Get Ready for the Global Phase-Shift: What You Need to Know | with Nafeez Ahmed
Nafeez Ahmed: This very old, industrial paradigm, centralized way of thinking it's totally outmoded, and it's just not going to work. It's just not going to be fit for purpose to deal with this reality of this interconnected, converging decentralized kinds of systems that are emerging. So I think one of the biggest tasks of our time is to explore how do we create new frameworks to be able to have these conversations? How do we have a new framework to be able to explore these things? And I think that's where we really need to remove the boundaries, because it's not going to be what we think it is. We're going to have to be able to think across silos, across boundaries, not just in terms of scientific disciplines, but even in terms of our management, then our departmental borders. All of that is going to have to shift because we're going to have to be able to have these conversations across those boundaries, because those boundaries aren't going to exist in the same way in the next two decades. Stina Heikkila: Hello everybody.
Welcome to the Boundaryless Conversations podcast, where we meet with pioneers, thinkers, doers and entrepreneurs and speak about the future of business models, organizations, markets, and society in the rapidly changing world we live in. I’m Stina Heikkila. I’m co host of the show alongside Simone Cicero. Hello, Simone. Simone Cicero: Caio.
Nice to be here. Stina Heikkila: And today we are joined by Dr. Nafeez Ahmed. Nafeez is a systems theorist with over 20 years of experience and works as a change strategy consultant and investigative journalist.
He is the creator of the Age of Transformation newsletter, where he writes about systems thinking for what he calls the global phase shifts. He’s director of the Futures Lab at United Communications Limited, where he leads on system transformation advisory services for governments, businesses and charities. He is also a distinguished fellow at the Schumacher Institute for Sustainable Systems and a commissioner at the Club of Rome’s Transformational Economics Commission. And not the least, he’s the best selling author of eight books, including the first ever systems framework to understand interconnections of climate, energy, food, conflict, terrorism, and state militarization. His latest book is Failing States, Collapsing Systems: BioPhysical Triggers of Political Violence, published by Springer Nature.
So, lots of things there. Really great to have you with us, Nafeez. Welcome. Nafeez Ahmed: Thank you both. Lovely to be here.
Stina Heikkila: We have a lot of things to dig in, but I’m going to start with a quite open question that kind of pulls together a little bit what we are doing at Boundaryless and your work. Our mission at Boundaryless is to enable everyone to participate in the future of organizing. And we do that by providing frameworks for sense making and business modeling. Essentially, one thing that caught our attention was a film that you co-produced, Rethink Humanity, which was based on a book by Tony Seba and James Arbib back in 2021, if I’m not wrong.
And there you highlight how technological progress and forecasts, if you look at them through S curves and how things evolve over time, are impacting a shift towards a new global civilization, essentially. And the underlying thesis there is that new globalization, global civilization would be more networked, more decentralized, and would enable people to participate in the new organization of society. So this seems to converge with our mission and we would be interested to hear more about that thesis.
Nafeez Ahmed: I’d love to be able to talk about this issue. I was very privileged to work on that film, which essentially translates the ideas of our two co-founders at RethinkX, Tony Seba and James Arbib. In their book on this issue, Rethinking Humanity, I was very fascinated to see how they broke this down. They essentially identify within the human system these five fundamental areas of production, which I think is a very useful way of thinking about technological change. So they say that really, when you look at any society or any civilization, there is a production system which you can kind of identify in five key areas.
So there’s energy, transport, food, information, and materials. And I think this is a very useful way of looking at things because it helps you to understand not only what are the key kinds of defining technologies using this definition, but also you can develop an understanding of the crossovers between those sectors. But I think that the thesis was pretty profound, essentially identifying through empirical data what are the key kinds of changes happening in these sectors.
And I think what they found is that we're at this very pivotal moment in history where we’ve seen in our own lifetimes that there have been big disruptions in the information sector. For instance, we’re still experiencing that. We saw it with smartphones. Now we’re seeing it with AI. We’re seeing that there is a disruption in the energy sector as fossil fuels are being increasingly out-competed by these new kinds of renewable energy technologies and so on and so forth.
And what they essentially have argued is that every single one of these five fundamental foundational sectors of production that kind of define the capabilities of a civilization—all of them are being disrupted right now. And this is quite a unique period in history because that’s not happened before in human history in this way, which I think that’s the kind of interesting point that they make. In the past, we may have had maybe a disruption in the transport sector. For instance, cars, the automobile and the auto assembly line disrupting the horse and carriage industry, which obviously was for millennia was there.
And then suddenly in the late 18th, late 19th century, early 20th century, you had this kind of explosion of innovation and very, very rapid changes over a matter of decades which completely transformed the transport system. And then that in turn drove all sorts of other innovations across multiple sectors. Transport disruption back at that time, the invention of cars led to all sorts of changes in the way that we consume, the way that we do mining, the way we fight wars. It kind of led to the complete reorganization of the urban landscape. Everything changed, even from a cultural point of view.
You had car culture changing the way that adolescents and young people actually engage and meet with each other and things like that. All of these kinds of compounding innovations that occurred after that and which kind of led over to innovations in other sectors. That perspective is quite useful because it helps you to realize that when we’re looking at each of these sectors there is a fundamental technological disruption taking place. Which means that the dominant industry or technology that’s prevailing right now in those sectors is in the process of being disrupted by new technologies which are out-competing them really fundamentally for economic reasons.
