The COVID-19 is evolving into a long-term emergency, unlike any other that the modern world has experienced before (even though it was an entirely predicted and fully ignored — a ‘white swan’ event). Its effects will manifest differently relative to countries’ ability to cope.
Those reliant on remittances, export of primary resources and foreign investments, SMEs and service sectors coupled with high degrees of informality, weak public services and limited fiscal space are likely to suffer a confluence of factors leading to a deep recession and devastating development effects . The UN has called on a $2.5 trillion emergency package for a Marshall Plan type of support to developing countries to cope with a ‘financial tsunami.’
If the response measures are conceptualized as lifelines to the current paradigms of governance, rights and growth, we as a global community would be wasteful at best and negligent at worst. As Aarathi Krishan put it, returning to the pre-COVID-19 world is a return to a system that is simply not fit for the future. Can we instead point to emerging contours of a new system?
The futility of control — the world of perpetual and reinforcing risks. The perpetual, fast acting, cascading and often unforeseen risks and periods of long emergencies will be playing out at the intersections of the changing climate, increasing density in cities, resource use, and digital revolution. In case after case, we’ve seen the pandemic compounding underlying systemic inequities in communities where poverty levels are high, where access to services like medical care is low, industries with high pollution quotients are present, and demographics include migrants, people of color or minorities. The notion of pandemics and shocks as bugs rather than intrinsic part of our future (does anyone remember Australia and Amazon burning a few months ago?), and growth paradigms that pin progress as separate from natural boundaries are not only unsustainable but risk inducing.
As a result, the existing and emerging structural vulnerabilities are coming into a sharp focus: rising antibiotics resistance, deteriorating citizen health due to changing lifestyles and air pollution, fragility of supply chains and logistics infrastructure, inequality of access to opportunities and resources, unchecked tracking power of technologies, systemic hollowing of the public sector and weakened social safety nets. If the real world ‘tolerates no control,’ we are looking at a fundamental shift in societal levers of stewardship and governance of our commons.
The antidote - recalibration of values. We’ve already seen well-being take precedence over economic growth, roll out of radical economic policies (various forms of Universal Basic Income, or UBI), adaptive manufacturing and repurposing of industries to extension of safety nets across the society, proliferation of unprecedented and digitally enabled services (eg.education), and calls for conditioning massive bailouts with sustainability criteria. What once was considered to be politically impossible has become politically inevitable — and history reminds us that welfare state, income tax and nationalization all grew out of massive crises, too. Taking a page from Dave Snowden- ‘in a crisis you should always deploy strategic innovation team next to your crisis response team in order to capture novel practices’, we have been tracking seeds of the new normal, policy alternatives that up until a few months ago would have been unfeasible (some in Asia Pacific, captured by our colleague Prat in this piece).
If on the other hand we look at them through the lens of a Covid Dividend, we might see the seeds of a new development paradigm characterized by the reforms, changes in behaviour and other innovations which were caused, prompted or dramatically accelerated by the COVID-19 pandemic that deliver sustained improvements in the social, economic, environmental, institutional, personal and community dimensions of our lives.’
From where we stand, there are at least four large streams emerging:
- Redefining notions of growth and value creation (NextGenECOnomies),
- Resurgence of the State spearheading radical policy experimentation (the Entrepreneurial State),
- Decentralizing production, consumption and trust (Alternative Infrastructures)
- Emerging forms of and relationship to ‘seeing’ and ‘engaging’ with complex risks (Alternative Intelligence)
- NextGenECOnomies: Rethinking the role of growth
Global supply chains and logistics are at risk and disrupted, vulnerabilities visible and the expectation from the public sector is high. The expansionary human project of endless economic growth has led to higher death rates amongst those living in polluted areas, plastics addiction and resource overuse — all of it demonstrating the interconnectedness and risks at the intersections of our natural environment, well-being and governance. Weak signals of emerging paradigms that decouple value production from externalities (plastic pollution, resource use, emissions) are percolating in a form of emerging business models, regenerative practices, and re-thought supply chains. Think botanical mines where it is plants that mine metals from the soil in a sort of a metallurgy druids. Think what building (clothes, packaging, cement) with life (microbes) implies for reimagining the built environment, incentivizing new business models, and building resilience across supply chains. This requires economies that enable mitigation of climate change & biodiversity loss, while at the same time reimagining our taxation & redistributive system to ensure that prosperity is shared, heralding a new era of solidarity.
