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Global Geopolitics: Disruption and Innovation

Read about the 2017 think.BDPST keynote lecture by Dr George Friedman. Global Geopolitics: Disruption and Innovation

The core message of the keynote lecture by Dr George Friedman, Founder and Chairman of Geopolitical Futures, was that geography is not the only key factor regarding national power but technology too. The relationship between technology and national power is a critical one. The lecture’s aim was to put technology in a geopolitical context and explain its impact on economic, security, and social changes.

 

Dr Friedman started his lecture by saying that technology is driven by social needs. He concluded that innovation and its implementation have to correspond with the challenges, their current forms, and their expected future aspects. He made a distinction between core technologies and subtechnologies. While the purpose of the former is to change the way of human beings’ life, the latter aims to improve efficiency. Henceforward the first belongs to the level of science, the second to the level of business organisation. To underline this, he repeatedly referred to the statement: there is no technology without science.

 

Secondly, he gave the warning that technologies have unintended outcomes. For example, during the industrial revolution, there was no plan to reshape the world to how it became afterwards, which is the same challenge we have today. Technology affects the way nature works. (Details below.) Through the advancement of technology, the environment and geopolitics change as well.

 

Thirdly, he underlined that core technologies have a 50-year cycle. Until new core technology is found, productivity declines; the gap between the old and new technology usually lasts for 10 years.

 

When turning to the most transformative core technologies, he started with the steam engine. Industrial revolution was built upon the expansion of its role. This was the fundamental process for a lot of industries. On the geopolitical level, the British Empire ultimately rested on steam engine and its access to coal. Another unintended outcome of the use of the steam engine was the appearance of mass production (multiple factors working together) that led to growing cities. The next period’s economic productivity depended on the internal combustion engine and the use of gas oil. It was more efficient in using and storing energy and needed smaller place (which improves efficiency). Its application made possible to set up the consumer society that led to whole sale production. Geopolitically speaking, the new types of key natural resources shifted the focus to the Muslim world, changing its relation to the developed world. Other unintended results were the new needs of the mass society; that is, to make cities liveable that meant the need for a new core technology: electricity. It brought revolutionary changes by transforming the human cycle. It became possible to work at night, to light the cities and it gave chance for a large mass of people to live together. Such outcomes as radio and TV only belong to subsidiary technologies.

 

Regarding the current cycle, the core technology is the microchip and the internet. It is already 45 years old and is mature, therefore, we are close to the end of the current cycle. After the Second World War until 1979, the income share of the middle class was growing faster than that of the upper class. During the next period (1979-2015), the wealthy grow much faster than the rest of the society, which in actual fact hardly grew at all: divergence between productivity and wage growth; slower wage growth, especially at the bottom. It is characteristic of this period that the GDP rose much faster than salaries because of the fact that the business model of the west changed dramatically thanks to microchips. This model highlights the role of large enterprises and creativity became an even more important factor compared to physical labour. In other words, the microchip had a strong influence on the labour market and the economy.

 

This shift has a key role in the political sphere as well. Dr Friedman concluded that the microchip was a fundamental factor of Donald Trump’s success as a beneficiary of social tensions in the country. This was the political outcome of the following economic changes: the GDP growth did not mean an increasing demand for human resources, which led to tremendous social tension and further isolation of the classes.

 

Regarding the 50-year technology cycle, it has to be reiterated that the microchip belongs, according to Friedman, to mature core technology, while the internet still has not achieved this state. In reference to his statement “Geopolitically, what we have to understand is that the main source of new core technologies has military background or come from it directly,” he concluded the necessity of the development of batteries with bigger storage capacities. Addressing the audience, Friedman explained that the United States of America understands how to take real advantage of technological innovations that can be beneficial for other countries as well, including Hungary.