And they’re going on these learning curves where the technologies are exponentially improving, the costs are going down. So there are these economic drivers pushing this process forward and that’s happening in every one of these foundational sectors. At the same time, that’s obviously a stupendous kind of place to be.
Also it means it’s unpredictable in a way, in the sense that with that kind of innovation taking place, that's okay, so there are certain kinds of incumbent technologies that are going to be disrupted, whether it’s oil, gas, and coal or livestock. The livestock industry in a kind of conventional agriculture, for instance, in the food sector, we know that those are going to be disrupted. We know that there are new technologies which are going to become much more efficient and as a result of those economic factors are going to become much more dominant. So one of the findings is that precision fermentation and cellular agriculture in the food sector are stupendous cost declines and it’s just beginning to go up that S curve of adoption.
So we know that there are certain types of technologies which are going to be likely to kind of lead the way. What we don’t know is exactly how that process plays out, what the follow-on innovations and cascading effects of those technologies are, and how that overall the the overall impact of all of those different things happening at the same time, how that changes our societal dynamics, our cultural dynamics, our governance dynamics. In a way it means that everything’s up for grabs because all of the kinds of the existing economic system and political system and even our culture and ideology very much evolved around those kinds of structures and systems of production which we’re very familiar with, which we define with industrial civilization. So it means that we’re going to have to kind of innovate new organizational systems to manage and regulate this very new world that is coming into being. So it’s a very interesting place to be.
Simone Cicero: Is there a way that we can imagine this transition to happen in at least a semi-ordered, semi-controlled, semi-stable way? And what could be the traits that characterize this evolution? For example, this transition? I guess it will be somehow place based because of the biophysics constraints that we have to start keeping in mind. And also your reference to foundational economies. The basics really resonate with that. I’m talking about something that can be maybe more about small players instead of large players. A transition that deals more with adaptive postures versus predictive postures. I’m also thinking about something that will kind of put many of the boundaries that we have in question between institutions or between sectors.
If you have to kind of give a few traits of this transition or keywords, what would they be? Nafeez Ahmed: That’s a really good question. I mean, I think that in order to answer that, it’s very important that we have a kind of a solid, kind of almost scientifically and empirically grounded understanding of what these technology disruptions actually are and how they look like they’re going to proceed. And there is quite a strong, emerging scientific literature on this, although the study of technology hasn’t been recognized as a kind of scientific discipline in itself. But I think what we found increasingly different kinds of experts who are looking at technology disruptions are realizing that there are these very specific kinds of features and dynamics at play which kind of occur time and time again. So, as I mentioned before, we look at examples like the disruption of horses by cars. It’s useful to look at these past examples because they give us a sense of what we’re likely to see over the next two decades.
So one of the things that we’re going to see, for instance, is that disruptions are rightly called disruptions in the sense that they can often, especially when we don’t have an ability to see what’s coming—maybe 100 years ago, very difficult to understand. Disruptions are disruptive in the sense that they very much do shake up the existing status quo, and it can be quite surprising for the vast majority of people at the time. If you look back at just at that example when these nascent innovations were first emerging, people were tinkering with these inventions of the car, and the people who were driving, going around in their horses and their carriages were looking at them and saying, you guys are just kind of like strange outsiders messing around with funny technology. And you would kind of feel justified in thinking that because these strange vehicles were breaking down in the middle of these kinds of there weren’t roads. They were just kind of long avenues of mud.
There was no infrastructure to allow cars. So it was completely beyond imagination at the time. Could these guys seriously do this? It seemed completely impossible. If you look at some of the there’s some really iconic photos of New York City that my colleague Tony Seba would use a lot, where you have a photo of New York City in 1900, you’ve got that the slide is Spot the Horse. So sorry. Spot the Car.
There’s only one car, and there’s a sea of these horses and carriages. And then the next photo is from 1913, and then the slide is called Spot the Horse. There’s just cars everywhere.
The roads have changed, and there’s like one horse only. And it’s quite a shocking depiction of how rapidly change can happen. So I think when we take some of those principles and apply them to what we’re seeing today, there are certain kinds of dynamics that become clear.
One of them is that there is a suite of technologies which I believe in, which my colleagues at RethinkX and several other people believe are the disruptive technologies. And this is an empirical question. There are some people who are looking at hydrogen, some people who are looking at carbon capture and storage, for instance, in the energy sector. But looking at the empirical realities here.
It’s pretty simple. It’s solar, wind and batteries that are going down these exponential cost curves and as a result, they’re being pushed along these exponential adoption rates. And you just kind of use the kind of forecasting approaches to kind of see, well, what’s the probability distribution then of how fast these things are likely to scale based on previous types of cases? And what we can see is that these things can really happen very very quickly, within about 15 to 20 years. Now of course, there are choices to be made which can delay or accelerate. But I think one of the things we’re seeing is that the speed of that change is surprisingly fast.
It may start slow at first, but it then kind of kicks off and it becomes rapidly exponential. So we’re looking at a very, very disruptive kind of transformation in each of these sectors. Now, what that also means is it opens up a kind of uncertainty. And I think this becomes clear when we’re thinking about things like information.
