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A Global Affairs Media Network VO L UME 12 I ISSUE 1 I J AN UARY 2018














By Roland Siegwart

By Andrew Keen

By Jason Starr

By Uju Okoye

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Contents VO L UME 12 I ISSUE 1 I J AN UARY 2018

06 I Editor’s Note: Introducing the Olympics of Innovation

By: Ana C. Rold

10 I Are Robots Transforming the Way We Work?

By: Ana C. Rold

14 I The Future of Universities in a Digital Era

By: Lino Guzzella & Gerd Folkers

18 I What to Expect From Robot Intelligence

By: Roland Siegwart

20 I In the Robot Era, Keep a Copy of The Iliad Under Your Pillow

By: Scott Hartley

22 I Learning With Angry Birds

By: Ana C. Rold & Winona Roylance

26 I The Future of Work and Global Talent: What About the Poor?

By: Manjula Dissanayake

28 I How to Create and Retain the Next Generation of Leaders

By: John Fistolera

30 I Teaching Students to Defeat World Hunger Through Creativity and Innovation

By: Anders Hedberg

34 I IMF’s Annual Meetings Explore the Future of Work

By: Kaeleigh Forsyth

36 I Book Review: The Future of War, A History

By: Joshua Huminski

38 I How to Fix the Future

By: Andrew Keen

42 I What if Blockchain Cannot Be Blocked? Cryptocurrency and International Security

By: Gregory Gleason & Sean S. Costigan

46 I From Kirkuk to Curitiba: The Politics of Rich Regions’ Referenda

By: Jason Starr

50 I Opinion Editorial: The Task of Deeper Cultural Understanding

By: James H. Billington

52 I Illicit Financial Flows: How to Patch Up Africa’s $50 Billion Hole

By: Uju Okoye

Masthead Publishing house Medauras Global publisher & ceo Ana C. Rold

director of social media Madeline Terry

Editorial Advisors Fumbi Chima Sir Ian Forbes Lisa Gable Anders Hedberg Mary D. Kane Greg Lebedev Anita McBride

un correspondent Akshan de Alwis

director of sales Maria San Jose

DC EDITORS Michael Kofman Paul Nash Winona Roylance Bailey Piazza

Marketing associate Sophie Kwisda

Creative Director Christian Gilliham Chief Technology officer Chris Purifoy

CONTRIBUTORS James H. Billington Jacqueline Christ Sean S. Costigan Manjula Dissanayake John Fistolera Gerd Folkers Kaeleigh Forsyth Gregory Gleason Lino Guzzella Neil Hare Scott Hartley Anders Hedberg Joshua Huminski Andrew Keen Uju Okoye Bailey Piazza Roland Siegwart Jason Starr

senior photographers Michelle Guillermin Sebastian Rich

Researchers Yulia Buynova Lindsey Washington

PUBLISHING. Diplomatic Courier magazine is produced by Medauras Global LLC, an independent private publishing firm. The magazine is printed six times a year and publishes a blog and online commentary weekly at www.diplomaticourier.com. PRINT. Print issues of Diplomatic Courier average 40-80 pages in length. Individual and back issues cost $10.00 per issue (plus S&H). Student rates are available to both part-time and full-time students with proof of school enrollment. New print issues of Diplomatic Courier are published and mailed in January, March, May, July, September, and November. Subscriptions commence with the next issue. EDITORIAL. The articles in Diplomatic Courier both in print and online represent the views of their authors and do not reflect those of the editors and the publishers. While the editors assume responsibility for the selection, the authors are responsible for the facts and interpretations of their articles. PERMISSIONS. Authors retain all copyrights to their articles. None of the articles can be reproduced without their permission and that of the publishers. For permissions please email info@medauras.com with your written request. ISSN. The Library of Congress has assigned: ISSN 2161-7260 (Print); ISSN 2161-7287 (Online). ISBN: 978-1-942772-01-9 (Print); 978-1-942772-02 (Online).

letters to the editor/editorial submissions Editors@diplomaticourier.org advertising/sponsorship/sales Info@medauras.com website/apps support ITsupport@medauras.com mailing address 1660 L Street, NW, Suite 501 Washington, DC 20036 download the app for free

LEGAL. Copyright ©2006-2018 Diplomatic Courier and Medauras Global. All rights reserved. No part of this publication can be reproduced without written consent of the publishers. All trademarks that appear in this publication are the property of the respective owners. Any and all companies featured in this publication are contacted by Medauras Global and the Diplomatic Courier to provide advertising and/or services. Every effort has been made to ensure the accuracy of information in this publication, however, Medauras Global and the Diplomatic Courier magazine make no warranties, express or implied in regards to the information, and disclaim all liability for any loss, damages, errors, or omissions. ART/PHOTOGRAPHY/ILLUSTRATIONS. In order of appearance: page 6, photo by Joyce Boghosian; page 14, photo by Gian Marco Castelberg for ETH Zurich; page 15, photo by Alessandro Della Bella for ETH Zurich; page 16, photo by Gian Ehrenzeller via Keystone; page 18, illustration by Maurizio Nitti; pages 34-35, photo by IMF Staff photographer Stephen Jaffe; page 36, book cover image courtesy of Hachette Book Group; page 38, photo by Clarisse Meyer via Unsplash; page 40, photo by Dan Freeman via Unsplash; page 50, photo courtesy of the office of James H. Billington, Librarian of Congress Emeritus; All other images and photos by Bigstockphotos.com. All advertising images supplied by the respective individuals, organizations, or companies advertising.

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D I P L O M AT I C O U R I E R .c o m

Welcome VO L UME 12 I ISSUE 1 I J AN UARY 2018

FUTURE OF SOCIETY. There is no question we will solve to live longer, work less, and know more than ever before. But what will we do in this post-employment world? Who will win? How will society deal with the knowledge and new social classes (those who have or create the knowledge and those who consume it)? Supercomputers, drones, robots, transformative gadgets, quantum computing, 3D Printers, etc. These advancements are allowing us to re-imagine and re-engineer our world. But what will they mean for the Future Society? FUTURE OF HUMANITY. We know Artificial Intelligence (AI) will reign supreme in our imaginations but the World in 2050 will not be a battleground between AIs and humans. Augmented humans will test the limits of humanity and they are already walking among us now. Biotechnology and gene editing are allowing us to engineer a new kind of human.

Ana C. Rold Publisher & CEO

Introducing the Olympics of Innovation


FUTURE OF ENERGY. Humans’ impact on the planet is so irreversibly profound that exploring alternative forms of energy will be paramount to humanity’s survival in the long term. Innovations and cutting-edge research is already in the works but the goal of our generation will be to become less and less dependent (and eventually completely independent) from fossil fuels

he issues which define the 21st century are unfolding daily. As populations grow and urban centers expand, humanity’s mutual needs increasingly collide. Clean water, fresh air, renewable energy and climate change are challenges confronting all nations collectively. Coming up with the solutions will take an inter-disciplinary approach. Most importantly, solutions will not come from government heads—or, at least not from government heads alone. For the first time in history, mind-boggling technological advancements have democratized solution-making. Now more than ever, every single individual is empowered to create sweeping change for humanity. For more than a decade, our team of futurists at Diplomatic Courier and our Think Tank, The World in 2050, have been concerned with the state of the world. Our global summits have tackled the future of diplomacy; philanthropy; connected cities; jobs and education; and, much more. We don’t profess to be fortunetellers. Rather, we embrace the skills, practices, and behaviors of futurists. It is behind this backdrop that we are thrilled to announce the launch of a unique new program aimed at identifying and elevating a new group of solutionists from around the world. The Olympics of Innovation, a yearly global innovation list, will champion top ideas, startups, and innovations in seven categories. The program will focus on solutions in seven clusters, each representing a megatrend that will be transformative for our long-term future. Who should be a part of this? Whether you are a writer or an engineer, a student or a business leader, we want you to be a part of this. We want to use our global platform and connections to showcase your work and help take you to the next level: recognition, partnerships, and even funding. To learn more and to apply visit www.2050challenge.com.

FUTURE OF HEALTH. On a large scale, humanity is struggling against bacteria and disease as well as noncommunicable diseases (NCDs). Today our focus is on primary prevention (intervening before a disease is developed) or secondary prevention (preventing progression of a disease when you are already sick). In the near future, we will be solving for “primordial prevention”, looking at the prevention of the risk factors in the first place, and we will treat age as a disease that not only can be “cured” but can be prevented. FUTURE OF TRANSPORTATION. Flying cars, the Hyperloop, intergalactic travel? These are not Sci-Fi visions of the future but the world now. At the famous World’s Fair in New York in 1939, GM envisioned a futuristic society where highways connected the rural to the urban. With 70% of the world’s population moving to the urban sphere in the coming decades, innovating in the transportation realm will be paramount. OFF THIS WORLD. Space is the next great frontier for our civilization and becoming a multi-planetary species is one of the most important future forward achievements we can strive for. Advancements in space flight and moonshots by both private sector (SpaceX and Virgin Galactic) and government (UAE’s Mars 2117 initiative) will make ours the first Mars Generation. ARTISTIC VISIONS OF THE FUTURE. What about art, poetry, or inventions for things and issues that have not even been imagined yet? What is the role of pop culture or film in solving for the future? This category is for the dreamers who will marry the practical to the whimsical.

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THE STORCHEN ISN‘T JUST IN ZURICH, IT IS ZURICH The Storchen experience extends far beyond the hotel‘s wall and fully embraces the spirit of Zurich, one of the cities consistently ranked as offering the best quality of life in the world. You are invited to enjoy the Storchen and appreciate an authentic taste of the much-celebrated Zurich lifestyle. For early birds or night owls, a quick drink or a long, leisurely lunch: no matter what you‘re looking for, we offer the full gamut of gourmet experiences – all presented with a hearty portion of passion, creativity and flair. www.storchen.ch

Ranked among the top ten universities in the world, this Swiss Federal Institute of Technology in Zurich, Switzerland is where the future begins! www.ethz.ch/en

“A good university not only imparts knowledge, it also teaches people to think.” Lino Guzzella, President – ETH Zurich

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Are robots transfo the way we work? By Ana C. Rold

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or the past decade we have been hearing about the unprecedented advancement in robotics and artificial intelligence. But it wasn’t until earlier this year that AI and robots grabbed the attention of a much wider general audience. Sex robots aside, the biggest development in robotics has all of us wonder: how will this ever-evolving technology change the way we work? While many robot-centered films depict robots as being machines of destruction bent on not only taking over the workplace, but the entire world—such as I, Robot’s army of NS-5 helper robots whose awakening brings about a thirst for the destruction of humanity—many other robot films are centered around the more positive and humanistic aspects of machines, such as Pixar’s Wall-E or the titular gentle robot in The Iron Giant. Opinions are divided on whether the future of robots will be one of coexistence or of a masterslave relationship, but one thing is for certain: robots are transforming the world, and more importantly, the way we work. Much like I, Robot’s depiction of sentient robots as the end to human society, there is often a sense of fear in the general public’s understanding of robots and their role in the job economy. With current trends leaning towards increasing numbers of robots in the workforce as well as increased rates of unemployment for human workers, robots involved in lowskilled labor such as assembly and production-related jobs are often pinpointed as one of the main factors behind this concerning trend. Even as recent as this past March, companies such as Domino’s have announced the creation of robots capable of delivering pizzas to residents nearby any Domino’s franchise, an invention that many believe could put delivery drivers out of business and lead to potentially larger conflicts between self-driving automation technologies and those whose livelihood depends on working in the transportation industry.

With the vast majority of robots set to take over low-skilled jobs, having a human workforce of highly skilled workers to fill higher job roles is crucial.

