, as in the case of the South African production of decorative baskets from telephone wire. But another way to promote them has been the spread of microcredit to provide for the initial investments needed for such enterprises to emerge. This has been so successful that more recently it has spread to poor areas in the developed world, such as parts of New York City.
Examples of the second are the facilitation of distant access to information from many different sources that was initiated by the search engines (Yahoo, Google, etc.), and then led to the development of specialized online encyclopedias such as Wikipedia that not only assemble but also synthesize information. It is now entering a different stage with the emergence of the Massive Open Online Courses (MOOCs) driven by major universities such as MIT and Stanford. These enable anyone to study free of charge anywhere in the world. They are currently experimental, but likely to spread if ways are found to return to the educating institution a small percentage of the proceeds ultimately generated by the people thus educated. They are part of the ‘online revolution’, which in the next thirty years will fundamentally transform the worldwide education landscape at all levels.
In addition, there are many e-based tools that, even though they do not deliberately aim to educate, have very important educational components. These range from blogs to social networks to games that promote certain learning skills. In this domain, we may expect many more innovations that contribute to the transformation of the information-processing landscape.
We conclude that we have to take the hypothesis seriously that one of the main impacts of the information revolution will be a redistribution of knowledge and information-processing capacity that will fundamentally undermine the current structure of our societies, businesses and governments because information can no longer be kept from spreading.
In our vision that will inevitably end the very regime of wealth inequality that is about to lead to major social disruptions due to the fact that the extraction of resources (including natural resources, wealth and labor) from the periphery around the core of society which currently controls the information processing system has gone to the point that such extraction is more and more costly and damaging. From an energy perspective, the concentration has come to the point, for example, that whereas individuals need about 100 watts to comfortably survive, in the US, the per capita energy consumption is about 11,000 watts. At the same time the RoI for energy has gone from the neighborhood of 100 to around 10. For many other natural resources, the same is happening (though maybe less drastically). For extraction of human capital there are no such clear figures, but the lack of trust in the current governance system in many parts of the world and the wealth imbalance that has grown over the last few centuries point in the same direction. This has, for example, been noted by the security establishments of the US and UK, for example. In public reports, they predict that many social systems in the developing world have been so fragilized by this process, that their survival will seriously be endangered by the consequences of climate change.
If we are to avoid such a major and uncontrolled restructuration of our current societies, the question in front of us is thus: How do we play into these insights in a way that contributes to also reduce the environmental impact that our societies currently have? The core of the answer is in our opinion a long-term policy of stimulating and harnessing demand. But rather than do so by heavy advertising directed at the same populations that businesses have for so long depended on, they have to identify new pools of demand, so that we can once again grow the economy based on demand-driven innovation.
Identifying that demand begins, of course, close to home, in our western societies, by identifying existing pools of demand that have thus far been ignored, such as in the New America Foundation’s effort to develop new demand in construction and agriculture in the US by restructuring the economy around construction in existing urban cores of housing and offices that are low-energy (including refitting), and promoting novel strategies to increase sustainable agriculture in the Midwest.
In the developed societies, much larger (and more durable) pools of demand can be generated by improving the education of the general population, as has been done in, for example, Finland and other Scandinavian countries. Education is good for business, and business would do well to heed that and invest in it – whether directly or indirectly (through taxation and government spending). Better-educated people are more likely to be upwardly mobile, to gain more and thus to generate more demand, and they are also more likely to stimulate invention and innovation, thus enhancing the total value space of the societies involved. They stimulate the economy on the supply as well as the demand side. In due time, this will close the income gap and strengthen the middle classes, thus reducing the risk of fracture in our societies.
Hence, western business should not leave the education and development of the middle classes in Africa and elsewhere to others, such as China and India. There are huge markets to be conquered once the goal is long-term rather than short term, and the strategy is not to ‘westernize’ and stimulate the consumption of western goods and the creation of western-style infrastructure, but the discovery and encouragement of ways in which the populations involved can develop their own kinds of culture, society and – ultimately – demand. Collaboration between governments (both western and local), NGO’s and businesses is essential to achieve this. NGO’s in particular have developed a wide and deep knowledge of the other cultures in which they are active, and can point the way.
Education is clearly not the only way forward. Improving access to the basic commodities necessary for a healthy life will increase life expectancy, and thus contribute in its own way to creating new demand, both in our own societies and elsewhere. Investment in freshwater access, locally generated energy, access to healthcare, improved transportation and communication all increase not only life expectancy, but also economic activity, interaction, information processing and innovation in all parts of the world. Much is being done in this respect, again mostly in collaborations between governments, foundations and NGOs, but business should come to see more widely that it is in its own long-term advantage to upscale and spread these efforts by investing in them. In particular, there seems to be a growing disinterest in doing this in the health and education areas in some western countries, where this is in principle the easiest to achieve. There again, business can and should make important investments.
In first instance, such efforts would reduce infant mortality, and thus create a wave of young, energetic people aiming to enter the labor market in many places where the jobs are not available to cater to them. Investment in job creation – by fostering small and medium sized businesses and creating a legal and institutional climate in which business activity is regulated and protected are thus other tasks that need urgently to be undertaken and invested in. Large international companies could for example take a number of small and medium-sized companies in developing countries under their wing, develop collaborations, and ultimately profit from their growth (driven by local markets). Governments could use their experience to invest in designing and creating the legal and institutional frameworks necessary. In particular this might concern a revision of intellectual property rights, in view of the fact that communication is becoming so pervasive that the current legal frameworks are obsolete.
All this is predicated on two major assumptions. Firstly, that we can change the way in which we innovate. Since the industrial revolution, our western societies have essentially, and increasingly, innovated in every which way there was immediate profit to be gained. Business is now engaged in a race for the invention of more and more material goods at a rhythm never reached, and this speed find its parallel in the short-termism of the financialized economy. This has led to a situation in which society clamors for innovation to lead us out of the current sustainability predicament (greenhouse gases, ocean acidification, waste and other problems), while forgetting that two centuries of indiscriminate innovation have brought us to this point. Western science, because of its reductionist tendencies, has not been able to study the process of innovation scientifically, which of course concerns the emergence of novelties. It has therefore conceived of invention as a ‘black box’ (‘creativity’), and concerned itself mostly with the conditions under which it happens, and its results. But from a complex adaptive systems perspective, it seems that we might now get a better idea of how inventions emerge, and how they are introduced into society so that they innovate. Business has much more experience with that process, and it would be in business’ direct long-term self-interest to use that experience to focus on directing invention and innovation towards domains that combine generating new demand with a reduction in resources needed and waste produced. This may well include an important component of re-purposing of existing technologies and processes.
The other major condition sine qua non for an approach like this to be successful is finding and harnessing the important, long-term, funding stream needed. Currently, the vast majority of wealth is invested in, and draws its profits from, short-term financial speculation rather than investment in production for any market. Taking a proportion of that wealth and investing it for the long term in the domains mentioned above is a necessity if we want to make the transition towards an ‘opportunity economy’ of the kind proposed here. This will require a joint effort of government, business and visionary elements of the financial world to build a different, stable long-term socio-economic structure that engenders widespread trust. Until that has been achieved, the temptation to invest in short-term speculative values will persist.