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It may sound trivial, but I argue that the technicalities of EU law have been neglected and that an in-depth inquiry is lacking. To see why such an inquiry might be interesting, we must go beyond the traditional understanding of legal technicalities and see them as protagonists in their own right. We need to focus on lawyers' knowledge practices and to inquire into the transformative power of legal technicalities.

Loet Leydesdorff on the Triple Helix: How Synergies in University-Industry-Government Relations can Shape Innovation Systems





This is the sixth and last in a series of Talks dedicated to the technopolitics of International Relations, linked to the forthcoming double volume 'The Global Politics of Science and Technology' edited by Maximilian Mayer, Mariana Carpes, and Ruth Knoblich 







The relationship between technological innovation
processes and the nation state remains a challenge for the discipline of
International Relations. Non-linear and multi-directional
characteristics of knowledge production, and the diffusive nature of knowledge
itself, limit the general ability of governments to influence and steer
innovation processes. Loet Leydesdorff advances the framework of the "Triple
Helix" that disaggregates national innovation systems into
evolving university-industry-government eco-systems. In this Talk, amongst others, he shows that these eco-systems can be
expected to generate niches with synergy at all scales, and emphasizes that, though
politics are always involved, synergies develop unintentionally.




Print version of this Talk (pdf)




What is the most relevant aspect
of the dynamics of innovation for the discipline of International Relations?



The
main challenge is to endogenize the notions of technological progress and
technological development into theorizing about political economies and nation states.
The endogenization of technological innovation and technological development
was first placed on the research agenda of economics by evolutionary economists
like Nelson and Winter in the late 1970s and early 1980s. In this context, the
question was how to endogenize the dynamics of knowledge, organized knowledge,
science and technology into economic theorizing. However, one can equally well
formulate the problem of how to reflect on the global (sub)dynamics of
organized knowledge production in political theory and International Relations.



From
a longer-term perspective, one can consider that the nation states – the
national or political economies in Europe – were shaped in the 19th
century, somewhat later for Germany (after 1871), but for most countries it was
during the first half of the 19th century. This was after the French
and American Revolutions and in relation to industrialization. These nation
states were able to develop an institutional framework for organizing the
market as a wealth-generating mechanism, while the institutional framework
permitted them to retain wealth, to regulate market forces, and also to steer
them to a certain extent. However, the market is not only a local dynamics; it
is also a global phenomenon.



Nowadays,
another global dynamics is involved: science and technology add a dynamics different
from that of the market. The market is an equilibrium-seeking mechanism at each
moment of time. The evolutionary dynamics of science and technology nowadays
adds a non-equilibrium-seeking dynamics over time on top of that, and this puts
the nation state in a very different position. Combining an equilibrium-seeking
dynamics at each moment of time with a non-equilibrium seeking one over time
results in a complex adaptive dynamics, or an eco-dynamics, or however you want
to call it – these are different words for approximately the same thing.



For
the nation state, the question arises of how it relates to the global market
dynamics on the one side, and the global dynamics of knowledge and innovation on
the other. Thus, the nation state has to combine two tasks. I illustrated this
model of three subdynamics with a figure in my 2006 book entitled The Knowledge-Based Economy: Modeled,
measured, simulated (see image). The figure shows that first-order interactions
generate a knowledge-based economy as a next-order or global regime on top of
the localized trajectories of nation states and innovative firms. These complex
dynamics have first to be specified and then to be analyzed empirically.



For
example, the knowledge-based dynamics change the relation between government
and the economy; and they consequently change the position of the state in
relation to wealth-retaining mechanisms. How can the nation state be organized
in such a way as to retain wealth from knowledge locally, while knowledge (like
capital) tends to travel beyond boundaries? One can envisage the complex system
dynamics as a kind of cloud – a cloud
that touches the ground at certain places, as Harald Bathelt, for example,
formulated.



How
can national governments shape conditions for the cloud to touch and to remain
on the ground? The Triple Helix of University-Industry-Government Relations can
be considered as an eco-system of bi- and tri-lateral relations. The three
institutions and their interrelations can be expected to form a system carrying
the three functions of (i) novelty production, (ii) wealth generation, and
(iii) normative control. One tends to think of university-industry-government
relations first as neo-corporatist arrangements between these institutional
partners. However, I am interested in the ecosystem shaped through the tri- and
bilateral relationships.



This
ecosystem can be shaped at different levels. It can be a regional ecosystem or
a national ecosystem, for instance. One can ask whether there is a surplus of synergy
between the three (sub-)dynamics of university-industry-government relations
and where that synergy can generate wealth, knowledge, and control; in which
places, and along trajectories for which periods of time – that is, the same
synergy as meant by "a cloud touching the ground".



For
example, when studying Piedmont as a region in Northern Italy, it is
questionable whether the synergy in university-industry-government relations is
optimal at this regional level or should better be examined from a larger perspective
that includes Lombardy. On the one
hand, the administrative borders of nations and regions result from the
construction of political economies in the 19th century; but on the
other hand, the niches of synergy that can be expected in a knowledge-based
economy are bordered also; for example, in terms of metropolitan regions (e.g.,
Milan–Turin–Genoa).



