The Age of Fragility

Anyone joining the workforce since the financial crash of 2008 would be forgiven for believing that the business world is one of almost constant disruption. Anyone joining since 2016 would consider this to be especially true. But this has not always been the case.

I started corporate work after leaving university in the early 1990s, and back then, the pace of change seemed linear and manageable, a state of affairs that appeared to have been constant for many years. With the outside world seemingly under control, business improvement initiatives focused on reducing internal waste and improving functional efficiencies, with methodologies such as Six Sigma, Lean Thinking and TQM becoming popular.

So when Michael Hammer’s seminal article ‘Reengineering Work: Don’t Automate, Obliterate’ [i] was published in 1990, it captured the imagination of forward-thinking CEOs desperate to identify new ways to increase corporate profitability. As Hammer commented at the start of his article, the usual methods for boosting performance—process rationalization and automation—haven’t yielded the dramatic improvements companies need. In particular, heavy investments in information technology have delivered disappointing results—largely because companies tend to use technology to mechanize old ways of doing business. They leave the existing processes intact and use computers simply to speed them up. But speeding up those processes cannot address their fundamental performance deficiencies.

His article struck a new tone, advising leaders that in the new world of knowledge workers, the real opportunity was not to optimise existing ways of working but to initiate a radical re-design of their company’s end-to-end processes, organisation, and culture. In 1993, Hammer extended his work into a book (with James Champy) called ‘Reengineering the Corporation: A Manifesto for Business Revolution’, which created great excitement and enthusiasm for business re-engineering and paved the way for the ERP revolution that swept across the corporate world. While no doubt disruptive, this change was very different from what we are experiencing now. Rather than external market chaos, this was disruption that companies decided to impose upon themselves. We call this inside-in transformation.

The Past is a Foreign Country…

This mindset that the world was now in a state of stability was reinforced in 1990 when Francis Fukuyama released ‘The End of History and the Last Man’[ii]. In this, he proposed that the fall of the Berlin Wall and the end of the Cold War meant that the geo-political chaos of the past was over, liberal democracy would now become the final form of government for all nations, and the future was one of stability, peace and economic prosperity for all. Times, he said, will not be a changing. Fukuyama proposed that the past was now a foreign country where things were done differently from how they would be done moving forward.

Yeah, about that. Lol. ?

As we now know, these declarations of history’s demise were comically premature. Once again, our so-called visionaries have had to eat humble pie as they learn the often-repeated lesson that while history may not repeat, it sure as hell rhymes.?

But why does it rhyme?

Those familiar with my writing will already know the answer. History rhymes because change is cyclical, not linear. These progress cycles occur at a macro ‘civilisational’ level and a more micro ‘technological’ one. The macrocycles of empires rise due to exploration, collective and individual risk-taking, and conquest. Infrastructure is then laid down to defend these gains and enable and control the flow of resources and people. The new empire creates a sense of national duty in its people, leading to a proud and optimistic society with strong social cohesion. Over time, the empire over-extends beyond its fiscal and military capabilities, while internally, its political leaders become complacent and self-serving, losing any feelings of noblesse oblige. The mass assimilation of citizens from multiple different societies – many of those from lands acquired by the empire – naturally reduces national pride and any sense of duty to the empire, leading to social fragmentation, internal demoralisation and disorder, ultimately resulting in decline and collapse. As the saying goes, hard times create strong men, strong men create easy times, easy times create weak men, and weak men create hard times.

The five power stages in the life cycle of empires are well articulated in the diagram below:

Historically, these empirical cycles last approximately 250-300 years, meaning the end of the current empirical cycle of capitalist liberal democracies is imminent. The transition from the British Empire to the US military and economic hegemony has probably extended this cycle’s life. Still, right now, all of the contractive phase characteristics are on show, while none of the expansive ones are.

The Age of Innovation and Industry.

The impact of the current civilisational cycle on human history has been unprecedented. To understand precisely how impactful this current empirical cycle has been, one needs only to review the three charts below:?

These charts are all great examples of what exponential progression looks like. All three highlight that at the end of the 18th century, something happened that enabled humanity to escape the Malthusian limitations of the past. Starting in Britain, these improvements in health and wealth soon spread across the world, leading to dramatic increases in living and working conditions, life expectancy, literacy rates and a reduction in child mortality. Freedom – both literal and economic – had enabled humanity not just to survive but to thrive.

