DAVOS/SWITZERLAND, 19JAN16 - View of Davos, the Alpine city where the Annual Meeting 2016 of the World Economic Forum ist taking place January 19, 2016.
WORLD ECONOMIC FORUM/swiss-image.ch/Photo Michele Limina
January 22, 2018
According to most predictions at the end of the 20th century, economic interdependence and liberal democratic institutions should have spurred long-lasting global peace. However, the opening of broad geopolitical fissures in the 21st century have disproved the synonymy between economic prosperity and social cohesion. National, regional, and global divides have driven the creation of confliction political strategic narratives. Economic policies aim to capture the singular benefits of global integration and avoid its shared obligations. Social fissures are two-fold. First, a shared identity and collective purpose has not been established despite increased capacity to communicate. Second, the contract between society and the government continues to erode in many countries.
Simultaneously, the global economy stands on the brink of the Fourth Industrial Revolution. Built on the back of the digital advancements of the Third Industrial Revolution, this technological wave is characterized by exponential innovations that blur the lines between the physical, digital, and biological spheres. The Fourth Industrial Revolution has the potential to significantly raise global incomes, revolutionize business models, and increase the efficacy of governments; however, it also has the potential to greatly increase inequality.
It is behind this backdrop that over 1,000 of the world’s top thought leaders gather at the annual World Economic Meeting in Davos this January, to deliberate on the following megatrends shaping our shared future.
The Fourth Industrial Revolution will place the consumer at the epicenter of the economy. And by giving the consumer unprecedented access to processing power and knowledge will have a profound effect on her/his expectations. In order to fulfill new consumer expectations data-based services and consumer analytics will become increasingly important, requiring extensive collaboration among suppliers. Overall, the Future of Consumption System Initiative aims to find creative ways to navigate the changing consumer landscape in order to create a future in which its benefits are inclusive. Specifically, it will confront four challenges of the Fourth Industrial Revolution: managing demographics shifts in tandem with rising inequality, meeting consumer demand for convenience, instant gratification, personalization, and experience over product, managing the introduction of artificial intelligence in the market, and addressing societal challenges to create inclusive change and environmentally friendly solutions.
Digital Economy and Society
This system initiative will focus on how public-private collaboration can be used to fully harness the Fourth Industrial Revolution’s potential benefits. Because digitization and Internet connectivity are the driving force of the Fourth Industrial Revolution, the initiative aims to create shared, safe global digital networks that encourage organizations to take action to create stable economies and societies. Specifically, the forum will focus on the issues of the impact of the digital economy in global growth—the increasing gaps in affordability and accessibility to digital tools; the growing impact of cyber threats; the rules around data usage; the digital transformation of industries; and internet governance.
According to WEF, rising income inequality is the cause of both low consumption and social and political unrest. Growth and equality go hand in hand. The future of economic progress system initiative aims to drive growth in way that promotes equality by enhancing understanding of competitiveness and inclusive growth, and informing multistakeholder action on these issues; facilitating public-private collaboration to improve the competitiveness and inclusive growth performance of particular economies and regions; supporting the broad diffusion and adoption of corporate social innovation practices in the private sector; and, raising awareness of how people experience and are affected by challenges pertaining to economic growth and social inclusion, and invoking stakeholder participation.
Education, Gender, and Work
Exponential technological change driven by the Fourth Industrial Revolution may expand skills, education, and gender gaps in the economy. In order to ensure that benefits from the Fourth Industrial Revolution are inclusive, old education systems must be rethought and new forms of public-private collaboration must be created. To this end, the future of education, gender, and work system initiative focuses on three bodies of work: education and skills, work and employment, and gender parity. Within the education and skills portfolio collective dialogues explore the best methods to reshape education systems and define the core features of a future-ready education system. The work and employment project aims to contribute to the understanding of what skills will best fit the changing nature of work and determine new policy options. Finally, the gender parity workshop aims to devise mechanisms to close existing gender gaps.
Energy is the lifeblood of economic development; however, it also contributes two-thirds of greenhouse gas emissions. Currently, a blend of innovation and major changes in consumer demand and policy drives significant change in existing energy systems. The future of energy system initiative aims to accelerate this change using public-private collaboration. The system initiative has four principle priorities: to identify energy transition outcomes, enable the means to reach these outcomes, contribute to the development of new policies, market systems, and technology that can deliver these means, and understand the human impact of the energy transition.
Financial and Monetary Systems
To ensure steady economic growth a healthy and secure, interconnected global financial system must exist. However, as the Great Recession demonstrated, an interconnected global financial system can also bring economic growth to a screeching halt. In order to rebuild public trust and develop new policies and regulations that may harness the Fourth Industrial Revolution the future of financial and monetary systems system initiative aims to create a more efficient, resilient, and equitable international system. It will focus primarily on analyzing how financial stability can be ensured during the next industry transformation, promoting an inclusive financial system, and understand how the changing role of financial institutions and regulations creates uncertainty and risk in the economy.
