Moby famously sang that we are all made of stars. And yesterday evening at the Institution of Engineering and Technology (IET), Professor John Wormersley, Chief Executive of the Science and Technology Facilities Council, echoed Moby’s mantra (okay, maybe that’s a bit of stretch). Professor Wormersley spoke about how the search for black holes and the higgs boson impacts society and the economy.
Professor Wormersley’s talk was engrossing for a number of reasons, not the least of which was the fact that he emphasised the link between ‘big science’ (think of the discovery of the Higgs boson at CERN last year) and the implications for our daily lives, society and the economy.
While for many people (me included), our knowledge of theoretical physics may come mostly from reruns of The Big Bang Theory on E4, Professor Wormersley noted that we rely on the numerous outcomes and chain reaction results from ‘big science’ in our daily lives: the internet (originally Tim Berners-Lee’s method for information management for scientists at CERN), wifi (which was enabled through Hawking radiation), and MRI scanning (which comes from knowledge of superconductors). In short, we need theoretical physics to help develop and improve our economy, our health, and the environment.
Yet ‘big science’ is often viewed as a risk because it is in an investment in the unknown, the unexpected and can often fail. But, as Professor Wormersley pointed out, we must be willing to take that risk.
So, Professor Wormersley’s thesis got me thinking about design. Just as Wormersley emphasised the need for and the link between theoretical and applied science, I think we need both theoretical and applied design.
But how can we teach and understand and then reap the benefits of theoretical design?
We can interrogate the design brief. Instead of just applying our knowledge of design and the design process (observing, analysing, prototyping, etc. ), we should use design to question our motives and why things are the way they are, without necessarily expecting a certain outcome.
This is where projects like The Great Recovery come in. The RSA’s Great Recovery project is about how we can promote and foster a circular economy and for now, we’re focusing on making connections between science, design, manufacturing and policy. But, we don’t necessarily know what the end result will be – though there actually is some ‘small, medium and big science’ going on in our workshops related to the project) as we don’t know necessarily what the end result will be.
You might even call it ‘big design.’
Morning all, and welcome to your first ever networks round-up.
Hot networks news this week includes this rather attractive networks visualisation from the New York Times, which breaks down various elements of the ‘Euro crisis’.*
A first slide shows how everything is connected: in this case the way that debt straddles country borders.
The graphs the goes on to show the debts that borrowers from one country have with banks in other countries. It then charts the possible ways a crisis could spread.
The immediate risk is, of course, posed by Greece. Greece has massive debts in 9 other economies, including the ‘shaky’ Portugal, Italy, Ireland and Spain.
This could possible lead to a scenario of ‘debt contagion’ where, given the single currency, we might have a run on the banks scenario as people shift their money from more risky to less risky countries.
A collapse in Greece would then lead to less confidence in the four shakier counties, possibly leading to an increased debt burden if interest rates are raised. If a country such as Italy were not able to cope, this could massively impact France whose banks own $366 billion of Italian debt.
Crises impacting in France and Italy could then massively impact the USA, which has a very large exposure in both these countries. When it’s all connected, crises can go global.
Wondering how the banks and global corporations all link up beyond country borders? If you haven’t read up on ‘the network of corporate countrol’, you really should now.
The research,based on 2007 data , shows an unstable global structure. The the network is scale-free, meaning that a few companies have the vast of majority of all connections, suggesting that if one company goes down, it will have (as 2008 showed) massive repercussions on rest of the system.
*What follows is a description of other people’s research. Here I am just the networks messenger.
The fascinating thing about today’s growth data is what it tells us about the rather painful birth of a new type of UK economy. Before the Crash of 2008, growth in the UK was largely driven by public spending, construction and business and financial services. New Labour Governments lived with this quite happily by skimming off the tax revenues from the buoyant economic activity in these sectors and directing it into public services and tax credits.
While in opposition, George Osborne made a great deal of how this economic approach was now defunct and it was time to create a new “British Economic Model” based on a wider base of high growth sectors, an active but more constrained finance sector and much less public spending.
While the Treasury is making much of how buoyant manufacturing is and suggesting that this shows the UK is beginning to rebalance in the way Osborne wants, the data suggests something far more complex and less certain is happening.
The story of the first quarter of 2011 is, in fact, one of a reasonable contribution to growth from manufacturing (0.1%) but a much more significant contribution from public spending (0.2%) and business and financial services (0.2%). Over the last year, public spending and business and finance have contributed 0.3% each, while manufacturing has contributed 0.4%.
The other big driver of the New Labour era was construction. This is still the case currently with the building sector contributing 0.4% to growth in 2010. But what is striking is the extraordinary volatility in this sector. Construction has gone from boom in the second and third quarters of 2010 to recession with major shrinkage in the fourth quarter of last year and the first quarter of this.
So we cannot yet say that there is any sign of a really significant break from the New Labour approach yet. What growth there is in the UK economy is still coming from business and finance, public spending and construction. What is new is that manufacturing is making more of a contribution than it has historically but will probably need to do much more to suggest a real shift to Osborne’s vision. And construction is highly volatile and, as such, deeply unpredictable.
The truth is the economic jigsaw pieces were jumbled up massively by 2008. The data suggests we may have to wait quite a lot longer to see how they fall but for the moment signs of a completely new picture emerging are limited.
So the IMF now agrees with practically everybody else that growth in the UK is going to look much more sluggish this year than expected. Cue a round of political ping-pong between the parties and yet more debate about whether the cuts are good or bad for the economy.
Leaving aside the confusing irony that everyone is arguing about forecasts as though they are facts when those forecasts are merely revisions of previous forecasts that turned out to be wrong (maybe), there could be a deeper problem here.
It’s a problem highlighted by the law firm DLA Piper that has just published the first of three reports on how “traditional business models” are being challenged by the online world. The report shows straightforwardly how the internet is making factors such as business size less relevant and product authenticity more so.
Admittedly, this is only the first offering but I hope the next two reports are able to communicate more clearly quite how significant the changes are. For as Matthew Lockwood and I explored in a recent pamphlet, the rise of Web 2.0 does not merely demand new business strategies but will ultimately demand a totally new way of doing business. And the core of that shift is to recognise that the once firm dividing line between producer and consumer has broken down. Consumers increasingly expect and have the resources and skills to design, shape, manipulate and even sell the products and services they purchase.
This matters enormously to the future growth of the UK economy. The major technological transformations that capitalism has experienced since the mid-eighteenth century – such as the growth of railways and canals, the use of electricity, the rise of mass production – have tended to focus on manufacturing. Web 2.0 is the first general purpose technological transformation that is revolutionising the service sector and this is of course where the great bulk of the UK’s GDP growth comes from.
Unfortunately, our record on dealing with previous technological transformations is not strong: the UK never became a very good mass producer in the first half of the 20th century, nor did it do very well in adopting flexible production techniques in the second half – perhaps the major reason why we became so dependent on the service sector. If we miss this boat, however, there really isn’t another sector to turn to.
Which brings us back to the current rather short-term debate about growth. Of course, it is vital that we have the right policies to boost our growth rate over the next year or two but it will in the end be for nothing if we haven’t identified the right public policy framework and business practices to sustain growth in the next decade or two. With the development of our new strand of work on enterprise and innovation , I hope the RSA can do its bit to identify and promote these new policies and practices. In the meantime, a debate from our political leaders that looks beyond the next twelve months whenever these forecasts hit the headlines might be a start.