Creative Destruction: The Phoenix of Progress

But what caused this exponential shift? A different type of cycle, one facilitated by a new form of liberal, democratic society that was very different to the spectrum of authoritarian civilisations that had existed for most of human history. A series of unexpected and unintended consequences that emerged from events such as the English Reformation, the Glorious Revolution and the agricultural, scientific and industrial revolutions enabled British society to move from a world of serfdom and servitude to one of freedom and consumerism. A new model emerged that enabled and encouraged experimentation and entrepreneurship and allowed people to keep the proceeds of their inventiveness and labour. While this type of society seems normal now, just 250 years ago, it was deemed revolutionary.

The emergence of this liberal, capitalist society enabled a series of smaller cycles to emerge, and it is these that have caused the exponential effect shown in the previous graphs. These cycles – or waves - are the real drivers of modern progress, for they are based around technological progress and the innovators and entrepreneurs that invent and invest in them. Approximately 40-50 years in length, give or take a war or two, they are called Kondratiev waves (K-waves), named after the soviet economist Nikolai Kondratiev, who was the first to identify them. They are also known as Schumpeter’s Gales, named after Joseph Schumpeter, who defined the process of technological ‘creative destruction’ as the driving force behind these waves, for while new innovations create new industries, they correspondingly destroy the ones they replace. The rail revolution destroyed the need for horses and carriages, Henry Ford’s automotive revolution destroyed the buggy whip industries, the PC and word processor destroyed the typewriter and secretarial sector, e-commerce is currently destroying the shopping malls, etc.?

These technological cycles of creative destruction comprise the following phases:

• A Spring installation period. This is when new inventions appear, the market gets excited by their potential, and a tech bubble emerges. However, these innovations primarily generate production efficiencies rather than radical transformations due to technological immaturity and a lack of underlying infrastructure. In short, these new technologies are used to do old things in new ways.
• The Turning Point / Transition Period. Market overinflation and the collapse of the ‘mania’ bubble surrounding the new wave’s technology cause great fragility and uncertainty, leading to recession, stagflation, and significant social and geopolitical unrest.
• A Summer deployment phase. When the unrest from the Transition Period abates, inflation settles, and real incomes rise, the real potential of the new inventions emerges - either directly or through the convergence with other innovations. This time, we use these technologies to invent new ways to do new things. However, the industrialisation of these new technologies destroys the prevailing paradigm and market, creating a technological Golden Age.
• A downswing Autumn period. Once the new paradigm becomes established, the technology and market mature, leading those with money to seek more effortless ways to make money (such as from fiscal products, not industry).?
• A Winter period when the market collapses, leading to a recession/depression. i.e. 2008 – 2012.

Five waves have occurred since the First Industrial Revolution, and we are currently experiencing the disruptive transition period that emerges midway through the sixth wave’s upswing.

Danger, Will Robinson!

In the early 1990s, global commentators and the leaders they influenced shared Fukuyama’s belief that the turmoil associated with history was at an end and that the future was theirs to control. This mindset was convinced that the economy was all that mattered (summed up in 1992 by Bill Clinton’s strategist, Jim Carville’s quote, ‘It’s the economy, stupid’), cultural issues were no longer irrelevant, and growth was infinite. They believed this because, at that time, they were sunning themselves in the warm rays of the fifth wave’s late summer period and thought - like many before them – that easy times were here forever. By the end of the decade, a dotcom bust would occur, and in 2007, the global financial market collapsed.?

History was back, baby!

Before the rise of each new wave, the old one has to end. This winter phase is marked by a flat market, stagnating wages, limited innovation, and governments trying to stimulate growth through low interest rates and other fiscal incentives. This situation was exactly what transpired for five years following the 2007 collapse. However, as the winter thaws and a new wave’s spring period begins, new inventions emerge that redefine the art of the possible. We entered the Sixth Wave’s upswing around 2012, coincidently the year I first noticed a proliferation of new technologies emerging across the supply chain, writing about their potential future impact here .

Several significant new investments were made in different technologies, ranging from warehouse logistics (Kiva / Amazon) to autonomous driving (Google), co-bots (Rethink Robotics), delivery drones (Amazon), and Blockchain (IBM). We also saw AI emerge from the famous ‘AI winter’, with IBM Watson first appearing in 2011 and AI startups such as Deepmind acquired by Google in 2014 (which then invested heavily) and AlphaGo making its appearance in 2016.