Since
political dynamics are always involved, this has implications for International
Relations as a field of study. But the dynamic analysis is different from
comparative statics (that is, measurement at different moments of time). The
knowledge dynamics can travel and be "footloose" to use the words of Raymond
Vernon, although it leaves footprints behind. Grasping "wealth from knowledge"
(locally or regionally) requires taking a systems perspective. However, the
system is not "given"; the system remains under reconstruction and can thus be
articulated only as a theoretically informed hypothesis.



In
the social sciences, one can use the concept of a hypothesized system
heuristically. For example, when
analyzing the knowledge-based economy in Germany, one can ask whether more synergy
can be explained when looking at the level of the whole country (e.g., in terms
of the East-West or North-South divide) or at the level of Germany's Federal
States? What is the surplus of the nation or at the European level? How can one
provide political decision-making with the required variety to operate as a
control mechanism on the complex dynamics of these eco-systems?



A
complex system can be expected to generate niches with synergy at all scales,
but as unintended consequences. To what extent and for which time span can
these effects be anticipated and then perhaps be facilitated? At this point,
Luhmann's theory comes in because he has this notion of different codifications
of communication, which then, at a next-order level, begin to self-organize
when symbolically generalized.



Codes
are constructed bottom-up, but what is constructed bottom-up may thereafter
begin to control top-down. Thus, one should articulate reflexively the
selection mechanisms that are constructed from the bottom-up variation by
specifying the why as an hypothesis.
What are the selection mechanisms? Observable relations (such as
university-industry relations) are not neutral, but mean different things for
the economy and for the state; and this meaning of the observable relations can
be evaluated in terms of the codes of communication.



Against
Niklas Luhmann's model, I would argue that codes of communication can be
translated into one another since interhuman communications are not
operationally closed, as in the biological model of autopoiesis. One also needs a social-scientific perspective on the
fluidities ("overflows") and translations among functions, as emphasized, for
example, by French scholars such as Michel Callon and Bruno Latour. In
evolutionary economics, one distinguishes between market and non-market
selection environments, but not among selection environments that are
differently codified. Here, Luhmann's theory offers us a heuristic: The complex
system of communications tends to differentiate in terms of the symbolic
generalizations of codes of communication because this differentiation is
functional in allowing the system to process more complexity and thus to be
more innovative. The more orthogonal the codes, the more options for
translations among them. The synergy indicator measures these options as
redundancy. The selection environments, however, have to be specified historically
because these redundancies—other possibilities—are not given but rather constructed
over long periods of time.





How did you arrive where
you currently work on?


I
became interested in the relations between science, technology, and society as
an undergraduate (in biochemistry) which coincided with the time of the student
movement of the late 1960s. We began to study Jürgen Habermas in the framework
of the "critical university," and I decided to continue with a second degree in
philosophy. After the discussions between Luhmann and Habermas (1971), I
recognized the advantages of Luhmann's more empirically oriented systems approach
and I pursued my Ph.D. in the sociology of organization and labour.



In
the meantime, we got the opportunity to organize an interfaculty department for
Science and Technology Dynamics at the University of Amsterdam after a
competition for a large government grant. In the context of this department, I
became interested in methodology: how can one compare across case studies and
make inferences? Actually, my 1995 book The
Challenge of Scientometrics
had a kind of Triple-Helix model on the cover: How do cognitions, texts, and
authors exhibit different dynamics that influence one another?



For
example, when an author publishes a paper in a scholarly journal, this may add
to his reputation as an author, but the knowledge claimed in the text enters a
process of validation which can be much more global and anonymous. These
processes are mediated since they are based on communication. Thus, one can add
to the context of discovery (of authors) and the context of justification (of
knowledge contents) a context of mediation (in texts). The status of a journal,
for example, matters for the communication of the knowledge content in the article.
The contexts operate as selection environments upon one another.



In
evolutionary economics, one is used to distinguishing between market and
non-market selection environments, but not among more selection environments
that are differently codified. At this point, Luhmann's theory offers a new
perspective: The complex system of communications tends to differentiate in
terms of the symbolic generalization of codes of communication because this differentiation
among the codes of communication allows the system to process more complexity
and to be more innovative in terms of possible translations. The different
selection environments for communications, however, are not given but constructed
historically over long periods of time. The modern (standardized) format of the
citation, for example, was constructed at the end of the 19th
century, but it took until the 1950s before the idea of a citation index was
formulated (by Eugene Garfield). The use of citations in evaluative
bibliometrics is even more recent.



In
evolutionary economics, one distinguishes furthermore between (technological)
trajectories and regimes. Trajectories can result from "mutual shaping" between
two selection environments, for example, markets and technologies. Nations and
firms follow trajectories in a landscape. Regimes are global and require the
specification of three (or more) selection environments. When three (or more)
dynamics interact, symmetry can be broken and one can expect feed-forward and
feedback loops. Such a system can begin to flourish auto-catalytically when the
configuration is optimal.



From
such considerations, that is, a confluence of the neo-institutional program of
Henry Etzkowitz and my neo-evolutionary view, our Triple Helix model emerged in
1994: how do institutions and functions interrelate and change one another or,
in other words, provide options for innovation? Under what conditions
can university-industry-government relations lead to wealth generation and
organized knowledge production? The starting point was a workshop about Evolutionary Economics and Chaos Theory: New
directions for technology studies held in Amsterdam in 1993. Henry
suggested thereafter that we could collaborate further on university-industry
relations. I answered that I needed at least three (sub)dynamics from the
perspective of my research program, and then we agreed about "A Triple Helix of
University-Industry-Government Relations". Years later, however, we took our
two lines of research apart again, and in 2002 I began developing a
Triple-Helix indicator of synergy in a series of studies of national systems of
innovation.





