30.03.2016
Russia in a World of Technological Diktat
№2 2016 April/June
Evgeny Kuznetsov

Deputy Director-General of the Russian Venture Company.

Three Scenarios of the Future.

The fundamental change of the world order taking place these days puts each country in front of the need to thoroughly reconsider its future capabilities. The current combination of geopolitical, social and technological shifts complicates an analyst’s task manifold. Although any forecasts in a situation like this will be risky to make, it is worth trying to blend the variety of circumstances into several likely scenarios the world and Russia may follow.

 

MAIN FACTORS OF CHANGE

The twenty-first century is witnessing quick accumulation of a critical mass of technologies and methods of activity that imply a fundamental change in the very nature of the economy, society and human existence as such.

Individualized, distributed and robotized production becomes increasingly widespread. It shapes the markets of labor, and while not depending on them, is very sensitive to the availability of sales markets.

In communications, politics, trade, management, logistics, and finance, transition is underway from the hierarchical to the distributed network model of organization.

In the spheres of transport, housing, and expensive properties, the sharing economy is gaining the upper hand over the economy of ownership.

Advanced countries experience a considerable extension of life expectancy and significant rise in its quality.

Neurotechnologies dramatically enhance the depth of communication and interaction.

Language and culture barriers are being erased.

There emerges a fundamentally new key subjectivity whereby the process evolves from goods and objects to impressions and emotions. The border line between possession and possession-related emotions is disappearing.

The structure of resources needed and used in industry and energy production is changing drastically in favor of renewable ones. Development priorities are revised, with the following markets and instruments beginning to play a key role.

  • Education and social structure. Status obstacles to accessing the modern technological and social system are removed. Education is moving from the hierarchical model to a network and cluster one. The entire system of social lifts is in crisis.
  • Transport. Geographic and property barriers hindering the accessibility of goods and services are run down. Inequalities in the quality and availability of goods and services among megalopolises and distributed centers are disappearing. Urbanization is giving way to sub-urbanization and eventually to de-urbanization.
  • Health. Life expectancy limits undergo fundamental shifts; property and status hindrances to achieving a certain quality of life, and also sensitivity to the place of residence (de-urbanization) are disappearing.
  • Security. More barriers are emerging against unconventional activity which becomes commonplace and less expensive. Controls are getting ever more comprehensive. Preventive law enforcement measures are taken.
  • Information. Sharp increase in the amount of required, transferred or processed information. The human and machine environments are hybridized.
  • Neuronomics. Impressions and emotions turn into materialized objects (memory structures, cartridges, and blocks), an entire new industry is emerging to provide (through trade or open access) impressions/emotions and related knowledge.
  • Trade. The focus is shifted from selling goods and service to granting the right to use them; as a result the share of product maintenance and servicing grows, thus heralding a return from financial-industrial groups to financial-trading groups.
  • Energy. A distributed network-based system relying on micro-energy and renewable resources is taking shape. The technological and social spheres become increasingly autonomous, de-urbanization is under way.
  • Finance. Further drift away from money as an equivalent of goods’ value towards money as an equivalent of the value of possession and energy.

 

DISTRIBUTION OF THE POPULATION AND PRODUCTIVE FORCES

  • Population (space). Transition from megalopolises towards specialized techno-clusters and agglomerates with distributed housing systems (from the city-suburb-village pattern to real agglomerations on the basis of university, industrial, and shopping and entertainment centers).
  • Population (age). Fast growth in the percentage and share of senior citizens; education and services focus on prolonging the active period of life and involving senior citizens in production chains and expanding services for them.
  • Production. Transition from industrial complexes to clusters of technological companies with related infrastructures; distributed autonomous production close to places of consumption.
  • Energy. Reliance on distributed and individual generation and smart networks; dramatically improved energy efficiency of equipment and citizens; personalized trade in energy (sales and consumption).
  • Transport and logistics. Global commodity flows are confined mostly to components and materials, and local ones, to goods and services; a greater share of micro-transport (freight and passenger) in contrast to heavy transport.