So we’ve seen, for instance, that in the information sphere we’ve had multiple disruptions, one after the other, from the Internet, to smartphones to video streaming and on and on. And now we’ve got AI. And AI is kind of like an amplifying disruptor that is going to feed back across the information system.
And of course, we’ve also seen what’s really interesting about the information disruptions is how they have completely and utterly transformed every other sector. So we’ve had information disruptions, changing transport, changing how we do food, changing materials. So one example is the impact of information on precision biology, where applying computing power and machine learning and things like that is allowing us to now develop these new ways of dealing with molecules, which has kind of driven this innovation called precision fermentation, where we’re now able to essentially program molecules, program proteins, and essentially create any protein that we want. And now the costs of that are going down. So the other thing that we’re seeing is the interconnectedness across domains, which I think has always to some extent happened, but that interconnectedness is becoming even more kind of impossible to kind of override.
And that’s what’s also making things unpredictable in the sense that what we can say with a degree of certainty is that certain technologies are likely to scale very fast, very rapidly, exponentially. They will very likely disrupt existing status quo technologies. Those technologies are likely to in terms of the, they will ultimately be replaced. So that also creates obviously, questions around jobs.
The biggest question, of course, is economic losses for those incumbents and a question of how to manage that process in a way which, as you mentioned, this question of is there a stable path through this? And I think there’s various scenarios here which all depend on human choices. And that’s why I really want to emphasize that understanding these technology dynamics doesn’t really allow us to be deterministic or necessarily super optimistic or super pessimistic. It gives us a certain sense of we have a certain sense of certain dynamics that are very likely to take place, but really it’s going to be up to us to choose how we manage that because, let’s just say for example in the energy sector and in the transport sector where we know that there are these big disruptions taking place which are disrupting oil and gas and oil and gas demand.
So what happens with the incumbent industries if they do nothing and kind of double down on their existing kind of business models and kind of just keep asking for more subsidies and trying to keep going? That’s not going to work because the economic dynamics inevitably going to mean that these guys get out competed. So what’s the way forward? So there has to be a kind of strategic approach which says well these are the possibilities ahead. Is there a way for us to pivot in such a way that we can minimize the damage and the losses and maximize the gains? So there’s a strong case, for instance, to say well, if we turn a blind eye to this and ignore it, we could see a situation where there are hundreds of thousands if not millions of workers in the oil industry who are left without work. There could be all sorts of cascading effects on politics and culture which could destabilize our societies. On the other hand, there is a huge dividend that could be right there round the corner if we look at it from another perspective, which says, well, actually, we have this huge opportunity where we know that certain industries are now going to be disappearing, but we have this window of opportunity over the next decade to ensure that we retrain utilize the existing infrastructure of these industries and the expertise that’s been built up and redirect them into the industries of the future, which are emerging now, in the right way.
And do this along a science based timeline where we can kind of reinvest huge profits that the incumbent industries are making into these new kinds of innovations that are taking place. And there are interesting examples of European companies where you’ve had, I can’t remember the name but there was a very famous European company which was an incumbent oil and gas company which realized what was going on and pivoted and is now a clean energy company. So there’s lots of examples where this can happen. But I think what we learn from history is that that’s rare.
A lot of the time the incumbent industries just get wiped out because they don’t understand what’s coming. They don’t understand the dynamics of the new industries and new technologies and you become complacent like the horse and carriage industry being there for thousands of years. You kind of tend to think well nothing’s going to change, it’s just going to stay the same.
But I think what we’re now learning due to complex systems theory and a lot of these different models and abilities to kind of use data, we’re now starting to see that actual change isn’t linear. It happens very, very fast, very rapidly and in a cascading way. Simone Cicero: So I’m trying to kind of weave some threads here, right, for our listeners. And I think you said many very interesting things. You said, first of all, let’s look at the data, so let’s look at the empirical evidence of the transformations that are happening.
And you mentioned clean energy transitions. Maybe there are some other kind of threads that are manifesting themselves in data that we should be looking into. Then another thing that I know is essentially prepare for the unthinkable and prepare for the unthinkable to happen fast in an exponential way, right? You spoke about the transition from the horse to the car. It was completely unthinkable, there was no infrastructure. So essentially as any player that’s listening to this, prepare to see this transition happen fast and be, I would say, ready to work in a context where there is no infrastructure, there is no clarity, it’s really difficult to understand.
Another thing that is very important that I think it’s coming up again for us, we had a conversation with another speaker, Mark von Reinerman. If I say, well, a few weeks ago about how do you interpret the future? And this idea of convergence was really strong. So the idea that to really understand the impacts, maybe you have to play with convergences. So you have to take one technology, another one, or maybe one thread, another thread and see how they converge together and what does it mean? So for example, you spoke about information technology and data and genomics.
We can probably do similar considerations around AI and this new emergence of AI capabilities with existing contexts, that’s another thing. So again, look at the data, prepare for the unthinkable and explore convergences. But then you said there are both challenges and opportunities and you spoke about us a few times. So you said we should be strategic, right? That’s what I perceive. We should look at the situation and see where we can reap the benefit, where should we be ready to let go? Maybe some of the existing things we have. So who are we? So where do you see and what kind of behaviors you see possibly in the future of the policymakers, the large incumbents, and the small players? So if you have to say if you are a policymaker, do this, if you are a large incumbent, do this.
