Boundaries. A core problem at the Brexit is the border between Northern Ireland and Ireland. This conflict symbolizes the transition from the classical to the digital world. From the world where national sovereignty is the dominant structure to the borderless world of the future digital society. Maintaining or drawing borders in an increasingly borderless world costs a lot of money and leads to many problems as experienced by the British. Can the UK ever really become a sovereign country again ?
What’s going on? At a tremendous pace, the world is becoming one big cohesive workshop. Due to digitization, globalization has become a “fact of life”. In addition, the economy is shifting at a breathtaking pace from offline to online. Not only the manufacture of physical products is becoming more and more internationally organized. Whole previously physical product categories, such as books, music, films, photos, are disappearing and being replaced by cheaper and better digital equivalents, made and traded by previously non-existent companies: the tech giants.
Boundaries blur. All these effects are causing national borders in the digital online society to diminish in importance and to become increasingly artificial. In the labour market, this leads to a separation between a relatively small group of people with high education who are involved in this globalization and a large group of people who work nationally in more traditional professions. The first group is working hard on the further digital transformation of business sectors leading to more and more global tech giants. For this category of companies we lack people. The second group of people mostly work in national companies that are losing more and more ground, due to both automation and globalization and there we have a labour surplus.
Increasing migration. In addition, migration is increasing worldwide. Of the approx. 2.8 % of the world’s population that was adrift in 2004, this has risen to approx. 3.5 % (= approx. 260 million) at present. And all those people are looking for work and food in countries where they think it is better. A final consequence will be that labour costs will start to level off worldwide. This is already noticeable in Western countries. It’s no wonder then that “yellow vests” groups take to the streets anxiously because of dwindling perspectives.
Political rearguard. Politics has so far misunderstood all these effects. In the UK, the Brexiteers still think they can regain a sovereign UK in an increasingly connected world. In the US, Trump thinks he can bring the US back to the 1950s with his own independent steel, coal and car industries. In Eastern Europe, countries such as Poland and Hungary, which are members of the European community of values, think that they can decide for themselves how a European constitutional state functions. All these populist movements are rearguard battles in the irrevocably globalizing world. On the other hand, Macron and many technocrats in Brussels who believe in and work towards further globalisation, but systematically underestimate the negative sentiment of the group that threatens to miss the economic boat.
Labour is becoming digital and more international. Broadly speaking, a large part of the classical, massive, locally-based manual labour is being replaced by digital, non-local, international labour of scarce and highly educated people. An economy 4.0 will therefore have to make maximum use of retraining for digital professions. And also on new tax structures so that tech giants will contribute at least as much to taxation as traditional companies. And if high-tech giants increasingly also become managers of the digital data of citizens and companies, agreements will have to be made with those companies about their role as the utilities or data banks of the future. After all, the trading and protection of data and information is at least as vital in the digital society as money, gas, water and electricity are in the classical world.
Europe is digitally lagging behind. For the time being, Europe is on the losing side when it comes to the battle for these digital “utilities”, as they operate mainly from the US and China. Europe will have to pull out all the stops in areas that are still promising, perhaps digital medical technology, perhaps in FinTech, in order to be able to play a significant global role. If Europe does not succeed in this, there will be no economic redistribution within Europe and growth will take place elsewhere.
Digitization means that in many areas national borders are losing their meaning and are counterproductive. Even very large countries such as China and the US will not be able to manage on their own in the long run. The current titanic battle between these two countries has everything of a rearguard action. Meanwhile groups of other, smaller countries as well as Europe together with trade agreements will form a counterforce against Chinese or American hegemony. National governments will increasingly realize that better international cooperation in many areas is necessary for a peaceful, sustainable society, as well as for the wallet of the citizen.
Spontaneous international cooperation. Collaborations develop in many areas such as environment and sustainability, chemistry, pharmaceuticals, transport, industrial production, finance and money movement. Time and time again, the larger nation states prove to be the disincentive for intensifying cooperation rather than working on control models to promote these collaborations. European citizens need, for example, rail traffic, air travel, telecommunications, healthcare, environmental policy, defence cooperation on a European scale, but the larger member states in particular are blocking any progress, innovation and cross border cooperation’s in these areas. National sovereignty, as the Brexit proves, is a costly and outdated matter in many areas, which is neither in the interest of innovation nor in the interest of the citizen. On the other hand, there will of course remain certain sectors where there will always be important national and local economic activities, such as construction, agriculture, culture.
Division of the labour market is imminent. Politicians have to take into account that, despite powerful retraining programs, a large part of the population cannot find a job with the increasing number of tech giants or digital companies. This requires two things. On the one hand, a meaningful perspective has to be found for the many who are unable to find work or who are given less work. Solutions can be found in reducing retirement ages, shorter working hours, basic income, revaluation or better rewarding of manual labour, etc. On the other hand, global tax systems will have to be actively worked on for the tech giants as well as their social position as new utilities.
In search of the fluid society. Not an easy challenge, but neither the return to sovereignty, as the British or Trump want, nor the uncontrolled exploitation of tech giants are good alternatives. It’s not about one or the other model, but about maintaining a proper balance between these two extremes in the fluid society. On the one hand, the “solid” chunks, the nation states that are losing influence, versus the “fluid” digitalizing society that has yet to find its operating system. In which the long term perspective is one world without borders, as in ancient times.