System Transformation Suvit Maesincee Sasin Institute for Global Affairs (SIGA) New Approach for...

System Transformation

Suvit MaesinceeSasin Institute for Global Affairs (SIGA)

New Approach for Achieving Stable

Growth, Shared Prosperity, Secured Peace &

Sustainable Planet

• Grand Challenges

• Global Dynamics

• Thriving in the 21st Century

• Food for Culture

The 20th CenturyChallenges

The 21st CenturyChallenges

Four terrible global tragedies- Two brutal WWs- A global pandemic- A worldwide depression

• Global Economic Crisis• The Eurozone Chaos • The Arab Spring

Uprisings • Consequences of

Climate Change• Cyber-Attacks• Pandemics• The Nuclear Worst

Case Scenario in Fukushima

Grand Challenges

Source: Divided Nations

Nature

Humanity

Interaction Between Nature & Humanity

Entropic Flow

From Order to Disorder

Negative-Entropic Flow

From Disorder to Order

The World of ImbalanceN

atu

reH

um

anit

y

NatureHumanity

Human-Nature

Imbalance

Human-Human

Imbalance

The World of RebalanceN

atu

reH

um

anit

y

NatureHumanity

Human-Nature

Rebalance

Human-Human

Rebalance

Global Dynamics

Geo-Political

Change

Global Dynamics

Demographic

Change

Climate

Change

Geo-Political

Change

Demographic

Change

Climate

Change

Global Dynamics

Global GDP %

1820 70 1913 50 73 2005

Developing Countries

Developed Countries

25

50

75

The Rise of the RestThe Triad

The Rest of the World The Rise of Asia

World Economic Structure

Source: The Economist

The Transition of Power

The New USA

The Rise of the Asian Middle Class Sector

World Bank, Australian Government

Source: Bussolo, Maurizio (2007)

In the year 2000, the middle classes in East Asia and the Pacific region were estimated to be around one sixth of the total global middle class (approx 72 million people or 1.4% of the global population)

In 2030, the World Bank predicts this proportion will rise to nearly half of the total global middle class , approx 600 million people or 8.9%, accounting for 7.7% of global income

Geo-Political

Change

Demographic

Change

Climate

Change

Global Dynamics

The World Population Growth

Source: UN, FAO, BBC

1950 1975 2000 2025 2050

2.5 bn 4.1bn 6.1bn 8.0bn 9.2bn

ResourceConstraints

• Shortage of Foods• Shortage of Energy• Shortage of Water

The First World of the Aging Industrialized Nations

DevelopedCountries

DevelopingCountries

AgingSociety

Dynamic Young Society

North America, Europe,

and Asia’s Pacific Rim

The First World

The Second World

The Third World

South Korea

• It’s total population is projected to decline by almost 9% by 2050 (from 48.3 million to 44.1 million)

• Its working-age segment is expected to drop by 36% (from 32.9 million to 21.1 million)

• The number of citizen aged 60 and above will increase by almost 150% (from 7.3 million to 18 million)

The Third World of fast growing, young, and increasingly urbanized countries with poorer economies and often weak governments

DevelopedCountries

DevelopingCountries

AgingSociety

Dynamic Young Society

The Second World

The Third World

The First World

• Today, roughly nine out of ten children under the age of 15 live in developing countries

• Over 70% of the world’s population growth, between now and 2050, will be concentrated in 24 countries, all of which are classified by the World Bank as low income or lower-middle income

The Second World of fast growing & economically dynamic countries with a healthy mix of young and old inhabitants

Brazil, Iran, Mexico, Thailand, Turkey, and Vietnam

The Second World

The Third World

The First World

Thailand’sPotential Supportive Ratio

7

6

5

4

3

2

1

0

2000 2020 2050

Source: Kua Wongboonsin

Geo-Political

Change

Demographic

Change

Climate

Change

Global Dynamics

Asean countries are likely to face more severe consequences of the climate change than the global average due to limited adaptive capabilities

Local Climate Change Action parallel to Global Action

Governing for Sustainability, p. 157

Voluntaryclimate action

World Mayors Council and others

Local Government Climate Roadmap

Copenhagen World Catalogue of Local Climate Commitment

The Global Cities Covenant on Climate (Mexico Pact) and the carbon Cities Climate Registry

Durban Adaptation Charter

Renewed Local GovernmentClimate Roadmap to 2015

Level of

Com

ple

xit

y a

nd

Inte

gra

tion

2005 2007 2009 2010 201120122013

UNFCC

Kyoto Protocol

Bali action Plan

Copenhagen Accord

Cancun Agreement

Durban

Warsaw

Global Climate Action

Local Climate Action

1990

Food and Fuel Security

Food

Fuel

• Improve energy efficiency • Encourage on renewable energy• Classify and separate type of food base on

purpose i.e. food for hunger and food for energy and formulate plan focusing on the purpose of each type of food

• Form a collaborative network with other countries to do R&D on energy issue

• Focus on climate change mitigation or resilience plan

• Improve farm productivity through education and other supportive measure i.e. land utilization, irrigation system, infrastructure and technology etc.

