More than a Financial Problem - A Global Crisis of Maturity

More than a Financial Problem - A Global Crisis of Maturity

Posted in Other | 07-Jan-09 | Author: William E. Halal

"There is no choice except to meet these challenges"

The constant drumbeat of cascading business failures is certainly daunting, but the truly frightening thing is that the financial meltdown is part of a larger “global crisis of maturity” – energy shortages, climate change, weapons of mass destruction, terrorism, and other yet unforeseen threats that are straining old systems to the breaking point. These are all interrelated elements of a failing global order that increasingly looks like a train wreck in slow motion. If not sub-prime mortgages, some other flaw in today’s aging economic system would likely have caused roughly the same failures. Just as the collapse of Communism resulted from an over-controlled planned economy, today’s “collapse of Capitalism” is the result of an under-controlled market economy.

The challenge facing Americans – and the world as a whole – is to understand this historic transition in order to find our way through it as best as possible. Trillions of dollars are being poured into reviving economic life and President Obama shows the needed temperament to lead. But, in the rush to be practical, we may have slighted the need for a guiding vision of a viable society beyond the one that is failing. We even lack a clear understanding of what is taking place and what it all means.

I lead a small research team that forecasts the evolution of technology and its massive impacts that are changing the world. We have developed an intelligent website (www.TechCast.org) that pools the knowledge of 100 experts around the globe to forecast breakthroughs in all fields. Technology forecasts are especially insightful because our collective “tools” and scientific knowledge form the foundations of society, the anchors of the social order. The relentless power of technology can be seen in the fact that the dot-com bust of 2000 didn’t faze advances in the Internet, which has now entered a more sophisticated “participative” stage of Web 2.0 sites, like Facebook and YouTube, and even the election of Barack Obama. As Andy Grove, Chairman of Intel, put it so well “Technology always wins in the end.”

Our forecasts show that a green revolution is imminent that promises to pull the global economy out of today’s deepening recession at about 2015. Today’s surging interest in green business practices should reach mainstream use in four-five years and governments are likely to take serious steps to curb global warming about the same time. Alternative energy sources – largely wind turbines, biofuels, and solar cells – are growing 50% per year, the same rate of the famous Moore’s Law that drives advances in information technology (IT) to double every 2 years.

Because these complex issues are so intertwined, the Federal Government should invite major corporations and other governments to work together on innovative solutions. Green technology is roughly a $500 billion market and expected to reach $10 trillion in 2020, larger than autos, health care, and defense. In short, the present mess in energy and environment policy actually offers a great opportunity in disguise. It may be that the resulting economic growth in a noble cause to protect the Earth could even defuse the race toward weapons of mass destruction and conflict generally as diverse cultures are more closely integrated into the global community.

. Almost all sectors of the economy are likely to be rejuvenated with high-tech advances in roughly the same time framework. A new wave of green autos powered by hybrid, electric, and fuel cell engines should enter the mainstream about 2013 - 2018, and we are likely to see “intelligent cars” that may even drive themselves. So there are growth opportunities for automakers if Detroit can get its act together with badly need changes in the governance of corporations.

The forces of IT now driving the global economy are gaining momentum as e-business, publishing, entertainment, virtual education, and other forms of e-commerce reach the take-off point over the next 5 -10 years. And the huge populations of China, India, Brazil, and other developing countries are moving to PCs, the Internet, smart phones, and other global media in droves. Our forecasts show that three-four billion people will soon inhabit a digital world that is smarter, faster, and interactive, creating online markets of several trillion dollars and forming a fine web of global consciousness.

"We even lack a clear understanding of what is taking place and what it all means."

The year 2015 seems to mark the serious beginning of all this innovation because it is the next inflection point in the 35 year cycles that govern U.S. markets. The roaring twenties were the peak of a 35 year cycle that ended in 1929 with the Great Crash and Depression. The Eisenhower boom of the sixties started about 1945 and was followed by the Reagan boom that began with his election in 1980. Today’s collapse marks the end of the Reagan 35 year cycle, and it is likely be followed by the “global boom” outlined above starting about 2015.

These are enormous challenges, of course, so it’s hard to imagine how they can be achieved in a world that celebrates power politics, money, glamour, consumerism, and self-interest. The 2008 financial crisis, however, is widely understood to mark an end to that era, and the outpouring of support around the world for the Obama presidency signals the possibility of global unity. Polls show that 70-80 percent of Americans are also united behind his proposed plans along these lines.

Beneath the surface, deep rivers of fresh thought are bubbling up. Pollster John Zogby analyzed his data over the past 20 years to conclude “We are in the midst of a fundamental reorientation of the American character… Away from wanton consumption and toward a new global citizenry in an age of limited resources.” Young “Millennials” lead in embracing this global view, despite our common image of disheveled youngsters oblivious to all but their cell-phones and iPods. Zogby finds that young adults 18 to 29 years old constitute the “First Globals.” This “digital generation” accepts all races, sexual orientations, national cultures, and other differences equally, and they are intent on living sustainable lives in a unified world.

The crisis of maturity may not prove catastrophic if acted on in time, but a major turning point seems inevitable as these multiple threats reach critical levels over the next decade. I don’t think we can muddle through as usual because the world seems poised at the cusp of a great discontinuity – much like a teenager when trust into the passage to adulthood. Whether a teenager shedding the baggage of youth to become a responsible adult or a civilization facing the imperative to form a mature, functioning society, the imperative is much the same – grow up or perish.

Things look bleak because that’s the normal situation facing any system struggling through maturity, whether a teenager or an entire civilization. The new era that is emerging seems to possess a life all its own that is unfolding rapidly, and it is precisely because so many people are so deeply concerned that a change in consciousness is underway. We have accepted women in power, transformed planned economies into free markets, and begun to protect the environment. Now the tough challenge of forming a sustainable, collaborative, intelligent global order lies ahead. Hardly a perfect world, of course, but a world that works.

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William E. Halal is professor emeritus at George Washington University and President of TechCast LLC. His latest book is Technology’s Promise: Expert Knowledge on the Transformation of Business and Society (London: Palgrave Macmillan, 2008) He can be contacted at Halal@gwu.edu.

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