2. The Entrepreneurial State
The state and its institutions are at the heart of the response to the pandemic. Beyond the emergency response, the public sector globally is expanding and reimagining itself for the remote and digital era, as well as stepping in to protect the (newly) vulnerable. Current disruption opened up fissures deep enough for new paradigms of fairness and wellbeing, and rethinking social welfare instruments. Education and other services have gone digital overnight, adaptive manufacturing and repurposing of resources is done on the go (from trains being turned into isolation wards to rethinking public space for resilience and jobs), and radical new economic and social welfare policy experimentations (Spanish Government calling for UBI to become a permanent instrument of the government’s effort to build an equal society and city of Amsterdam adapting donut economics to mend post corona economy).
The state, after a retreat, is playing a leading role, and the challenge is “to balance delivering immediate solutions, but designing them in such a way to serve the public interest over the long term.” The type of dexterity we witness now is necessary to continue in the ‘new normal’, when investment in innovation is needed for renewables, new technologies, and wellbeing — WRI modeling shows investments in low carbon infrastructure post-COVID create more jobs relative to the dirtier alternatives. The true test of the Entrepreneurial state comes with decisions on where billions invested in recovery will go — toward decarbonizing economies and strengthening social safety nets not as costs but investment in resilience, or investing in building roads and infrastructures that reinforce the failing fossil fuel economy?
3. Alternative (decentralized) infrastructures
The fragility of complex value chains & logistics is also an opportunity to spearhead digital transformation and lower carbon emissions. In the “new normal”, new redundancies will be created, as our way of life, work and socialization shifts. We already see decentralization towards local & communal level: grassroots social movements & communal social capital are re-emerging (after years of degradation of public trust), local governments are championing adjustment to the new normal, & residents are nudged to “buy local”. Depending on the duration and intensity of the pandemic, nation states will seek to strengthen their vital systems (food, medicine, energy) and consumers are likely to adjust some of their preferences, to support local industries (and usher in a new era of ‘community owned supply chains’). The invisible nature of the threat and lack of security is already surfacing new forms of traceability both on humans (and their interactions) and on the economy — heightening the risks of continued biological surveillance & a new wave of patriotism driven consumption. Even in the face of extreme state led surveillance measures to curb epidemic spread with COVID-19, growing number of activist organizations mobilized decentralized networks to design entirely new and less invasive solutions premised on opt-in digital commons or disposal digital identities.
4. Alternative intelligence
Can the crisis propel us into a higher level of intelligence in our societies? In responding to COVID-19, we’re seeing society on a steep learning curve as it grapples with complexity. Decision makers are introducing concepts like exponential growth, scenarios, ambiguity (making decisions in context of little information). At the same time, decentralized and collective intelligence is creating alternative ways of understanding and addressing the crises, and propelling the public sector as a proactive vs reactive agent to damage. closing the loops in public sector. The fragility of the system & its nestedness (interconnection) surfaced new ways of understanding (ASU’s Synthesis center’s modeling of alternative economies). Beyond scenario development, the new era promises deeper inquiry about how human and ecological systems interact and a need to tap into the collective wisdom, which may even be more relevant as the Arctic starts to melt and release new bacteria. Crisis moments heighten risk-taking, but climate, population dynamics and digitalization, are all dynamic, complex and interrelated — they require a similar level of tolerance for ambiguity and exploration.
While we flag that the world is facing ‘futility of control,’ our blog post is a way to navigate this space of high uncertainty and start making sense of the signals we see - we get the incoherence! The future of development hangs in the balance as the costs of economic recovery & social safeguards accumulate.
What are we missing from this conversation? What questions are not percolating through? This is our effort to join the conversation about our collective soul searching and (hopefully) renewal in face of crises…
Thanks to those we spoke to or were inspired by: Sandrine Dixon-Decleve, Club of Rome; States of Change learning collective; Giulio Quaggiotto, head of the UNDP’s Regional Innovation Center in Bangkok; Dan Hill, Vinnova; Luca Gatti, Chora Foundation; and Indy Johar, Dark Matter.
Editor’s Note: If you enjoyed reading this article, check out “COVID-19 will change our lives. And our ways of working.”