What would you give as
advice to students who would like to get into the field of innovation and
global politics?



In
general, I would advise them to be both a specialist and broader than that.
Innovation involves crossing established borders. Learn at least two languages.
If your background is political science, then take a minor in science &
technology studies or in economics. One needs both the specialist profile and
the potential to reach out to other audiences by being aware of the need to
make translations between different frameworks. Learn to be reflexive about the
status of what one can say in one or the other framework.



For
example, I learned to avoid the formulation of grandiose statements such as
"modern economies are knowledge-based economies," and to say instead: "modern
economies can increasingly be considered as knowledge-based economies." The
latter formulation provides room for asking "to what extent," and thus one can
ask for further information, indicators, and results of the measurement.



In
the sociology of science, specialisms and paradigms are sometimes considered as
belief systems. It seems to me that by considering scholarly discourses as
systems of rationalized expectations one can make the distinction between
normative and cognitive learning. Normative learning (that is, in belief
systems) is slower than cognitive learning (in terms of theorized expectations)
because the cognitive mode provides us with more room for experimentation: One
can afford to make mistakes, since one's communication and knowledge claims
remain under discussion, and not one's status as a communicator. The cognitive
mode has advantages; it can be considered as the surplus that is further
developed during higher education. Normative learning is slower; it dominates
in the political sphere.





What
does the "Triple Helix" reveal about the fragmentation of "national innovation
systems"?



In
2003, colleagues from the Department of Economics and Management Studies at the
Erasmus University in Rotterdam offered me firm data from the Netherlands containing
these three dimensions: the economic, the geographical, and the technological dimensions
in data of more than a million Dutch firms. I presented the results at the
Schumpeter Society in Turin in 2004, and asked whether someone in the audience
had similar data for other countries. I expected Swedish or Israeli colleagues
to have this type of statistics, but someone from Germany stepped in, Michael
Fritsch, and so we did the analysis for Germany. These studies were first
published in Research Policy.
Thereafter, we did studies on Hungary, Norway, Sweden, and recently also China
and Russia.



Several
conclusions arise from these studies. Using entropy statistics, the data can be
decomposed along the three different dimensions. One can decompose national
systems geographically into regions, but one can also decompose them in terms
of the technologies involved (e.g., high-tech versus medium-tech). We were
mainly relying on national data. And of course, there are limitations to the
data collections. Actually, we now have international data, but this is
commercial data and therefore more difficult to use reliably than governmental
statistics.



For
the Netherlands, we obtained the picture that would more or less be expected:
Amsterdam, Rotterdam, and Eindhoven are the most knowledge-intensive and
knowledge-based regions. This is not surprising, although there was one surprise:
We know that in terms of knowledge bases, Amsterdam is connected to Utrecht and
then the geography goes a bit to the east in the direction of Wageningen. What
we did not know was that the niche also spreads to the north in the direction
of Zwolle. The highways to Amsterdam Airport (Schiphol) are probably the most
important.



In
the case of Germany, when we first analyzed the data at the level of the
"Laender" (Federal States), we could see the East-West divide still prevailing,
but when we repeated the analysis at the lower level of the "Regierungsbezirke"
we no longer found the East-West divide as dominant (using 2004 data). So, the
environment of Dresden for example was more synergetic in Triple-Helix terms
than that of Saarbruecken. And this was nice to see considering my idea that
the knowledge-based economy increasingly prevails since the fall of the Berlin
Wall and the demise of the Soviet Union. The discussion about two different
models for organizing the political economy—communism or liberal democracy—had
become obsolete after 1990.



After
studying Germany, I worked with Balázs Lengyel on Hungarian data. Originally,
we could not find any regularity in the Hungarian data, but then the idea arose
to analyze the Hungarian data as three different innovation systems: one around
Budapest, which is a metropolitan innovation system; one in the west of the
country, which has been incorporated into Western Europe; and one in the east
of the country, which has remained the old innovation system that is state-led
and dependent on subsidies. For the western part, one could say that Hungary
has been "europeanized" by Austria and Germany; it has become part of a
European system.



When
Hungary came into the position to create a national
innovation system, free from Russia and the Comecon, it was too late, as
Europeanization had already stepped in and national boundaries were no longer
as dominant. Accordingly, and this was a very nice result, assessing this
synergy indicator on Hungary as a nation, we did not find additional synergy at
the national (that is, above-regional) level. While we clearly found synergy at
the national level for the Netherlands and also found it in Germany, but at the
level of the Federal States, we could not find synergy at a national level for
Hungary. Hungary has probably developed too late to develop a nationally
controlled system of innovations.



A
similar phenomenon appeared when we studied Norway: my Norwegian colleague
(Øivind Strand) did most of our analysis there. To our surprise, the
knowledge-based economy was not generated where the universities are located (Oslo
and Trondheim), but on the West Coast, where the off-shore, marine and maritime
industries are most dominant. FDI (foreign direct investment) in the marine and
maritime industries leads to knowledge-based synergy in the regions on the West
Shore of Norway. Norway is still a national system, but the Norwegian
universities like Trondheim or Oslo are not so much involved in entrepreneurial
networks. These are traditional universities, which tend to keep their hands
off the economy.



