Creative Destruction: The political dimension

Get a group of people in a room and ask them what the drivers of change are  – the forces that could reshape the world we live in.  I would hazard a guess that the list of change drivers that we would generate would be headed up by:

  • Climate change
  • Energy supply
  • Sustainability
  • Technology, e.g. Web 2.0
  • Economic prospects
  • Food supply

The problem is that, at least in Europe, there is another force staring us in the face that has the potential to drive through change that just 3 months ago would have been inconceivable.  And that is the force of New Politics.

This issue has surfaced in earlier posts.  For example, New Politics is on my list of trends to watch. Other posts include The Seeds of Change and Greece, Debt, Contagion and Political Change.

The scale of change that we could see across Europe and other members of Bloc #3 – the losers of the great recession – could be immense and the position with regard to Europe (or rather the end of Europe as we know it) is summarised by Etienne Balibar[1]. The major points in Balibar’s article are:

1. Europe does not consist of a series of aligned economies. Efforts to do so have failed. I would also add that the concept of aligning states around their  geographic proximity is a dated one and does not reflect the global value chains that have emerged over the last 10 – 15 years.  The idea of geographic proximity as a mustering point goes back way before the Internet age to the early 1950s.
2. A sound economic system relies on “trust” and trust is a product of (i) a stable currency, (ii) a rational system of taxes and (iii) policies aimed at ensuring full employment (Europe in its present state could fail all three of these tests).
3. We are facing a new economic order that fundamentally challenges the macro-economic structure of most, if not all, developed economies. In my view, the coming decade could well be “The Great Battle for Jobs” as employment in both the public and financial service sectors shrinks in the developed world. In Balibar’s words “Europe, or most of it, will experience a brutal increase of inequalities: a collapsing of the middle classes, a shrinking of skilled jobs, a displacement of “volatile” productive industries, a regression of welfare and social rights, and a destruction of cultural industries and general public services”.
4. It is the last point, The Great Battle for Jobs, that could well stimulate political change driven as Balibar puts it “from below”.
5. The real problem is that Europe faces at least in part a political vacuum – the politics of the last decades have lost credibility – so what will fill the vacuum?

These are critical issues to consider now.  Here are some potential questions that should be debated:

(a)  Could Europe dissolve?

(b)  Could a two-tier Europe (with possibly separate currencies) emerge?

(c) Could a new economically aligned group appear – with members not limited to mainland Europe?

(d) Which countries are exposed to the risk of political change and unrest?

(e)  What form could “New Politics” take in such countries?

(f)  What impact could New Politics have on the business environment and your organization’s strategy?

These are not just questions of theoretical intellectual interest. The forces of change are staring us in the face.

[1] Balibar, E. Europe is a dead political project. The Guardian. May 25, 2010.

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