Forget “The Roaring Twenties”, they will not happen
For several months now, many have been talking about the period after Covid as the new "Roaring Twenties". In their eyes, this decade promised to be one of carefree enjoyment in a post-Covid world. We would take back our freedom and - in response to 2 years of societal standstill - indulge as never before. The "Roaring Twenties" symbolized the world of regained liberty.
Meanwhile, we live in a different world, where a carefree future seems further away than ever. This time it is not because of Covid, but because of the crisis between Russia and the West. No-one could have predicted that in just a few days the geopolitical situation would get so out of hand that the risk of a Third World War becomes a reality.
I myself never believed in that euphoria of the "Roaring Twenties." In some of my earlier blog posts and in the presentations I have given in recent weeks and months, I talk about a different decade. A much less rosy period that I have named "The Great Disequilibrium".
The Great Disequilibrium
In short, "The Great Disequilibrium" is a transitional period of uncertainties and disruptions to the social, economic and even geopolitical order of the past 75 years. We have assumed that the status quo that we have known since the end of WW2 in terms of consumption, (personal) development, care, leisure, democracy or security, is a fixed fact. An achievement to which we are entitled as a society.
I describe both in my book "The World Is Round" and in more recent blog posts that this idea is an illusion, which is now coming to an abrupt end. This order was temporary and is now being thoroughly disrupted by a succession of unseen system shocks.
How 3 major system shocks in under 9 months time shook up our world
Since the beginning of 2020, I have referred to the Covid crisis as a system shock: an impactful event capable of turning an existing system upside down, often resulting in a new system. In itself, this concept is nothing new, but on this global scale, we have not experienced this in our recent history.
On a smaller scale, we have experienced a series of recent economic system shocks as a result of digital transformation over the past 20 years. Entire industries and sectors have been undercut by digital challengers resulting in the replacement of traditional models (and even entire industries) with new solutions. Photography (by smartphones), the music industry (by Napster, via Apple to Spotify), the media (with the proliferation of new options such as Youtube, Facebook, TikTok, ...) and so on. For users these upheavals were often a good thing, for the stakeholders of those industries they were a disaster and often the beginning of the end.
As bad as these revolutions were, they were limited in their impact and were economic rather than social in nature.
And suddenly we are experiencing 3 major system shocks in less than a year. First, there is the Covid crisis, which made itself felt at least as much in 2021 as in the previous year. The social and economic impact is enormous: the human suffering, the strain on the healthcare system, the economic downturn and the sky-high cost of measures to keep the economy afloat. Costs that we will have to pay back in one way or another over the coming decades.
A second system shock that has painfully confronted us is the climate disasters that struck Europe and the rest of the world in the summer of 2021. There were the floods, but forest fires and violent storms also wreaked havoc. And for the first time it came very close to home: floods in Europe resulting in many deaths and billions in damage. According to a recent study, 1 in 10 homes in the US was impacted by climate disasters in 2021. The associated costs and the societal changes as a possible consequence force us to reconsider the status quo. Suddenly the climate is a factor that does weigh on our economies, on business strategies, on business models, on insurance premiums and on our personal budgets.
A third system shock in less than a year is the war in Europe. Few could have foreseen that Russia would create a geopolitical crisis with such consequences. At the time I write this blog post, there is little positive outlook in the situation: at best, there is the immense human suffering in Ukraine; at worst, it is the beginning of a new global military conflict, with potentially disastrous consequences. However this situation plays out, the global social and economic impact will be unseen. After all, the sanctions not only affect the Russian economy, but they will also make themselves felt worldwide: higher energy costs, companies losing a key market, massive investments in the military in Europe and the U.S. in response to the new threat. All this is changing our Western societal and economic status quo in an unprecedented way.
In search of the New Equilibrium
We can no longer deny that the existing model has come under pressure. In the coming years and decades, we are facing unprecedented bills that will run into trillions of euros annually: reimbursement of the costs of the Covid crisis, new investments in the militaristic apparatus, costs for prevention and mitigation of climate disasters, costs for dealing with (climate) refugees in a humane manner.
We are going to have to pass these costs on to our economy, and that will have major implications on what we can and cannot afford anymore, as a society and as individuals.
The good news is that we are able to provide an answer. With the transformative insights of the past 20 years, we are able to think creatively about new models, about a new world, about a New Equilibrium for people and society. Some examples.
The energy crisis of 2022 may be prompting the world to accelerate its move away from fossil fuels (and their often questionable countries of origin). Higher costs in production and thus in finished goods, perhaps creates an acceleration in the shift from "having things" to "using things” - a model I describe in detail in my book The World Is Round as the so-called Peak-Stuff Economy.
Disrupting the global supply chain may prompt us to move faster from using virgin materials to models of repair, re-use and recycle.
The next decade promises to be one of unprecedented challenges, during which many of our apparent certainties will be lost. But if we approach this positively and optimistically, each of these system shocks will be the catalyst for the major turnaround that we as a society and economy must nonetheless make to meet the long-term challenges. Perhaps we need this period of disorder to accelerate our move toward the New Equilibrium, the model for the rest of this century.
What is clear from this is that the scope of digital transformation has become completely inadequate to define tomorrow's business strategy. We need to look at the broader technological and societal disruptions and include them in a deep Impact Transformation approach.
For more details on the concepts of the Societal Equilibrium, the Great Disequilibrium and the New Equilibirum, I refer to this blog post, and to the series of posts on "Impact Transformation", which places the concept in a broader context.
Would you like to chat about the ideas? Contact us and we will make an appointment for a real or virtual coffee.
If you have a transformation challenge and you are looking for a vision for your company in the New Equilibrium, don't hesitate to contact us as well. We might be able to help you.