While the emergence of these new inventions causes great excitement, the infrastructure needed to create a paradigm-shifting revolution is lacking. From 2012 to 2020, there was nothing but excitement about these technologies and their potential, but none created a new industry. We just had glimpses of future potential that made us go ‘wow’ but didn’t change anything. The market was also getting hyped around these new technologies, and tech companies were recruiting by the tens of thousands. This is classic phase one behaviour.?COVID then hit, and this accelerated investment into these new technologies, but they were still used to do existing things more efficiently. Cryptocurrencies went exponential and massive amounts of money was invested into these.

Then, around the mid-point of the upswing of each new wave, when the mania around the new technologies is at its peak, the bubble bursts, the market goes into recession, and things get both disruptive and dangerous. Billions were wiped off crypto, and tech companies laid off thousands. No one is posting TikTok videos about all of the crazy free benefits they get working from Meta / Google / Apple / Twitter etc anymore.

The danger of this time was first observed by Kondratiev himself in 1926, when he wrote, “It is during the period of the rise of the long waves, i.e., during the period of high tension in the expansion of economic forces, that, as a rule, the most disastrous and extensive wars and revolutions occur.”[v] True to form, the current transition period is plagued by conflict and geo-political, social, and technological unrest as old and new ideologies, paradigms, and power structures clash. Everything from our personal finances to our democratic freedoms and planetary ecosystem is experiencing heightened disruption, uncertainty and fragility. One of the causes of this is a geo-political battle between the current hegemony – the globalist, liberal, GDP-focused Western nations and the US-backed financial and military structures that support them, and the more centralised planning systems practised by the more authoritarian governments in China, Russia, and the Middle East. You know, those historical systems of governance that Fukuyama proclaimed deceased thirty years ago.

The danger is everywhere. At the time of writing, the two-week war between Russia and Ukraine is now well into its second year and is escalating fast as Ukraine moves from defence to offence. The Middle East is currently a tinder box due to the war between Israel and Hamas escalating as Lebanon and Iran are itching to strike a blow against their ideological enemies, and there are high tensions in the Chinese Sea, specifically around Taiwan’s right to independence. None of these conflicts have yet peaked, and so are likely to get much worse before they get better.

Meanwhile, the West is indirectly involved in all these external conflicts while directly being at war with itself. ?The US elections are about to be held in November, and whatever the result, the other side is unlikely to take it well. Tensions and tribalism have only escalated since 2020, leading many to predict that civil unrest is likely. Had Trump not slightly turned his head to look at a graph, then the recent assassination attempt would have succeeded, and an alternate reality would now be playing out. Across the West, social cohesion is collapsing, accelerated by unprecedented levels of illegal and legal migration. Protests about issues in foreign countries have become an almost weekly occurrence, rankling a large percentage of the native population, who are unhappy about the levels of mass migration into their countries.

The Age of Decadence and Decline

The signs of the West’s economic and industrial decline are everywhere for those willing to see them. Britain has moved away from entrepreneurial and innovation-based capitalism, which created its wealth and position as a global super-power, to rentier capitalism, an economic system organised around income-generating assets. In the words of the Financial Times, privatisation, deregulation, and financialisation have led to Britain becoming a “rentier’s paradise”.[vi] The buyers of these assets are often foreign, with overseas buyers accounting for 41% of activity in the London property market. This addiction to London-centric financialisation has caused an enormous drag on the rest of the British economy.? In 2018, a trio of economists tried to establish how much of a drag, concluding that from 1995 to 2015, excessive financialisation cost the UK economy ￡4.5 trillion in unrealised growth.[vii] Ouch.

In late July, the UK also slipped out of the top 10 manufacturing nations for the first time, overtaken by Russia and Mexico, and now languish in 12th place.[viii] Unless something radically changes, this slide backwards will continue, for the birthplace of the Industrial Revolution no longer seems able to do industry. Part of the decline was due to the outsourcing and offshoring of manufacturing during the last wave’s winter period. When local employment couldn’t be avoided, mass migration allowed corporations to keep wages low, a move welcomed by shareholders but not by those who rely on these wages to survive. While off-shoring appeared logical, it was, in fact, horribly myopic, for while direct labour costs were reduced, other costs – such as transportation – were increased. Offshoring also introduced new risks that were not an issue when things were made locally, and companies realised that high volume, long-lead time supply chains required predictability and market stability to achieve their benefits. Unfortunately, since 2016, predictability and stability have been in short supply, replaced by uncertainty – lots of it. This uncertainty tested the agility and resilience of global supply chains, finding most lacking in both.