If you are a small player, do this. Or prepare in a certain way, adopt a certain posture. So I’m interested in hearing from you about this and maybe also who is the biggest candidate for instability here. So where should we think about instabilities? Nafeez Ahmed: In terms of the instabilities, I think it’s now becoming quite clear that there are incumbent industries across each of these five foundational production sectors which are going to be disrupted.
And that’s where we’re going to see the biggest kind of instabilities and that will have social, political, and economic ramifications. Obviously, the energy system is perhaps the most pivotal production sector because it’s at the bedrock of everything that we do. It’s at the center of everything you can’t move without energy, fundamental physics. So I see that as being kind of a focal point for the big changes that are coming. And I think what we’re seeing, certainly what I’m seeing and what I’ve argued, is that the energy sector today is experiencing both internal and external disruption pressures. So the internal pressures are coming from problems within the existing industry.
One of the ways of tracking this is a measure called Energy Return on Investment, ROI, which essentially measures the amount of energy that you use to get a certain amount of energy out. So it’s kind of a simple ratio, but it can be very complicated to figure it out because obviously how do you measure the energy that you’re using and how do you measure the energy that you’re getting out? At what point do you measure it? There’s obviously many, many different kinds of components of an energy production process. In oil and gas, obviously there's exploration, there's mining, there's extraction, there's refining, there’s all sorts of things. There’s the transporting, the stuff that you can use, and then there’s the point of delivery when it actually becomes usable energy.
And there’s all sorts of debates in the literature about that. But I think there is a consensus that’s emerged which has shown that absolutely we had the heyday of the fossil fuel industry is well over. Maybe the ratio was looking at triple digits in the early days of the oil industry around a century ago, 100:1. That ratio has plummeted to the point that most good analyses of ROI are looking at the value being around 6:1 for oil and gas today.
We’ve moved from the cheapest stuff to the more expensive stuff. And that has an impact. It means that the costs of your production are going up. It means that the amount of energy that you’re using to get the energy out is going up.
And that has an impact on your society because the less energy that you then have left over means that there’s less energy for all the other things that you would want to do outside the energy system in your society, whether it’s all sorts of economic activities, public goods and services, so on and so forth. So what we’re seeing is over the last 20 years, that process has really accelerated. And I think that’s been reflected as an underlying driver of many of the economic challenges that we’ve had and why we are experiencing this kind of strange period of very slow economic growth, globally.
If not, it’s kind of flat-lined. It doesn’t really seem to be going anywhere. Of course, this has been exacerbated by other complex emergencies such as we had the COVID-19 pandemic, which suddenly, out of the blue, kind of also kind of impacted the economy in a very drastic way and also highlights exactly what this term of convergence is, which are not just happening in technology, but also happening between different elements of the human system and the earth system. So you’ve got the energy system on the one hand, we’ve got our relationship with the earth system and our natural systems which has led to a global pandemic. So these things end up compounding each other and of course then they have an impact on the economy. And that’s without even mentioning obviously the biggest kind of ecological crisis that we’re seeing, which is climate change which is obviously kind of brewing away on the horizon, apparently quietly in the background.
But it’s impacting us every day. So I think when you take all of that and you try to kind of have an understanding of the issue of where does the instability really lie. I think first of all, the oil and gas industries are going to face a reckoning because as they’re facing these internal challenges domestically and some scientists are saying that by around the early 2030s, those internal dynamics are going to make one assessment says that by around 2050 you’ll be using 50% of the energy from oil just to get the oil out. Earlier than that it will be like a quarter, probably around 2030, it will be like a quarter of the energy or something like that. I mean that’s just crazy. It’s a crazy amount of energy just to keep the energy system going.
It’s not sustainable. It’s not going to work. So this is without looking at climate change. That’s without looking at the demand dynamics that will come into play as renewable energy technologies increasingly scale up, which they’re already beginning to take a chunk out of the energy demand.
And coal has kind of faced a massive disruption already which has actually had a tangible impact on carbon emissions. It slowed the growth of emissions. So as it begins to feed into oil and gas, that’s going to accelerate too. Obviously the electric vehicle disruption is also taking place.
That is also if you look at the various forecasts again within the next decade or so, that is going to take a huge chunk out of the demand for oil and gas. What that means is that these industries are going to face a reckoning within the next decade. So both their internal economic challenges and their external kind of lack of demand. Imagine an industry which is already suffering from problems.
I mean these industries are sustained by trillion-dollar subsidies every year. That’s what keeps them alive. So the moment when they start to lose significant amounts of profit because demand starts to evaporate.
They’re just not going to be able to survive and that’s going to be extremely disruptive. What’s interesting is that that’s not the only disruption taking place. I think at RethinkX, the areas that we were really interested in were transport and food. So we were looking at electric vehicles as well. And the food sector is also one that I think has taken people by surprise because what we found is that precision fermentation in cellular agriculture is going through those very same S curves that we’ve seen with smartphones as we’re seeing in the energy sector.
They’re going through the same thing and those costs are going down and already we’re seeing these huge innovations in precision fermentation, which essentially means that at the moment, most of the disruption is taking place right now in terms of traditional kinds of vegan foods. We’re getting better at producing non-animal proteins, but eventually, within the next few years, animal proteins are going to become much more commercially viable as well. And eventually it’s going to get just looking at those cost trajectories, it’s likely to get ten times cheaper around the kind of 10 to 15 years from now, something like that, give or take, depending on policy choices around regulation and things like that. Those are the things that can obviously affect these issues.