Unfortunately, this fear isn’t completely unfounded. In the 1970’s, for example, the popularization of self-serve gas pumps rendered the majority of gas station attendants’ jobs obsolete. Since then, the rapid evolution of machinery has put to rest many classic forms of labor and in its place installed more efficient robotic technologies, such as Rethink Robotics’ Baxter robot, which is capable of not only basic assemblyline techniques, but also possesses the ability to learn new movements from hands-on learning in order to become widely applicable and flexible to the needs of different industries. The never-ending evolution of these machines often points to potential mass unemployment, with a 2016 study by the World Bank predicting that nearly two-thirds of jobs in developing nations will be replaced by automation. In the next 10 years alone, a Roland Berger study anticipates that robots could replace hundreds of thousands of unskilled jobs, potentially affecting up to 1.5 million positions in the Eurozone. If movies such as Wall-E are to be trusted, however, a future of robots in the workplace does not necessarily spell out devastating losses for humans. While it is true that robots will take up many of the activities that unskilled workers currently perform, the number of jobs won’t necessarily decrease as dramatically. First, the increasing demand for robots in the workplace will create countless jobs for people to design and assemble them, as well as skilled workers who can operate and maintain both current and future robots—something that J A N U A RY 2 0 1 8 12

could potentially lead to the introduction of an estimated 2 million jobs in the next eight years alone. Similarly, a Forrester Big Idea report forecasts that while 16% of jobs will disappear due to automation by 2025, there will be a simultaneous 9% increase in jobs, leading to a total net loss of 7%—much less than the devastating percentages of unemployment many people fear. While automation is inevitable and concerning, it is the automation of automation that will likely be the real change maker. Relatedly, the increase in automation-based technologies working in unskilled labor positions will lead to a decrease the number of employees working in more dangerous work positions, such as those that deal with repetitive tasks or unsafe working conditions. In Poland and Brazil, for example, drones are beginning to be used more frequently to inspect unsafe buildings, while others are being used to remove snow from roofs. Even more encouraging, the increasing intelligence of automation can be used to complement and augment the capabilities of human workers, such as robots working alongside human workers on assembly lines, a practice that is already being put into place in Ford factories throughout Germany. With this ever-increasing co-dependency between humans and robots, it is easy to view robots more as collaborative co-workers—or “co-bots,” as they are often coined—and less as the evil competitors many movies make them out to be. In order to reach this ideal state of co-habitation in the workplace,


however, it is imperative that we educate and prepare workers for an unpredictable future. With the vast majority of robots set to take over the more low-skilled jobs, having a human workforce of highly skilled workers to fill higher job roles is crucial—and therefore, both general education and specialized training is key to creating meaningful and important jobs for human workers. On a more general scale, it is important to not only prepare the workers themselves, but also the job economy itself for the unpredictable effects that robotics will have on all industries. With the widespread introduction of home computers in the 1980’s and 1990’s, for example, training programs that focused on training workers to fix typewriters

and other older technologies had to quickly adapt in order to train workers in computer repair and maintenance instead, lest these programs become obsolete. As we move forward, it is all too likely that reaction time to robotic innovations will have to increase dramatically both within and throughout all industries—and in order to accomplish this, training programs and educational institutions must remain flexible and prepare for an uncertain future. Ultimately, the future of jobs and how robots will play a part in the job economy is completely dependent upon how humans proceed. While we should remain cautious and aware of the unpredictable nature of technology

While it is true that robots will take up many of the activities that unskilled workers currently perform, the number of jobs won’t decrease as dramatically.


in the workplace, with proper preparation and a focus on creating a more educated human workforce, the benefits of working alongside automated technologies are endless. Instead of the dreary potential of a robot apocalypse that movies like I, Robot caution against, then, it is equally safe to say that our future partnership with robots will be one augmented by opportunities for advanced intelligence, unimaginable innovations, and prosperity for all involved. ●

ABOUT THE AUTHOR Ana C. Rold is Founder and CEO of Diplomatic Courier. She teaches political science courses at Northeastern University and is the Host of The World in 2050–A Forum About Our Future. To engage with her on this article follow her on Twitter @ACRold.



nce the preserve of medieval monasteries and their libraries, in the second millennium, universities became the curators of knowledge. As the digital revolution transforms society, what is the role of universities as “intelligent” machines begin to ask and answer the questions of the universe? SANCTUARY! SANCTUARY!

By: Lino Guzzella & Gerd Folkers

Monasteries—the guardians and sanctuaries of knowledge—once maintained huge collections of manuscripts that formed the foundation of current knowledge. The Abbey of St. Gall, whose architecture, school, and even its herb garden served as a blueprint for many monastic communities, not only preserved their livelihood, but also fostered learning. While the monks working in the scriptorium copying time-honored Christian texts—some scribes barely able to understand their content, the revolutionary ideas recorded in Roman manuscripts (such as Lucretius’s tract) rotted in the cellars of abbey libraries until Poggio, an “enlightened” former papal secretary roaming the country on a donkey, no less, came across the treasure trove. The historian Stephen J A N U A RY 2 0 1 8 14

Greenblatt regales Poggio’s’ tale of discovery of De Rerum Natura. For nearly a thousand years, universities have provided a home for thinkers who questioned wisdom, clearing a path for scientific progress as modern and open democratic societies expressed a need for a body of knowledge that is individual, collective and socially relevant all at once. With the advent of the printing press 600 years ago, technology has played a revolutionary role in the dissemination of knowledge, as well as placing it in a critical and social context. Today, new media cultivates, digests, and questions knowledge, much as it did six centuries ago. Despite technological advancements, society still faces significant obstacles in terms of transparent processes and access to scientific discoveries. With machine learning and quantum computing on the horizon, “How will the digital era influence knowledge acquisition, critical thinking, and ultimately, the future of universities?” KNOWLEDGE AND PROSPERITY Education, prosperity, and quality of life appear intrinsically linked. Galileo incurred the wrath of the cardinals not because he placed the


sun at the center of our planetary system, but because he wanted to publish his work in Italian, to benefit the “common people.” True to Galileo’s ideal, universities bear a responsibility not only to make their knowledge accessible to the public, but also to challenge the prevailing worldviews. Knowledge, and the ability to process it, is the capital of universities. Only by continuously nurturing this capital and putting it to good use can we increase the prosperity of an open society and its fitness in competition with other societal forms. New technologies and their commercialization happen more rapidly with prominent “publications.” The market takes longer to recognize findings overshadowed by the higher-profile scientific journals, but their economic potential is nevertheless powerful. The new gene-editing technology CRISPRCas9 is a case in point. After years of attracting minimal publicity, prestigious universities are now squabbling over patents. The prominence of the discovery’s publication and its potential (or actual) successful commercialization in turn serve as an important medium for universities, by attracting investors. If a university can demonstrate that its

“Universities have been in the knowledge market for more than a thousand years. Since the founding of the University of Bologna, universities have been processing knowledge and creating new perspectives through reflection and transformation.” products are instantly marketable, it enhances its reputation among taxpayers, and, ultimately, among politicians. DEMOCRACY AND CRITICAL THINKING Universities have been in the knowledge market for more than a thousand years. Since the founding of the University of Bologna, universities have been processing knowledge and creating new perspectives through reflection and transformation. The empirical method—an integral


component of teaching—is a structure that has held up over time, proving itself repeatedly as an effective approach, in terms of both effort and reward. The structure of a university imposes a strict methodology that teaches the next generation how to engage knowledge critically, to question, and reform—a process only possible if universities exist within a democratic system that allows unrestricted freedom of expression. Every “Why?” question challenges the established view of the world— enhancing societal understanding and helping people navigate the world more easily. Knowledge-based advances have eliminated diseases such as smallpox and polio, democratized mass communication, and revolutionized mobility. The new media and machine learning are prompting a fundamental change in education and research. It may take a while, but machines may eventually be capable of asking “Why?” questions, searching for systematically ordered answers and adopting a methodical approach in doing so. Even so, the task of validating the findings of artificial intelligence through reasoning and evidence will remain an essential part of our culture of discourse. Humans will also continue to set


themselves apart from intelligent machines in terms of their capacity for empathy, intuition and abstraction. We have a wealth of emotional intelligence that will prevent robots from ever replacing us. THE FUTURE OF UNIVERSITIES No one disputes the fact that the foundation of science rests upon a fixed structure of axioms, laws, and theories, rather critical questioning of the prevailing world model is elevated as a guiding principle. Never the less, there is a temptation in academia to look for affirmation rather than disagreement, to cite positive results, and narrow perspectives instead of breaking free from the constraints of a single discipline. This problematic attitude gives rise to publication bias, “alternative facts,” and, at its worst, fraud. It is the duty of universities, and indeed all scientists

and their institutions, to continuously review and improve the peer-review process. As the technological advances of the digital era fundamentally alter both the creation and dissemination of knowledge, universities have lost their once dominant role. They now compete with a host of digital knowledge providers accessible 24 hours per day, seven days per week, and worldwide. One thing is certain, significant changes lie ahead for the knowledge business as a whole. As knowledge is democratized, value-based critical and creative thinking becomes a university’s unique selling proposition. Universities should profit from this proposition by continuing to foster an exchange between different worlds, languages, and thinking. In doing so, universities too will evolve critically and reatively. ●

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“Knowledge, and the ability to process it, is the capital of universities. Only by continuously nurturing this capital and putting it to good use can we increase the prosperity of an open society and its fitness in competition with other societal forms.” ABOUT THE AUTHORs Lino Guzzella is the President of ETH Zurich; Gerd Folkers, is Full Professor in ETH Zurich’s Department of Humanities, Social and Political Sciences. The article is an extract from “Universities as curators of knowledge”—a conference paper from Glion Institute of Higher Education. This feature was edited by Marianne Lucien.

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very day news and social media fascinates us with the capabilities of Artificial Intelligence (AI) and frightens us with the potential dark side of Deep Learning. Even Elon Musk and Mark Zuckerberg sparked a heated, and ongoing, debate about whether or not AI will take control of humanity. Indeed, AI continues to demonstrate impressive capabilities. Earlier this year, the AI built into Google’s DeepMind AlphaGo defeated the world’s top Go player, Chinese professional, Ke Jie. Go is a popular Asian board game reputed to be much more complex than chess. AI is not just for gaming, it also demonstrates a high reliability for detecting cancerous tissue in medical images. Unfortunately, some AI experts, and especially non-experts, go a bit too far when extrapolating the achievements of AI creating the false expectation that we can anticipate AI in autonomous cars or intelligent service robots to reach human capabilities within only in a few years. Presently, I am not aware of any AI program that is capable of understanding the complexity of our daily environment or creating totally novel ideas. Today’s AI is J A N U A RY 2 0 1 8 18

still not much more than code that enables “optimization” across large data streams. On the bases of large datasets, Deep Learning allows optimal input and output correlations, like identifying the part of an image that represents cancerous tissue. Here, computers are better than humans are, because they can access and treat large volumes of data much faster and more efficiently. Today’s AI systems are incredibly narrow in what they can do. While AI is increasingly successful when applied to structured problems with a limited search space, it is quite a leap to infer the same success in service robots. Service robots have to deal with the unrestricted space and complexity of our daily environment. Unlike pure data analytics and strategic games, robots require a real “human-like” understanding of complex and dynamic situations. They have to make reliable decisions based on partial information and interact with a high degree of sensitivity and tactility in their environment. Robotics is much more than just good AI algorithms; it is about diverse and multi-modal perception, interaction, and deep semantic understating.


As roboticists, we are of course excited about the new tools and recent advances that AI offers. It enables us the opportunity to tackle some of the big challenges we face in developing fully autonomous robots. However, knowing the wonderful skills and interaction capabilities of humans, as well as, the limitations of today’s robots, most roboticists do not share the overhyped expectations purported by some AI experts and futurologist. Solutions to complex problems typically do not evolve disruptively. Despite the very extensive robotics research effort in the last few decades, robots are still not “intelligent.” They do not have real tactile interaction capabilities and still require highly skilled people to program even the simplest tasks. When serious market analyses institutions predict that robots will take over millions of jobs from artisans to nurses - within the next 10 to 20 years, I dismiss such predictions as ludicrous. In the last century, robots have taken over many highly automated jobs in industrial production gradually releasing humans from boring, dangerous and unhealthy jobs. However, how many robots have

you seen cleaning a dinner table, fixing a broken car, or installing a new kitchen? Have you ever seen an AI system that interacts with a human client and generates a new software to meet his or her needs? AI and especially robots are tools that will eventually allow us to do certain jobs more efficiently or more precisely. However, they do not yet offer the wonderful creativity and interactivity of a human worker. There is little to fear with regard to robots and AI systems taking over our jobs or even the world. Instead, let us embrace new opportunities in robotic technology that will offer us a co-worker for unhealthy and dangerous jobs, make agriculture more efficient and sustainable, or make our streets safer and more comfortable. If used wisely, robots and AI technologies can help us to make our planet a better world to live. ●


“AI and especially robots are tools that will eventually allow us to do certain jobs more efficiently or more precisely. However, they do not yet offer the wonderful creativity and interactivity of a human worker.”