Actually,
when we had discussions about these two cases, Norway and Hungary, which both
show that internationalization had become a major factor, either in the form of
Europeanization in the Hungarian case, or in the form of foreign-driven
investments (off-shore industry and oil companies) in the Norwegian case, I
became uncertain and asked myself whether we did not believe too much in our
indicators? Therefore, I proposed to Øivind to study Sweden, given the availability
of well-organized data of this national system.



We
expected to find synergy concentrated in the three regional systems of
Stockholm, Gothenburg, and Malmö/Lund. Indeed, 48.5 percent of the Swedish
synergy is created in these three regions. This is more than one would expect
on the basis of the literature. Some colleagues were upset, because they had
already started trying to work on new developments of the Triple Helix, for
example, in Linköping. But the Swedish economy is organized and centralized in
this geographical dimension. Perhaps that is why one talks so much about
"regionalization" in policy documents. Sweden is very much a national
innovation system, with additional synergy between the regions.





Can governments alter
historical trajectories of national, regional or local innovation systems?



Let
me mention the empirical results for China in order to illustrate the
implications of empirical conclusions for policy options. We had no Chinese
data set, but we obtained access to the database Orbis of the Bureau van Dijk
(an international company, which is Wall Street oriented, assembling data about
companies) that contains industry indicators such as names, addresses,
NACE-codes, types of technology, the sizes of each enterprise, etc. However,
this data can be very incomplete. Using this incomplete data for China, we said
that we were just going to show how one could do the analysis  if one had full data. We guess that the
National Bureau of Statistics of China has complete data.
I did the analysis with Ping Zhou, Professor at Zhejiang University.



We
analyzed China first at the provincial level, and as expected, the East Coast
emerged as much more knowledge intense than the rest of the country. After
that, we also looked at the next-lower level of the 339 prefectures of China.
From this analysis, four of them popped up as far more synergetic than the
others. These four municipalities were: Beijing, Shanghai, Tianjin, and
Chongqing.



These
four municipalities became clearly visible as an order of magnitude more
synergetic than other regions. The special characteristic about them is that –as
against the others – these four municipalities are administered by the central
government. Actually, it came out of my data and I did not understand it; but
my Chinese colleague said that this result was very nice and specified this
relationship.



The
Chinese case thus illustrates that government control can make a difference. It
shows – and that is not surprising, as China runs on a different model – that
the government is able to organize the four municipalities in such a way as to
increase synergy. Of course, I do not know what is happening on the ground. We
know that the Chinese system is more complex than these three dimensions
suggest. I guess the government agencies may wish to consider the option of
extending the success of this development model, to Guangdong for example or to
other parts of China. Isn't it worrisome that all the other and less controlled
districts have not been as successful in generating synergy?



Referring
more generally to innovation policies, I would advise as a heuristics that
political discourse is able to signal a problem, but policy questions do not
enable us to analyze the issues. Regional development, for example, is an issue
in Sweden because the system is very centralized, more than in Norway, for
example. But there is nothing in our data that supports the claim that the
Swedish government is successful in decentralizing the knowledge-based economy
beyond the three metropolitan regions. We may be able to reach conclusions like
these serving as policy advice. One develops policies on the basis of intuitive
assumptions which a researcher is sometimes able to test.



As
noted, one can expect a complex system continuously to produce unintended
consequences, and thus it needs monitoring. The dynamics of the system are
different from the sum of the sub-dynamics because of the interaction effects
and feedback loops. Metaphors such as a Triple Helix, Mode-2, or the Risk
Society can be stimulating for the discourse, but these metaphors tend to develop
their own dynamics of proliferating discourses.



The
Triple Helix, for example, can first be considered as a call for collaboration
in networks of institutions. However, in an ecosystem of bi-lateral and
tri-lateral relations, one has a trade-off between local integration
(collaboration) and global differentiation (competition). The markets and the
sciences develop at the global level, above the level of specific relations. A
principal agent such as government may be locked into a suboptimum. Institutional
reform that frees the other two dynamics (markets and sciences) requires
translation of political legitimation into other codes of communication. Translations
among codes of communication provide the innovation engine.





Is there a connection
between infrastructures and the success of innovation processes?



One
of the conclusions, which pervades throughout all advanced economies, is that
knowledge intensive services (KIS) are
not synergetic locally because they can be disconnected – uncoupled – from the
location. For example, if one offers a knowledge-intensive service in Munich
and receives a phone call from Hamburg, the next step is to take a plane to
Hamburg, or to catch a train inside Germany perhaps. Thus, it does not matter
whether one is located in Munich or Hamburg as knowledge-intensive services
uncouple from the local economy. The main point is proximity to an airport or
train station.



This
is also the case for high-tech knowledge-based manufacturing. But it is
different for medium-tech manufacturing, because in this case the dynamics are
more embedded in the other parts of the economy. If one looks at Russia, the
knowledge-intensive services operate differently from the Western European
model, where the phenomenon of uncoupling takes place. In Russia, KIS
contribute to coupling, as knowledge-intensive services are related to state
apparatuses.