You can accelerate or delay. You can’t really change those fundamentals though. So what that means is that I think that there are these key sectors which are definitely going to experience these big transformations. So that’s the livestock industry, the conventional energy industries, the fossil fuel industries, obviously those are very interconnected because the conventional livestock industry does depend on the existing energy system. That’s also going to affect kind of normal conventional agriculture as well, because conventional agriculture is again very dependent on these kinds of fossil fuel energy inputs at the moment. And of course, I think that we have to talk about AI because we can see the information system is going through this huge disruption that’s also affecting our kind of innovations in materials, things like nanotechnology and precision biology, which I mentioned, obviously affecting food.
But in itself we can see that AI is going to kind of have this really interesting effect on many of the kinds of working tasks that we kind of take for granted, which are currently supplying people with jobs. Some of those are going to be a huge fate of disruption, which makes it much cheaper and easier to automate many of these things. So that opens off this very, very kind of startling question as to, well, which sector isn’t going to be facing instability in that sense? And in my view, there isn’t any sector which is not going to be affected by these areas, which that may seem on its face slightly overwhelming, but I think using the five foundational kind of categories to think it through allows us to come up with a slightly more strategic approach because then we can begin to see, well wait a minute, if it’s these particular technologies in these sectors which are likely to be disrupted, what as investors can we do to pivot? What as governments can we do to pivot? What are companies within those sectors? Maybe we are an incumbent company, what can we do to pivot from that? So I think what we need here is that kind of approach where everyone kind of steps back and says, well wait a minute, let’s do an assessment, let’s look at this data, let’s understand where we are, let’s understand what the risks are, what the opportunities are.
And then that obviously has specific implications for different kinds of players and actors in this context. So if you’re an incumbent kind of company who is likely to face disruption, then you might want to learn from the history of a company like IBM, which was going to be disrupted by these kind of things, but actually what they did, they created a company which was going to focus on new innovations that were disrupting them and that company eventually grew and then that company essentially took over and became the new IBM. And all the other old stuff was kind of left to go to the side. And there’s a few cases in history where we’ve seen that there are strategies that companies within sectors that are being disrupted can actually do to ensure that they can pivot and kind of mitigate losses and kind of be really kind of maximize their existing expertise in a way that and their resources to allow them to move into a really kind of much better situation. But of course, not all companies are going to do that.
And there’s a question of how do governments look at this? And I think governments very much need to step up to understand that they have to play a very active role in rethinking some of the things that they’re doing. I mean, there’s huge amounts of taxpayer money which are being spent on propping up industries that are already facing significant economic problems and challenges. And rather than just throwing money at these things, what we need to do is think about how we do that strategically. There are ways in which they can kind of re-evaluate those approaches, but that obviously means that they need to rethink, for instance, what are the areas that we should be investing in? If government money is going to go somewhere, where should it go? What other industries should it go in? What’s the best way to support that? That, for instance, might mean recalibrating markets, I think, because a lot of these technologies are scaling exponentially, I don’t think many of them need subsidies.
I mean, there’s an interesting debate here to be had, but I think it’s more about eliminating subsidies for the old stuff, kind of supporting workers in those industries to move into new sectors. And then thirdly ensuring that that kind of helps you to level the market playing field by saying well, let’s actually allow these companies and these enterprises to compete on a fair playing field. Rather than saying well let’s just keep throwing loads of money at these guys and hopefully allow these guys to compete in a very unequal playing field, it’s less about doing that. So for instance, I would say do we need a carbon tax? I’m not quite sure, but does a carbon tax make sense when you’re spending trillions of dollars of money on propping up carbon companies? Maybe it makes sense just to get rid of those subsidies and that’s your way of dealing with that issue. But those are things that we need to be exploring and obviously at different levels, depending on where you are, you’re going to see this in a different way.
Stina Heikkila: I think this really ties neatly into another topic that of course is very close to our hearts, which is around business ecosystems and platforms. Because when you are talking about disruptions and the incumbents being disrupted, that’s essentially what the platform revolution or the ecosystem thinking is sort of all about: to challenge the assumption of one big player dominating the market and kind of capturing the opportunities that are within an ecosystem. When I’m listening to you, I’m wondering what role would the ecosystem and innovation through the ecosystem have in this? Because you were talking about the different demand dynamics that we can see around electric vehicles, food systems, energy and to some extent this can also be helped by AI. There can be different forms of innovation happening. But I think it would be very interesting to explore the decentralized innovation in these fields. And if we move beyond the idea of even having those large industrial incumbents because this seems to be part of the old paradigm and the old system that we’ve had structuring our civilization.
So what kind of new organizational coalitions, alliances, ecosystems will emerge? And you were talking about the role of governments and you can see now in the EU, for example, this big bet on having five missions on the EU level and a lot of research and innovation going into those. This is a way to kind of make governments and organizations work together. Maybe sometimes you never know if this is too much top-down because the ecosystem tends to be more disobedient and actually be a disruptor itself.
