Written by Econintersect Guest
Technological Disruption and its linkages to history: We are truly approaching the fastest, deepest, and most consequential technological disruption in history.
— this post authored by Trishna Patnaik
In the next 10 years, all the key technologies will converge to completely disrupt the five foundational sectors such as information, energy, food, transportation, and materials that will underpin our global economy to a certain extent. We need to make sure the disruption benefits everyone. Suppose we told you that solutions to the world’s most intractable problems, like poverty, climate change, and inequality are solvable in the next decade You would probably say it’s impossible, preposterous, and totally unthinkable. We’ve also heard that about our predictions too. But now we have been totally proven right.
We are completely predicting the fastest, deepest, most consequential technological disruption in history and with it, a moment of civilization has never encountered before. In the next 10 years, key technologies will converge to completely disrupt the five foundational sectors such as information, energy, food, transportation, and materials that do underpin our global economy, and with them every major industry that is present in the world today. Costs will also fall by 10 times or more, while production processes will become an order of magnitude (10x) more efficient, using 90% fewer natural resources and producing 10 times to 100 times less of waste.
It is these technological disruptions that are turning towards the prevailing extraction and exploitation, scarcity and central control model of production on its head, driving a new model of localized creation from limitless, ubiquitous building blocks that a world built not on coal, oil, steel, livestock, and concrete, but on photons, electrons, DNA, molecules and (q)bits.
This implies that we need no technological breakthroughs. Solar and wind are now the cheapest energy sources for the majority of the planet; Uber and Lyft made us rethink transportation as a service. Impossible Foods and others are disrupting conventional agriculture.
Humanity is now at a very crossroads. This is hardcore understanding.
While we have the potential to capture the extraordinary societal benefits that these technologies unlock, our ability to do so depends on an unprecedented transformation of society. Our models of thought, belief systems; political, social, and economic systems (together with our organizing system) are industrial-era relics, they co-evolved with and are optimized for the industries of yesterday.
As these disruptions do accelerate, leaders are increasingly unable to understand, manage, and organize our world. That is why we are witnessing social injustice and unrest, environmental destruction, and a global pandemic wreak havoc on society. And it is just the start. It is the beginning of the end. Let us look at a detailed action plan for investors, policymakers, and corporate leaders to embrace the new creation-based production system and solve our most daunting global challenges in the process. Here are a few steps for both the public and private sector leaders to keep in mind.
The first step is to recognize the speed, magnitude, and nonlinear nature of the disruption ahead, and accelerate the rollout, infrastructure, and value chains of the new production system. We must resist the urge to protect incumbent, legacy industries, which will result in the lock-in of the uncompetitive systems, stranded assets, and trillions of dollars of losses.
Instead, we need to focus on protecting people and maintaining social stability while strategically winding down the old extraction model of production (i.e. fossil fuels and industrial agriculture). While we are at it, governments should exit the energy business; they should not own electric power generation, transmission, pipelines, and mines.
Governments must focus on accelerating the rollout of new infrastructure and value chains in the five foundational sectors:
- Information: 5G, broadband, small satellite networks, unmanned aerial vehicles
- Energy: Solar, wind, batteries
- Transport: Batteries, fleet-charging networks, support for AVs, and integration and conversion of rail and public transit with Transportation as a Service (TaaS)
- Food: Distributed, localized, precision fermentation production hubs
- Materials: Building production capacity for proteins and organic materials through precision fermentation
Information is at the centre of each disruption: consumer data on energy use, transport, personalized nutrition, and healthcare, for example, does have value. Ensuring individual ownership and then controlling of private data will provide economic benefits to consumers that are currently being extracted by the third parties. It is recommended treating user data like intellectual property (IP) that individuals would own all personal data and have the right to license it to anyone on their own terms.
That is, “legal agreements,” whereby companies like Facebook, Google, and Amazon, compel users to give up rights to their data in exchange for access to apps, must be illegal. The coming disruption has profound implications for investments and even asset management as well.
Pensions and savings must be protected from stranded assets and must instead be used to build out the new system. We need to create new asset classes to allow individuals to invest directly in small cash-generating projects such as the local community solar, battery power plants, transportation-as-a-service vehicles, and also the precision fermentation hubs.
The fixed return profile of these investments will closely match the total liability profile of pension schemes (much more than the traditional pension portfolios) and are a good proxy for the ultimate needs for which pensions are designed to meet (such as food, housing, energy, and transportation). Changing rules to help drive pension assets and savings toward these technologies and projects would provide the critical stepping stone to distributed, participatory ownership (or a new social contract based on a “right” to energy and other needs). As information networks do take over an increasing share of economic activity, driven by the powerful network effects, our ownership models will need to change in order to prevent inequality on an unprecedented scale.
This brings us to the fact that adapting metrics and taxation to fit the new system is critical. For example, move transportation taxes and fees to a cents-per-mile basis to replace gasoline tax and annual vehicle fees. Keep gasoline taxes for internal combustion engine vehicles as the industry winds down. Treat electrons as we do information: individuals should have the right to generate, store, and sell electricity. Do not tax solar self-generation or energy storage, only tax sales to the grid or third parties.
Aligned with this, do adapt subsidies to fit the new system and stop subsidies and regulatory support to legacy sectors. For transportation, consider a zero-emission-miles (ZEM) not zero-emissions-vehicle (ZEV) incentive. Incentives for purchasing vehicles (ZEV) do encourage the inefficient use of more vehicles that impose up to 10x more costs on society through inefficient resource utilization and externalizing costs (e.g. materials, traffic, and parking space needs).
At the core of this very decision making, it is protecting people, not businesses. Allow unviable incumbent businesses to go bankrupt, but protect people through policies to retrain, provide financial and healthcare support, and access towards social capital through the transition. This is a clarion call to leaders across society be it public and private to see what is really happening, to understand the implications, and to rethink the way we all do business, invest and organize society.
About the Author
Trishna Patnaik, a BSc (in Life Sciences) and MBA (in Marketing) by qualification but an artist by choice. A self-taught artist based in Mumbai, Trishna has been practising art for over 14 years. After she had a professional stint in various reputed corporates, she realised that she wanted to do something more meaningful. She found her true calling in her passion that is painting. Trishna is now a full-time professional painter pursuing her passion to create and explore to the fullest. She says, “It’s a road less traveled but a journey that I look forward to every day.” Trishna also conducts painting workshops across Mumbai and other metropolitan cities of India.
Trishna is an art therapist and healer. She works with clients on a one on one basis in Mumbai.
Trishna fancies the art of creative writing and is dappling her hands in that too, to soak in the experience and have an engagement with readers, wanderers, and thinkers.