In
the Russian case, the knowledge-based economy is heavily concentrated in Moscow
and St. Petersburg. So, if one aims –as the Russian government proclaims – to create
not "wealth from knowledge" but "knowledge from wealth" – that is, oil revenues
–it might be wise to uncouple the knowledge-intensive services from the state
apparatuses. Of course, this is not easy to do in the Russian model because
traditionally, the center (Moscow) has never done this. Uncoupling
knowledge-intensive services, however, might give them a degree of freedom to
move around, from Tomsk to Minsk or vice
versa, steered by economic forces more than they currently are (via institutions
in Moscow).





Final question. What does path-dependency mean in the context of
innovation dynamics?



In
The Challenge of Scientometrics. The development, measurement, and
self-organization of scientific communications (1995), I used Shannon-type information theory to study
scientometric problems, as this methodology combines both static and dynamic
analyses. Connected to this theory I developed a measurement method for
path-dependency and critical transitions.



In
the case of a radio transmission, for example, you have a sender and a
receiver, and in between you may have an auxiliary station. For instance, the
sender is in New York and the receiver is in Bonn and the auxiliary station is
in Iceland. The signal emerges in New York and travels to Bonn, but it may be possible
to improve the reception by assuming the signal is from Iceland instead of
listening to New York. When Iceland provides a better signal, it is possible to
forget the history of the signal before it arrived in Island. It no longer
matters whether Iceland obtained the signal originally from New York or Boston.
One takes the signal from Iceland and the pre-history of the signal does not
matter anymore for a receiver.



Such
a configuration provides a path-dependency (on Iceland) in
information-theoretical terms, measurable in terms of bits of information. In a
certain sense you get negative bits of information, since the shortest path in
the normal triangle would be from New York to Bonn, and in this case the
shortest path is from New York via Iceland to Bonn. I called this at the time a
critical transition. In a scientific text for instance, a new terminology can
come up and if it overwrites the old terminology to the extent that one does
not have to listen to the old terminology anymore, one has a critical
transition that frees one from the path-dependencies at a previous moment of
time.



Thus,
my example is about radical and knowledge-based changes. As long as one has to
listen to the past, one does not make a critical transition. The knowledge-based
approach is always about creative destruction and about moving ahead,
incorporating possible new options in the future. The hypothesized future
states become more important than the past. The challenge, in my opinion, is to
make the notion of options operational and to bring these ideas into
measurement. The Triple-Helix indicator measures the number of possible options
as additional redundancy. This measurement has the additional advantage that one
becomes sensitive to uncertainty in the prediction.





Loet Leydesdorff is Professor Emeritus at the Amsterdam School of Communications Research (ASCoR) of the University of Amsterdam. He is Honorary Professor of the Science and Technology Policy Research Unit (SPRU) of the University of Sussex, Visiting Professor at the School of Management, Birkbeck, University of London, Visiting Professor of the Institute of Scientific and Technical Information of China (ISTIC) in Beijing, and Guest Professor at Zhejiang University in Hangzhou. He has published extensively in systems theory, social network analysis, scientometrics, and the sociology of innovation (see at http://www.leydesdorff.net/list.htm). With Henry Etzkowitz, he initiated a series of workshops, conferences, and special issues about the Triple Helix of University-Industry-Government Relations. He received the Derek de Solla Price Award for Scientometrics and Informetrics in 2003 and held "The City of Lausanne" Honor Chair at the School of Economics, Université de Lausanne, in 2005. In 2007, he was Vice-President of the 8th International Conference on Computing Anticipatory Systems (CASYS'07, Liège). In 2014, he was listed as a highly-cited author by Thomson Reuters. 





Literature and Related
links:



Science & Technology Dynamics,
University of Amsterdam / Amsterdam School of Communications
Research (ASCoR) 


Leydesdorff,
L. (2006). The Knowledge-Based Economy: Modeled, Measured, Simulated. Universal Publishers, Boca Raton, FL.


Leydesdorff, L. (2001). A Sociological Theory of Communication: The Self-Organization of the
Knowledge-Based Society. Universal Publishers, Boca Raton, FL.


Leydesdorff,
L. (1995). The Challenge of Scientometrics . The development, measurement, and
self-organization of scientific communications. Leiden, DSWO Press, Leiden University.


http://www.leydesdorff.net/





Print version of this Talk (pdf)



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Just a quick note on a couple of my papers that recently got published. First,  Josh Hendrickson and I published in the Journal of Money, Credit, and Banking earlier this year with an article titled "Nominal GDP Targeting and the Taylor Rule on an Even Playing Field". Here is the abstract:

Some economists advocate nominal GDP targeting as an alternative to the Taylor Rule. These arguments are largely based on the idea that nominal GDP targeting would require less knowledge on the part of policymakers than a traditional Taylor Rule. In particular, a nominal GDP targeting rule would not require real‐time knowledge of the output gap. We examine the importance of this claim by amending a standard New Keynesian model to assume that the central bank has imperfect information about the output gap and therefore must forecast the output gap based on previous information. Forecast errors by the central bank can then potentially induce unanticipated changes in the short‐term nominal interest rate, distinct from a standard monetary policy shock. We show that forecast errors of the output gap by the Federal Reserve can account for up to 13% of the fluctuations in the output gap. In addition, our simulations imply that a nominal GDP targeting rule would produce lower volatility in both inflation and the output gap in comparison with the Taylor Rule under imperfect information.