ABOUT THE AUTHOR Roland Siegwart is a professor for autonomous mobile robots at ETH Zurich and founding co-director of the Wyss Zurich. He is currently Head of ETH Zurich’s Institute for Robotics and Intelligent Systems. Siegwart also studied mechanical engineering at ETH Zurich, spent ten years as a professor at EPFL Lausanne, and held visiting positions at Stanford University and NASA Ames. He was also Vice President of Research and Corporate Relations at ETH Zurich from 2010 - 2014. Siegwart co-founded a half a dozen spin-off companies. He also strongly supports and promotes innovation and entrepreneurship in Switzerland.



n the 2016, Harvard University president Drew Faust delivered an address to 800 cadets at the U.S. Military Academy at West Point. The nature of inquiry fostered by the humanities, she said, “teaches us how to scrutinize the thing at hand, even in the thick dust of danger or drama or disorienting strangeness… it imparts skills that slow us down – the habit of deliberation, the critical eye, skills that give us capacity to interpret and judge human problems; the concentration that yields meaning in a world that is noisy with information, confusion, and change. The humanities teach us many things, not the least of which is empathy – how to see ourselves inside another person’s experience.” Known not only as the training ground of American Army officers, West Point is also one of the premier Liberal Arts institutions in the United States, and a university where hardened future officers also read great literature and spend a semester studying history of the military art. As Lieutenant Colonel Christopher Mayer, a philosophy professor and Associate Dean at West Point explains, “our graduates are best prepared for our uncertain and interconnected world by completing a core curriculum that brings together STEM and humanities disciplines in a J A N U A RY 2 0 1 8 20

way that develops a broad array of abilities and perspectives. This is why our philosophy majors take engineering, information technology, physics, and calculus courses, and our engineering majors take philosophy, literature, psychology, and political science courses.” Harvard biologist and two-time Pulitzer Prize winner E.O. Wilson describes the sciences as the study of all that does exist, and the humanities as the study of all that could possibly exist. At West Point, graduates are forced to grapple with both. The notion of a liberal education has nothing to do with politics. It has everything to do with liberating the mind by exposing it to a wide array of topics and methodologies, by forcing the student to grapple with, and debate what brings them to the edge of comfort. It forces upon the graduate a period of radical self-inquiry. It is indeed the idea that education is not just an investment in transactional skill, or an insurance product that mechanistically generates graduates with vocationally fortified cognitive skills. It is in equal part a consumption product, or something meant to be enjoyed. It is something to slow us down, force us to question our values and beliefs, and make us better citizens of the world. It gives us a toolbox from


which to draw when the world takes an unforeseen turn, and adaptability is required. A typical liberal arts graduate leaves university with exposure to mathematics and logic, the natural sciences and the social sciences in equal measure to the arts and humanities. Even at great schools like Stanford University, known for its engineering and computer science, many students opt for a year long, freshman option called SLE, or Structured Liberal Education. In this program students read and debate great works of literature and philosophy, and engage with classical texts such as Homer’s The Illiad, or Dante’s Inferno. Even as an electrical engineer, it is difficult, if not impossible, to graduate without having crossed paths with Descartes and Dostoevsky, Jung and Joyce, Hobbes and Hemingway. “I’m not worried about artificial intelligence giving computers the ability to think like humans,” Apple CEO Tim Cook stated in his 2017 commencement address at the Massachusetts Institute of Technology (MIT). “I’m more concerned with people thinking like computers without values of compassion.” Indeed today, as we play tug of war between the promise and the peril of technology, we overlook that technology is not an exogenous

creation. Rather it is endogenous, entirely reflective of human values. Technology may be agnostic in the abstract, but it is also deeply procyclical when it comes to the human values, propensities, sensitivities and biases baked into ones and zeros. There is nothing objective about technology, and mere “big data” does nothing to mitigate the fallibility of outcomes generated from, and interpreted by human beings. Idealistically, technology might one-day supplement human judgment, mitigating bias and nudging us the right way. But this very optimistic scenario is predicated on what, and who decides, these very human values. More pessimistically, we might merely focus on what the technology can do without recognizing that its only value inheres in our ability to point it in the right direction. What it should do is the normative, values-based question for which we need many inputs into our technology, diversity of background, outlook, and methodology factored into education and hiring. The most important investment we can make in the technological era is one of self-reflection, humility, and empathy. While we invest in science, technology, engineering, and math, so called STEM education, let us not forget that building is meaningless without an


understanding of context, grounding in human problems, and a firm grasp on values. The gravest threat to humanity is not robots; it is humanity itself, accelerated by technology. “Keep your own Iliad under your pillow,” Faust advised the cadets on a steel-gray day. “Lead, also, on behalf of the liberal arts – of the traditions of human experience and humane insight that they represent. Recognize the importance of the attributes they have given you, mark their presence in your lives, advocate for them in the lives of others… be the world’s best force for the humanities – and thus for human possibility.” We need not fear robots, but we might fear those sleeping with iPhones under their pillows. We might all take a lesson from president Faust to engage with technology, but also lead on behalf of the humanities and liberal arts, for they are the very things that give human life meaning. ● ABOUT THE AUTHOR Scott Hartley is a Silicon Valley venture capitalist and the best-selling author of The Fuzzie and the Techie: Why the Liberal Arts Will Rule the Digital World. Prior to venture capital he worked at Google, Facebook, Harvard’s Berkman Center for Internet & Society, and the White House as a Presidential Innovation Fellow. He holds three degrees from Stanford and Columbia University.

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LEARNING WITH ANGRY BIRDS By: Ana C. Rold & Winona Roylance


hile the idea of gamification of learning has been around for quite some time, new and emerging technologies—such as VR headsets and mobile applications—are allowing the concept of gamification to impact education and workforce training in new ways. In fact, gamification—which is the approach to instruction that facilitates learning and encourages motivation using game elements such as mechanics, gamebased thinking, and reward systems— has recently moved beyond the limits of video games and into a broader sphere. From K-12 education to employee development to the government and its communities, gamification has taken hold of all forms of learning, enabling students to engage in a more creative and productive manner. Due to gamification’s fairly new popularization within mainstream education, there still remain many myths that surround it. First, many people often confuse gamification with technology-based learning—and while gamification is usually augmented by technology, game mechanics such as receiving badges for accomplishing a work-related task could also be considered gamification. Second, many believe that gamification is only effective on younger people, but several J A N U A RY 2 0 1 8 22

studies show that all age groups are interested in games, such as an Entertainment Software Association’s report which reveals that 48% of adults aged 50 and older play video games and more traditional card and board games on a weekly or even daily basis. Finally, there is a common misconception that there is a lack of science behind gamification, but a Georgia Southern University study discovered that using brief, spaced quizzes as a form of gamification increased retention of quiz material by as much as 40 percent, an outcome which ultimately shows that gamification can make use of a plethora of established learning practices—such as retrieval practice and spaced retrieval—to enhance retention of knowledge and learning rates. Gamification has proven to not only be effective, but also enjoyable. Pep Boys, for example, recorded a 95 percent employee voluntary participation rate for its gamification efforts for all employees. Similarly, popular food chain KFC has recently announced a virtual reality training program designed to educate newly hired employees on how to inspect, rinse, bread, rack, and pressure fry virtual chickens through the use of a virtual reality headset in a mere 10


“an Entertainment Software Association report reveals that 48% of adults aged 50 and older play video games and more traditional card and board games on a weekly or even daily basis.”

minutes, as compared to the 25 minutes it traditionally took to train employees. Through virtual reality, companies can step away from traditional training videos and instead focus on training new employees in both company practice and hands-on experience while also gamifying elements such as employee onboarding and staff re-training, cooperation and collaboration, and informing on company policy—thereby allowing employees to retain new knowledge in fun and sustainable ways. A recent Futuresource Consulting report estimates that the number of students who will have access to virtual reality and augmented reality will increase from 2.1 million in 2016 to 83 million in 2021. With the rapid expansion of this new technology will come a plethora of potential uses of gamification, including the creation of virtual labs, mobile applications tailored toward individual learning, and expansive virtual libraries. The Library of Miss Gadish, for example, is a mobile app that has gamified reading through the use of animations and a reward system to incentivize readers to read books to completion. While there are many other potential applications for gamification, the use of creativity and engaged learning will engage younger

students on a deeper level and increase retention rates of information. Perhaps one of the most interesting institutions involved in gamification, Quest to Learn—a grade 6-12 charter school located in New York—is an educational establishment whose entire curriculum is founded upon gamebased learning. In a 9th grade biology class, for example, students may spend the entire school year role playing as workers in a fictional bio-tech company whose job revolves around the creation and maintenance of dinosaur clones, while in an English class, students may work together as “storyweavers” to create collaborative stories through role play. These forms of gamification are not only engaging, but also allow for more flexible learning, and while most institutions do not include as in-depth gamification-based curriculum as the charter school, Quest to Learn’s program demonstrates that gamification can be applied to nearly every classroom. Interestingly, gamification can also be used to increase engagement between both national and local governments and their communities. In Santiago, Chile, for example, in order to combat childhood obesity, the city created local-level competitions in which 10- to 12-year-olds form teams


to earn points for healthy behavior that can be used towards prizes such as a trip to the pool or new playground equipment—a program whose success has spurred involvement from parents as well. In terms of civic engagement, the city of Salem, Massachusetts has created a game called “What’s the Point” that seeks out resident ideas for neighborhood improvements and rewards posts with virtual currency, which can then be used to fund real causes in the community. And in Hawaii, the government has gamified its government employees’ online services by creating a website used by all departments in which employees can create a profile and keep track of how much time, paper, and mileage they saved by completing government transactions digitally—and through a community board, employees can then compete against each other with these stats in order to win prizes. Ultimately, gamification can apply to all forms of learning. Indeed, through the engaging and entertaining nature of gamification, learners will not only be able to retain knowledge better, but have an enjoyable time doing it—and with new discoveries in technology each day, technology-driven gamification may very well be the staple educational tool of the future. ●

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t is now widely accepted that the future of work requires different set of talent and skills. It is also argued that the global economic ideology is shifting from Capitalism to Talentism— a new era where human capital would hold more influence than financial capital. From Washington DC to Zurich to Seoul to Delhi, we discuss, debate, and commit to act so that the education we provide today meets the demands of the future. It is no longer sufficient that students just memorize content in an era of “digital enlightenment” where content is at their fingertips. The goal today is to prepare these students to fulfill the jobs in 2050 by equipping them with skills such as the ability to use content to solve complex global problems, agile thinking to make critical and informed decisions at times of uncertainty, and collaborating with cross-cultural and diverse teams in a borderless and global job market. THE GLOBAL SKILLS AND TALENT MISMATCH Today, it is quite ironic that globally, over 200 million, including those who complete secondary school, are unemployed while nearly 60% of employers report a shortage of skilled J A N U A RY 2 0 1 8 26

labor. On the one hand, in 2013, the global unemployment rate was at 12.6% out of which 73 million were youth between the ages 15-24. On the other hand, millions of jobs go unfilled due to the increasing skills mismatch with the U.S. alone accounting for 11 million unemployed people and 4 million unfilled jobs. The gap in some of the developing nations is far worse. This issue has become a global phenomenon that it became the theme of the World Development Report 2018 with the premise that it is the skills and competencies acquired through education, and not the time spent in school, that prepare our youth to meet the shifts in the global workforce. In Sri Lanka, every year, 140,000 students, nearly 50% of school leavers, complete their education without employable skills—a perfect example of universal access to education not transforming into learning. LEAVING THE POOR AND THE MARGINALIZED BEHIND Having realized the urgency, one part of the world is moving rapidly towards tackling these challenges that would determine their future global competitiveness. In contrast, another section of the world—the poor and the


“while one section is preparing for the “postemployment” era where robots and artificial intelligence would replace their current jobs, 265 million between age 10 and 17, are left out of school altogether.”

marginalized—both across countries and within countries—continue to lag behind. Today, while one section is preparing for the “post-employment” era where robots and artificial intelligence would replace their current jobs, 265 million between age 10 and 17, nearly 20% of the world’s population of that age group, are left out of school altogether. For the ones in school, not only are schools failing to equip them with the 21st century skills they need for employment, but they also fail to provide even the basic literacy and competencies needed today. Globally, 250 million primary school students cannot read and write and another 200 million youth leave school without the skills they need to contribute in society and find jobs. THE URGENCY FOR EMERGING MARKETS TO LEAPFROG By 2030, not only will emerging market economies contribute 65% of the global GDP, but they will also be home to the majority of the world’s working age population, according to the Learning Generation Report. By contrast, the demand for talent in Western Europe, is projected a rather modest growth of 3.5%. Employers will increasingly seek to recruit from these

economies in Asia, Africa, and Latin America. Ultimately, the youth in these regions will be the engines of the world’s future growth and prosperity. Yet, education in these countries lags behind. In developing countries, the gap in primary school completion rates between the richest and poorest children is more than 30%. Meanwhile, around 45% of public education resources are allocated to educate the top 10% most educated students. In low and lower-middle income countries, approximately 1 out of 4 young people is illiterate and only less than 10 percent of schools are connected to the internet. If we were to meet the changing demands of the future, these gaps need to be addressed through quick and effective mechanisms. THE NEED FOR AN INCLUSIVE AND EQUITABLE ADVANCEMENT Looking closely at the progression and the rate it was achieved over the last few decades, we need a significantly different approach to tackle this issue. Today, no longer can we afford to measure the poor with just basic literacy—ability to read and write a sentence—while we measure the rich with 21st century skills and competencies. If status quo were to continue, by the time the poor leave school, their education would have already become obsolete—creating a recipe for a global crisis of talent and an increasing socioeconomic gap and polarization. The conversations and action of world’s best academia, think tanks, and policy makers need to shift from the “G20s” of the world to include all countries and all communities within each country down to each individual child to ensure that the advancement in learning outcomes is inclusive and equitable.