The trouble now is that the loss of manufacturing, shifting demographics and increasingly authoritarian political leadership means the UK is no longer seen as a safe and stable place to reside. Millionaires are currently fleeing the UK faster than any other country, except for China, where foreign investors withdrew ￡11bn in the three months between April and June 2024.[ix] While China will have more millionaires emigrate in 2024, Britain outpaces them per capita by a factor of 14! Why are millionaires leaving China in such large numbers? Because they know that China’s authoritarian government could take away their money and freedom at any time. Now, ask yourself why so many are leaving the UK.

Kinda' worrying, don’tcha think??

Worse before it gets better

The reason for this exodus is more than just economic. Unsurprisingly, the capital-centric, financial services-focused, mass migration and asset-selling approach to growth has proven to be unpopular with much of the native population, whose wages have stagnated and whose heritage, culture and communities are disappearing before their eyes. People are increasingly aware that their leaders no longer see themselves as servants of the people and do not have the country and its citizens' best interests at heart. While the political class only cares about whether the line on the national GDP graph goes up, most people care about issues other than economics. Especially when they don’t benefit from this economic ‘growth’ as GDP per capita – the real measure of national wealth - is no higher than in 2007 (as shown below).

The answer to every economic problem seems to be to increase the migration of cheap labour to keep wages low, then increase the proportion of tax funds to support the bottomless public sector pit whose service to said public seems to decline in inverse relation to the amount spent. In the UK, we are constantly told that the economy and public services like the NHS cannot survive without infinity migration and infinity money. This does nothing but highlight their fragility while correspondingly aggravating the native population, who would like to see less migration and better and more accessible public services. They also care that the high-trust society their parents inhabited is disappearing at a rate of knots, and any protestation about this is immediately silenced. They have repeatedly voted for less migration and more investment in the local economy, but this has resulted in nothing but broken promises, an acceleration in the rate of legal and illegal migration and a prioritisation of funds to support these new entrants. The UK economy is now effectively one giant Ponzi scheme, requiring a constant inflow of new entrants just to stop the lie from being exposed and the whole pyramid collapsing.

Capable of only managing decline, our tepid political leaders appear absent any sense of noblesse oblige, viewing their country’s population not as citizens to inspire and serve but as an amorphous collection of consumers to control. This is creating an ever-growing divide between the more conservative, working-class ‘somewheres’ and the globalist, neo-liberal and upper-middle-class ‘anywheres’.[1] The ‘anywheres’ contain nearly all the political class, and their unwillingness to listen or even legitimise the concerns of the native population is preventing peaceful recalibration. Absent democratic outlets, the unheard are left with limited options and turn to the streets, a situation we have seen play out in 4K across the UK over the last few weeks.[x] As I predicted in Transition Point, the pendulum is moving to the extremes, increasing the division and creating more momentum for the swing back, which usually means more violence and destruction. The refusal of those in elite positions to even acknowledge the concerns of the working class is something that history contains plenty of lessons about. Still, it appears that our leaders' self-serving agendas and myopic mindsets make them unwilling to learn from them.

Rather than listen, learn and adapt, governments are instead turning to technology. They are increasingly repurposing our digital tools of communication and convenience into ones of control and compliance. There has been an alarming rise in state-sponsored speech suppression already, including the imposition of hate speech and blasphemy laws and attempts to censor global platforms such as X (formerly Twitter). These draconian measures are not unsurprising, for as Nicolás Gómez Dávila observed, ‘dying societies accumulate laws like dying men accumulate remedies.’ Back in 2018, I commented in Transition Point that restrictions on the use of social media were limited to more traditional authoritarian leaders, such as President Erdogan in Turkey or Xi Jinping in China. However, in the chapter ‘Brave New World or Big Brother?’ I also warned that we should not consider ourselves too lucky, for Western societies were set to impose similar guidelines. I ended that chapter with the comment that Orwell’s most famous work was intended as a warning, not an instruction guide.

