The Great Restructuring Begins

The UK is the first global economy staring into the face of the 21st Century Great Restructuring. This restructuring both in terms of speed and size will need to be of a magnitude unwitnessed by a major global economy in modern history ( including, I would suggest, China) – in terms of necessary speed of reconfiguration.

Yet much of the public discourse seems stuck on the pretence that the future will be a little bit less of, more of the same – focused on saying the same all things: from Housing Shortage to Tech Start-ups. The solutions to this foundational transition cannot be reduced to just this – I would argue that both are mere figs leafs in the scale of the transition we are facing.

Brexit, Trump and the rise of the far right and wider structural discontent are not baselined against a previous “better world” but the world we have promised each other and the social contract we supposedly operated under – equality, justice, and freedom.

Increasingly, these fundamentals or perhaps their illusion has been visibly undermined – by growing and visible inequality (be it gender pay inequality or concentration of wealth); growing visible injustices (from British MPs expenses scandal to the 2008 financial crisis); to widespread economic precariousness (where work is no longer a route out of poverty).

In this context, Brexit correlates (whether it is causation is up for discussion) with other major shocks and transitions in our economy – either currently apparent or near horizon visible.

1. Rise of the Post Managerial Society

We are witnessing massive technological, organisational disruption of our economy and workplace. Already we know a major European Bank looking to downsize from 50,000 to 800 employees, along with new organisations like Burtzoorg (a neighbourhood care organisation) being born – which have 10,000 nurses and only 50 people in HQ.

These are early signals for how the rise of Platform, Automation and Ai economies are driving the demise of the administrative HQ and the birth of the post managerial economy. They are refocusing the added value of human contribution to our economy and society, and fundamentally disrupting the rise of the managerial city over the last 30 years and the value of labour.

2. Rising Monopoly Network Economy

We are witnessing a massive transition in Value Creation from the means of production to the means of Market Production and Curation.

Take for example Uber – here the taxi driver is a bare transitionary commodity and interchangeable. The real value creation instrument is Uber which creates, curates the market – this process now extends from Retail – Amazon – to Manufacturing, AliBaba. This reality signals a great transfer of value creation from the relatively distributed means of production to the massively globally centralised & privatised means of market making & marker curation. The implications of this are massive for inequality and scaling of precarious citizenship.

3. Growing impacts of Climate change

Cities are the epicentre of this transition – seeing the direct impacts from the costs of food, climate extremes, and public health impacts, to the major drivers of carbon consumption: from food, construction to logistics and travel.

Over the course of the next 10 years, we are likely to see the simultaneous need to mitigate and manage impacts along with structural need to reduce carbon production and consumption of an order as yet un-envisaged. How will we democratise this transition, how will be use this transition to create new lead markets and new behaviours (the rising tide of veganism etc)?

4. Rise of the rentier land economy

As our economy shifts from being built on tangible assets to intangibles (as well articulated by Stian Westlake and his co-author), land is an increasingly powerful tool in harvesting the value created (largely due to the nature of the intangible assets and how they create value).

The correlation between the dramatic increase in the value of land (in the UK) and its transition towards an intangibles economy is significant and has, you could argue, massively facilitated the capture and concentration of new value by a very old and concentrated class of wealth – subverting the near “natural” democratization of new value creation and thereby accelerating the concentration of inequality and driving the economic precariousness we witness around us.

5. Deep Re-skilling Society

The technological disruption is challenging the fundamental skills of society, but what is being disrupted is not the plumber or craftsmen but the middle classes – the management, administrative and intermediary skills. “Uber did not disrupt the taxi driver – it started by disrupting the cab office”. This heralds a fundamental disruption in human contribution to the future economy and needs us to reimagine our human development institutions and conditions for human development from neighbourhoods and nurseries to adult education institutions – to focus on AQ, EQ, capacity to learn and unlearn, craft behaviours, creativity, care, complex collaborative skills, human machine integrated agency.

6. Molecular Violence & Future of Human Rights

We are witnessing a shift in our understanding of being human and a new comprehension of violence – where we understand the impact of air pollution as molecular violence with systemic effects on the health of humans; where emotional violence and racism can we correlated with literally taking years off people’s lives through persistent raised levels of cortisone; and where poverty reduces IQ by 13 points and its effects transmit biologically across generations. How will cities deal with the 21st Civic Rights movements and a growing sense and realisation of systemic molecular injustice & inequality? How will we advance a second generation of human rights and welfare to address these structural inequalities, focused on unleashing the full capacity of all citizens?

7. Shift in how we govern and regulate

Technology has not only disrupted how we operate and work but also broken and bypassed how, what and who we govern.

Our Governance model is broken, we live in a ‘systemocracy’ – a world of massive inter-dependency yet we are holding on to 19th century versions of governance. This creates the illusion of sovereignty & supremacy – acting as a denial of the complexity we must confront. We need a new governance model which acknowledges our global inter-dependence at all scales & focuses on the quality, diversity and integrity of feedback in all its natures, whilst recognising the future is real-time and negotiatory. For us to move forward structurally, we need massive reform of our model of governance – reinventing it for the 21st century.

Traditional regulatory bodies and accountability mechanisms may not be well suited to managing the emerging tensions between industry and society in a digital age. The challenge of propagating innovation while also protecting public goods, and detecting new public harms, is not yet solved. In a world where platforms and tech services cut across national borders, products & services evolve rapidly and continuously, and consumer technologies diffuse at incredible speed with large risks of unintended consequences – the pace of analogue regulatory design is unable to keep pace.

We need to support & drive governance innovation – experimenting with algorithmic policy; imagining new processes for legibility, legitimacy for Algorithmic Policy & Compliance; build the public infrastructure and protocols for this future etc; but not as a means to control but accelerate distributed, decentralized, democratised innovation for the civic good and accountability.

Transition Pathways

This transition cannot be driven by just start-ups alone – we need a whole system shift. We need to create and recreate lead markets. We need to shift, transition and redesign existing markets and systems themselves. Traditional economic development strategies will no longer work focused on place marketing, skills fulfilment, 19th century infrastructure and start-ups – these strategies were fit for accelerating a more of same world but are not fit for purpose in a new future.

We need to reimagine our learning & development infrastructure to support not innovation by the few but innovation for and by all; remake our means for investing and structuring intangible assets; drive an inclusive & open automation of our economy; prepare a transitory welfare state so we do not leave a whole communities of people behind; redesign our process, practices and institutions for governance & regulation and perhaps most critically reimagine the city in this future and start preparing the new necessary built environment for this future.

This transition due to both its complexity and need for an integrated contextual response will not be led by nation states but cities and regions.

Cities & Region will need full transition plans and strategies, new means of organising focused and new model of systems financing – which embrace a full systems view and embrace it urgently.

Tinkering and marketing just won’t do – sorry. Britain will most certainly be forced to face this transition first – this is a curse and opportunity to way-find the next economy and society. Whether we are successful or not, either way at the end of this journey our cities and regions will have been fundamentally altered and the era of great consumer, Managerial city will be over and a new era will have begun.