When empowering our youth with the talents and competencies of the future, we need a multi-stakeholder and collaborative approach to ensure that we create systematic changes that are inclusive and universal: 1) Educating the poor and the marginalized has to be a global priority and should be integrated into every discussion and policy decision when designing the future of our education. 2) The reforms and new approaches need to be innovative and should integrate digital and technology enabled interventions so those populations who currently lag could leapfrog into the realities of tomorrow. 3) Encourage, engage, and facilitate the business community, start-ups, non-profits, and social enterprises to transform these sections. The governments and policy makers have failed to deliver or meet the expectations in the past, so there’s no reason to believe that the governments by themselves would be able solve this issue in the future. CASE STUDY: SRI LANKA In tackling the learning crisis in Sri Lanka, over the past decade, Educate Lanka Foundation, a non-profit social enterprise, has developed innovative platforms to bring together resources and stakeholders to empower the marginalized by providing them with equal opportunities to succeed. Having realized that schooling isn’t transforming into learning, it developed a complementary corporate partnership platform to provide a “journey of opportunities” for its children and youth in the form of mentorship, skills development, values integration, and global exposure so that they are equipped with the tools and learning that will position them for the talent and skills required in the future. It envisions a future in which opportunities are universal for all so that everyone is capable of positioning them to meet the demands and co-create our future in 2050. ●

ABOUT THE AUTHOR Manjula Dissanayake is a banker turned social entrepreneur and founder of the non-profit social enterprise—Educate Lanka Foundation. Manjula was also nominated for the Inspired Leadership Award and his efforts have been recognized by the UN, USAID, the U.S. Department of State, and the Clinton Foundation.




ver 100 years ago, America’s business and policy leaders identified the need to create and retain the next generation of leaders for our national economy. These visionaries saw the direct connection between creating a talented workforce, strengthening our economy and protecting our national security. Their solution, a collaboration between America’s public education system and business and industry that created a comprehensive learning model that includes: classroom instruction, applied learning and assessment. The model has proved itself durable, adaptable and, most important, effective. Originally called vocational education, and focused on agricultural and household careers, the program has adapted and expanded to serve the needs or our nation’s changing economy. Today, career and technical education (CTE) programs prepare over 2 million students for college, career and community leadership every year. The impact of the programs is measured through student achievement, business engagement and emulation from emerging economies. And while there is much to be celebrated in the accomplishment and evolution of our national strategy, J A N U A RY 2 0 1 8 28

each measure of success also poses a challenge to our continued efforts to create and retain the next generation of leadership. STUDENT ACHIEVEMENT Taking DECA as an example, we know that the model works. Independent third-party research conducted by the National Research Center for College and University Admissions (NRCCUA) demonstrates that: • 93% of DECA students say that participation has prepared them with 21st Century Skills • 87% of DECA students say that participation has prepared them for college and careers • 90% of DECA teachers say that the learning model is effective in the classroom What we have learned over our 70-year history, is that while this model remains effective, we must anticipate change – for content and delivery – to stay relevant. In the 1980s, we fundamentally changed our learning model to align with changing accountabilities in federal law and the changing needs of business. In the early 2000s, we completely reimagined


“there’s the secret to creating and retaining the next generation of leaders. It’s only been right in front of us for 100 years… The model was born of necessity and driven by the creative vision of America’s very best business leaders, entrepreneurs and educators. It has risen to every economic and policy challenge presented to date.”

our brand, instructional resources and delivery methods to address a generational shift in our teacher core. Today, we are grappling with everchanging governmental accountabilities, disruption in all business sectors and students’ 21sth century mindsets that challenge all conventions about the relevance of college and careers. If the face of all of that, enrollment in DECA and other CTE programs is at an all-time high. BUSINESS ENGAGEMENT Again, business and industry was at the forefront of the movement to create career and technical education. They’ve played an integral role in every part of our comprehensive learning model. First, they’ve helped us create the performance indicators upon which our student assessment is measured. Next, they’ve supported classroom instruction by serving as guest speakers. They’ve provided applied learning opportunities through project-based learning, internships and employment. And, finally, they’ve served as judges in career competitions that evaluate students understanding of concepts and skill development. All of this made perfect sense for the past 70-years. Companies like Sears

and JC Penney were anchor stores and employers in nearly every community across the country. They both needed a steady pipeline of new employees and community engagement opportunities for existing employees. Then came the computer, disruption, recession and that perfect model will never be the same again. Obviously, that doesn’t mean that business doesn’t still want, and need, to create and retain the next generation of leaders. It seems like we hear about the “skills gap” every day. Personally, I don’t believe that we have a skills gap. There is need, no doubt. But, there is supply – over 2 million high school and college students, annually, who have expressed an affirmative interest in every major cluster of employment in the national economy; and in becoming entrepreneurs themselves. The solution, in my mind, is illustrated by the new iPad commercial where the young person asks, “what’s a computer?” That is to say, “how do we engage the model today?” Fortunately, over 70 national and international business leaders are working with us to make the model relevant today and anticipate tomorrow. EMULATION In the 14 years that I have been at DECA, I have met with many foreign government delegations, NGOs and private education companies to explain how we “teach business” in the United States. I’ve also worked with the American Councils on International Education on a proposal to integrate our model into Eastern European school systems. These visionaries, like ours so many years ago, have come to understand that government and business have a role in creating and retaining the next generation of leadership for their economies.


While DECA doesn’t actively develop outside of the United States, nine foreign countries have established associations and actively participate in our comprehensive learning program and International Career Development Conference. Canada is our most successful foreign association and boasts over 10,000 student members who are highly successful in international competition. The reason that we haven’t actively developed outside of our boarders is an abundance of caution toward fidelity to our charges in federal law, connection to state departments of education and delivery of locally adopted curriculum. There is purpose and value in our model and brand. That’s why our international friends want to emulate us. While I absolutely believe in and support our fidelity to mission, here too is a lesson for DECA. We are now all in the global market place and I absolutely believe that our international partners can help DECA better fulfill our mission. So, there’s the secret to creating and retaining the next generation of leaders. It’s only been right in front of us for 100 years… The model was born of necessity and driven by the creative vision of America’s very best business leaders, entrepreneurs and educators. It has risen to every economic and policy challenge presented to date. It faces its greatest economic and policy challenges ever. While past performance is not a guarantee of future results… I absolutely believe that we can and will meet the challenge and continue to create and retain the next generation of global leaders. ● John Fistolera is Assistant Executive Director of Corporate & External Affairs, DECA, Inc. He is responsible for the visioning and stewardship of DECA’s strategic partnerships, advocacy and external affairs. Prior to joining DECA, he was an advocate and professional staffperson in the California State Legislature.

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nnovation is a powerful driver in the world of business, and companies recognized as highly innovative are hailed as leaders in their fields, with a share value reflecting the public’s confidence in their leadership. We have followed rapid change in sectors where old, but by no means stagnant, corporations like Ford Motor Co. has yielded leadership to highly innovative companies like Tesla Motors. Creative internet retailers like Amazon are taking huge market shares from brick and mortar retailers like K-Mart forcing them to change their marketing and sales strategies. Accurate assessment of innovation potential in the corporate world is not trivial. However, Jeff Dyer (Brigham Young University) and Hal Gregersen (MIT) developed a paradigm using an objectively calculated “Innovation Premium,” based on which they published a list of the world’s ten most innovative companies in Forbes. This list includes Chinese, Indonesian and South Korean corporations, but it is dominated by US names, such as Salesforce, Tesla, Amazon (1, 2 and 3, respectively), Netflix, Incyte and Regeneron (5, 6 and 10, respectively). Not surprisingly, these companies also rank as top leaders in the 2017 list of Future Fortune 50 corporations. J A N U A RY 2 0 1 8 30

Important as it may be to shareholders and employees, corporate innovation prowess is most interesting if it contributes to the greater good of humankind, worldwide. In a global comparison, the Global Innovation Index, released annually by Cornell’s SC Johnson College of Business, INSEAD and World Intellectual Property Organization (WIPO) ranks 127 countries based on a number of contributing factors. Now on its tenth year, the GII has dedicated the 2017 report to the topic of Innovation Feeding the World in recognition of the vital role of innovation to address one of the world’s most challenging sustainability issues. It also highlights the power of governmental responsibility to stimulate innovation and R&D through investment and taxation. Food production and agriculture are among the oldest pillars of national wellbeing, now more dependent on innovation, digitization and efficiency increase than ever before. It is rewarding to know that this is happening at a rapid pace. The GII rank list, topped by Switzerland, Sweden and the Netherlands, shows predominantly highly sophisticated economies in its upper half, and mostly poor, developing countries in the lower half, ending with


“Important as it may be to shareholders and employees, corporate innovation prowess is most interesting if it contributes to the greater good of humankind.”

Togo, Guinea and Yemen. This implies that, if innovation is a prime weapon in defeating world hunger, it will be necessary not only to distribute food to those who need it most, but also to transfer innovation skills to these nations. We are now approaching the crux of the matter. How can creativity and innovation skills be bottled and shipped to the needy? Better yet, how can we help inspire educators (and policy makers) across the globe to stimulate and nourish the development of creativity and innovation skills from an early age? CREATIVITY VS. INNOVATION: IS THERE A DIFFERENCE? Andrew Marshall states that “The main difference between creativity and innovation is the focus. Creativity is about unleashing the potential of the mind to conceive new ideas… It is also subjective, making it hard to measure…” whereas “Innovation, on the other hand, is completely measurable. Innovation is about introducing change into relatively stable systems. It’s also concerned with the work required to make an idea viable. “ As an applied business example, a pharmaceutical company may recognize an unmet medical need and

invest in innovative R&D to develop a medicine which is projected to bring a fiscal return on the investment many years and billions of dollars later. What about creativity in this context? Theodore Levitt, the late Harvard economist who coined the term “Globalization” might have clarified the relationship: “What is often lacking is not creativity in the idea-creating sense but innovation in the action-producing sense, i.e. putting ideas to work.” If Creativity leads to Ideation, and Innovation best relates to Implementation, then both skills are necessary and intimately connected. It makes sense then, to encourage young learners to practice both skills together. Among educators who take special interest in the STEM field of education, it is well-known that by exercising practical problem solving, learners are stimulated to think creatively. Farming advocates are likely to be correct when they assert “Challenges often arise on a farm; addressing these issues develops skill in independent thinking, problem solving, ingenuity, and offering creative, innovative solutions.”.

opposite effect on the learner, namely to squelch and dampen curiosity and the joy of learning. DeGraff goes on to define five types and levels of creativity: 1. Mimetic Creativity. This is the most basic form of creativity, which uses mimicry of a behavior to solve a problem in another application area. Even Steve Jobs credited this in talking about his success: “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things.” 2. Bisociative Creativity. Arthur Koestler introduced the term “Bisociation” to describe how our conscious mind can combine rational and intuitive thoughts to produce Eureka moments. The well-known Brainstorming is an exercise of successful bisociative creativity which builds on three F’s:

CAN CREATIVITY BE TAUGHT? • While the question is interesting, any straight-forward answer is likely to be met with skepticism, largely because no clear evidence exists for or against. First, let us consider creativity as the initial step of developing a novel idea. Jeff DeGraff suggests that “Everyone is creative, but in very different ways and to varying degree.” We all have creative talent, but very few of us come close to Archimedes or Ludwig van Beethoven. It is frequently said among STEM educators that every child is naturally and fearlessly curious and explorative, and our job is to encourage and nurture these talents. Ideally, Hippocrates’ Oath “Do No Harm” should also apply to the education establishment, since some education practices can, in fact, have the


Fluency – It is more productive to have lots of unpolished ideas than a few “good” ones because the greater the diversity of ideas, the wider the range of possible solutions Flexibility – The “right” ideas put it in the “wrong” places fails to solve the problem so we have to move them around to see where they best fit to meet our challenges Flow – It is near-impossible to be creative on demand, as an author suffering from writer’s block can attest to. We need to be both simulated and relaxed to draw out the energy required to create. Ideas pop while in the shower, listening to music or even sleeping.

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3. Analogical Creativity. We use analogies to transfer information that we believe we understand in one domain (the source) to help resolve a challenge in an unfamiliar area (the target). For example, vacuum cleaner design was largely unchanged for nearly a century when inventor James Dyson used a different analogue— cyclones—to separate particles through the spinning force of a centrifuge. 4. Narrative Creativity. Narrative is a story communicated in sequence. It is how the tale is told. Stories can be readily deconstructed and reconstructed to make different version—as we recognize when trying to re-tell a good joke. 5. Intuitive Creativity. This is the synthesis of novel ideas at its most complex level. Sophy Burnham (The Art of Intuition, 2011) defines intuition: “… as the subtle knowing without ever having any idea why you know it.” “It’s different from thinking, it’s different from logic or analysis ... It’s a knowing without knowing.” Perhaps this ability to intuitively create a powerful idea represents the highest level of creative talent. Does this mean that an intuitively creative person spouts off revolutionary ideas all the time? Probably not. It is more likely that famously innovative geniuses like Leonardo da Vinci, Amadeus

