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Human capabilities

Human capabilities

This is a time of unprecedented insight. We know vastly more about an ever-expanding range of things - science, society, the human condition, technology, the grand systems by which we live and the tiny fretwork of life that largely passes us by - and there are, of course, very many more people who have access to this understanding. There are likely to be around two billion university graduates alive in 2020, which is a substantially greater number than the entire human population of 1900.

Trained, enabled people are to be linked into a network of formal and informal communications, and into systems of employment and engagement which make use of their talents in ever-more effective ways. Feats of engineering which would once have excited the popular imagination are already routine, and often seen more as intrusive than grand. Science presses our understanding forward into areas which would have seemed pure fiction even a decade ago. (The areas in which science may surprise us are reviewed elsewhere.) The potential which humankind will be able to exploit will continue to expand, and we shall not only be able to do utterly, probably astounding new things, but we shall also be able to repair some of the scars which have been left from when our abilities were less.

The economic potential is equally immense. Productivity has brought down the cost of delivery of almost all staples and many luxuries. The cost-performance of computers is an oft-cited example of this, but almost all commodities are now cheaper than they were a generation ago. The output from a skilled worker, and from the capital and organisation which backs their efforts, has also grown very substantially on almost all metrics. It costs us less inputs to get a unit of output, and this fact is both the essence of economic performance and a trend which should continue to accelerate in those nations which are predisposed to pick up the now readily-available tools.

Competition has been a powerful spur to productivity growth, and we shall see much more intense competition in at least some of the economically-important parts of the world. Technology has also been a major driver, as has the increased effectiveness of the human resource on which our economies can draw. We know that investment in both education and pure science have economic discount rates in the 30-80% region: that is, they are extraordinary effective in generating streams of added value. The very considerable investment which is being made in both of these fields - seemingly something in the order of a fifth of GDP in most industrial nations - must be expected to have a very major impact on our collective economic prospects. Savings, too, have grown in absolute terms, and savings rates have increased in most of the developing nations. Capital is, therefore, cheaper than it has been for generations and levels of investment are likely to remain high.

Behind the realisation of these sources of advantage are, however, two questions. First, are we allocating resource effectively? This is discussed elsewhere, with particular reference to the institutional background against which events unfurl. However, the answer is also plainly linked to the quality and character of the management talent with which the world will supply itself. The second issue is to do with the friction which is inherent in all of this potential.

There are, of course, always negative possibilities which are associated with every source of potential. Powerful things can do harm. Commerce will be driven to ever-faster life cycles, and the current crop of winners and losers will soon be lost in history. Nations and organisations which can deploy knowledge in adaptive, distributed ways will be the invariable winners, and those which cannot or do not do this will be the losers.

As we have noted elsewhere, the likely pace of change will imply social upheaval amongst many world-wide cadres and within specific vulnerable nations. New political alignments, painful interfaces forced upon us by a close-knit world and the surrender of individual sovereignty in order to win mutual benefits will all set an agenda which, if it is not addressed, may pitch this array of human and technical potential into rougher seas than might be hoped.

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