Technological and social changes will inevitably bring about new ideological and political trends:

  • in consumer behavior possession gives way to impression (the value of emotion is higher than the value of possession);
  • departure from the ethnic and cultural identities in favor of global networks (global class structure);
  • mounting struggle between vertical (national) and global network-based principles of integration and their infrastructures;
  • neo-religions as forms of identification and self-determination in the global network space;
  • emergence of synthetic post-national globalized cultures, their competition among themselves (from the domination of U.S.-European culture to the market of global cultures);
  • rejection of attempts to achieve unequivocal identification with major communities in favor of a plurality of identifications with micro-groups (uniqueness).

 

THE WORLD ORDER: “VALLEYS” AND MULTICOLOR SCHEMES

The exponential growth of new technologies brings about qualitative mutations of society, the economy and even the human being. A globalized economy and society require the fastest possible transformation of regulatory institutions. The existing consensus implies, ideally, that the governments of industrialized countries do not interfere in how companies run their business, and the companies, for their part, do not interfere in politics. But it is immediately clear that this is a hindrance to the development of major global corporations. The combined potential of such giants by far exceeds that of many national economies and encourages them to seek the status of independent political actors and devise a new world order.

The leaders of change are advanced sub-societies (clusters) of major economies (for convenience let us call them “silicon valleys”), which reproduce society of the future (never aging, creative and technologically integrated), the economy of the future (robotized production, services, transport and start-up economy) and policies (direct democracy and taxes).

The economic power of clusters results in their actual alienation from the surrounding territories in their own and other countries: high cost of living, “prohibitive” for outsiders, access to a completely different level of services (Internet, healthcare and education), and their own system of security (cyberpunk society).

The “valleys” become indisputable leaders in aggregating talent. They push “losers” (both individuals and businesses) into the adjoining “support belt” (“green belt” or “the belt of comfort”), where acceptable living conditions are created by servicing leading economies. The “green belt” brings together other regions in the valleys’ host countries and selected regions in other countries (the symbiosis of the Silicon Valley and Israel is an example). Within the “green zone” culture and politics are borrowed from the “valleys;” their own culture is secondary; and national and ethnic features are erased and unified. Inside the “silicon valleys” one is very likely to see the drift away from individual cultural traits to a “silicon valley average.”

Around the “green belt” a “yellow belt” emerges of developing regions and countries harnessed to support the “silicon valley” and the “green belt” regions with resources (above all, human resources), materials and production components. The “yellow belt” is maintained in a comfortable state with goods from the “green belt,” and the exodus of talents is compensated for by the generation of new ones or their import from inferior zones located around. National cultures and governments keep the “yellow belt” stable.

The “yellow belt” is surrounded by the “red” one, a zone of controlled instability, active development, destruction of national (“traditionalist”) governments and the conversion of human capital and resources into a super-fluid state. Talented workers move to the “yellow” and “green” zones, talented intellectuals head for the “green” and “silicon” valleys, and resources in the most unprocessed form go to the “yellow” and “green” zones (the “silicon valleys” deal only with high-level components and complex, cartridge-packaged materials).

What makes this transformation so special is that instead of forming structurally similar national economies (with the advanced sector at the top of the pyramid and the resource base at the bottom) there occurs global reorganization into sub-regions and communities where national governments and economies lose control of the flows of goods, talents and resources.

Attempts by the national governments to “retain” the vertical supply chain of value-added goods and services will result in the marginalization of the country in question, the flight of businesses and talents, tough competition for resources, and attempts to trigger a sharp plunge in their prices. Aware of that, the national governments of the industrialized countries will delegate sub-regions to be included in the global network and compete for a place in the top ten or top twenty world centers (London-Cambridge-Oxford, Seoul, Shanghai, Hong Kong, Singapore, Amsterdam-Eindhoven, Israel). The role of national regulators will be shrinking, and that of global will be growing. The leading centers (both existing ones and would-be “silicon valleys”) will get integrated with the global network and create around themselves the contours of “green” zones, from which they will receive components, packaged materials and talent.

The “silicon valley” policy is confined exclusively to the management of the flows of cash, knowledge and talent—items that yield the highest returns. All “industrial policies”—placing production facilities, cutting costs, increasing added value, etc.—is the prerogative of “green” and “yellow” zones, which service the “silicon” ones. The “red” zones translate into reality either a trend towards “co-transformation” (a regime loyal to the upper tiers) or an “alternative strategy” (terrorists). Getting into the “yellow” zone is the loyalists’ prize to win.