Many of you may have  seen this article before since it has been a working paper for many years now. I am glad to finally get it published. 


More recently, I published an article in the Cato Journal titled "The Financial Stability Case for NGDP Targeting." I presented this paper at the 2018 Cato Monetary Policy Conference. Here is the abstract:

Ten years after the financial crisis there is a new appreciation for the role household debt and financial fragility play in the business cycle. As a result, policymakers are looking for tools to promote financial stability. A number of recent studies claim that nominal GDP (NGDP) targeting is just such a tool. For it can theoretically reproduce the distribution of risk that would exist if there were widespread use of state-contingent debt securities. This paper empirically test this view by exploiting an implication of the theory: those countries whose NGDP stayed closest to its expected pre-crisis growth path during the crisis should have experienced less financial instability. This paper constructs an NGDP gap measure for 21 advanced economies to test this implication and finds there is a meaningful role for NGDP in promoting financial stability.


There are a lot of other interesting papers in this Cato Journal that were presented at the conference. So take a look. For those interested, here is the video of my panel at the conference:













P.S. In my last post I asked if the Fed's floor system was about to fold. Well, the answer is no, for now. My concerns about overnight interest rates rising above the IOER have faded as they have for the most part converged back to the Fed's target interest rate range. I also said I would outline in the next post how the Fed could transition to a symmetric corridor symmetric corridor if this collapse was imminent. That promise is still good, but on hold for now. I am doing some more reading and thinking on this topic and will return to it. 

Dirk Messner on the dynamics
of global change and the significance of international science and technology
cooperation in the post-Western world



This is the fifth in a series of Talks dedicated to the technopolitics of International Relations, linked to the forthcoming double volume 'The Global Politics of Science and Technology' edited by Maximilian Mayer, Mariana Carpes, and Ruth Knoblich 





In recent years, the analysis of new emerging powers and shifting global order has become central to the study of international relations. While International Relations, aiming to evolve into a truly global discipline, is only just about to start opening up towards Non-Western perspectives, global power shifts have already led to a restructuring of global governance architecture in large fields of political reality and practice. Dirk Messner illustrates how far global power shifts have to lead to new patterns of international cooperation using international science and technology cooperation as a case in point. He argues that investment in joint knowledge creation and knowledge exchange is vital for managing the earth system. Messner also points to the multitude of tasks related to socio-technical systems which the political sphere is currently facing, particularly with regard to the challenge of managing the climate system. 




Print version of this Talk (pdf)




What is the most important challenge facing global politics that should be the central debate in the discipline of International Relations?



The biggest challenge of the next decades which we have to come to terms with is governing the big global commons. When I say global commons I do have in mind the atmosphere, the climate system, and other parts of the earth system, but also international financial markets and global infrastructures, such as the Internet – stability of these and other global commons is a public good much required. We need to stabilize the global commons and then manage them in a cooperative manner.



Three dynamics of global change make it specifically challenging to manage these global commons. The first wave of global change is the globalization wave; the economic globalization, cross-border dynamics, global value chains. It becomes evident that in many areas and especially when it comes to the global commons, regulation exceeds the capacity of individual nation states. The international community is required to institutionalize multilateralism and efficient global governance mechanisms in order to properly address issues arising from global dynamics. The second big global change is the shift from a Western to a post-Western world order. Global power shifts remaking the international system impede governing global commons. The third wave of global change is related to climate change, which adds a new dimension of global dynamics; human beings now have to learn how to steer, to stabilize, and how to govern the earth system as such. We are not only a species living on this planet, depending from resources and ecosystems of the earth systems. With the acceleration of economic globalization during the 1990s and the emergence of new, non-Western economic drivers of change, like China, humankind now significantly impacts the physical structures of the earth system. This trend is new. For the first 4,6 billion years of the existence of the earth system it was driven by the laws of physics, the dynamics of biology and bio-chemical processes. Homo sapiens appeared 220.000 years ago, and the impact of our species on the earth system has been marginal until the industrial revolution started 250 years ago. During the last decades human mankind became a major driver of change at a planetary scale.





How did you arrive in your current thinking about these issues?



I have always been interested in international relations, international policy dimensions, and the global economy. I started at the Free University of Berlin at the beginning of the 80's towards the mid-80's, studying Political Science and Economics. One among those professors who have been particularly important to me is Elmar Altvater. He was the supervisor of my diploma as well as of my Ph.D., and he sent me abroad. This resulted being a pivotal experience to me. I studied the last year of my first degree in Seoul, in South Korea. It was the period, the 80's, when the four Asian Tiger states emerged following Japan's example: South Korea, Taiwan, Hongkong, and Singapur. I had the chance to visit these countries, study there and learn a lot about Asia. I was fascinated by the dynamics of emerging economies and what this implied for the international arena. Somewhat later, the Latin American continent became the center of my interest. I did research in Nicaragua, Uruguay, Chile and some other Latin American countries, trying to understand liberalization-movements, how weaker actors come under pressure in Western-dominated global settings, but also how some countries managed it to become dynamic parts of the global economy (like the "Asian tigers" or Chile) and why others failed. I learnt that it is crucial to understand dynamics of global change in order to being able to build solid and inclusive economic structures and legitimate political systems at national levels. There has always been a political impulse that pulled me into certain fields I decided to work in.