Mozart, Marie Curie, Thomas Alva Edison, George Washington Carver and Pablo Picasso constantly challenged themselves with new problem scenarios in their respective field. And they were not afraid to fail. Thomas Alva Edison, one of the most productive inventors in modern times, has been quoted: “I have not failed. I’ve just found 10,000 ways that won’t work.” “Many of life’s failures are people who did not realize how close they were to success when they gave up.” Could it be then, that these admittedly talented inventors were able to maintain their impressive productivity by constantly practicing creativity? Quoting a study by Anders Ericsson, Malcolm Gladwell claims, in his bestseller Outliers that to become a virtuoso one must make an enormous time commitment, as much as 10,000 hours for practice. He refers to the unparalleled success of The Beatles’ and Bill Gates’ computer savvy as examples. The Beatles’ spectacular breakthrough in 1964 came after 1,200 live performances over four years in Hamburg, Germany, equaling more than 10,000 hours of playing time. Gates gained access to a high school computer in 1968 at the age of 13, and spent 10,000 hours programming on it before launching his business. Few of us have the available time to practice any skill (beside our profession) for 10,000 hours, nor J A N U A RY 2 0 1 8 32

do we necessarily need to reach a skill level of virtuosity, but we know that practice pays off in every area. Consequently, if we hope to develop a creativity and innovation talent pipeline for the future, it makes good sense to help educators encourage students to practice these skill areas. What about innovation, the process of making a creative idea practically useful? First, Innovation CAN be taught, according to Jan Buijs. The claim is substantiated by a study of 155 small-medium sized Dutch companies that over five years were taught to innovate. 71% of the firms formulated a business plan for innovation, leading to 21 new innovations introduced on the market. A year later, the number of marketed innovations doubled. Does this example from the systemically organized business environment also apply to individuals? Yes! – says Drew Boyd, a professor of marketing and innovation at University of Cincinnati. He reported that middle schoolers taught Systemic Inventive Thinking were able to apply systematic steps to invent “New-to-the World” products in only 30 minutes (12). He suggests a framework for effective innovation skill development: 1. Equate innovation to other skillsbased activities. Innovating takes skill just like sports or dancing. Don’t let children think innovation is some


special, innate talent that only certain kids have. 2. De-emphasize patents. Patents are often seen as the ultimate reward of innovation. If a child invents something that has already been invented, this is a success, since it shows an ability to create novel ideas that have a track record of success. 3. Apply innovation across a variety of situations. It is not just for inventing new products. Teach children to apply innovation methods to things like writing a poem, doing school work or getting dressed in the morning. Make innovation a routine way to tackle new situations. 4. Distinguish between innovation skills and problem-solving skills. They are related, but different skills. Example: Innovate a new way to clean their room, but problem-solve when they want to avoid having to do it. 5. Teach “ambidextrous” innovation. There are two directions of innovation: Problem-to-Solution and Solution-toProblem. Example: If the kitchen toaster keeps burning the bread, a novel way to fix it is Problem-toSolution. Other the other hand, if a toaster is programmed to work “on-demand” then the toast can be ready precisely when you want it. This is Solution-to-Problem innovation. 6. Set an example. Parents and teachers must “walk the talk.” Innovation is no different. Let children see how you and others, especially other children, use innovation methods to do cool, fun, and important things. So, creativity CAN be practiced and innovation CAN be taught and learned in the K-12 classroom. How can we make this happen? Aiming to assist high school teachers in exploring project-based learning (PBL) of creative thinking and innovative problem solving, a public-private partnership, consisting of six global pharmaceutical companies, state government agencies and public school districts in five US states launched RxeSEARCH An Educational Journey in 2008. Curriculum materials and teacher professional development were administered in collaboration with the Smithsonian Science Education

Center and enthusiastically received by teachers and school administrators alike. Four years of follow up and assessment revealed that, although effects on student learning were universally positive, a highly specific curriculum like this requires an extremely resourceintense support system and a longrange budget commitment. Updated standards for student learning like the Next Generation Science Standards in the US and equivalent education policies in other countries address the need for skill development as this paper discusses. The Partnership for 21st Century Skills has developed a Learning Framework which includes Learning and Innovation Skills based on the “Four Cs” – Critical Thinking, Communication, Collaboration and Creativity. Schools that have adopted these standards are very likely successful in preparing their students for future life and careers. However, many countries, regions and states have not yet taken this step, and need both encouragement and assistance. Public-private partnerships can offer networks for collaboration between teachers and workplace representatives that can develop effective models for creativity and innovation skills development in the classroom. This is also supported by a European Commission Expert Group report advising that “Systematic, sustained and concerted action is required to significantly enhance the creative and innovative capacities of young people in ways that are relevant to employability.” Notably, non-formal education, referring to educationworkplace collaboration, is prominently represented in the proposed sixpoint strategy: 1. Explaining non-formal learning to employers and educators 2. Translating non-formal learning outcomes to the world of work 3. Enhancing the ability of those working directly with young people 4. Developing a strong focus on entrepreneurship 5. Improving partnership working and cross-sector innovation 6. Extending the evidence base through focused research and impact analysis 7. Including non-formal education and learning in Youth Guarantee plans.


BACK TO FIXING GLOBAL HUNGER… In summary, the string of reasoning in this paper highlights a series of connections: Innovation is dependent on creative idea generation, talents that we all possess to varying degrees. Both creativity and innovation skills can be enhanced through practice, and possibly also taught through process training. Schools can and must support student skill development in these areas since this enhances their employability and increase their employer’s competitiveness. Active corporate involvement in K-12 education will enable schools to improve in this area while simultaneously strengthening the pipeline of talent available for employment. Workplace innovation is vital for marketplace competitiveness, and contributes to aggregate national innovation status, which is closely linked to national economy. Highly ranked innovative countries must share their capabilities with developing poor countries in order to address a global challenge such as world hunger. International collaboration in education will, over time, enable poor developing nations to strengthen their talent pipeline and, as a result, also corporate development, national economy and food production. Again, teachers are at the focus of intervention. It is not helpful to educators to have increasing demands on their time and performance. Instead, they should be encouraged to review existing materials and lesson plans for opportunities to insert creativity and innovation exercises in their daily student interaction. Curriculum materials specifically designed to stimulate inquiry (STC, FOSS, Insights) are uniquely suitable for such activities. In-service teacher professional development dedicated to the use of these curriculum materials offer unique opportunities to explore the teacher’s role in this important endeavor. As always, the teacher is the Master of the Classroom, and any and all activities offered to assist in his/her work must be adapted to the situation at hand. ● ABOUT THE AUTHOR Anders Hedberg is Senior Advisor to Diplomatic Courier’s Global Talent Summit. He is also the President of Hedberg Consulting.

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he looming questions that drive discussion around the future of work and its evolution are both significant in number and import: will technological advancements halve employment opportunities? How will informally employed workers organize themselves to advocate for social safety nets that are respected across governments globally? What policies do we enact now to incentivize a restructuring of the educational paradigm quickly enough to prepare workers for a “micro-entrepreneurial career” alongside machines? These were only a few of the topics considered during IMF’s New Economy Forum on the Future of Work moderated by IMF Managing Director Christine Lagarde on October 11, 2017. A TIME OF DISRUPTION The workforce principles and guidelines that were developed for a post-industrial era are largely irrelevant now. A third of the United States workforce is freelance and can’t rely on an employer for their social safety net. Episodic income means workers are not saving, and this employment uncertainty is a large driver of socioeconomic mobility in terms of ability to invest or settle down. J A N U A RY 2 0 1 8 34

Our approach to workforce development has not adapted to accommodate these social trends, according to Gallup’s CEO Jim Clifton. In advanced economies, birth and marriage rates have sharply declined for decades, indicating that individuals are now looking to their jobs to generate meaning in their lives. Clifton suggests that a complete rethinking of how we approach employee recruitment and development is required to address this shift in priorities, or won’t effectively leverage the human capital that will be needed to address our most pressing issues: climate change, food shortages, and disease management, to list a few. Recent Gallup polling (which included five billion people) reveals that the top response worldwide to the question “What is your dream?” is to have a good job—30 hours a week with a good paycheck—and that 1.2 billion people worldwide have that. However, the dated assumption that that individuals stay in one job for their entire lives and aim to advance only within the confines of that limited role continues to guide our advanced education and development models. People need to feel like they are contributing to something greater than themselves, and feel that they are


“technology will have a greater impact on the value of empathetic work than it will on employment numbers in general.”

career paths that have been classically considered low-mid wage positions which fall within the realm of “women’s work.” Especially as aging populations become an issue, and increasing rates of humanity crises that require human solutions multiply across the globe, finding ways to incentivize these positions becomes key.

engineering) need help crossing the chasm from un- or underemployed to perpetually employed at a much higher wage scale. “Technology has driven progress, but productivity goes up only when human capital is successfully utilized”, according to Johnson. To achieve this, he emphasized you have to both train and place individuals, and then you must foster a continuous education model: “Have a complete picture of how you will move them across the chasm and keep them on the other side.”



experiencing constant personal development. Clifton noted that many new approaches to business management attempt to tackle this issue by focusing on worker satisfaction (volleyball courts, free lunch, beer on tap, etc.), which still neglects to address the core of what younger generations feel they require— fulfillment and purpose. He stated: “One could argue that the idea of employee management doesn’t work anymore, and that it needs to be disrupted. Unless you can figure out how to do that, you’re going to miss a whole generation.” Andela’s CEO Jeremy Johnson and McKinsey Global Institute’s Chairman James Manyika both corroborated this assertion that our current models of training and development are outdated, especially, emphasized Manyika, given that technology currently has an incredibly brief 18-month life cycle. Workers no longer specialize in specific tasks for the span of their professional careers; they need to be infinitely more dynamic and have the tools available to progress and adapt. Johnson promoted the idea that high-capacity individuals who lack resources to overcome cost/time barriers to entry to technical career fields (e.g. software development and

Productivity has gone up faster than wages have, which ILO DirectorGeneral for Policy Deborah Greenfield argues accounts for some of the global discontent. Workers are not getting their fair share of their efforts around the world, and Manyika thinks that technological advancements will only widen the socioeconomic divide. Mid-discussion, the question that weighed most heavily on those contemplating the future of work was addressed: will technological developments eradicate half of our workforce? The responses to this were surprisingly varied, but Manyika interjected that we can’t approach the question in this way, in that technology will have a greater impact on the value of empathetic work than it will on employment numbers in general. He mentioned that the narrative we have become comfortable with recently is that people won’t be replaced by machines, but we will work alongside them in new roles. The problem we must anticipate is that these hypothetical roles involve low-skilled labor, which will contribute to socioeconomic stratification. Greenfield agreed: young people today are working but still living in poverty, and this will not improve with technological advancement unless we can have deliberate discussions as a society about re-valuing empathetic


Many systems need to be disrupted for meaningful progress to begin on many fronts, according to the panelists. Increased economic dynamism that allows for mobility where there currently is none involves tackling advanced education, wage setting mechanisms, social safety nets, employee protections that span borders, among many other factors. Sara Horowitz, founder of the Freelancer’s Union, lamented that our system continues to rely upon businesses themselves to determine what workers are given, on their own volition, and at their cost. Given that the global workforce is increasingly employed informally and episodically, it must be determined what systems will be accountable for providing the consistent professional development all career paths will require to remain dynamic. There are currently no policy incentives that encourage human capital development, which raises a host of questions: if not businesses’, should professional development be the responsibility of governments? Who will provide the training? Will people pay for it themselves? Though it is no small undertaking, Greenfield notes that the payoff for democratizing professional development and clearing access to highly technical training will be tremendous. Those who were previously burdened by barriers to access or traditional workforce stigmas will find much easier paths to professional success, and those who live in locations they would have previously had to leave to receive training will be able to remain in place and not only continue to contribute to their local economies, but tackle the problems that affect their home communities. So what’s the first step toward this lofty objective? According to Greenfield: “We have to put the playbook to the side.” ●

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n a clear crisp fall day, not too many years ago, I entered the classrooms, located just off Fleet Street in London, of King’s College. I was a graduate student in War Studies, a field of study that, to this day, raises eyebrows and often prompts quizzical looks. For those unacquainted with this outstanding program (please excuse the obvious personal bias) War Studies is analogous to security studies—a mélange of history, politics, military science, with a dollop of other fields. As I took my seat amongst my peers I eagerly awaited the opening lecture delivered by the doyen of the field— Sir Lawrence Freedman himself. As an undergraduate I read many of his works, it was hard not to come across him at some point if you were studying national security affairs, international relations, or a similar field. He was, and is, a titan in the field. His course, grandly titled the “Conduct of Contemporary Warfare” (CCW as we wrote in shorthand) was a survey of conflicts in the modern age, from World War I to the insurgencies of Iraq and Afghanistan. For each lecture, even guest ones, Sir Lawrence provided context and clarity. Contemporizing distant battles and remote locations in his magisterial, but not condescending tone. For those who have not had the pleasure of taking a course from Sir Lawrence, you would do well to pick up his recently published “Future of War”. As with his CCW course, the book covers the breadth and depth of recent warfare, but takes to task the futurists and forecasters of conflict. Sir Lawrence surveys the futurists of their times. From Basil Liddell Hart to Hermann Kahn to Henry Kissinger and to the COINdinistas of recent years, Sir Lawrence adroitly places their forecasted futures into the context of the times and highlights the shortcomings. He is, however, largely limited to analysis of the U.S. and UK. Whereas his previous work, Strategy, surveys the breadth and depth of Strategy from the Bible to contemporary strategic analysis. The Future of War doesn’t mine from as broad a vein as Strategy, but this is somewhat made










THE FUTURE OF WAR, A HISTORY Author Sir Lawrence Freedman Public Affairs/Hachette Book Group, 2017

