Democracy With Green Swan Characteristics
Tags: Green Swan, Capitalism, Sustainable Development, Sustainable Business, Democracy

John Elkington

How can our politics embrace — and drive — positive exponentials beyond COVID-19?

Once again, capitalism faces an existential struggle. To survive and, yes, grow it must be embedded in healthy ecosystems, healthy societies, and, critically, healthy political systems. None of these are true of today’s world as most of us experience it, as I describe in my new book, Green Swans: The Coming Boom in Regenerative Capitalism.

Addicted to the daily news cycle, particularly since COVID-19 hit, many of us struggle to raise our eyes to the future. The sociologist Elise Boulding put it this way: “If one is mentally out of breath all the time from dealing with the present, there is no energy left for imagining the future.”

Some people see China’s push into clean technology as evidence that democracy’s growing myopia can only be countered by more rigidly run surveillance states. I disagree, strongly. Over time, despite its messiness, democracy is almost certainly the best way to handle complex long-term challenges. But current forms are in urgent need of seismic shocks and a radical overhaul. As the latest pandemic shows, the first are guaranteed, while the second is still to play for.

Three Horizons model (source: Volans, based on sources referenced above)

Populism is a powerful narcotic

The design failures now afflicting a growing number of modern democracies could hardly be more painfully clear. I was returning from the Ivory Coast when I heard the news about Brexit, an ill-informed, indeed externally corrupted vote that tipped the so-called Mother of Parliaments into an existential meltdown. Populist leaders have now grabbed the reins in countries as diverse as Brazil, Britain, the Philippines, Russia, Turkey, and the United States.

At times it is as if these governments have ingested a potent psychoactive drug that promotes narcissism and paranoia, radically shrinking both planning timescales and the range of people actually served, whatever the promises and campaign rhetoric may have been.

So how to dive into tomorrow? And how to track — and spur — the shift from a world of Black and Gray Swans to one increasingly populated by Green Swans? We asked Bill Sharpe of the International Futures Forum, who helps leaders engage the future in terms of three distinct horizons. All three, he noted, exist in the present. His framework has underpinned both our Tomorrow’s Capitalism Inquiry and the development of the Green Swans narrative.

The first horizon — H1 — dominates today, representing “business as usual”. As the world changes, so H1 thinking and practice begin to feel out of step, no longer fit for purpose. In the end, they are superseded by new ways of doing things. The increasingly obvious shortcomings of the H1 system spur growing innovation, although much of this may be captured by the existing system, for example through mergers and acquisitions.

This creates a second horizon, H2. Eventually, the new, innovative approaches become more effective than the original system, creating an inflection point, a point of disruption. Clayton Christensen flagged this as the onset of the “innovator’s dilemma”: Should you protect your core business that is at risk, or instead invest in the innovations that look as if they might replace it?

Often, breakthrough innovations — including exponential Green Swan solutions — emerge at the edges of the current system. This is the domain of Apple’s misfits, crazies, round pegs in square holes. Their H3 mind-sets seem light-years away from the H1 status quo, founded on very different assumptions. Easy to ignore, discount. This is the emergent third horizon, H3. It is the new way of thinking and doing things. Ignore it at your peril.

Bill Sharpe explains that H1 is the world of the manager, H2 of the entrepreneur, and H3 of the visionary. All have strengths and skills needed to make a successful transition to a better future. Note, however, that many elements of today’s H1 reality, including the triple bottom line, were themselves H3 ideas back in the twentieth century.

In Green Swans, Horizons 1 (today) and 2 (2021–2030) frame the period when we might expect “Ugly Ducklings” — weird-seeming innovations that almost no-one can imagine disrupting the status quo — to pop up all around. Horizon 3 (2031–2100) will then see a growing number of Green Swan solutions taking flight — and, in doing so, changing the system for the better.

That said, very few governments and policy makers are now able to seriously project out into Horizons 2 and 3, having been pretty much glued to the spot in Horizon 1. This is a major headache at a time when so many of our grand challenges require intergenerational thinking, priorities, and investment. One bright spot in this gloomy landscape, however, is New Zealand’s efforts to build intergenerational well-being — including improved approaches to issues like mental health and child poverty — into strategic planning and reporting at all government agencies.

Stretching our horizons

Our assumption, as sketched in the first of these posts, is that we are now moving into a historic U-bend, with very different forms of capitalism and democracy likely to emerge in surprisingly short timescales.

Alongside business leaders, attention is also now turning to cities — and to city mayors in particular. Democratically elected for the most part, they are much closer to local politics than are most presidents and prime ministers. As it happens, I trained as a city planner and things now seem to be coming full circle, with cities increasingly central to our agenda.

This reflects global reality, with 55% of the world’s population now living in urban areas, a proportion forecast to increase to 68% by 2050. Projections show that urbanization combined with the overall growth of the world’s population could add another 2.5 billion people to urban areas by 2050, with close to 90% of this increase taking place in Asia and Africa.

On the flip side, some cities have experienced population declines in recent years. Most of them are located in the low-fertility countries of Asia and Europe where overall population sizes are stagnant or declining. Economic contraction and natural disasters have also contributed to population losses in some places.

Source: Pixabay

How do we give more people — particularly the young — a more powerful voice?

But the city is where democracy started and where it must now largely be reinvented for the twenty-first century. One interesting place to look for signals of where politics and policy may be headed is Apolitical, an online platform that aggregates best practice from around the world and makes it easily available to public servants.

The Apolitical team explains:

Whether we like or dislike government, love it or despair of it, most of us can agree that government plays a pivotal role in solving wicked problems — from the refugee crisis and the strain of urbanization to climate change, cyber security and adapting to a world where an algorithm somewhere is chasing your job. And innovative solutions often already exist.

Around the world, the hundreds and thousands of men and women working in government are tackling similar problems. Often the solutions they find can be shared. But with public servants working under tight time pressure and often in silos, good ideas often remain confined to a country or a sector. This leads to duplication of effort, wasted taxpayer money and poorer services for citizens.

Government, in short, must be reinvented to become fit for the future. And there are some signs that the public sector is being forced by the COVID-19 pandemic to attempt in weeks innovation that would once have taken years or even decades.

Populism, inequality, and poverty, as I conclude in Green Swans, are among the great scourges of our time. They are also failures of democracy and ultimately must be solved by democracy. But to work effectively, democratic processes must be informed by the right mindsets, priorities and intelligence flows, which is where we turn in the next, final post in this short series.