But here we are.

Rhyme Time

It is important to remember the cyclical nature of these technological waves, which explains why these types may not repeat, but they do rhyme. So, while the future may not look like the recent past, it sure does look like the longer-term past - such is the nature of cycles. Look back at the same transition period of the last wave, and you’ll find that the world was at constant risk of nuclear annihilation as tensions between the US and the Soviet Union heightened and the Doomsday clock was set at one second to midnight. The UK was plagued with strike actions that saw the dead unburied, electricity rationed and people working a three-day week. An 83% top tax rate was imposed on the population, which led to a significant brain drain and exodus of the wealthy, a phenomenon not so dissimilar to the millionaire exodus we are witnessing today. Violence was no stranger either, with the IRA blowing up high streets and a Brighton hotel hoping to assassinate the Prime Minister and her entire cabinet (five were killed, and thirty were injured). Across the pond in the US, the economy was still suffering the aftereffects of the Vietnam War while on high alert due to the ever-present Cold War. Across the country, there were mass protests and unrest around social and racial justice, fuel shocks and oil crises, and a general feeling of societal malaise.

As we now know, this disruptive period would pass, and a new Golden Age would emerge, driven economically by low taxes and deregulation and technologically by the personal computers and the systems that ran on them. Thus, the fact that we have been here before multiple times and emerged relatively unscathed into a new technological golden age should give us hope. We have not just survived these periods but thrived afterwards. The world is more educated, healthier and fairer than fifty years ago.

But there is a reason why the sixth wave’s transition period will most certainly be more disruptive than previous ones:

1. Due to globalisation, the world is more interconnected, meaning disruptions are less regionalised.
2. We are now in the decline phase of the cycle of empires.

Like its predecessors, this wave exists within a larger cycle: the cycle of empires and civilisations, and where you are in that cycle dictates the impact of where you are in the smaller, technological one. During the transition point of the last wave, we were in the over-extension stage of this macrocycle, where the cultural decline of the West was evident, but the economic growth from globalisation masked it. This time, the transition point arrives at the weak men create hard times stage of civilisational decline, meaning that the West is less resilient to the effects of this transitional stage. Unlike previous waves, now our supply chains and economies are all linked, meaning that the effects of the disruption will be both more pronounced and more widespread. ?

We’ve also got the creative destruction impact from this wave’s technological revolutions to look forward to.

Summer is on its way…

To date, the technological innovations of the Sixth Wave have only shown glimpses of their true potential. For those aware of K-waves and their phases, this is expected, for every wave shows glimpses of the new technology’s capabilities in phase one (spring), but their real paradigm-shifting and productivity-generating capabilities only emerge when they converge in phase two (summer). For example, the true potential of the steam engine was not its ability to extract water from mines (phase one) but the ability to power new industries and transport people across continents. This required advances in steel production and the laying of miles of railway track. Likewise, the true potential of the combustion engine only emerged with the creation of the motor vehicle and the assembly line manufacturing process.

This initial ‘lag’ leads to people over-hyping the technology, then becoming disappointed when they do not see it delivering any real transformation, only to become surprised later when their real potential emerges. This phenomenon has a name - Amara’s Law. Named after the late American researcher, scientist and futurist Roy Amara, who observed that ‘We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run’.

This lag was behind the issue that Hammer highlighted in his 1990 article about the technologies of the fifth wave. In it, he lamented the fact that?companies tend to use technology to mechanize old ways of doing business.?This short-sightedness is classic phase one behaviour. At that time, people couldn’t imagine the internet and its possibilities as they had no frame of reference. Now, internet connectivity is an essential commodity; thirty years ago, it was science fiction. ?

Looking back at this stage in the previous wave, you can see why Robert Solow, Nobel Laureate in economics, famously said: “You can see the computer age everywhere but in the productivity statistics.” This comment highlighted the lack of productivity – less than 1% - that had emerged despite massive investment in information technology during the fifth wave’s spring phase, a level of investment that increased the US’s computing capacity a hundredfold. This became known as the productivity paradox. But as we now know, in the next phase of the fifth wave, these computers converged with a new technology, the World Wide Web, enabling the Internet Age and its gifts of globalisation, e-commerce, social media, and completely new B2B and B2C business models. And an unhealthy dependency on the magic rectangles we carry with us everywhere. ?