Book review by Joshua Huminski

up for by in its inclusion of fiction authors such as H.G. Wells and others. Unsurprisingly, we are ineffective in predicting the future of warfare, forever suffering from “last war-itis” as its been called; and it is not going to get any better. We are blinded by the circumstances of our times. At the time of their creation, innovations and technologies often appear as novelties with limited implications for conflict. It takes time and bold visionaries (seen as well outside the mainstream) J A N U A RY 2 0 1 8 36

to see how these technologies will dramatically affect the conduct of war. Tanks, which revolutionized warfare, were at the time seen as just a vehicle to bridge the trenches. Airplanes certainly changed reconnaissance and battlefield support, but few saw the implications of carrier-based aircraft so devastatingly displayed during Pearl Harbor. More recently the Internet—part of a program to harden communications during the Cold War—ushered in a new realm of warfare, fought with ones and zeros on an invisible front. We are just as bad at predicting political outcomes. Few saw or wanted to see the implications of the Treaty of Versailles. Fewer still, saw the coming collapse of the Soviet Union and the resulting fallout. While some warned about political instability in Afghanistan, 9/11 was not an expected outcome. It is equally the case that too much emphasis is placed on innovations or short-term developments as being revolutionary, transformative, or indicative of the longer term. Strategic bombing was supposed to break an enemy’s will. Shock and awe, too, would stun the enemy into compliance. Soldiers riding on horseback, supported by GPS bombs and local allies were to be the future of conflict. Unfortunately, despite the best efforts of admirals and generals, the enemy still has a say in warfare. So, should we continue to predict the future of warfare? Or should we just pack it in and call it a day? The obvious answer is no, we shouldn’t stop. Forecasting the future of conflict is critical to every aspect of national defense, obviously. Sitting around and waiting for the future to happen is a recipe for invasion and disaster. Prediction allows for developments and innovations, in an attempt to create tactical, operational, and strategic outcomes. What we need to get better at, is recognizing the weaknesses and fundamental flaws that underpin our ability to forecast the future. Questioning assumptions, red teaming scenarios, counterfactual analysis/assessment are just a handful of tools that, when used properly, strengthen forecasts and predictions. Even still, we must be prepared to be surprised. ●

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he future, it seems, is broken. We are caught between the operating systems of two quite different civilizations. Our old twentieth-century system doesn’t work anymore, but its replacement, a supposedly upgraded twenty-firstcentury version, isn’t functioning properly either. The signs of this predicament are all around us: the withering of the industrial economy, a deepening inequality between rich and poor, persistent unemployment, a fin-de-siècle cultural malaise, the unraveling of post–Cold War international alliances, the decline of mainstream media, the dwindling of trust in traditional institutions, the redundancy of traditional political ideologies, an epistemological crisis about what constitutes “truth,” and a raging populist revolt against the establishment. And while we are all too familiar with what is broken, we don’t seem to know how we can get anything to work anymore. What is causing this great fragmentation? Some say too much globalization, others say not enough. Some blame Wall Street and what they call the “neoliberalism” of free market monetary capitalism, with its rapacious appetite for financial profit. Then there are those who see the problem in our J A N U A RY 2 0 1 8 38

new, unstable international system— for instance, the cult-of-personality authoritarianism in Russia, which they say is destabilizing Europe and America with a constant barrage of fake news. There’s the xenophobic reality television populism of Donald Trump and the success of the Brexit plebiscite in the United Kingdom— although sometimes it’s hard to tell if these are causes or effects of our predicament. What is clear, however, is that our twentieth-century elites have lost touch with twenty-firstcentury popular sentiment. This crisis of our elites explains not only the scarcity of trust bedeviling most advanced democracies but also the populist resentment on both left and right, against the traditional ruling class. Yet it also feels as if we are all losing touch with something more essential than just the twentiethcentury establishment. Losing touch with ourselves, perhaps. And with what it means to be human in an age of bewilderingly fast change. As Steve Jobs used to say, teasing his audience before unveiling one of Apple’s magical new products, there’s “one more thing” to talk about here. And it’s the biggest thing of all in our contemporary world. It is the digital revolution, the global


“From old carpet factories in Berlin to gentlemen’s colonial clubs in Bangalore to lawyers’ offices in Boston to the European Commission headquarters in Brussels and beyond, How to Fix the Future offers a new geography of how regulators, innovators, educators, consumers, and citizens are fixing the future.”

hyperconnectivity powered by the internet, that lies behind much of the disruption. In 2016, I participated in a twoday World Economic Forum (WEF) workshop in New York City about the “digital transformation” of the world. The event’s focus was on what it called the “combinatorial effects” of all these new internet-based technologies— including mobile, cloud, how to fix the future artificial intelligence, sensors, and big data analytics. “Just as the steam engine and electrification revolutionized entire sectors of the economy from the eighteenth century onward,” the seminar concluded, “modern technologies are beginning to dramatically alter today’s industries.” The economic stakes in this great transformation are dizzying. Up to $100 trillion can be realized in the global economy by 2025 if we get the digital revolution right, the WEF workshop promised. And it’s not only industry that is being dramatically changed by these digital technologies. Just as the industrial revolution transformed society, culture, politics, and individual consciousness, so the digital revolution is changing much about twenty-firstcentury life. What’s at stake here is worth considerably more than just

$100 trillion. Today’s structural unemployment, inequality, anomie, mistrust, and the populist rage of our anxious times are all, in one way or another, a consequence of this increasingly frenetic upheaval. Networked technology—enabled in part by Jobs’s greatest invention, the iPhone—in combination with other digital technologies and devices, is radically disrupting our political, economic, and social lives. Entire industries—education, transportation, media, finance, health care, and hospitality—are being turned upside down by this digital revolution. Much of what we took for granted about industrial civilization—the nature of work, our individual rights, the legitimacy of our elites, even what it means to be human—is being questioned in this new age of disruption. Meanwhile, Silicon Valley is becoming the West Coast version of Wall Street, with its multibillionaire entrepreneurs taking the role of the new masters of the universe. In 2016, for example, tech firms gave out more stock-based compensation than Wall Street paid out in bonuses. So, yes, our new century is turning out to be the networked century. But, to date, at least, it’s a time of ever-deepening economic inequality, job insecurity,


cultural confusion, political chaos, and existential fear. We’ve been here before, of course. As the “digital transformation” WEF workshop reminds us, a couple of hundred years ago the similarly disruptive technology of the industrial revolution turned the world upside down, radically reinventing societies, cultures, economies, and political systems. The nineteenth-century response to this great transformation was either a yes, a no, or a maybe to all this bewildering change. Reactionaries, mostly Luddites and romantic conservatives, wanted to destroy this new technological world and return to what appeared to them, at least, to be a more halcyon era. Idealists—including, ironically enough, both uncompromisingly free market capitalists and revolutionary communists—believed that the industrial technology would, if left to unfold according to its own logic, eventually create a utopian economy of infinite abundancy. And then there were the reformers and the realists—a broad combination of society, including responsible politicians on both the left and the right, businesspeople, workers, philanthropists, civil servants, trade unionists, and ordinary citizens—who focused on using human agency to


fix the many problems created by this new technology. Today we can see similar responses of yes, no, or maybe to the question of whether the dramatic change swirling all around us is to our benefit. Romantics and xenophobes reject this globalizing technology as somehow offending the laws of nature, even of “humanity” itself (an overused and under-defined word in our digital age). Both Silicon Valley techno-utopians and some critics of neoliberalism insist that the digital revolution will, once and for all, solve all of society’s perennial problems and create a cornucopian post-capitalist future. For them, much of this change is inevitable—“The Inevitable” according to one particularly evangelical determinist. And then there are the maybes, like myself—realists and reformers rather than utopians or dystopians—who recognize that today’s great challenge is to try to fix the problems of our great transformation without either demonizing or lionizing technology. This is a maybe book, based on the belief that the digital revolution can, like the industrial revolution, be mostly successfully tamed, managed, and reformed. It hopes that the best features of this transformation— increased innovation, transparency, creativity, even a dose of healthy

disruption—might make the world a better place. And it outlines a series of legislative, economic, regulatory, educational, and ethical reforms that can, if implemented correctly, help fix our common future. Just as the digital revolution is being driven by what that WEF workshop called the “combinatorial effects” of several networked technologies, solving its many problems requires an equally combinatorial response. As I’ve already argued, there is no magic bullet that can or will ever create the perfect society—digital or otherwise. So, relying on a single overriding solution—a perfectly free market, for example, or ubiquitous government regulation—simply won’t work. What’s needed, instead, is a strategy combining regulation, civic responsibility, worker and consumer choice, competitive innovation, and educational solutions. It was this multifaceted approach that eventually fixed many of the most salient problems of the industrial revolution. And today we need an equally combinatorial strategy if we are to confront the many social, economic, political, and existential challenges triggered by the digital revolution. Maybe we can save ourselves. Maybe we can better ourselves. But only maybe. My purpose in this book is to

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draw a map that will help us find our way around the unfamiliar terrain of our networked society. I traveled several hundred thousand miles to research that map—flying from my home in Northern California to such faraway places as Estonia, India, Singapore, and Russia, as well as to several Western European countries and many American cities outside California. And I interviewed close to a hundred people in the many places I visited—including presidents, government ministers, CEOs of tech start-ups, heads of major media companies, top antitrust and labor lawyers, European Union commissioners, leading venture capitalists, and some of the most prescient futurists in the world today. The wisdom in this book is theirs. My role is simply to join the dots in the drawing of a map that they have created with their actions and ideas. One of the most prescient people at the 2016 WEF workshop was Mark Curtis, a serial start-up entrepreneur, writer, and design guru who is also cofounder of Fjord, a London-based creative agency owned by the global consultancy firm Accenture. “We need an optimistic map of the future which puts humans in its center,” Curtis said to me when I later visited him at the Fjord office near Oxford Circus in London’s West End. It’s a map, he explained, that should provide guidance for all of us about the future— establishing in our minds the outlines of an unfamiliar place so that we can navigate our way around this new terrain. This book, I hope, is that map. From old carpet factories in Berlin to gentlemen’s colonial clubs in Bangalore to lawyers’ offices in Boston to the European Commission headquarters in Brussels and beyond, How to Fix the Future offers a new geography of how regulators, innovators, educators, consumers, and citizens are fixing the future. But there’s no Uber or Lyft–style service that can whisk us, with the click of a mouse or the swipe of a finger, into the future. No, not even the smartest technology can solve technological problems. Only people can. And that’s what this book is about. It is the story of how some people in some places are solving the thorniest problems of the digital age. And how their example can inspire the rest of us to do so too. ●

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key challenge of law enforcement has always been to make sure that crime never pays, at least not well. When law enforcement could not succeed at monitoring and preventing crime and even if there were no smoking gun tipping off who committed a particular crime, the high card was always their ability to track down criminals. Usually the best way to do that was to heed the admonition of skilled investigators everywhere—follow the money. Fast forward to today as new forms of digital money—known as cryptocurrency—are now making the money harder and potentially in the near future impossible to follow. The counter-crime implications of these developments are already apparent and significant national security implications are becoming clearer. What is just starting to come into focus are the vast implications for international security. Unlike bank issued currencies, cryptocurrencies such as Bitcoin are not the product of a single fiscal authority. Cryptocurrencies also share the unique characteristic that they can be transferred between parties without oversight or even a third party having any evidence that a transfer occurred. When combined with cryptocurrencies, J A N U A RY 2 0 1 8 42

new ways of disguising e-commerce transactions through encrypted and anonymizing applications, make it possible for parties who cannot even identify one another to conduct business beyond the ken of law enforcement and regulatory authorities. Revolutionary change itself is not new. Nearly a century ago the great Austro-American economist Joseph Schumpeter spoke of the evolutionary development of economies as being driven by the capacity to achieve new efficiencies through change, which may at times include almost convulsive change. Schumpeter argued that one of the great advantages of capitalism was the dynamism it gained from the “creative destruction” of new, efficient practices by replacing less efficient practices. More recently, Clayton Christensen and others have shown how breakthrough technological innovations can supplant less adept and less agile technological processes by unleashing “disruptive innovation.” Disruptive technology can swiftly upend even seemingly stable commercial relationships by rapidly shifting market shares. But change in the way money functions is new and the risks associated with this change are an


order of magnitude more important than products, companies, monopolies or even whole sectors being replaced by competitors. In less than a decade since Bitcoin was created, the emergence of cryptocurrencies has already challenged traditional ways of tracking criminals. It is less than five years since the first large criminal market place, Silk Road, sprang into action in late 2011 until it was shuttered in November 2013. Silk Road was the first large illegal internet market place conducting transactions out of open view and concealed through the use of a cryptocurrency, but it was most certainly not the last. In July 2017, U.S. Attorney General Jeff Sessions announced that the FBI in league with other law enforcement agencies seized and shuttered AlphaBay, a successor criminal enterprise to Silk Road. AlphaBay was similar to Silk Road with one important difference—the volume of activity was ten times the size of Silk Road’s operations. It is true that law enforcement has quickly gotten much better at the sleuthing work of identifying cyber criminals, but it is also true that criminals are often the first to adopt technologies, innovate and share expertise and so are increasingly more adept at what they do. Risks of

cryptocurrencies to law enforcement are now apparent. What is less apparent is that just around the corner is a new phase of cyber security that will be even more disruptive on an international basis. This new aspect of crypto innovation is going beyond national security to the area of international security. Bitcoin is only one of a growing number of cryptocurrencies, all of which work essentially along the same essential lines but through different platforms and processes. The underlying logic of cryptocurrency is based on blockchain, a distributed public ledger technology that puts the movement of value—“money” if you will—to work in a way that simulates a conventional currency. Every 10 minutes or so the current, encrypted ledger is distributed to all the holders in such a way as to prohibit double spending and maintain provenance without permitting ready identification. If cryptocurrency is not money, it does not matter because it can be exchanged for money, fungibles, and objects. The growth of the currencies has been phenomenal: as of August 2017, the total value of crypto assets topped $116 billion.