So I think it will be interesting to see how that would play out because that adds another level of uncertainty who is going to innovate what and where, when the opportunity comes, and should. If the incumbents want to be on board, maybe the best strategy will be to have a radical open innovation ecosystem and be part of it rather than trying to sort of protect itself against it. Nafeez Ahmed: Well, this is a really fantastic point, and I think it gets to the heart of one of the issues that often we forget when we’re looking at when we’re talking about technology, is that technology, in order for us to kind of make the most of these technological changes and there is an organizational shift that has to take place. And I think this is one of the really powerful insights that I saw in the work of Tony Seba and James Arbib when they were looking at past civilizations and this kind of the life cycle of civilizations, one of the really interesting insights they had is that the civilizations might end up innovating various technologies and kind of having these new kind of innovations coming into being.
But they have to be able to manage and regulate those technologies. And that often requires a fundamental shift in the organizing system of the civilization or society. So they basically created these two categories: the production system and an organizing system. And they described the organizing system as consisting of a lot of these different areas that we’re familiar with. It can be governance institutions, it’ll be politics, it could be culture, values, worldviews, ethics, many, many different things that contain certain business models, all sorts of things you can contain what an organizing system is.
And I think the challenge that we’re now seeing is that if a civilization is not able to evolve an organizing system that can actually manage the kind of new kinds of developments in its production sectors, it’s not going to survive. It will end up kind of regressing and if at worst it could end up collapsing and that’s obviously not the only reason a society could collapse. It could collapse due to many other things, external pressures. But that was one of the patterns that they saw in history.
I think that has a lot of really very profound implications for where we are going today. It means essentially that in order for us to kind of manage and regulate these kinds of big technological innovations we really need to understand the organizational implications. You both mentioned and have mentioned previously that we’re looking at this movement towards a more networked, decentralized kind of a space that’s emerging. And that’s really important because I think absolutely, certainly the trend line that we’re seeing is that the kind of prevailing industrial system, when you then look at these different sectors of production, is very much built on these quite centralized hierarchical structures which involves, you know, with oil, gas, and coal, for instance, is very much premised on centralized, fragmented control of these specific resources which are hierarchically controlled. It’s the same thing when it comes to agriculture. Same thing even if we’re looking at the old information system.
It used to be like a tiny number of people owning and controlling the information waves and that’s now starting to be disrupted with the kind of the platform revolution. And you know, before, you know, in order for you to reach millions of people you would have to put out an advert in a print newspaper, which would cost you perhaps tens of, not hundreds of thousands of pounds. Now you can do it at the click of a button on social media and you can reach millions of people. Obviously there are still, I think what’s interesting about this is now we’re seeing with the information disruption, we’re seeing that there’s been this definite technological shift, right? And obviously the cost dynamics make it quite clear, okay, so now it’s much cheaper to reach millions of people. Anybody can now produce videos, they can produce written stuff and content, and they can get it out there and they can reach lots of people.
What’s interesting about that, though, as we’ve seen with the polarization of politics and culture, kind of the degradation of public discourse around these issues, around the issues that we’re facing, what we’re seeing is that even though we’ve had a technological kind of shift, but the culture and the organizational kind of framework hasn’t really changed. And it’s still kind of framed within a very unequal economic organizing system. So that’s why you’ve had big platforms like Facebook, Google, or the rest of it, still owned and controlled by a tiny number of people there that store these kinds of same conventional lobbying kind of interests involved, all that kind of stuff.
And that’s created this very strange scenario, right, where you have this apparent decentralization of information, but yet it’s happening within these very centralized organizational structures. And yet even amidst all of that, there is still this kind of decentralization process taking place. Now with AI, for instance, we’re now seeing this new space emerging where it looks like if we’re following some of these cost trajectories, there are going to be all sorts of functions that are going to end up being something like ten times cheaper and will eliminate the need for human labor in many, many sectors. Now, on the one hand, looking at it from a conventional organizing system point of view, that seems really scary because you immediately think, well, what’s going to happen to all those jobs? And so you’ve had people talking about, well, we need to have the government response, which kind of leads like a UBI (universal basic income), where we can make sure that people still have the means to live and so and so forth. So that’s in my view, I think that looking at it from the same existing organizational economic framework, what I thought was very exciting about the AI potential is what it means from an economic point of view, because the fundamental limiting factor in an economy is labor. Productivity of labor is the biggest thing that basically means that your economy is not going to be able to kind of move forward.
If you can eliminate that as a limit, then literally the sky's the limit when it comes to economic productivity and growth. So we’re seeing this opportunity with AI, this possibility of limiting or removing the one thing that is limiting the economy. And that means of course that your economy itself is going to be fundamentally transformed. And it’s obviously not just AI that we’re seeing this transformation when we’re seeing the fundamental underpinnings of energy being changed.
So that we’re moving from a possibility of a world based on competition over scarce resources into a different world where we're actually sharing abundant clean electricity. That’s a very different type of economy to what we’re looking at now. So that raises the question of what kind of organizing systems do we have in place where the need for human labor is actually reduced? Does that mean that we just kind of plaster over a band-aid and say we need UBI? Well maybe as a transitional mechanism we do, but I think if we kind of break out our imaginations and think well, what does a world look like where people don’t need to do menial labor is even further eliminated? And I think rather than looking at it as there are, of course, apocalyptic scenarios, which I wouldn’t want to rule out for no reason, but I think we also need to look at the fact that there may well be almost semi-utopian scenarios. And it’s not exactly far-fetched, given that human labor, over time, has reduced. Like, the amount of human labor that we’re doing today, compared to what we were doing, say, several millennia ago, is completely different.
