Actions needed to re-couple our decoupling world — a reflection after G20 Think Summit

More than 130 G20 Young Global Changers from around the globe
Honor to be one of the Global Young Changers representing own nation at G20 Germany 2017

We are living in a decoupling and polarizing world

It was a pleasure to be selected as one of the 130 Global Young Changers, representing the young generation and our own countries at the G20 Think Summit. Our voices were heard but we need more than that… We need actions. The inaction and slow progress of changes have a lot to do with the fact that ‘Most speakers don’t think while most thinkers don’t speak, and few of them actually act.”

One of the most common topics during the G20 think summit was the schizophrenic world in where we are living today — On one hand we see an unprecedented explosion in technology but on the other we witness a more divided and polarized political world than ever; On one hand it is the rise of artificial intelligence, big data, block chain, VR but on the other it’s the dawn of multicultural tolerance represented by Brexit, right-wing nationalism and anti-globalization sentiments.

A more polarized world is seen, not just in US but everywhere in the world

Technological advancement, financial innovation and globalisation were once championed by all countries as they were significantly improving living standards and well-being. However, the economic progress derived from these factors has become decoupled from social progress and not everyone has access to their fair share. When people are enjoying the tremendous convenience Apple Pay and Alipay brought about, there are still more than 2 billion people who don’t have access to basic banking services. As economic and opportunity inequalities worsen, many stakeholders in the society stopped sharing in the material fruits of development and that will lead to catastrophic events. History has told taught us that already…

What history has taught us when the world decoupled

The First and Second Industrial Revolution had led to significant reduction in transportation costs for goods and increasing use of capital because of mechanization. The former has catalyzed international trade while the latter has led muscle power to give way to machine power in production. These developments became the seeds for globalization and the single-purposed machines have together given rise to the first fundamental decoupling of our economy and society. Labourers have been alienated from the outputs of their labour services; “Artisans gave way to factories and Work became divorced from family life and their outputs.”

To understand more about what ‘alienation’ means see —

The machines made the division of labour imperative and workers’ responsibilities become finer, more mundane and repetitive. The industrial revolution, on one hand, bolstered the economy, but on the other it also new classes consisted of unskilled workers and managers. Work become more delineated and hierarchical. The social tensions and the resulting political tensions had produced major upheavals, including two world wars.

The decoupling took decades to ‘recouple’ through the post-war welfare state system, which for the first-time education, public health etc. are provided by the government in order to narrow the gap.

The next dangerous decoupling?

The great and dangerous decoupling only took a break until the 80s when the First Digital Revolution, globalization and financial innovations had again taken place to drive the unprecedented economic growth and accelerated the split between ’skilled’ and ‘unskilled’ labour with a modern meaning. In the future, we already see the possibility that AI, big data and all other immersive technology could bring. Machines will not only take over much of our muscle power as it did a few centuries ago but also our predictable cognitive work. Computers are beginning to sort legal documents for relevance and find precedents; in the future, they would even be able to sue or settle and even judge. Human productivity rises at 2 or possibly 4 percent per annum but machine productivity rises at the rate given by Moore’s Law (roughly doubling every two years)

The alarm has already set off: recent political developments have also shown that the growing discontent in advanced economies about the distribution of technology and growth dividends has been vastly underestimated in the past. Unskilled workers in developed countries no longer feared being replaced by unidentifiable lower-wage workers somewhere else in the physical world, but also the unidentifiable ‘robots’ and ‘AIs’ somewhere else in the cloud.

To re-couple the cleavage we need more Inclusive and Responsible Entrepreneurs

Quoting one of the G20 Insights policy proposals, “…Social cohesion is not just about income but about all relevant dimensions of well-being and determinants of social status; it is also about including people in participatory decision-making to enhance their dignity and control over their lives…” The two examples of decoupling (one arising from the industrial revolution and the other one from digital revolution) have one commonality: they have both generated a popular majority who feel that ‘they are left behind’ and ’they have no control’ about it.

Brazil, photo by Oxfam

We may well wait for the government to act on its policies to levy technology taxes or retraining the population but given the current pace of political dialogues, everything will be too late by then. We need real and responsible doers and entrepreneurs to start leading the changes. Inclusive entrepreneurship goes beyond business ownership and benefits everyone by fostering a fundamental understating of business that includes all the community stakeholders and involve collaborations.

To see what an inclusive entrepreneurship or business model means, Doreming is one of the Fintech 100 firms nominated by KPMG to help financial inclusion for unbanked and underbanked workers. The platform it builds has enabled workers to tap into their accrued wages in real time and help smoothen cash flows and optimize personal finance for those who either live hand to mouth or might otherwise fall victim to ‘high-interest rate loan sharks’.

Doreming’s real time payroll and payment system that allows works ‘pay as you earn’

Doreming’s story began with the mandate to help ‘Internet cafe refugees’ who sheltered themselves in Internet cafe as a result of the financial crisis and high youth unemployment rate in Japan. Doreming’s system allows young workers get early access to their accrued wages as soon as they finished work and spend them for food or pay expenses.

Internet Cafe in Japan, The Japan Times

This helped them to build up financial disciplines and protect them from predatory payday loan lenders. The business has delivered value not only to its shareholders but it has also empowered all stakeholders in the community.

We need actions NOW.

When it comes to driving ‘changes’, we cannot just rely on politicians and public organizations. The inaction and slow progress of changes have a lot to do with the fact that ‘Most speakers don’t think while most thinkers don’t speak, and few of them actually act.” Merely focusing in GDP and job creation in the status quo today is not enough if we do not prepare for the third wave of digital revolution. Efforts to narrow the gap today will be easily wiped out when those jobs we just ‘created’ are eradicated twice faster. Denying climate change or building infrastructures in nowhere is a very shortsighted way to make a country great again at the expense of the future generation. Technology is growing exponentially and social imbalance will only deteriorate at an alarming and increasing rate — What our society really needs is a prospective and entrepreneurial implementation of solutions that can foster inclusive economic development and best prepare the least well-off population in the future. We need more actions that create momentum in the future and less glossy policy memos that address problems in the past.

15 June 2017

Paul Lam, Fellow of Royal Society of Arts, Impact Investor and Entrepreneur