Four decades later, we can see an almost replica of Solow’s productivity paradox in the current wave, this time with AI, specifically Generative AI. Despite massive levels of hype around Gen AI, I’m yet to find many examples of companies that have been able to derive any real value from them. Earlier this year, Sam Altman, CEO of OpenAI, was even asked, “Can you detect when ChatGPT launched in the productivity figures?

His answer? “No – not yet.”

But it will. Just as the PC eventually led to the Internet / e-commerce revolution, when we come out of this transition period and into the next phase, we will see ChatGPT and other multi-modal Gen AI tools transform how we do everything from business to education. In the same way as people in the 1990s couldn’t imagine our constantly connected digital world, we will struggle to predict a future where AGI is commonplace.

Like previous waves, the sixth wave’s summer period will revolutionize how we generate power, transport goods and people, and communicate. (I detailed some of the technologies likely to emerge in the next phase here .) AI will be the engine that powers these improvements, creating breakthroughs in everything from humanoid robotics to autonomous driving and quantum computing. Combined, these developments will solve long-existing problems around nuclear fusion, hydrogen storage and distribution, genetic engineering, vehicle autonomy, etc.

The sixth wave’s next phase will create both great opportunities and risks. And I fear that the leadership in our countries and corporations will be unable to leverage these opportunities or mitigate the risks.

Slipping Behind…

Much of the discussion during this disruptive period is on becoming more resilient to survive. But this will not be enough. As we are in the decline stages of the macrocycle, success requires thinking differently. The last two stages of empire—over-extension and decline—traditionally see a rise in protectionism rather than innovation and an inability to invest in the vital infrastructure needed for its future survival. True to form, the West—especially countries like the UK—is falling behind precisely for these reasons.

Take robotics, for example. Robotics is one of the pivotal technology areas of the sixth wave, and the convergence of multi-modal Gen AI with robotics will see its growth explode exponentially. Yet, the West is already falling far behind. Last year’s World Robotics report showed the rate of industrial robot installations in Europe (15%) and the US (10%) compared to Asia (73%).[xi] China implemented more industrial robots in 2022 than the rest of the world combined, effectively installing every other robot. It knows that it is no longer competitive on low wages, but it also knows that robots – once acquired - work 24/7 without breaks for the cost of electricity, meaning that automation allows Chinese companies to out-compete even the lowest-cost human-centric manufacturers.

It gets worse for the UK, as it is the only G7 country that sits outside the top 20 regarding robot adoption. This year, it went backwards, slipping from 24th in the world to 25th, with approximately 98 robots per 10,000 employees, compared to a world average of 126 units. This is less than a tenth of Germany’s sales, whose own figures were still less than a tenth of China’s. To reach the robot density level of its nearest G7 competitor, France, the UK would have to spend between ￡9-12bn on installation costs alone, based on IFR World Robotics Report 2023 data. The payoff would be worth it. Under current trends, automation and robotics would positively impact the UK economy of ￡6.4bn. However, should the UK government strive to reach a level of investment in automation and robotics that brings the UK in line with the G7, the economic impact would increase to between ￡252bn - ￡272bn by 2035.? But that would require vision, investment, and belief. All things that are in short supply at a national level.

The UK is operating on a past paradigm; its manufacturing industry hollowed out by globalisation, financialisation, and an addiction to cheap migrant labour. Our political institutions lack the resilience and insight to protect our existing industrial base while failing to provide division to create a new one. It has no clear industrial strategy, provides no vision for the future, and is, by all metrics, fragile. As Mike Wilson, Chief Automation Officer at the Manufacturing Technology Centre, highlights, “Automation adoption in the UK is a major societal problem, preventing the UK industry from transforming into high-performing workplaces to provide for a prosperous and sustainable society”.

The UK government appears to have little idea how to invest or inspire UK manufacturing. To be clear, the UK hasn’t lost its inventiveness, as British engineers consistently create world-leading advancements in AI, nuclear fusion, genetics, new welding technologies, etc. Heck, I work for the UK’s centre of manufacturing innovation, so I see on a daily basis the impressive capabilities and ingenuity that we have to offer. However, because it has outsourced its manufacturing, the UK has lost its ability to industrialise these inventions. And the industrialisation of innovation is what drives progress and growth. So we end up being really good at solving problems but really bad at creating a job-creating industry off the back of these solutions, leaving that profitable endeavour to our competition.