The function of strategic decision-making moves away from the financial capitals to technology and innovation centers. Creative industries will be moving in the same direction. A new financial system will emerge (through the crisis of the current system of exchanges) to change the rules of the game in settlements and banking. “New” banks, affiliated with the technological giants, will create a global financial network which operated by the rules determined in the zone of “silicon valleys.”

The population of “silicon valleys” in the 2020s and 2030s can be estimated at 100 million to 200 million. No considerable increase is likely (with the balance achieved by the cost of living and the required quality of human resources). The population of the “green” zone will be one billion; that of the “yellow” zone, 4-5 billion; and the “red” zone will accommodate some 1-2 billion people.

  • The emergence of the construct described above will cause contradictions—and, consequently, sources of global instability—along the following lines:reluctance of the countries in the “red” zone (or states sliding from the “yellow” zone into the “red” one) to accept the rules of the game and agree to “re-assembly;”
  • reluctance of the national governments in the “yellow” zone to lose their independent status and form within the national boundaries some “silicon” or “green” belts, in fact administered by supra-national agencies;
  • reluctance of the governments in the “green” zone to lose control of high-yield “silicon” zones.

The above contradictions encompass the entire structure of global migration, trade turnover and labor distribution. More influences may be caused by competition within each individual zone, which under certain circumstances might prove a very tangible factor. In the worst case scenario, mounting contradictions may cause exponential growth of global instability in 2025-2035 and eventually a war. Its form, character and nature should be taken into account when selecting the scenario for further development.

 

THREE SCENARIOS AND THE PLACE OF RUSSIA

Any development scenario is based on the current state of affairs, to be understood as follows: Russia for the past 30 years has been drifting from the potentially “green” zone (perestroika’s ideal) towards the “yellow” one (the 1990s and 2000s), and eventually into the “red” zone. At this point it is on the border between zones.

Its further trajectory will depend on the global scenario. The three main ones are listed below.

Singularity. This scenario implies technological progress fast enough for the pace of transformations (and profit growth) in “silicon” zones to guarantee their indisputable leadership in terms of the quality of life, security and military potential.

The national elites are unable to resist and try hard to buy a place for themselves within the “silicon” zones with their comprador and servile policies. Elites in some countries split up: the global integration-oriented part will be persuading the educated population that it can benefit from entering the “green belts” and struggling for the right to have at least one “silicon” cluster in its territory. Access to modern healthcare and education services and highly profitable spheres of activity (in terms of  income) will be their trump cards. The conservative circles are to be pushed to the sidelines and will form defiant opposition in regions with obsolete lifestyles. Global actors provide support for the “integrators” in their armed standoff with the opponents. Technological superiority suppresses the insurgency or makes it marginal.

The “yellow belt” swaps the right of nations to self-government for cheap resources and talents (it neither resists their exodus nor forms national “breakthrough zones”). The living standards stabilize at an acceptable level and there emerges a national consensus of “sufficiency.”

The “green” zones formulate a philosophy of “sufficient comfort” maintained by the cultural and technological products of the “silicon” zones (import of impressions and immersion of the population into virtual and mixed environments). The “green” zones’ economy is confined to the manufacture of components and properly packed resources, as well as low-profit products (consumer goods).

The “silicon” zones see an explosive growth of technologies and fundamental breakthroughs (technical immortality, technical telepathy, full robotization and automation of the environment, full realism of virtual media, creation of mixed real-virtual media). Human nature becomes the corner stone of development due to the possibility of dis-identification of a human being and his body, which would lead to true immortality and a qualitatively new state of the human race—integrated multi-individual conglomerates (super-communities). Mastering the new reality is an extremely important development task to be tackled for several centuries by that part of humankind which will live in the “silicon” zones, that is, at the very top of the new hierarchy.

The subject matter of their activity is known to everybody else in a very vulgarized form, prompting deification of part of humanity. This sparks the emergence of a neo-religion of techno-enlightenment intended to create a gap and a hurdle blocking access to the “silicon” zone.

Access to a multi-individual real-virtual environment will depend on a combination of talents and skills. “Recruitment” will proceed through mass channels available to all (mass computer games, mass education), with talented individuals subsequently brought into zones of instruction first and then in the core of the “silicon community.” Joining them means “enlightenment” and success and is regarded by the societies of the “green” and “yellow” zones as good fortune of both the family and the nation. The reverse flow of human resources from the “enlightened” back to the family becomes a tangible factor for the economy of the “yellow” zones. Mass culture is a prerequisite for engagement, instruction, and unification of culture codes and images, and gets enriched with ethnic elements (multi-culturalism), thus facilitating access for representatives of different cultures.