• Offer incentive to attract more investment on food production

• Form a collaborative network with other countries to do R&D on food security issue

Offshore Farming

Food & Agriculture

The 1st Wave

The 2nd Wave

The 3rd

Wave

Manufacturing

Services

Resource wars – the world will demand 70 percent more food by 2050, outstripping population growth

Cash-rich Arab and Asian governments are buying up arable farmland all over developing world

- Chinese businesses are investing in South America and Africa, not only to gain access to commodities, but to get in position to profit from sales to the emerging middle class

- China is also buying up large tracks of land throughout Africa to produce biofuels and to produce food

- India's companies have formed a consortium to invest in corporate farming of oilseeds in Latin America, most notably Uruguay and Paraguay

Thriving in the 21st Century

The Systemic Transformation Framework

Nature

Humanity

Technology CapitalismSystemic

Transformation

• Human life is mirrored in nature, and vice versa

• Balance the infinite growth imperative & the finite resources of Planet Earth

• Bridging technology & real needs of society

• It is not high-tech or low-tech,

but appropriateness and sustainable solutions

• Capitalism with social and environmental balance

Sustainism is the New Modernism, Leading from the Emerging Future

Modernism Postmodernism Sustainism

• Make it • Use It • Revitalize it

• Machinelike Environment

• Socio-Technical Environment

• Mirroring Nature in the Digital Environment

* Modified from Sustainism is the New Modernism

In response to environmental imbalance & social inequality, we see a shift from the current Age of Postmodernism towards a New Age of Sustainism

* Meme Wars : The Creative Destruction of Neoclassical Economics

BusinessEconomySocietyPlanet

Neo-classical ParadigmThe Earth as a subsystem of the

Human Economy *

BusinessEconomySocietyPlanet

Ecological ParadigmHuman Economy as a subsystem

of the Earth’s Ecosystem *

From Neo-Classical Paradigm to Ecological Paradigm

Modernism Post-Modernism Sustainism

State-DrivenMercantilism

Free Market-DrivenLaissez-Faire

Stakeholder-DrivenSocial-Market Economy

Eco-System DrivenSustainable Economy

Modernism

Postmodernism

Sustainism

Modified from Leading from the Emerging Future

Change in Economic Development Models

Centralized State

State-Market

State Market

NGOs

State Market

NGOs





Modernism

Postmodernism

Sustainism


Primary Societal Challenges

• Stability • Expansion

• Growth• Distribution

• Negative Externalities • Inequality

• Green Society• Inclusive Growth





Modernism

Postmodernism

Sustainism


Driving Mechanism

Commanding: Hierarchy

Competing:Markets

Negotiating:Stakeholder Dialogue

Co-creating:Conscientious-based Collective Action

• New ways to coexist with the planet

• New ways to deal with people

• New ways to secure profit

We are seeking for

You cannot have well humans on a sick Planet*

*Thomas Berry, Cultural Historian

Creative Power of Limits

Imagined the Limitless

Sustainism is the New Modernism

Renewable,Reusable &Recyclable

Perishable,Disposable &Expendable

Nature as Source

Nature asResource

Planet

PeopleProfit

The New Ways to Coexist with the Planet

The Quest for Embeddedness

The Search for Autonomy


Open-Source Exchange

Appropriation

You are what you share

You are what you have

The Power of Shared Knowledge

The Power ofKnowledge

Rewarding Cooperation

Rewarding Competition

Inclusiveness

Exclusiveness

Planet

PeopleProfit

The New Ways to Deal with People

An intention to serve the well-being of the few

An intention to serve the well-being of all**Leading from the Emerging Future

Scale & Scope

Scarcity & Proportionality

Planet

PeopleProfit

The New Ways to Secure Profit

Productivity Generativity

Efficiency Sustainability

Utility Stewardship

The Third Industrial Revolution, P.225

ControlSupply Chain

Engaging in the Open Collaborative Network

Malthus Vs. Smith

• The tension between the bad news and good news today resembles what the world has faced before, at the onset of both the first and second industrial revolutions

• That tension boils down to the worldviews of two scholars, Thomas Robert Malthus and Adam Smith, both of whom wrote in the late 1700s

• Malthus argued that the growing population would overwhelm the world, leading to widespread famine. Smith argued that businessmen could adapt and innovate rapidly enough that productivity could increase faster than consumption

• Where Malthus saw “Disaster,” Smith saw “Opportunity”

• While over time there have been eruptions of famine and shortage in different parts of the world, Smith was right. As the first and second industrial revolutions unfolded, opportunity has trumped scarcity