Food Security and Agriculture
The Fourth Industrial Revolution will drive the global population to 9.8 billion by 2050, demanding 70% more food. The current global food system in not equipped to feed 9.8 billion people in a way that is both nutritious and sustainable. The future of food security and agriculture system initiative will pursue a leadership-drive, market-based action to reform the current global food system. Specifically, the system initiative aims to develop methods to strengthen global food systems by innovating current technology and policy and increase multistakeholder collaboration at the country and regional level.
Health and Healthcare
Just as the global food system must be reformed to support the expanding population, so must the global healthcare system. Technological advancements driven by the Fourth Industrial Revolution are transforming care; however, steps must be taken to ensure that their benefits are inclusive. The future of health and healthcare system initiative will create an advisory board to focus on six principle areas: regulatory, societal and business models’ innovations conditions to advance precision medicine; strategies to influence behaviors in health and healthcare; from micro-level initiatives to macro-level policy-making; dealing effectively with non-communicable diseases; the rising global burden of mental health; and, designing global response mechanisms to pandemics.
Information and Entertainment
In a technology-driven world a sustainable, reliable flow of information is a powerful tool that benefits both individual stakeholders and governmental organizations. Private-public collaboration in this sphere may spur new policies that allow new technology to drive business growth while protecting the interests of citizens. The future of information and entertainment system initiative will lead dialogues to enable an economically viable, accountable, and transparent flow of content that may both educate and empower stakeholders. These dialogues will focus on “day after tomorrow” thinking, namely ideas and policies that may revolutionize the system in the future.
International Trade and Investment
Growing inequality between the winners and losers of international commerce, rapidly changing geopolitics, and shifting societal expectations have created both risks and opportunities for citizens, businesses, and governments. Private-public collaboration must be used to transform new policies, practices, and norms, to ensure that international trade and commerce remain both stable and inclusive in the future. The future of international trade and commerce will provide thought leadership to policy-forums such as the G20 and Asia Pacific Economic Forum (APEC). The system initiative aims to drive policy reform and take practical steps toward modernizing the international trade system, establishing inclusive norms, and securing multilateral agreement on best practices for digital trade. Past iterations of this system initiative have helped form the Global Alliance for Trade Facilitation and the E15Initiative.
Current transportation systems cannot meet the growing demand without increasing both congestion and pollution. Without reliable and efficient transportation employment, education, healthcare, and trade are not inclusively available to all citizens, which dampens economic growth. Technological innovation spurred by the Fourth Industrial Revolution may offer opportunities to improve the system such as autonomous vehicles, biometrics, and ultralight materials. However, public-private collaboration is needed to take practical steps toward substantive solutions and ensure that innovations are safe, clean, and inclusive. The system initiative on the future of mobility aims to shape mobility to be safe and secure, clean and sustainable, and inclusive and efficient.
The Fourth Industrial Revolution will be characterized by the converging breakthroughs in technology. New generations of mobile connectivity, artificial intelligence, robotics, 3D printing and more will fundamentally transform the speed and scope of manufacturing. The future of production system initiative aims to guide these transformations to ensure that new manufacturing systems are innovative, sustainable, and are sourced in a way that benefits all parties involved. The system initiative will create dialogues to explore how the Fourth Industrial Revolution will affect value chains, the future of jobs in manufacturing, environmental sustainability, possible policy options, as well as how each of the other system initiatives may fit into the context of production.
Photo Credit: World Economic Forum/swiss-image.ch/Photo Michele Limina.
But it’s difficult to think about value when we have no buoy for understanding it outside our traditional lenses: for example, our time, our job, and what others tell us they are worth in cash. This, largely, is the world’s paradigm for value so far. But understanding what value really means changes everything—and will be at the center of the decentralized revolution in global coordination that will unfold over the next decade. So, where do we begin?
Let’s start with gold.
Gold is an inherent value. When backing a market, gold allows us to grow a balanced economy well into the trillions. But why does it allow for massive stable markets to form around it? It is gold's permanence that creates stability. We understand that gold will always have value, because it is inherent in all of us, not just in one part of the world, but everywhere, not just today, but tomorrow and for the long haul.
In the 1930s when the gold standard was removed, we learned that the U.S. dollar didn’t need gold to back its economy to flourish. We learned that it was just a symbol for U.S. citizens to decentralize their coordination around the United States economy.
It turns out, common agreement is a philosophy for building shared economy.
And so it seems inherent value is a marker for us to begin exploring what the future could look like—a future beyond gold and the existing realm of credit. And so what else has inherent value? Is education as valuable as gold? What about healthcare? What about a vote that can’t be tampered with? What about an ID that can’t be stolen or erased? What about access to nutrition or clean water? You will find value everywhere you look.