What is your advice for students who would like to get into the field of global change research or international cooperation?



My first advice is: visit and work in different countries and different cultural and political settings. It is one thing to learn from scholars or books, but having studied and having lived in different contexts and countries is absolutely a key experience. This is the way to understand global dynamics, to get a feeling for differences and similarities. My second advice stems from my experience and conviction that we need much more interdisciplinary research than we currently have. We talk a lot about interdisciplinarity, however, we do not have career paths that systematically build interdisciplinary teams.



Looking particularly at global environmental changes and the future of the earth system, at the end of the day, social scientists and natural scientists need to learn how to work together and to understand each other. The future of the oceans, for example, is not a question that can be understood by ocean biologists only. They are the people studying how these elements of the earth system are actually working, the dynamics and drivers - focusing on physical, chemical, and biochemical processes. But when we look at the oceans towards 2100 from the perspective of global change, the most important drivers are now us human beings, our economies, our consumption patterns, our greenhouse gas emissions and their impacts on the oceans. And this implies that to understand dynamics of global change, we need to analyze the interactions, interdependences and feedback loops between three systems: the ecological system(s); social systems (our economies and societies) driven by humans; the technical systems and infrastructures. Therefore natural scientists, social scientists, and engineers need to interact very closely.  In the German Advisory Council on Global Change we call this approach: Transformation Research. Currently, we do not possess the appropriate university structures to adequately address this sort of problems. This is an immense institutional challenge. If I were a young scholar I would move into this direction, crossing disciplinary boundaries as much as possible.





What is the role of science and technologies in the dynamics of global change?



There are multiple important dimensions, but I would like to focus on some of them by moving through the aforementioned waves of global change. Technology is driving economic globalization, the first wave of global change. So we need to understand the dynamics of new technologies, especially the impact of ICTs, in order to understand the dynamics of economic globalization. The World Wide Web and social communication media are restructuring industrialization processes and global value chains. ICT infrastructure is also displaying a big potential for less developed regions. In Africa, for example, we saw many African countries jumping from the old telephone technologies to smartphones within less than a decade, because the old, maintenance and capital intensive communications infrastructure was no longer needed. Many African people now have access to smartphones, thus to communication- and information networks, and begin to reshape prize constellations and the global economy. Because of its restructuring effects, the impact of ICTs is relevant in all areas of the global economy. The global trend towards urbanization is similarly related to ICTs. Currently, we approach the global economy via data on national economies. But this might be about to change, as global mega-cities develop into global knowledge and financial hubs, building their own networks. In 2040, 80 percent of the global production, global GDP, global consumption, global exchange might be concentrated in 70 to 80 global cities or city regions.



Technology is also linked to the second wave of global change – the tectonic global power shift – in the way that investment in technology and knowledge in emerging economies are growing rapidly. We are not only facing economic and political power shifts, but also a remaking of the global science and research system itself. From my perspective, international cooperation in the field of science and technology research between "old powers" and "new powers", between Western countries and non-Western countries is extremely important for two reasons: First, we need to pool know-how in order to solve core global challenges and to develop patterns for managing the global commons. Interaction and cooperation in the field of science and technology is especially important for the creation of knowledge that is "better" in any way. For instance, in the field of adaptation policies to the impacts of climate change, most of the knowledge on how societies and local communities actually work or respond under these conditions exists in non-Western societies. The generation of knowledge is context dependent. We need to interact with colleagues from the respective countries for mutual learning and common knowledge improvement. My second argument is that, as an effect of the global power shift, traditional development cooperation is losing legitimacy. Many of these societies, from China to Peru, from Kenya to Vietnam, are no longer interested in our usual business, in our "aid-packages", our money, our experts or our concepts. What they are more interested in is true and reciprocal knowledge exchange and joint knowledge creation. Therefore, investments in respective forms and institutions of knowledge exchange and creation will be a central pillar of/for future oriented development cooperation or international cooperation and beneficial for all partners involved. Joint knowledge creation is a precondition for joint action and legitimate global governance initiatives.



The role of technologies with regard to the implications of climate change is crucial and multifaceted. In the German Advisory Council on Global Change we put forth suggestions concerning the transformation towards a low-carbon global economy. We are relatively optimistic in a technological sense. This statement is partly based on the Global Energy Assessment (GEA) research, which has been driven by Nebojsa Nakicenovic, one of our colleagues, who is working on energy modeling. The perspective there is that we know which kind of technologies we need for the transformation into a low-carbon or even zero-carbon economy. We can even calculate the investment costs and structures of different countries and regions. But we do know relatively little about the transformation processes of entire societies, economies and, eventually, the international system towards low-carbon systems. The transformation towards a low-carbon society is a "great transformation". In the entire history of mankind there might be only two examples for such a profound change: the industrial revolution 250 years ago and the Neolithic revolution 10.000 years ago, which induced the practices of agriculture. Today, we thus witness the third great transformation: the decoupling from fossil resources, from high-carbon to zero-carbon. To achieve the 2° Celsius goal, a complete decarbonization of the basic infrastructures of the global economy (the energy systems, the urban infrastructures and systems, the land use systems) is required – within a very limited period of time, until 2070. Comprehensive knowledge is key to achieve this. Let me emphasize once more the significance of international cooperation in the field of science and technology research, particularly in the IPCC context. I am sure that politicians from China, India, or Brazil only accept what the IPCC is presenting as objective knowledge, as the stand of the art knowledge, because their national scientists are deeply involved. If this were a classical western-based knowledge project it would have resulted in a lack of legitimacy. In the case of global climate policy, it is obvious that investment in joint knowledge creation is also about creating legitimacy for joint action.