• We believe that history is repeating itself and that Smith will be right again

Resource Revolution

Fundamental Logics of Resource Revolution

• Finding opportunities to substitute away from scarce resources

• Eliminating waste throughout the system, from production though end use

• Increasing “Circularity” –upgrading, reusing, or recycling products

• Optimizing efficiency, convenience, safety, and reliability

• Moving products, services, and the processes that develop or deliver them out of the physical world and into the virtual realm Resource Revolution

Three Strategic Thrusts

• Combining information technology, nano-scale materials science, and detailed understanding of biology with industrial technology ad infrastructure yields substantial productivity increase

• Embedding high productivity economic growth in the developing world to support the 2.5 million new members of the middle class presents the largest wealth creation opportunity in a century

• Capturing this opportunities requires a new approach to management

Resource Revolution

From Cost Advantage to Loss Advantage

The New Capitalist Manifesto

• Achieving superior efficiency in 21st century terms—”socio-efficiency”--results not in cost advantage, but in loss advantage

• Loss advantage means an advantage in minimizing a business’s own direct cost, while also minimizing the social human, public and environment losses the business imposes on other economic actors

• While businesses seeking a cost advantage are often irresponsible , shifting, hiding, and pushing costs onto others, business seeking a loss advantage are radically—indeed, disruptively—responsible: they take responsibility for the full spectrum of the costs and losses production occurs

• Loss advantage happens by re-conceptualizing, organizing, and rebuilding production and consumption as a value cycle, instead of a value chain

• Today’s innovators are discovering that building cycles instead of chains is the key to renewing resources for tomorrow, instead of merely exploiting them today

P202, 204 The Third Industrial Revolution

• GDP is a measure of the wealth that a country generates each year, but from a thermodynamic point of view, it is more a measure of the temporary energy value embedded in the goods or services produced at the expense of the diminution of the available energy reserves and an accumulation of entropic waste

• All economic activity creates only temporary value, at the expense of the degradation of the resource base on which it depends

• Along with capital and labor inputs, energy is the “missing factor,” accounting for the rest of the productivity and economic growth

The Missing Factor

The New Capitalist Manifesto* The Third Industrial Revolution

The Value Chain

Inbound Logistics Operations

OutboundLogistics Marketing Service

The Value Cycle

ReverseLogistics

Remarketing

OutboundLogistics

Marketing

ServiceProduction & Reproduction

From linear to cyclical modes of production and consumption

From the thermodynamic perspective, the most important lesson we an learn is how to budget our consumption patterns to conform with nature’s recycling schedules, so that we can live more sustainably on Earth*

From Technical Productivity to Socio-Productivity

The New Capitalist Manifesto

• Today’s challenge is achieving a better kind of efficiency altogether: Socio efficiency that minimizes both direct costs and full-spectrum losses, creating thicker value

• To achieve gains to next-generation efficiency, all three—Walmart, Nike, and Interface—are innovating the cornerstone of industrial-age production itself: they are producing not in lines, but in circles

• They are doing this not out of altruism, but because doing so unlocks radical new paths for strategy, competition, and ultimately a new source of advantage: Loss advantage

• Simply, renewing resources for tomorrow is wiser than exploiting them today

Food for Culture

Nature

Culture

Food

Food as total nourishment for the body, the senses, the mind and the earth

• The entire food chain is reflected in what we eat, running from the soil to the plate

• It is beyond the modernist concept of nutritionism

• Sharing food = creating community


Food for Culture

• The disconnection between young people and the global food system is growing.

- Most young people do not grow up wanting to be farmers.- Consumers all over the world have forgotten basic cooking skills because of an overreliance on processed foods.

• Agricultural diversity is declining: most diets in riche countries consist of just six foods, including maize, wheat, rice and potatoes.

• Agriculture is looked down upon as a career and is often viewed as work for the poor or people who have no other options.

• Farmers also lack access to markets, making it hard for them to earn an income from their work

Danielle Nierenberg, Is Sustainability Still Possible?

Transition Culture

Reinstating the idea that food is something that grows near where you live, by someone you have some kind of a relationship with, and that you actually cook yourself


Production Consumption

Global

LocalFood Production and consumption occurred at the same place


Global

LocalSustainism is the New Modernism

From food as a part of local experience and community to food as a global economic commodity

Past: the same place

Present: different places


Lower

Higher

Fewer Diverse

Products

Quanti

ties

Marketplace wants “Less for More”*

*Chris Anderson, The Long Tail

More selective about what to grow and what not


In valuing time and place, we value seasonal and local foods


Global

Local

Option I: Shifting

Option II: Balancing

Every morning in Africa, a gazelle wakes up.It knows it must run faster than the fastest lion or it will be killed.

Every morning a lion wakes up.It knows it must outrun the slowest gazelle or it will starve to death.

It does not matter whether you are a lion or a gazelle.

When the sun comes up, you better start running.

African Proverb

“If You want to go quickly, go alone;

if you want to go far, go together.”

African Proverb

“It is not the strongest of the species that survive,

nor the most intelligent,

but the one most responsive to change.”

Charles Darwin

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