Reflecting on the norm

“The majority of people are sick of the status quo and feel they have been ‘abandoned’ by their leaders”. This was Stephen Hawking’s sentiment this week on warnings he put forward on the future. Italy’s rejected constitutional reform vote on Sunday can be seen as the latest political event to succumb to such a statement following Brexit and the US presidential outcome.

Can we see a future economic shift?

Taking the U.S. it has seen four major economic shifts in its history, transitioning from a barter-based economy in the 1600’s to an Agricultural economy in the 1700’s. Further progressing into an Industrial economy in the 1850’s following the Industrial revolution and finally settling into an Information-based economy in the late 1900’s, following the invention of computers.

The political shifts being seen this year may just be the trigger that halts globalisation, leading to a return of both protectionism and nationalism. Both economic policies are risks to higher tensions, risk of conflict and a repeat of human history before a new economic era settles in as the new norm to shape the future century or two. Professor Hawking’s concerns may after all not be light hearted.

Technology today, has progressed and is continuing to progress at an alarming pace. Whilst sceptical that the next economic shift will transition away from being technology based, due to the capitalist nature of our economies, the ever increasing knowledge requirements to keep up with such changes emphasises on and puts education as a predominant requirement of future employment.

The invention of robotics for example has been a major technological breakthrough in the past few decades but has at the same time become the nemesis of many blue collar workers. Ever improving technology advancements have led to more companies realising the better production output and cost synergies their manufacturing lines can achieve at the detriment of human labour.

This will unfortunately bring increased future unemployment to certain social classes already being affected by the fact that education is near to a certain requirement to keep up with such technological advancements.

It is difficult to assess the nature of the next economic shift. Though as the political map turns, so do policies, regulations and the norms people have experienced over a number of years. These shifts in political allegiances may unfortunately not bear the solutions to a problem that has stemmed through ever improving human knowledge as a consequence of evolution and not simply through failed government policy measures.

Changing demographics, social norms and political support will shape the next few decades and will be the triggers of the next economic shift. Letting things unfold as they are, in the form of deregulation, increased protectionism and flexible policy measures may be the only solutions to work around the problem that is the progression of human innovation at the detriment of human labour.

The hope will be that such changes lead us into a new economic era of knowledge, growth and innovation and not into one of conflict, feud and destruction.