Comment: new Scots thinking needed in global world

Scotland's care-free days, shown on the likes of Tartan Day, may be over. Picture: Donald Macleod
Scotland's care-free days, shown on the likes of Tartan Day, may be over. Picture: Donald Macleod
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THE banking crisis was just the start, as the world becomes smaller and everything we do impacts somewhere else, so a different way of thinking is needed, writes Graham Leicester

It was quite an opening. Ian Goldin, director of the Oxford Martin School, kicked off the Scottish Council for Development and Industry’s annual forum last month at RBS’s Gogarburn HQ with a message that, even in these difficult times, was more than usually sobering.

“We stand in a maze of uncertainty” he told the assembled audience of “influencers and thought leaders”. The financial crisis was just the start. In the future we will face a perfect storm of global systemic risks. So much so that “we are now entering the most testing couple of decades since the Second World War”.

It was fascinating to see how this uncompromising message resonated around the forum over a day and a half, vying uneasily for space with the apparently more pressing question of whether to vote yes or no in September next year. Yet what struck me was how neither camp was able to rise to the challenge that Goldin set: for that we have to look elsewhere.

Goldin is an economist, former vice president of the World Bank, adviser to Nelson Mandela, now directing some 350 researchers studying the future at Oxford University. So he speaks with some authority.

He told us that over the past 25 years, since the fall of the Berlin Wall, the world has undergone a fundamental transition to become globalised, liberal and open (North Korea and Turkmenistan aside). The rise of the internet in the same period has only served to reinforce these trends.

Largely this has been a positive story – abject poverty is down, life expectancy is up, literacy is improving and so on.

But there is a “dark side” too. The policy framework we have developed around globalisation has led to rising inequality within and between nations, which presages social tensions ahead. And hyper-connectivity makes the global system vulnerable. The vectors of connection are also vectors of contagion, making the system highly susceptible to cascades of shocks that quickly escalate beyond anyone’s control – like the financial crisis or the spread of pandemics.

The financial crisis has set the pattern for more crises to come – starting local and spreading rapidly, enabled by technology, unnoticed by the regulatory and supervisory agencies until it is too late.

Looking ahead, Goldin saw a continuing rise in the “emerging markets” – growing at two to five times the rate of the old OECD economies and accounting for 80 per cent of global economic activity by 2050. A bonanza for exports, perhaps, and (since they like to travel) for our tourist industry.

But this same trend will increase carbon emissions and put huge strains on natural resources and “the global commons”. The market will not provide an adequate response – it will just put up prices.

In consequence, Goldin is an advocate of activist government. But at least in the foreseeable future he was not optimistic either that existing leaders will raise their game to the new circumstances, or that new leaders from the emerging economies will be ready to step in. He therefore gloomily looked forward to intractable global problems “festering and spilling over” as we seek to navigate our way through a period of high uncertainty in “a leaderless world”.

The analysis certainly resonated with me. My own organisation was established in 2001 on precisely the premise that we are living in a world of boundless complexity, radical uncertainty and rapid change. We have focused ever since on the question: “how can we take more effective action in a world we no longer understand and cannot control”? It was gratifying to hear an authority of Goldin’s stature now bringing this message and its stark challenge directly to Scotland’s business, government and policy leaders, although I am not at all sure that they heard it.

So how might we best navigate the challenging landscape ahead? Goldin talked up the core value of “resilience” – a stance that flies in the face of the trend today to centralise and “rationalise” services in order to improve efficiency. Interestingly he highlighted the resilience value to the UK of having in Edinburgh a second thriving financial centre outside the City of London.

Goldin also offered two other general pointers. First, he advised, we must be aware that the rest of the world matters a lot more than it used to. Most of what affects Scotland does not take place in Scotland. And since whatever we decide to do will become out of date more quickly, partly as a result of this global connectivity, so we must consciously pursue policy as learning.

Second, he suggested that most things we will need to do will involve short term pain for long term gain. So we must engage as citizens in a conversation that acknowledges the world is changing and leaves us more willing to vote for leaders ready to address that uncomfortable reality.

This is sound advice – particularly the encouragement to move beyond denial. But he might also have pointed to the need, especially if we are to make that leap, for hope.

If things really are going to be as challenging as he suggests then we all need a hopeful story about the future to sustain us. For some that will be a story of technological advance or of the transition to a new kind of economy. For others it is the promise of constitutional change.

The important thing is that our hopeful story should carry an emotional quality. It needs to be inspiring. It needs to move us. We understand that difficult times call for courage, for daring, for character and belief. We know that the future is fundamentally unpredictable. It is not fate. It is radically open – so there is still all to play for. And we will change it by the commitments we make and the values we stand for in the present.

This tone of bold commitment against the odds seems to be part of the appeal of the independence story. That is true both in itself and of independence as a carrier, the means for delivering the ends, for several other hopeful stories we cherish about a Scotland transformed. Hence, I think, the recent calls within the Yes camp for more radicalism and a more adventurous spirit from the leadership.

But in truth we all need this spirit in today’s powerful times. Former first minister Lord McConnell, in his own speech to the forum, asked us all to show more vision and boldness and to “raise our game”. There are big questions that need to be addressed whatever our constitutional arrangements: how is Scotland going to position herself in the challenging world Goldin describes? How will we seek to influence it? What do we want to stand for?

But rather than engage with the world in this way, McConnell lamented, we prefer to trade statistics and weighty tomes about “the price of bread in an independent Scotland”.

It is not that the price of bread does not matter. Of course it does. But man cannot live by bread alone. We also need hope and inspiration. But not false hope.

There are countless people I encounter around Scotland who are displaying daring and adventure in abundance in their response to today’s challenges. They have noticed that the world is changing and are quietly going about the business of growing the new Scotland right where they are. They are not talking about a more viable future, they are living it. These are the pioneers who people my own hopeful story.

The truth is that the constitutional nature of the Scottish Government, independent or devolved, matters less to the long term success of their efforts than the degree to which our leaders and ourselves are willing to accept the deeper message in Ian Goldin’s thesis: the ways of thinking that got us into this mess are not going to be enough to get us out of it.

• Graham Leicester is director of International Futures Forum