The “red” zones are bombed and destroyed with the use of various types of weapons, including biological ones. The use of the latter is hard to identify (a sudden flu epidemic, HIV mutation, progressive decline in birth rates in famine-stricken areas, etc.) A classic description of this scenario is Laputa—a fictional flying island described in the 1726 book Gulliver’s Travels by Jonathan Swift.

The probability of the “singularity” scenario is 30 percent.

Even though the development rates are very high, the readiness to create mechanisms for managing global politics and economy dramatically falls behind, while the risks of instability remain very high.

Russia’s strategy in a situation of triumphant “singularity” will imply struggling for the status of a global technological hub in one or two mega-agglomerations (Moscow–St. Petersburg, Tomsk–Novosibirsk); creating new “green” belts around them (new regionalization); surrounding them with “yellow” belts; and reintegrating the latter into the external “yellow” zones (greater Caucasus, Arctic resources). The prize to win is access to the supra-national systems of government and resource redistribution granted to the elites and hubs, “silicon” living standards for 1/10 or 1/6 of the population, the “green” level of development for a third of the population, and the “yellow” level for all the rest (approximately half of the population).

Inquisition. The beginning of this scenario is similar to the mainstream trends and the singularity scenario. World leadership zones (“silicon valleys”) provoke the transformation of “green” and “yellow” zones and foment tensions in the “red” ones. The situation is getting worse in all countries in transition (India and China from “yellow” to “green” and Russia and Brazil from “yellow” to “red”). The reason is the national elites’ refusal to agree to the auxiliary role and their wish to prevent the exodus of talent, capital and resources. The emerging obstructions lower the effectiveness of “silicon” zones’ growth and provoke the national governments (landlords) into conducting aggressive polices and struggling for the influx of resources and talent.

There develops an antagonism of the “old-time” leaders (the United States, Great Britain, part of continental Europe, etc.) and the “new” ones (China, India, Russia, and Brazil). While avoiding direct clashes, the actors turn the “red” belts into a scene of competition, and instability there becomes an instrument for taking over the adversaries’ resources.

The scale of clashes in the “red” zones, as well as the saturation of their leaders, structures and communities with weaponry and resources causes instability to spill over to neighboring “yellow” zones, which the actors are prepared to sacrifice. The scale of clashes and losses provokes the growth of militarism and tensions in the “green” zones, thereby creating gaps in the system of world trade (sanction wars, reliance on “import substitution,” and focus on the national development projects to the detriment of global ones). All this ruins the international system of investment and triggers the emergence of investment-friendly local regions (zones) and opposing blocs (BRICS vs G7).

The lack of consensus and latent support for the rival parties in the “red” zones cause hostilities that spread to all potentially unstable regions (Sub-Saharan Africa, Maghreb, the Middle and Near East, and Central Asia). The need to commit more money to confrontation slows down the development of all countries, including the leading ones.

As the conflicting countries seek to achieve competitive dominance, they tend to give up ethical restrictions in the use of technologies. Information and biological attacks, militarization of outer space, fast growth of robotized armies, leaks of nuclear technologies and deliberate climate change—all this provokes violence and brings about unintentional consequences and man-made disasters resulting from the uncontrolled effects of “limited” use. There develops a new type of global confrontation called “new Cold War” or “hybrid world war,” which drastically slows down the development of all industries related to the quality of life (amid booming technologies of robotization, new materials, controlled evolution and biological correction of human beings and nature). Militarization and bias towards dual technologies result in the emergence of “corporate” states and state capitalism even in the countries that currently boast of their liberal systems. Complete elimination of the rival countries as independent political entities and their dismembering into sub-states (incitement of ethnic, religious, class and regional discord) become a strategy.

Growing zones of instability and destruction of the “window of opportunity” for technological progress raise the awareness of the need for balance. In the context of bloc mentality and ruined global investment system, consensus becomes achievable only through “parity” (technological parity) development of countries. But the need for such an “agreement” appears no earlier than after 15-20 years of active confrontation, casualties, violence and a series of man-made disasters and epidemics (including climatic and biological ones).

