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Five things you need to know about the global economy – but didn't

Political transformation, the “gig” economy, and the individual value chain; meet the new global economy.

Five things you need to know about the global economy – but didn't

Technology and globalisation are marching lockstep towards the social and political transformation of both the individual and the nation-state. We tapped three visionaries to get their ideas on how the global economy is changing, and what it means for business.

1. Scale isn’t what it used to be

Scale happens quickly in the technologically driven global economy. This is good for the consumer, says John Ferguson, senior economist at the Economist Intelligence Unit, but it’s not so great for employment.

“Compared to Ford 100 years ago, companies like Twitter employ far fewer people,” Ferguson says. “This is something we need to think about from a macroeconomic perspective because scale doesn’t create the same number of jobs as industry did a century ago.”

2. Change means having great vision

The pace of technological change is so vast that business is often ahead of where the public is, says Ferguson. “While there are great technological opportunities presented to us, they exist in a vacuum without a political vision for what the future might look like,” he says.

As the rate of change becomes exponential, political vision for the future must keep pace to avoid alienating and disenfranchising people.

3. Buzz is an economic indicator

Humans naturally desire the new and interesting, says David Adam, founder and principal of Global Cities. This means the local texture in an economy, diversity of experience and excitement are just as important as other social and political considerations.

“David Bowie came in from Bromley in South East London to go to Central London to make something and experience new opportunities,” Adam says. “That is the kind of creativity that cities can create and buzz is fundamental to that.”

“It’s the diversity of people and the diversity of ideas that will make a city vital and resilient.”

– David Adam, founder and principal, Global Cities

4. Individuals are the new economy

The individual is now the central unit of value creation, says futurist Ross Dawson. Organisations have to become flexible and fluid in how they use people. “People want more control and flexibility in their lives,” he says. “Companies are going to have to restructure what they do and how they do it to accommodate this trend.”

According to Dawson, some forty per cent of people in the US are now members of what he calls the “gig” economy. This gig economy is also driving the rise of platforms to enable the individual. “Think about eBay, Etsy and others,” he says. “They’re all enabling platforms for the individual.”

5. Global citizens means political transformation

The globalisation of the workforce is vital for the texture and resilience of cities and economies, says Adam. “It’s the diversity of people and the diversity of ideas that will make a city vital and resilient,” he says.

And as citizens become global, they begin to transform the political process. “They will ask what more is there for me, how can I grow as a person,” Adam adds. “And that means political transformation is an inevitable part of this growth.”

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