Digital Transition Phase

Transition phase. That humanity is in a phase transition on the way to a digitized society (the liquid society) will gradually become clear to everyone. Where that digitized society differs from the current one, however, is another point. The vast majority of people believe that the current basic structure of the world will remain about the same. But that will certainly not be the case.

Eroding nation states. The digitizing world will also profoundly affect the age-old countries’ structures, the nation-states with their sovereign powers. The current nation states, with the exception of the US and China, are increasingly losing control of global affairs. And it is highly questionable whether even China and the US, despite their clash of arms, can curb the digital forces that disrupt society. What is going on ?

Digitization does not stop at borders. Digitization has the property of not being concerned at all about existing laws, national borders, the power of nation states, international institutions. Digitization is a new technological development that, in contrast to previous technological or industrial developments, takes place to a large extent “underground”. It is a development that really turns everything upside down, from the lives of individual citizens, to corporate structures, to the development of countries.

A digital peat fire. Digitization is the driving force behind globalization and migration flows. These are developments that really cannot be stopped by anyone, not even Messrs Trump or Xi. Digital developments and their effect on everything that exists in society is like an underground peat fire that comes above ground at unexpected moments. Digital developments are neither good nor bad, just like all technological developments. They just happen and it is people who use the technologies for good or bad.

Turning point. More and more people are calling for control of new developments because more and more people see and notice that all kinds of things are getting out of hand. In a previous article (the Digital Black Hole), countless issues got off the rails. The key question is whether it will all turn out fine by itself, or whether humanity is really at a “turning point” of profound, fundamental social changes. The latter is undoubtedly the case. Digitization is much more than social media and online store concepts. It is much more than any inconvenience to hackers who block or steal data files from a few. Digitization is an unparalleled “game changer” that will completely and profoundly disrupt society in the coming decades.

Everything connected with everything. Digital developments, the internet and social media in particular, have done something that has never before occurred to mankind in any other way. That is that literally everyone (with internet connection) can come into contact with everyone else at any moment. That in itself seems to be something silly, but it is not. Of course everyone could predict that it would be nice if a grandmother in the Netherlands could send a nephew in Australia a movie. But what nobody predicts is that millions of people will suddenly and shamelessly stir up on the internet about anything and everything. A complete short circuit on earth has arisen between all people, but also devices (Internet of Things). This option suddenly offers countless possibilities that are developing at lightning speed. Everyone can know what is happening elsewhere. Anyone can inform everyone else about events or important issues. Everyone can digitally group with kindred spirits. Everyone can digitally attack or threaten anyone else. But also help or put a belt under the heart.

New world order. Thousands of new, digital communities are suddenly emerging as a result. Straight through classical cultures, physical boundaries, language boundaries, political barriers. It was author McLuhan in the sixties who, through his book: “The medium is the message”, already pointed to the gigantic impact of a medium on society, regardless of the content of a message. His message is clearly proven with the arrival of social media. Social media are deeply rooted in the existence of billions of people and are often the most important source of information or activities. But apart from social media, the internet in a broader sense has also led to thousands of new forms of communication between companies, scientists, artists, politicians, opinion leaders, etc. This creates millions of new forms of cooperation, especially in the private sphere among consumers and companies .

Borders are disappearing: liquid society is emerging. The many new networks and digital groups in all kinds of sectors have eroding effects on traditional forms of governance and the organizational form of sectors. The first turn was retail and travel, but in fact all sectors are upside down and are in the process of establishing digital platforms or services. Huge shifts are taking place within all sectors, both private and public. And in many business sectors it is pumping or drowning. Either one goes along and plays a primary role in the digitization transformation, or one is phased out. And then it is mostly, and that is essential, the replacement of thousands of nationally organized business models and sectors with international platforms. As a result, national borders disappear and national legislation becomes less relevant. The world is moving from a fixed structure to a more liquid structure: digitization melts the world into one digitally linked world.

Production growth stagnates; grows digitally. In most countries we are currently seeing an almost economic stagnation in traditional sectors, such as construction, production and transport. On the other hand, we are seeing rapid growth in all kinds of digital services. Those who are active on the stock exchange and put their money into ASML, Google, Apple, Amazon, and the like were a bullshit and often managed to make dozens of percentages of profit per year. However, those who put their money into the traditional sectors have hardly experienced any growth, or even a decline. At the moment, economic growth mainly runs on tech companies and platforms. And that is precisely the conversion of thousands of traditional, nationally organized sectors into digital business models.

Government in confusion. The government stumbles behind all these developments. In contrast to companies and consumers, governments hardly work together digitally. There is great confusion at the national level about how to restructure sectors such as healthcare, banking, insurance, social services. How to deal with all kinds of new forms of work on the labor market, such as the self-employed, as well as the demand for other forms of work (much more technology and IT, much less traditional professions) All kinds of issues that need to be tackled internationally, such as data privacy, cyber crime, migration, infrastructure, are completely stalled, because national governments cannot work together internationally on these issues.

National compartmentalization. People are fiddling with national compartmentalization with issues such as an Electronic Patient Record (EDP) or Digital Passport, while it has long been clear that these issues can only be resolved internationally. Laws, especially fiscal ones, are no longer valid because the new platforms use a business model that is not taxable from old nationalistic thinking. There must be international tax frameworks for the tech giants and platforms. National governments are miles behind consumers and companies in collaborating and communicating online.

Contradictions get worse. And what a few, usually ruffled in the back room, shout: “we have to tackle a lot more together internationally, because it doesn’t work anymore nationally”, but does not get into the front rooms, because populist currents with a lot of bombing dislodge everything that is not in their nationalist, populist booth comes into play. In summary, these are many ingredients for a major crisis.

Crisis inescapable. The digitization cannot be stopped and continues. Simply gone because the consumer embraces the benefits of many digital things offered by the platforms. And because companies like to collaborate internationally, as well as scientists and many others. But the populist movements, with the help of their fear messages on social media, opposed more international cooperation. Europe in particular, with an extremely weak administrative structure and countries that have problems with their domestic governance, will find it difficult in the coming years. But also the US and China will not be able to escape the ongoing digitization train. Even these large, powerful countries will eventually, although it may well take ten or twenty years, have to bow to digitization, which forces globalization of activities. Companies and scientists will continue to work together internationally. More and more issues (climate, migration, cyber crime, etc.) are totally stalled at national level and are also forcing the US and China to work together more.

How does the liquid society look like? If nation states have to give up their sovereignty more and more, what will replace it? Which structures are disappearing, which new ones will replace them? That in a following article.

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