We not only outsourced our manufacturing; we also outsourced our thinking. Worse, we were happy to do this because it seemed easier. But nothing of worth was ever achieved because it was easy.

Resilience is not enough: The Need for Anti-Fragility.

We are still in the dangerous transition period of the current K-wave. However, because we are also in the latter stages of the civilisational macrocycle, while the disruption may be similar, the societal and economic fragility is heightened. If you are concerned, you should be. Every empire believes that it is an empire without end. Every empire to date has been wrong.

So, does this mean that the die is cast, and managed decline is all we should aspire to?

No. This article is not an obituary but a call to action.

The question, therefore, remains: in this time of disruption and fragility, what do we do?

The first thing is to approach change with a different mindset. This was what Michael Hammer proposed back in 1990.? And he was right. Sort of. Hammer identified that the real opportunity is not just to improve the efficiency of what we already do but to undertake a complete rethink of the organisational processes, culture and organisation. But this is not enough, for, as mentioned, it is an inside-in transformation. While doing this will increase the organisation's resilience, what we really require is for our nations, organisations (and ourselves) to strive to do more than just survive.?

This requires a more outside-in approach, one that starts with an understanding of socio-economic and technological cycles and what impact they are likely to have on your industry, market and customers. It also requires a rethink of the organisation's purpose, who your customers are, and what it is that they value. Kodak could have redesigned its organisation, aligned its processes, delivered the best ERP implementation in the world and made its supply chain super-resilient. But unless that work enabled them to confront the brutal fact that despite the record profits they were getting from film sales, digital photography was the future, and their actual business was in the capture and sharing of memories, then all this effort would still be in vain.

Therefore, we must go beyond resilience and learn to become anti-fragile—at a national, organisational, and individual level. This is non-optional, required not just to survive the current disruption but also to overcome the effects of a society living through managed decline. We cannot continue to justify the costly redundancy of remaining in constant readiness for the next global crisis.

We must relearn to become the architects of our future. We must relearn how to industrialise, not just invent.

We must relearn how to thrive.?

Next Time…

The next article in the anti-fragile series will discuss why companies are fragile and struggle in this time of great change and why nearly all their issues are self-inflicted, caused by industrial thinking in a digital age.

In the final article, we’ll define the difference between fragile, resilient and anti-fragile organisations and how a combination of critical, systems and design thinking is crucial in developing an anti-fragile mindset that will ensure long-term personal, organisational and hopefully national success.

[1] From David Goodheart ‘The Road to Somewhere: The populist revolt and the future of politics.’

[i] https://hbr.org/1990/07/reengineering-work-dont-automate-obliterate

[ii] Francis Fukuyama (1992). The End of History and the Last Man. Free Press. ISBN 978-0-02-910975-5.

[iii] https://youtu.be/amhTPJS0jdk?feature=shared

[iv] https://www.davidmurrin.co.uk/article/5-phase-life-cycle

[v] N. Kondratiev (1926) ‘Kondratieff Cycles - The Long Waves In Economic Life’, reprinted in The review of Economic Statistics, 1935 https://www.slideshare.net/exopolitika/kondratieff-cycles-the-long-waves-in-economic-life-1935

[vi] Jonathan Ford; ‘Lax regulation has turned Britain into a rentier’s paradise’, Financial Times October 1, 2017 https://archive.is/2Qded#selection-1913.1-1919.13

[vii] Baker, A. Epstein, G. and Montecino, J. (2018) The UK's finance curse? Costs and processes. Report. Sheffield Political Economy Research Institute (SPERI), University of Sheffield. https://eprints.whiterose.ac.uk/143275/

[viii] https://www.telegraph.co.uk/business/2024/07/29/britain-ceases-top-10-manufacturer-first-time-industrial/

[ix] Melissa Lawford, ‘Blow for Xi as investors scramble to quit China’, The Telegraph, August 12 2024. https://www.msn.com/en-us/money/markets/blow-for-xi-as-investors-scramble-to-quit-china/ar-AA1oETSx

[x] https://www.telegraph.co.uk/news/2024/08/09/judge-refuses-bail-riot-bystanders-belfast/

[xi] https://ifr.org/ifr-press-releases/news/world-robotics-2023-report-asia-ahead-of-europe-and-the-americas