It’s completely changed. So these things that we might think were unthinkable today were unthinkable to people 1000 years ago. So that what seems unthinkable is actually worth exploring and worth thinking about because it opens up these possibilities. The question then, of course, is how do we navigate this in terms of a practical way forward? And I think what we certainly need, what we’re certainly seeing is that the trend-line of these technologies as they are more networked and more decentralized and more participatory there is this opportunity space that’s opening up. And what we can see is that the way in which these technologies work best is in a networked, distributed way.
They don’t work best when they’re part of a centralized, old organizing system. And I think that is the key that we need to think about. The question that we then need to ask is what kind of in my view this really is interesting because it means that even our conventional ways of thinking about these things are going to be challenged, they’re going to be outmoded.
So the way in which we do things at the moment we’re very very siloed. We’re very very fragmented. We’ve got economists thinking in one department about one thing. You got the energy guys thinking about something else. And this is a very old, industrial paradigm, centralized way of thinking and is totally outmoded and it’s just not going to work. It’s just not going to be fit for purpose to deal with this reality of this interconnected converging, decentralized kind of systems that are emerging.
So I think one of the biggest tasks of our time is to explore how do we create new frameworks to be able to have these conversations, how do we have new frameworks to be able to explore these things? And that is a kind of a foundation for us to be able to say how do we now innovate new organizational approaches to managing this new world that’s emerging? And I think that’s where we really need to remove the boundaries because it’s not going to be what we think it is. We’re going to have to be able to think across silos, across boundaries, not just in terms of scientific disciplines, but even in terms of our managerial and departmental borders and things. All of that is going to have to shift because we’re going to have to be able to have these conversations across those boundaries, because those boundaries aren’t going to exist in the same way in the next two decades. Simone Cicero: Certainly we perceive the massive responsibility that each of us have in exploring these futures, right? So one thing that comes to mind, it’s really this first-person responsibility that we have as organizational builders, citizens and so on. So it’s not something we can wait for someone to come with a recipe, right? It’s more like we have to participate in it. Another thing that I have in mind is this question around what’s going to stay industrial to some extent.
So what is the role of centralization in this kind of decentralizing world where energy is decentralizing and capabilities for—you spoke about precision fermentation. We can expand it to AI and genetics and whatever. So if these capabilities are decentralized and together with a massive decentralization in energy, what will remain centralized? What’s going to decentralize, how is this interplay going to work? And again, another question that I have in mind is what’s going to happen to the non foundational elements of the economy? So what’s going to be about our consumer economy that has been built on top of the industrial structures that have governed our civilization for the last probably 200 years or something like that? So really lots of questions from this conversation with you today. So I don’t know if you maybe want to add some finer remarks that can help. I don’t want to say make clarity on what’s going to happen, but maybe if I ask you to just highlight a few points for a listener, what would they be? Nafeez Ahmed: Well, I think the first, most important thing is for us to recognize that there is a real amazing opportunity that we’re seeing with these technologies.
And I think there’s a lot of people who are worried about AI, they’re worried about climate change, worried about all these things. It’s absolutely right to be concerned about the future, because if we make the wrong choices, things could of course go really bad. But I think what’s really exciting is the new opportunity space that is opening up, which in many ways is unprecedented. With the energy system, for instance, again, when we’re using the lens of disruption to understand this, we can see that we’re not looking at these as one-for-one substitutions. And I think conventional analysts often look at these issues like, oh, there’s a new product that’s going to replace the old product and that’s it, and the system stays the same. Actually, what we see with disruptions is that it changes the whole system, the system changes.
What does that mean? When the system changes, it means that the rules and the properties of the way you organize yourself change. So that’s why when horses were disrupted, total transformation roads changed, everything else changed, the rules and the properties of the system completely changed. And that created new possibilities as well. Some of them negative, some of them positive. What we’re seeing here with energy, for instance, is there is this possibility of a space of superabundant clean electricity. When we’re looking at the cost curves of these technologies, we’re seeing that the price of energy is, as it continues to get cheaper, it’s going to be around ten times cheaper than the incumbent system within the next 10 to 15 years.
It’s already cheaper than incumbent electricity, incumbent energy systems, and that’s only going to get much better. And I think one of the other interesting things that we found at RethinkX, there’s many other research groups have confirmed the same thing, that when you optimize the way that you design that system, and that means kind of the generating capacity of solar and wind has to be kind of supersized by around three to five times demand, just depending on the region and so on and so forth. That means that your battery inputs are massively, massively reduced by about 90%. And that also means that the mineral inputs and the metals and materials inputs are actually much, much lower because the battery system is the most expensive component of the system.
So this is—obviously I’m getting down in the weeds a little bit. But the reason I wanted to do that is because I wanted to make clear that when you get into the empirical nitty gritties of some of these technologies, you really begin to see exciting possibilities. Because that means in this particular case, that you’ll be producing three to five times more energy than we’re currently producing today in the current existing fossil fuel system with far, far less metals and minerals input.