“The underlying logic of cryptocurrency is based on blockchain, a distributed public ledger technology that puts the movement of value to work in a way that simulates a conventional currency.” Money has always been an abstract commodity, but digital money is dramatically different. When Claude Shannon in the late 1930s as a young researcher on signal theory at MIT realized that physical signals such as telegraph transmissions could be represented as numerical code he initiated the digital revolution. Advances in cryptography and computing in World War II opened the information age. The subsequent creation of semiconductors and integrated circuits made possible vast increases in computational power. From there, linking individual computers into networks facilitated the creation of the Internet, web and


cloud computing. The invention of asymmetric public key encryption made it possible to conduct ecommerce online with the assurance that transactions could take place with a high degree of confidentiality. Because of their extreme volatility, cryptocurrencies carry a high investment risk that is compounded by the absence of transparency. The private sector financial industry has not embraced cryptocurrencies as such but have tinkered and adopted some Blockchain technology. That said, the private sector is clearly not prepared to ignore cryptocurrencies’ future implications. For instance, the fast growing “fintech” sector is represented in every major commercial and investment bank and has been working to monetize and absorb the opportunities presented by the blockchain and crypto. In contrast, the public sector financial management and oversight community has been slow to respond to the implications raised by the emergence of cryptocurrencies. Many central banks, including the U.S. Federal Reserve as well as other international financial organizations, are wary of cryptocurrencies but nevertheless see the blockchain technology as playing a role in the future. Nonetheless, throughout the entire financial community there is an emerging consensus that distributed ledger technology, DLT, is as an inevitable stage in the future evolution of money. Even Russia’s Federal Security Service (FSB) recently has acknowledged that it is directly involved in the International Standards Organization (ISO) efforts to create a global standards for new “blockchain” technology for Bitcoin and other cryptographic currencies winning international attention. National central banks in most countries play the key role of serving as the gatekeepers in their role as overseers of monetary policy through managing capital flows in the form of setting currency exchange rates for the purposes of export and import management. There is a wide variety in the differences of central banks among countries. Some central banks stipulate and enforce currency exchange rates directly. In other countries, central banks function in parallel with secondary currency markets in which supply and demand

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autonomously play a role in establishing exchange rates. Despite the variety of monetary arrangements, in all cases national financial authorities need to have visibility with respect to financial transfers in order to properly do their job. The same is true for the public international financial institutions with which they work, such as the International Monetary Fund. Cryptocurrencies may deprive these institutions of the necessary level of visibility. The settlement of accounts among central banks, commercial banks, and retail banks continues to exist in the context of national central bank authorities. Dynamic changes in legal and observable payment processing technologies and mechanisms are increasingly relying on private firms such as Apple Pay, Android Pay, PayPal, Square, Stripe, Vantiv, and WorldPay and others in adopting recently developed peer-to-peer services such as Venmo, all of which continue to be observable exchanges. Cryptological transfers such as those through blockchain can be conducted within the legitimate and observable processes but, technologically, can also be conducted outside this circle in a way in which they are not necessarily visible. The present scale of these illegal transfers currently appears to be small. That is a conjectural rather than empirical conclusion because, obviously, if they are not visible they cannot be counted. However, there are no technical constraints which ensure that the scale of unmanaged financial transfers will remain small. If blockchain transfers are not visible, it follows that some at least will not be blocked. The question is how big is the scale? World practice in controlling capital mobility is varied but is increasingly diverging between the more democratic, market-driven processes of the western world in which the use of cryptocurrencies is only officially endorsed with reservations as opposed to some of the more authoritarian and state-driven processes of the eastern world in which electronic transfers not under the control of the state are widely viewed as categorically unacceptable. The creation of a “Great Firewall” to use state control over the telecommunication infrastructure to

“Any confidence that a new global treaty on cyber security will in itself be sufficient to address the risks of the disruptive potential of cryptocurrencies to our national and well as international security interests is surely naive.” establish filters and blocks to eliminate ostensible risks to national security is an example of how a state can employ its administrative capacity to control the cyber revolution. Rumors recently circulated in the press and were then explicitly denied by Chinese authorities that there was a plan to eliminate the use of VPNs, virtual personal network services, located outside of the physical territory of China. However, measures have been taken in China to block such applications as WhatsApp and chat services. These steps fall short of addressing the emerging and growing role of peer-to-peer (P2P) communications through wireless electromagnetic space that does not rely upon servers, optical fiber or copper wires, or relay transmissions systems. Such P2P transmissions, including the transmission of monetary value through cryptocurrencies is outside of the view and thus the control of government authorities. In Russia officials have referred to cryptocurrencies in the past in very hostile terms. Now, however, there are indications that a shift in perspective is now taking place as illustrated by Vladimir Putin’s recent meeting with the creator of Bitcoin’s closest competitor, Ethereum. The recent interest of Russian officials in cryptocurrency as means of exchange may be less important than the interest in understanding the potential of cryptocurrencies as instruments of disruptive intervention in international markets. Consider the history of the Russian government’s goal of pairing up with China to displace the U.S. dollar as the de facto global reference currency. So far, apparently, the wide-scale use by criminals of cryptocurrencies

J A N U A RY 2 0 1 8 44

has been nominal. This may be primarily because the financial technology is so technically advanced and complicated that it requires substantial technical expertise to master. Empirical instances of the use of cryptocurrencies by terrorists, global criminal groups, illegal economic cartels, traffickers in weapons of mass destruction, and other global syndicates either acting on their own in conjunction with rogue or otherwise disruptive states, is not something that has captured much international attention. As an indicator of interest in the technology, criminals have already started stealing crypto from each other. Rogue states and those involved in narco-trafficking will surely be paying attention and experimenting. As such, a new focus on crypto is direly needed if we are going to be smart in addressing these threats. The risks of emerging cryptocurrencies to international security can only be properly addressed in the context of international diplomacy and cooperation. But in all diplomatic agreements, big and small, in the end there is no right without a remedy. If there is no fall back to hard consequences, any soft power diplomacy is little more than a bromide. All international agreements in a world as dynamic as that of the present must be, to some extent, self-enforcing and based on the self-interests of all participants prepared to defend them. Any confidence that a new global treaty on cyber security will in itself be sufficient to address the risks of the disruptive potential of cryptocurrencies to our national and well as international security interests is surely naive. More research needs to be done on what individual and independent steps can be taken to protect national and international security interests. It is time to get smart about these disruptive technologies before the costs become more than we can afford. ●

ABOUT THE AUTHORs Gregory Gleason and Sean S. Costigan are Professors at the George C. Marshall Center and Contributors to Diplomatic Courier.



etween September 25 and October 22, 2017 residents of Iraqi Kurdistan, Spain’s Catalonia region, the Brazilian states of Paraná, Santa Catarina, and Rio Grande do Sul, and Italy’s Lombardy and Veneto provinces voted for increased autonomy from their central governments. While the referenda enjoyed varying degrees of legitimacy, participants in each voted overwhelmingly for greater home rule. In explaining the causes for this recent phenomenon, observers have noted that the regions that voted for increased autonomy are wealthy compared to their nations as a whole. As a result of their relative wealth, these regions generate more revenue for their central governments than they receive in return for local expenditures, provoking resentment among their populations that they are subsidizing poorer, less productive regions. But economic explanations for the wave of recent autonomy referenda ignore a more salient trend regarding the political context in which each vote took place. In each case, the central government’s unpopularity, internal scandal, or uncertain success in future elections resulted in widespread political discontent that referendum organizers sought to exploit. As a J A N U A RY 2 0 1 8 46

result, recent independence referenda in Iraq, Spain, and Brazil—and provincial referenda on greater fiscal autonomy in Italy—were borne more of political opportunism than of a legitimate desire to redress economic grievances. Kurdistan, Catalonia, South Brazil: The Myth of Economic Viability The relative wealth of each autonomyseeking region is certain. Iraqi Kurdistan, for instance, has a higher standard of living, lower poverty rates, and a higher per capita GDP than Iraq as a whole. Catalonia accounts for a fifth of Spain’s GDP and tax revenue, but receives only 14 percent of the country’s budget. Similarly, southern Brazil accounts for 16 percent of national GDP, but receives back only 20 percent of the tax revenue it sends Brasília. Yet, despite their relative prosperity, independence would leave these regions poorer overall. Iraq’s Kurds rely on pipelines through Turkey—which vehemently opposed the Kurdish referendum—to export oil, which accounts for 80 percent of Iraqi Kurdistan’s GDP. An independent Catalonia would lose tax-free access to EU markets in which most of the region’s exports are consumed. Indeed, the prospect of a Catalonian exit from


the EU in the wake of its referendum caused over 2,000 businesses in the region to flee to other EU hubs. And the southern Brazilian state of Rio Grande do Sul declared bankruptcy in November 2016, owing $16 billion to the Brazilian government. Contrary to many observers’ claims, these regions offer poor economic justification for independence. The Political Opportunism of Autonomy Referenda Political opportunity arising from weak or embattled national leadership offers a more reliable explanation than economics for each region’s bid for more autonomy. In Iraq, Shiite prime minister Haider al-Abadi faces national elections in 2018 amid claims from some Iraqi Sunnis and other Arab leaders that he is too compliant with Iran, and is unable or unwilling to govern inclusively with Iraq’s Sunnis. Iran and some Iraqi Shiites, on the other hand, believe he is not compliant enough. Low oil prices have caused a deep recession across Iraq, ripening the environment for general political discontent. Finally, Iraq’s federal government has relied heavily on Kurdish security forces to reclaim northern Iraqi territory lost to the

Islamic State since 2014, increasing Kurds’ potential leverage over Baghdad in the months before their September 25 referendum. Catalonian leaders sensed a similar opportunity to capitalize on Spanish Prime Minister Mariano Rajoy’s unpopular and crisis-stricken government. Rajoy narrowly retained his premiership in November 2016 despite his Popular Party winning only 137 out of 350 parliamentary seats— the lowest level of parliamentary support for a government since Spain’s return to democracy in the 1970s. Rajoy’s popularity reached its nadir in July when he became Spain’s first leader ever to testify in court regarding a corruption scandal implicating members of his own party. This embattled position provided Catalonian referendum organizers a window in which to portray their October 1 plebiscite as a more attractive alternative to remaining part of Spain. Southern Brazil’s referendum on October 7 took place weeks after a prosecutor indicted President Michel Temer for obstructing justice in relation to a corruption scandal for which he was also indicted in June. Meanwhile, a sweeping, three-year corruption investigation into Petrobras, Brazil’s state oil company, has consumed dozens of Brazil’s political and business elite—including its past two presidents. Amid these scandals, Temer has been unable to pass an austerity package designed to lift his country out of its worst recession ever. With his approval rating in the low single digits and political discontent rife across Brazil, southern secessionists seized the moment to call their referendum. The Italian Outlier: Different Goal, Similar Motive Veneto and Lombardy provinces fit a similar economic profile as Iraqi Kurdistan, Catalonia, and southern Brazil. The two provinces contribute a combined 30 percent of Italy’s GDP but only 25 percent of its population. Yet their referenda on October 22 were the only ones that did not poll voters on whether they wanted to secede— only whether to negotiate “further forms of autonomy” with Rome. Since the votes did not offer a choice of secession, Italy’s constitutional court confirmed their legality, making them the only recent autonomy referenda to


receive central government approval. Despite their more limited aims, the Veneto and Lombardy referenda, like those elsewhere, were motivated primarily by the political aims of their organizers: provincial officials belonging to the Northern League party, which has advocated for northern Italian independence since its founding in 1991. With national elections due in 2018 and populist, anti-establishment parties like the Five Star Movement gaining ground on Prime Minister Paolo Gentiloni, holding nonbinding autonomy referenda in Veneto and Lombardy provided the Northern League an opportunity to galvanize its electoral base. While ostensibly undertaken as a basis for negotiating greater regional autonomy, the primary value of the Italian referenda was to consolidate the League’s pre-election support in two of Italy’s wealthiest and most populous provinces. Lessons from Rich Regions’ Referenda Independence-seeking regions’ political motivations for their recent referenda serve as a cautionary tale for both the regions themselves and the countries to which they belong. National leaders whose territories include provinces with restive populations would do best to avoid political turmoil that could convince those regions that secession is compelling or likely to succeed. Luckily for such leaders, however, the Iraqi and Spanish responses to the Kurdish and Catalonian referenda suggest that a swift and decisive central government response can quash post-referendum euphoria and even bolster public perception of their leadership. In light of this, the recent wave of recent autonomy referenda instructs that prosperous regions can most effectively seize upon their central government’s vulnerabilities by seeking redress for grievances through negotiation—not by holding inflammatory secessionist referenda that might only undermine more pragmatic aspirations. ●

ABOUT THE AUTHOR Jason Starr is a manager of state and city government partnerships at Dataminr, a technology company in Washington, DC.




s world leaders in politics, business, media, science and entertainment gather this year for the 48th World Economic Forum (WEF) in Davos, under the thematic banner of “Creating a Shared Future in a Fractured World,” it is time for the status of Taiwan to finally be considered and addressed. While it is axiomatic that the “squeaky wheel get’s the grease,” it is critically important to correct the human rights violations for a people who choose to lead in economic production, manufacturing and innovation. rather than engage in disruptive behavior. Taiwan is such a leader, but continues to thrive despite the facts that it is not a recognized country in the global community of nations, is not recognized by the United Nations, the countries of the G7 and G20, and does not even march under its own banner at the Olympic Games. The weight of this political purgatory has existed since the end of World War II, and it is past time for the world’s leaders to join in a meaningful effort for permanent change. This year’s Davos meeting is constructed around big picture items represented in WEF’s System Initiatives, which are similar to the J A N U A RY 2 0 1 8 48

UN’s Sustainable Development Goals (SDGs). These agenda items include information technology, energy, transportation and infrastructure, healthcare, workplace issues, and the environment. Taiwan is a leader in many of these areas despite its lack of international status. By way of example, no less than 36 Taiwanese companies manufacture components of the new Apple iPhone 8 models, including FoxConn, Pegatron Corp. and Largan Precision, according to the Taipei-based Market and Intelligence & Consulting Institute. This all from an island nation of only 25 million people. On the geopolitical front, leaders are grappling with a shift away from the multilateral agreements and institutions constructed in the wake of World War II. Clearly, a major issue contributing to today’s “fractured world” is North Korea’s nuclear ambitions. Regardless of its tenuous geography, Taiwan remains a steadfast ally of the United States and Western democracies in the region. So, why does the international community continue to ignore Taiwan’s lack of international status and the human rights violations that led to it? It is important to review the facts about Taiwan.