It turns out, we’ve already done the legwork necessary to uncover the most elemental inherent values: The Sustainable Development Goals are commitments grown out of the drive to bring to life basic tenets of the Universal Declaration of Human Rights—the closest possible social contract we have to a global, common agreement.
We’ve already agreed, as a global community, to ensure inclusive and equitable access to quality education. We’ve already agreed to empower all women and girls, to ensure pure and clean water access for all, to promote health at all stages of life, and to end hunger.
We’ve already agreed.
Our agreements are grounded in deep value centers that are globally shared, but undervalued and unfulfilled. The reason for this is our inability to quantify intangible value. All of these rich, inherent values are still nebulous and fragmented in implementation—largely existing as ideals and blueprints for deep, globally shared common agreement. That is, we all agree education, health, and equality have value, but we lack common units for understanding who and who is not contributing value—leaving us to fumble in our own, uncoordinated siloes as we chase the phantoms of impact. In essence, we lack common currencies for our common agreements.
Now we find ourselves at the nexus of the real paradigm of Blockchain, allowing us to fuse economics with inherent value by proving the participation of some great human effort, then quantifying the impact of that effort in unforgeable and decentralized ledgers. It allows us to build economic models for tomorrow, that create wholly new markets and economies for and around each of the richest of human endeavors.
In late 2017 at the height of the Bitcoin bubble, without individual coordination, planning, or the help of institutions, almost $1 trillion was infused into blockchain markets. This is remarkable, and the revolution has only just begun. When you realize that Blockchain is in a similar stage of development as the internet pre-AOL, you will see a glimpse of the global transformation to come.
Only twice in the information age have we had such a paradigm shift in global infrastructure reform—the computer and the internet. While the computer taught us how to store and process data, the Internet built off that ability and furthered the conversation by teaching us how to transfer that information. Blockchain takes another massive step forward—it builds off the internet, adding to the story of information storage and transfer—but, it teaches us a new, priceless and not yet understood skill: how to transfer value.
This third wave kicked off with a rough start—as happens with the birth of new technologies and their corresponding liberties. Blockchain has, thus far, been totally unregulated. Many, doubtless, have taken advantage. A young child, stretching their arms for the first couple times might knock over a cookie jar or two. Eventually, however, they learn to use their faculties—for evil or for good. As such, while it’s wise to be skeptical at this phase in blockchain’s evolution, it’s important not to be blind to its remarkable implications in a post-regulated world, so that we may wield its faculties like a surgeon’s scalpel—not for evil or snake-oil sales, but for the creation of more good, for the flourishing of commonwealth.
But what of the volatility in blockchain markets? People agree Bitcoin has value, but they don’t understand why they are in agreement, and so cryptomarkets fluctuate violently. Stable blockchain economies will require new symbolic gold standards that clearly articulate why someone would agree to support each market, to anchor common agreement with stability. The more globally shared these new value standards, the better.
Is education more valuable than gold? What about healthcare or nutrition or clean water?
We set out in 2018 to prove a hypothesis—we believe that if you back a cryptocurrency economy with a globally agreed upon inherent value like education, you can solve for volatility and stabilize a mature long lasting cryptomarket that awards everyone who adds value to that market in a decentralized way without the friction of individual partnerships.
What if education was a new gold standard?
And what if this new Learning Economy had protocols to award everyone who is helping to steward the growth of global education?
Education is a mountain. Everyone takes a different path to the top. Blockchain allows us to measure all of those unique learning pathways, online and in classrooms, into immutable blockchain Learning Ledgers.
By quantifying the true value of education, a whole economy can be built around it to pay students to learn, educators to create substantive courses, and stewards to help the Learning Economy grow. It was designed to provide a decentralized way for everyone adding value to global education to coordinate around the commonwealth without the friction of individual partnerships. Imagine the same for healthcare, nutrition, and our environment?
Imagine a world where we can pay refugees to learn languages as they find themselves in foreign lands, a world where we can pay those laid off by the tide of automation to retrain themselves for the new economy, a world where we can pay the next generation to prepare themselves for the unsolved problems of tomorrow.
Imagine new commonwealth economies that alleviate the global burdens of poverty, disease, hunger, inequality, ignorance, toxic water, and joblessness. Commonwealths that orbit inherent values, upheld by immutable blockchain protocols that reward anyone in the ecosystem stewarding the economy—whether that means feeding the hungry, providing aid for the global poor, delivering mosquito nets in malaria-ridden areas, or developing transformative technologies that can provide a Harvard-class education to anyone in the world willing to learn.
These worlds are not out of reach—we are only now opening our eyes to the horizons of blockchain, decentralized coordination, and new gold standards. Even though coordination is the last of the seventeen sustainable development goals, when solved, its tide will lift for the rest—a much-needed rocket fuel for global prosperity.
“Let us raise a standard to which the wise and the honest can repair.”—George Washington