So counterintuitively, you can have more energy, but we are actually using kind of less damage to the planet. Of course, there are lots of questions we need to answer along the way. If we’re going to be ramping up lithium production and so on and so forth, how do we do so in a way which protects—we create a circular economy? We adopt an approach which doesn’t damage the environment, which doesn’t create these kinds of over extractivist models and so on and so forth. But we’re moving into a system which is very different, because once you’ve built out that energy system, it lasts something like—most solar panels and wind turbines actually last up to around 50 years.
So once you’ve built it, you don’t need to keep rebuilding. You actually now have a solid kind of infrastructure which can then be the basis for future manufacturing and so on and so forth. So when you’re looking into these possibility spaces and you combine that with what’s happening with our ability to make clean proteins, our ability to kind of deal with information cheaply and kind of reduce the need for kind of manual labor and so on and so forth, what we’re actually seeing is this unprecedented possibility space for a new civilization, a new system that really upgrades our capabilities and allows us to do far more than we ever thought possible, and which, in turn, opens up a new space for us to think about how we want to organize our societies in a way which everyone can benefit. And I think this is really exciting because we’ve never seen that possibility before in that way. People have talked about utopian societies throughout history, but I think what we’re seeing is that we’re really walking a knife edge with this thing that we call the global phase shift, where there’s a fundamental reordering taking place, which means that if we make the wrong choices, we could end up aborting a lot of these things. If we don’t accelerate the clean energy transformation fast enough—even though many of these dynamics are unstoppable, the problem is that if we don’t do it fast enough, we’re going to hit that climate danger zone of 1.5 C, if not 2 degrees Celsius.
It’s happening fast, it’s happening exponentially, but it’s not happening fast enough to get us out of that danger zone, which, of course, could trigger all sorts of runaway feedback effects and so on and so forth, that could allow the climate system to go out of control. And that’s just looking at this one sector and the interplay between energy and the environment. But what that says to me is that this really is the most pivotal decade in human history.
The decisions we make right now are literally going to determine the fate of the entire human species. It’s a lot to take on, but it means that each one of us has this really pivotal role to play. The choices that you and I make today are literally going to be the things that are going to determine what happens to us for the next few millennia. So I think with that in mind and really focusing on the positive possibility space I think if we work together, what we’re seeing is that there is a tremendous opportunity that’s opening up for us, but we very much need to understand what is happening, use the best of our science and our data to inform our decision making process, and really learn new ways of collaborating with each other so that we can have these conversations, because we need to make these decisions now. Stina Heikkila: Thank you so much for also bringing it back to sort of a little bit of that beginning of this new civilization that for the first time maybe we have actually a possibility because it’s visible to us much more than it has been in the past.
And we can use this more networked and distributed way of accessing information accessing means of production, let’s say, in value creation, in an entirely new way. And the big question that we are facing now is is the organizing system going to keep up? And that is very clear for me from everything that you have shared that that will require a reckoning in some of the key production systems that we are looking at. And this is really like something that we are very of course passionate about contributing our small bit to in Boundaryless by doing sort of frameworks and so on. And then your knowledge that you are sharing on the Internet, it’s great for creating that awareness for people of what is actually happening. So thank you so much for the conversation today. Before we leave, we want to ask you to leave some breadcrumbs with our listeners.
So anything that they should keep in mind. Nafeez Ahmed: Well, at the moment I’ve been reading this book by a cognitive neuroscientist by the name of Bobby Azarian. It’s called The Romance of Reality. It’s a fascinating book which brings together some of the cutting edge developments in physics and biology and systems theory and really shows how there is a new paradigm that’s emerging about the nature of physical reality.
And it’s really exciting. It’s showing us kind of the interconnected complexity of the real world. And also I think what’s really interesting is that he’s kind of situated many of the things happening today in our lives in this kind of wider kind of cosmic physics-based understanding of an evolving universe which is moving actually towards a direction of kind of increasing complexity and so on and so forth. So it’s really interesting because he really kind of I think the implications for us today are that in terms of how we’re looking at our organizing systems and our societies, that there is a forward direction that evolution is moving us towards, which is actually part of nature, it’s part of the physical universe. And our job really is to kind of try and really use our sense-making skills to align ourselves with that trajectory.
What’s really exciting about Azarian—he really calls it kind of a cosmic trajectory. But there’s no superstition, there’s no supernatural stuff in there. It’s all based on hard science, hard data. So I found that really exciting. Simone Cicero: Thank you so much.
That was a really great and deep conversation. I think what I bring home is that we should ask contributors or in general workers and entrepreneurs. We shouldn’t think about stable perspectives, we should really think of the world as in flux. And maybe we should be aggressive enough with taking risks based on projections, based on, rooted in data, and rooted in the reality of what’s happening, making projections of the world of a difference in the world that can happen fast enough. So it’s essentially that transitions, as you said, happen fast. They are happening faster and faster.
So it’s really the moment for us to be ambitious, right, in terms of how we can contribute to this transformation from a business perspective, from an organizational perspective, and maybe from seed itself as well perspective. So thank you so much, that was great. I hope you also enjoyed the conversation. Nafeez Ahmed: Very much so. Thank you.
Simone Cicero: Thank you Stina for your always great questions. Stina Heikkila: Thank you. Simone Cicero: And for our listeners, of course, you can find the notes, the transcript of this conversation on our website. You should go to www.boundaryless.io/resources/podcasts and you would find Nafeez’s session over
there. And before we talk again, remember to think boundaryless.