Alf Rehn’s posterous

You must have flash to see this embedded document.

In an age that tends towards pessimism and looking for what’s wrong with the economy, it’s interesting to note just how many things that are right with Finland. This is a country that has exceptionally well-educated citizens, world-leading technical know-how, far fewer ecological problems than most other regions, and which has successfully undergone a restructuring of its industrial base in order to prepare it for future changes. Finland hasn’t been badly hit by real-estate bubbles, has almost no real corruption, a healthy entrepreneurial environment, and precious little in the form of civil unrest. By any of the usual yardsticks, the Finnish economy is doing pretty well — thanks for asking! The question, however, is whether the usual yardsticks are the right ones for assessing an economy’s future.

Looking to the changes that are affecting economies after the crises in the finance sector and the recession, it looks less and less likely that we are returning to business as usual. Whereas the financial crisis could be seen as an aberration, something that can be rectified with the right forms of oversight and control, there are a number of far more complex changes and shifts that are affecting the global economy. Environmental issues such as climate and water are starting to redefine many sectors of the economy, we are seeing new shifts in globalization – including questions regarding the future standing of China – and the old chestnuts of ‘high-tech will save us’ and ‘innovation will reign supreme’ are starting to look suspiciously worn out. Increasingly, the starting-point of the economy of the future looks like a perfect storm, one in which the most fundamental truths of business need to be questioned. 

If there is one thing that can be seen in the turmoil that surrounds any prediction about the future of e.g. Finland’s economy, it is this: We’re moving into an economy of Less. This isn’t just an issue of reigning in frivolous consumption and attempting to minimize environmental impacts, but in fact something far more fundamental. The future that Finland, along with all other countries, will have to adapt to is one where the old fundamentals of continuous growth, perpetual ‘progress’ and a logic of control may well be toppled. The need to think long and hard about the notion of growth is of course spurred by notions of sustainability, but this is not the only driver. Looking to consumption, we’re seeing a move towards simplicity and local production as a reaction to the conspicuous consumption of the last decades, as our unsustainable ways are falling out of fashion. Looking to production, we’re seeing how new technologies and a trend towards co-construction and mass-customization is slowly changing the way in which the mass market is viewed and understood. And looking to societal trends, we’re witnessing a move in which individuals, NGOs and social movements are waking up to the possibility of challenging the control-structures of corporate and state power. 

Taken together, these trends point towards a third wave of the post-industrialization of the global economy – where the first wave was represented by the move to a service economy and the second by the networked economy of information and communication technologies. This third wave will be defined by a move away from corporations prescribing the framework within which consumption occurs, a move where control over communication can no longer be upheld and where control over production moves much closer to end consumers. We’ve already seen this occurring in a limited form in social media and the ways in which e.g. social movements can be coordinated through it. But to just look at such surface effects would be a mistake. The real story is that technology and society are developing together in a way which makes old notions of control and lock-in effects outdated. Instead, we’re seeing how technologies that are now seen as marginal and/or hypothetical – things such as fabbing, 3D-printing, synthetic biology, ubiquitous computing and so on – are pointing to a future in which the quest for sustainability and advanced technology have together created a situation where the old industrial model of mass production for mass consumption has given way to something far more decentralized and thus less easy to control. This will in all likelihood be seen as dangerous and frightening for many, as our ideas and theories of economy and business to a great extent are developed as theories of control. Still, as so many ‘stable and permanent’ structures have already experienced, it is exceptionally difficult to hold back an idea whose time has come.

Right now, we need such new ideas. Even though it is possible to be skeptical towards some of the more extreme claims of the ecological movement, many hard facts exist – such as the fact that the issue of ‘peak water’ may well dwarf the debate regarding both the climate and peak oil. The global water supply is under threat, as is bio-diversity, and there are grave concerns regarding how the current global food system can be upheld, not to mention developed to accommodate more people in a sustainable fashion. Similar facts exist about other resources, as well as the complex set of strains that the general manufacturing apparatus places on the earth. To add to this, we’ve seen what happens when countries shortsightedly assume that financial wizardry can solve fundamental problems in the economy (are you listening, Britain?). In order to develop a new kind of economy, one which can handle both the issue of sustainable economy and the need for innovation and new forms of business, we need to re-imagine economy and find novel kinds of business thinking – what the heretical economist Umair Haque has called moving from leadership to buildership.

So what does all this mean for Finland? We could look at the issue in many a way, but the most direct one seems most suitable: In the coming years, Finland will need to capitalize not only on the many things that sets it apart in the ‘economy as usual’, but also look towards the things that can differentiate Finland in the economy to come. The good news here is that Finnish business is in fact well positioned to benefit from the coming changes in the global economy. Being a relatively small, local economy, while at the same time being both socially, digitally and geographically placed in a location that enables it to redefine itself as an enabler and a platform, Finnish economy could arguably be seen as a laboratory of future national economies. By drawing on a tradition of fierce independence, a culture of doing/building/making (what is sometimes referred to as the talko-spirit and which has deep historical roots in rural self-sufficiency), and a technological know-how that should be the envy of the world, Finland could become the poster-child for a new kind of approach to economy and business – if there is a will to do so. 

The only thing we know about the future is that we know very little about it. We can only guess, only follow the faintest of traces. At the same time, we can with some confidence look to the strengths we have now and see how these might be capitalized upon in the coming years. No-one knows what will happen to Finland, or the world, in the years to come. What we do know is that Finland is well-positioned to benefit from changes in the world and it’s economy. With its wide range of skill-sets, its position in the world, and its best-in-class sustainability, Finland has all the chances in the world to be a star pupil in the economy of the future – whatever shape this takes. Now, the key thing is to realize this. 

Posted from Turku, Finland