[T]o affirm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small and to establish conditions under which justice and respect for the obligations arising form the treaties and other sources of international law can be maintained.

“no less than 36 Taiwanese companies manufacture components of the new Apple iPhone 8 models, including FoxConn, Pegatron Corp. and Largan Precision, according to the Taipei-based Market and Intelligence & Consulting Institute. This all from an island nation of only 25 million people.”

Article 15 of the Universal Declaration of Human Rights states: (1) Everyone has the right to a nationality. (2) No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality. Despite these organizing principals, Taiwan does not have a seat at the UN table in any capacity. It does not even have observer states in any UN affiliates such as the World Health Organization. Second, while the Japanese relinquished control of Taiwan after World War II to the United States and its allies, memorialized in the San Francisco Peace Treaty of 1952, the U.S. as well as the rest of the world, have

chosen to pursue policies of “strategic ambiguity” and of a “One China” posture. These policies neither put Taiwan under formal U.S. control, nor provide the right of self determination, therefore keeping Taiwan in the political limbo it’s labored under for more than 70 years. Finally, and despite this lack of recognition, Taiwan is a significant contributor to the global economy. Taiwan is the world’s 11th largest and strongest economy in the world and the 5th largest economy in Asia, and produces $285 billion in exports annually. Taiwan is a leader in the technology, defense, and telecommunications industries, and

First, the people of Taiwan lost their nationality post World War II and live in a condition of statelessness, which is a violation of their human rights. The UN Charter states:


boasts a GDP of $1.1 Trillion. Is the international community punishing Taiwan and denying its people fundamental human rights because it is a strong economic actor, a peaceful partner, and strong ally of Western democracies? Dr. Roger Lin, founder of the Taiwan Civil Government (TCG), an educational and advocacy group with a goal of normalizing Taiwan’s legal status in the global community, argues that the time for change is now. Together, the world has an opportunity to help the Taiwanese people determine their own nationality and achieve universally recognized human rights with dignity and peace. During this prestigious gathering, the TCG implores the leaders of the world community to join its call for self-determination for the people of Taiwan. ●

About the author and Disclosure: Neil Hare is President and CEO of Global Vision Communications, a Washington DC-based PR and marketing agency. Materials distributed by Global Vision Communications on behalf of the Taiwan Civil Government. Additional information is available at the Department of Justice, Washington, DC.


THE TASK OF DEEPER CULTURAL UNDERSTANDING By: James H. Billington Librarian of Congress Emeritus


wenty years ago, on October 2, 1997, I delivered a speech to the Foreign Policy Research Institute arguing that “The task of deeper cultural understanding. . .may be the most important imperative of all for avoiding international conflict in the twenty-first century.” Among dangers looming on the horizon for our nation and type of society at the end of the twentieth century, I saw the continuing presence of weapons of mass destruction, authoritarian dominance still threatening post-Soviet Eurasia, nationalist paranoia developing in the wake of immigration from the global south to north, and the resurgence of other ethnic hatreds and conflicts. Culture, along with commerce and instantaneous global internet communications, seemed the best solutions to these problems two decades ago, while admittedly containing dangers as well as opportunities. For instance, regarding culture, “the human desire almost everywhere to preserve and even to reassert distinct and separate cultural identities” might potentially create new divisions and ethnic conflicts capable of tearing the world apart. By contrast, cultural riches of music and art promised to inspire and draw the world closer together. J A N U A RY 2 0 1 8 50

A lack of understanding about the religious factor in cultural affairs at the close of the twentieth century also had left us ill-equipped to understand —let alone anticipate—important developments such as the rise of the Christian right in America, the explosion of Islamic fundamentalism in Iran, and the collapse of communism in the Soviet Union. “What this nation needs,” I argued, “is a deeper understanding of what the many newly awakening peoples of our planet really believe, to be gleaned by more serious study of the art, folklore, and above all, religion of other human cultures.” For instance, “If Americans cannot penetrate the interior spiritual dialogue of other peoples,” I argued, “they will never be able to understand, let alone anticipate or affect, the discontinuous major changes which are the driving forces in history and which will probably continue to spring unexpected traps in the years ahead. To put it another way, if we cannot learn to listen to others as they whisper their prayers, we may well confront them later when they howl their war cries.” These words seem to have as much relevance today as they did two decades ago. However, such concerns also under-represent the many intrinsically positive reasons for developing deeper cultural understanding that we are celebrating through “A Concert for Unity”. Great works of beauty transcend negative cultural divisions. As I wrote in 1997, “Even if cultural gaps cannot be bridged, one becomes a better person and more appreciative of one’s own culture by the very attempt to understand someone else’s.” So, may it be for all of us gathered for this unique event of cultural cooperation in Washington DC on November 13, 2017: May we all become better people in the very attempt to understand one another. The organizers of this symposium and concert, under the fine leadership of Susan Carmel Lehrman, are to be commended for their efforts to celebrate the common ground between peoples of different countries and traditions, and particularly of U.S. Russia people-to-people relations through music, art, and culture. Kudos and thanks to you for hosting this important celebration. ●




or African governments desperate for more cash to invest in infrastructure and public services, there exists a deep well of untapped resources: the estimated $50 billion that the continent loses through illicit financial outflows every year. That sum—which vastly exceeds the amount of foreign aid, loans, and other money that Africa receives from external sources—consists of proceeds from all sorts of criminal activities, such as trafficking and money laundering. In total, between 1980 and 2009, illicit financial outflows added up to a staggering $1.4 trillion—proving that the age of plundering Africa is far from over. When it comes to the facilitators of illicit financial outflows, it’s not only organized crime groups who are guilty. Multinational corporations are also to blame for their use of tactics like aggressive tax avoidance and profit-shifting measures to squirrel away revenues from the grasp of tax authorities. Of course, illicit financial outflows are a global problem, even in developed economies like the EU, where governments have been pushing to find ways to make digital giants like Google and Facebook J A N U A RY 2 0 1 8 52

pay higher taxes. But they are an especially urgent issue in developing countries in Africa, where capital flight is one of the main obstacles preventing governments from achieving the Sustainable Development Goals (SDGs). After all, tax revenues in these countries are already very low—averaging 17% of GDP versus about 35% in wealthier states—as authorities lack sufficient resources to tackle the deep-seated corruption and complex tactics used by corporations to avoid paying their full bills. It was in this context that the Tax Justice Network Africa, the UN Economic Commission for Africa, and other stakeholders organized the Pan African Conference on Illicit Financial Flows and Tax in Nairobi last week, where experts discussed ways for governments to try to claw back some of the vast sums of money siphoning out of their countries. While such recognition of the problem at the multilateral level is certainly welcome, it is not enough on its own; individual governments must also commit to more concrete measures to crack down on tax avoidance, improve transparency and oversight of the most corrupt industries, and crack down on illicit trade.


“between 1980 and 2009, illicit financial outflows added up to a staggering $1.4 trillion—proving that the age of plundering Africa is far from over.”

First, African governments should push for aggressive tax avoidance to be included in the international definition of illicit financial outflows. So far, the UN Office on Drugs and Crime and the UN Conference on Trade and Development have been reluctant to do so, thanks in part to successful corporate lobbying. Yet without recognizing aggressive tax avoidance as a major contributor to developing nations’ lack of capital, it will be impossible to coordinate global action against the problem. Even if tax avoidance doesn’t immediately gain international recognition as an issue worth fighting, there is much that individual countries can do in the meantime to curb tax avoidance and reform tax incentives. This includes compelling large corporations to regularly disclose the details of their operations to ensure that their profits are properly taxed. Governments must also investigate the enablers of illicit capital outflows, especially banks, which often help cover up the cash hemorrhaging out of the continent. Certain industries—such as mining, oil, and gas—are also rife with opportunities for tax avoidance, bribery, and the generation of illicit

financial outflows. In fact, insufficient oversight and opaque management of the extractive industries are a main reason why African nations continue to suffer from high levels of poverty and inequality, despite often possessing vast natural resources. The Democratic Republic of Congo, for instance, is one of the world’s most important sources of minerals such as copper and cobalt, with up to $10 billion worth of these resources mined and sold overseas. Yet the multi-stage value chain of such commodities offers numerous opportunities for aggressive tax avoidance and corruption. According to recent reports, the state-owned mining company operates as a “closed book in terms of revenue management”—a main reason why a piddling 6% of the DRC’s yearly mining exports make it to the government’s coffers. As a result, rather than becoming a source of prosperity for the Congolese people, the extractive industry as it stands has only further privatized wealth in the hands of a few and fueled violent conflict throughout the country. In addition to the tempting tax avoidance and corruption opportunities offered by the extractive industries, trade in regulated or illegal products such as tobacco is also a highly lucrative wellspring of illicit financial outflows. One estimate put yearly losses in Africa at over $10 billion, as local tobacco companies sell cigarettes to partners in markets where tax rates are low, which are then shipped as contraband to countries where


taxes are high. In recognition of this, in recent years, some African governments have been taking steps to combat these practices. In Kenya, where more than 22 million cigarettes are smoked every day, the government has been imposing new regulations to both deter smoking and crack down on illegal trade in cigarettes. Despite legal opposition from corporations like British American Tobacco, which has an estimated 70% market share in the country, Nairobi nevertheless succeeded launching the Excisable Goods Management System in 2015, which is intended to verify tobacco and other products throughout the supply chain with methods such as track and trace technology. Of course, the tobacco industry has been strongly opposed to such measures and has been pushing their own—questionable—in-house tracking methods. But they are fighting a losing battle, with authorities elsewhere in Africa as well as in the EU also taking steps to implement independent track and trace systems. For revenue-strapped governments in sub-Saharan Africa taking steps to crackdown on illicit financial flows should be no brainers. But faced with stern opposition from industries like Big Tobacco, Big Oil, and Big Mining, which draw substantial benefits from such financial outflows and have the financial clout to throttle legislative progress, stamping out the practice is an uphill struggle. But with $50 billion annually at stake, the battle is one worth fighting. ●

This book is both a tonic and a manifesto. As we enter the age of artificial intelligence, we will need more and more of the human kind, nurtured not by the sciences but by the humanities. A compelling and convincing read!”

– Anne-Marie Slaughter President and CEO of New America

A Financial Times Business Book of the Month

Financial Times and McKinsey & Company Bracken Bower Prize Finalist

THE FUZZY AND THE TECHIE Why the liberal arts will rule the digital world Scott Hartley


Where nations connect Effective diplomacy requires influence and in DC’s international circles no place says influence like the Ronald Reagan Building and International Trade Center. Whether an economic summit, trade negotiation or a private diplomatic affair, our international trade experts and expansive network of leaders enable embassies and governments to amplify their message and strengthen their impact, locally and globally. Expand your reach. Grow your influence with us.


Deeper cultural understanding may be the most important imperative of all for avoiding international conflict in the twenty-first century. — DR. JAMES H. BILLINGTON Librarian of Congress Emeritus


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The World in 2050 | Diplomatic Courier | January 2018 Edition  

The issues which define the 21st century are unfolding daily. As populations grow and urban centers expand, humanity’s mutual needs increasi...

The World in 2050 | Diplomatic Courier | January 2018 Edition  

The issues which define the 21st century are unfolding daily. As populations grow and urban centers expand, humanity’s mutual needs increasi...

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