Globalise or fossilise!

Secretary-General of the OECD
Evolve or die! A harsh admonition, but a very appropriate one as we contemplate the century and millennium ahead! In 1893, John Hanson Beadle, author and journalist, wrote this epitaph for futurology (reported in New Scientist, October 15, 1994): “All history goes to show that the progress of society has invariably been on lines quite different from those laid down in advance, and generally by reasons of inventions and discoveries which few or none had expected.”
At that time a number of the “best minds in America” had been commissioned to predict what the world would look like in 1993. The occasion was the Chicago World’s Fair. It seems Beadle had the last word. The author of the New Scientist article remarks:“One clear lesson is that those versed in science and technology seem no more skilful at seeing the future than poets or preachers.”The examples offered are as sobering as they are amusing, given that these were indeed some of the outstanding minds of the day. Take George Westinghouse, the champion of “alternating electric current” who won the day over Edison. Westinghouse predicted that a railway locomotive might attain 100 miles per hour, but experiment showed that even a perfect brake could not stop a train at that speed. His conclusion: “the ideal speed, I think, will be about 40 miles per hour.” As New Scientist comments: too slow by over 100 miles per hour.The best brains of today would probably fall into the same trap: linear extrapolation of today into the future. Those are the lines laid down in advance to which Beadle refers. But why is this relevant to us as we contemplate the next century and beyond? I would sum it up with the word “adaptability”.We cannot predict what the future holds. Which is why our thinking, our institutions and our customs must become more flexible. Darwin identified this adaptation in his seminal work The Origin of Species. He was observing the biological world; the same principles hold for the socio-economic world. Darwin also found “living fossils”: some species that seem to have resisted evolution for reasons not fully understood. Crocodiles, cockroaches and some rare fish meet this definition – hundreds of millions of years and no detectable change. But had a linear extrapolation been done millions of years ago on the evolution of biological species it would have been even more inaccurate than the predictions of 1893! Everything has evolved largely in response to environmental challenges. Homo sapiens are a perfect example; it still remains difficult for most of us to associate ourselves, our DNA, our beautiful people, movie stars, models and heroes with our simian friends. But that is how it is.Now, as we enter a new millennium we see a world captured by the reality of “globalisation”. Those who do not adapt quickly to this new environment will find it hard to survive. Those who do adapt will lead the world into the 21st century. This is evident in e-business, where entrepreneurs like Richard Branson with his Virgin biznet have taken advantage of new opportunities on the Internet. However, such is the heady pace of change that even the most successful business leaders will have to keep evolving.Globalisation is not a policy; it is a process which will affect all aspects of our lives. We may not always like it; after all, it can compel us to give up cosy habits. But to stand against it would be sheer folly. Still, some believe they can somehow resist the powerful tide of globalisation. Take those who cling to protectionism to preserve jobs. Their thinking is fossilised. They forget that by their actions they drive up prices and actually destroy jobs, as well as choke off similar jobs in the developing world. But protectionists may have a case to plead where governments have failed to provide education, upskilling and other market-oriented measures. Governments too have to be adaptable and their policies shaped to meet new challenges and public demands. Businesses will be judged on the quality of their corporate governance, their ability to win contracts cleanly, their attention to the needs of stakeholders inside and outside the firm, and other criteria beyond the traditional motives of making profit and satisfying shareholders. Companies which adopt a flippant or negligent approach, to investing in human capital for instance, will find the going very tough indeed. The ability to adapt is fundamental to survival. Institutions and practices of all kinds must be able to respond rapidly to new environments or face obsolescence. Better they evolve, carrying their strengths forward into modernised institutions, than disappear, leaving the unknown, even the dangerous, to fill the vacuum left in their place. This applies to OECD and other international organisations too, of course. How to maintain the quality of work within a complex multilateral system, satisfy members’ needs and increase our relevance to non-members? This is the crux of our challenge. Obviously the OECD will have to evolve. What choice does it have? Becoming a “living fossil”, a dinosaur for future generations to gape at, is neither a dignified nor a feasible option. Which is why the only real alternative to evolution would be extinction.EndDonald J. Johnston is secretary-general of the OECD. To other articles by the same author.©OECD Observer No 219, December 1999

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

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