Such an agreement aim to guarantee countries’ synchronized development through control of progress in science and engineering (the “right to veto” research as compromised during the new Cold War); create a system of “partnerships” with equal quotas granted to all the participants; provide priority for international technological development projects that would be transparent for all partakers and where mandatory presence of all interested parties would be reserved in advance. For instance, this may apply to controlled climate change, space exploration, creation of a universal energy system, and controlled evolution of man. The system of world governance will be confined to a combination of political institutions (a new UN), commissions for technological development (COMCON), and a system of global cultural and ideological control—composite multiculturalism (“respect for diversity and traditions,” a new UNESCO).

The probability of this scenario is 60 percent.

Russia’s role in it will be to spearhead the conglomerate of “new leaders” (China), “hell-raisers,” “mercenaries,” and “anarchists.” The main competence will lie in warfare in the “red” zones; development, testing and export of non-conventional technologies; and creation of inter-state (but intra-bloc) military-technological corporations. Other competences will include leadership in technological espionage and copying (a neo-Soviet Union) and ideological leadership in the “non-alignment” movement—Russia will play the role of a systemic ally of new leader countries that create their own picture of the world, global and civilizational model, development of a prototype of a multi-cultural (Euro-Asian) model based not on synthesis, but on balance (transfer of European models/practices of behavior, management and organization to Asia and of Asian ones to Europe/the United States).

The Fall of Rome. History has seen this scenario realized many a time: the fall of the great civilizations of the Bronze Age—Egypt/the Hittites/Babylon, Rome, and China of the second half of the second millennium. The main reason was the inability to create systems of government that would be adequate to the technological and social transformations, and acquisition of technologies by less developed but better organized communities.

This scenario will start as the “singularity” option, with subsequent degradation to a “hybrid world war” and even deviation from this trajectory due to the inability to curb the destructive forces that have broken loose. The centers of destruction are the “red” zones that have implemented global integration projects (Islamic State, etc.), and also “yellow” zones that disagree to integrate as auxiliary regions (Russia, Africa, Latin America).

The scenario may start when the governments of the junior partners in the confronting blocs lose control of their territory (under the blows of their opponents), and also in the course of technological and climatic attacks and epidemics. The loss of control propels the radicals and fundamentalists to power. Both proceed to create a “Fundamentalist International” (FI) for resistance to the “evil empires.” The emergence of an alternative provokes deviation to a destructive track. The FI’s prime targets are megalopolises and “silicon” zones. Capital and companies are forced to flee to “technological citadels”—new special regions independent from the governments of the leader countries.

The FI is very effective in breaking national governments, with support from the rival countries at the initial stage, this causes political degradation, militarization, regionalization and loss of integrity by states and macro-regions. The fundamentalists seize power in a number of countries in the “yellow” and “green” belts. Their alliance becomes a global force.

Attempts by the leader countries, first on their own, and then together, to wipe out FI trouble spots and countries where they have seized power cause the release of non-conventional weapons, and man-made and climatic disasters and epidemics. They boomerang directly and through the public opinion on the leader countries, thus provoking their degradation and collapse.

The scale of strikes and the global nature of the war leave no chance for the United States to stay aloof. It will see the first war on its territory. Fast re-armament and conversion to robotized armies, and the use of biological, information and climatic weapons will provoke increased leaks of technologies to the rivals and subsequently to the fundamentalists. After ten years of such war, the United States will suffer the consequences of all conceivable strikes against its territory and eventually give in.

The ensuing global economic mega-crisis will force those still able to develop to lock up inside local citadels, where corporations will become the centers of competence. They will force weak national governments or their fragments to spare no effort to protect the corporations to the detriment of the remaining territory and then enter into talks with the FI in order to agree on the zones of control. This bargaining will produce a belt of independent corporate cities (shrunk “silicon valleys”) with degraded social and technological cultures, a zone of weak national governments (a degraded “green” belt) and a belt of warring fundamentalist states that purchase weapons from corporate cities in exchange for resources.

Development rates will slump by one or two orders of magnitude. The recovery of global cultural and social environment will take several hundred years.

This scenario’s probability is 10 percent.

Under this scenario Russia in all likelihood will become an independent nation state. It may lose some territories but remain a participant in the global trade in weapons and technologies. This is a model of quasi-Soviet Union of the 1950s. The country will develop technological dependence on corporate cities in all respects related to health, neuro-technologies and consumer goods.