What are the main obstacles of the low-carbon transformation?



The first two great transformations have been evolutionary processes. No one "planned" the industrial revolution, not to mention the Neolithic revolution.  These have been evolutionary dynamics. The sustainability transformation instead needs to be a governed process right from the beginning. In our institute, we looked at different transformation dynamics, not only the really big ones, the Neolithic, industrial, and the current sustainability transformation. We also examined structural adjustment programs in Latin America and Africa, the collapse of communism at the end of the 80s, the abolition of slavery, and similar other key transformations of human societies. Based on this historical perspective, we have identified four main drivers of transformation: The first one is crisis, this is the most important one. Confronted with strong crises, society and probably also individuals react and change direction. The second important driver is very often technology and scientific (r)evolution. The third driver is vision: If you are confronted with a problem but you do not know where to go to, transformation becomes very difficult. The European Union is the product of a fresh vision among elites after World War II; the United Nations is a result of the disasters of the first half of the 20th century. Advancing a vision is an essential means to move or to transform in a goal-oriented manner. Sustainability, of course, is also a vision. The fourth and last driver of transformation is "knowledge": you know that you have a certain problem constellation, and though the crisis is still not there, you react based on your knowledge in a preventive way.



For the low-carbon transformation, the fourth driver currently is absolutely key. We are able to address problems which would otherwise become much worse in the future, although the climate crisis is latent still – in contrast to, for example, the financial crisis, which is more visible in its effects. The impacts of a global warming of 4 or 5 degrees are still not visible. This makes for a huge difference. In fact, humans are not very good at acting and transforming significantly based on knowledge only. In combination with visible, tangible crises, knowledge is a strong driver of change, but without crisis, it is merely sufficient. Transformations based on knowledge and preventive action only are rare. The ozone hole is one positive example; solving the problem was possible because it required less complex technological change, affecting few industries only. Human beings are risk-averse in a sense, we are conservative, we do not like to change rapidly; we are path-dependent. John Maynard Keynes once said: "It is easy to develop new concepts and ideas. The difficult thing is to forget the old ones". Therefore, scientific tools are needed in order to sketch out future scenarios. Based on scientific knowledge, we need to convince our societies, our political decision-makers that it is necessary and possible to transform societies and economies towards sustainability – in order to avoid disruptive change in the earth system. Pushing towards sustainability at a point where the crisis has not yet materialized implies a specific and new role for science in managing global dynamics. Organizing a deep transformation towards sustainability avoiding significant crises driven by Earth system changes would be a cultural learning process – a civilizational shift.





What are the effects of growing multipolarity for global governance processes?



To start optimistically, I would argue that in contrast to historical situations in which this kind of tectonic power shifts led to conflicts or even wars, the current situation is different. The world is highly interconnected and economic interdependencies are stronger than ever. Charles Kupchan is differentiating between "war", "cold peace" and "warm peace". I think that a big "war" is not very probable, and "cold peace" is what we are in actually. "Warm peace" would be cooperative global governance: we identify our problems, have a joint problem analysis, and subsequently start acting cooperatively on them. But this does not describe the contemporary situation. While there are no severe global conflicts, we do not solve many of the global interdependency problems.



There are many barriers to global cooperation and I would like to mention two or three of those. The first one consists of power conflicts and power struggles. Hopefully realists such as John Mearsheimer are not right in claiming that "a peaceful rise of China is not possible". But the fundamental point remains that the re-organization and shuffling of power resources is rendering cooperation extremely difficult. The second point is that all the important global actors currently have severe domestic challenges to manage. The European countries are coping with the European dept crisis. Similarly, the United States is concerned with financial turbulences and rising social inequalities. China has to keep its annual growth rate of about 8 to 12 per cent and meanwhile stabilize its rapid modernization process. In India, there is still a large group of people suffering from poverty. So, managing that and trying to be a responsible global actor at the same time is not easy at all. In brief, all actors that we would like to see taking on a more responsible role on the global level are overcommitted domestically.



There is consensus among different disciplines on what cooperation is actually about. At the Centre for Global Cooperation Research we did a study on The Behavioural Dimensions of International Cooperation (2013) based on insights of very different disciplines – evolutionary biology, social anthropology, cognitive sciences, psychology, political sciences, behavioral economics – to find out what the basic mechanisms are which help human beings to cooperate at any scale towards global corporation in a world of nine billion people. Finally, we identified seven factors promoting cooperation: trust, communication, joint we-identities, reputation, fairness, enforcement – and reciprocity, which is the most fundamental prerequisite. These factors form an enable environment for cooperation and they are manmade. In contexts, actor constellations, systems, in which these basic mechanisms of cooperation are strong, they help to embed power dynamics, to solve social dilemma problems and to manage interdependencies. In contrast, contexts, actor constellations, and systems in which theses basic mechanisms of cooperation are weak, will be driven mainly by power dynamics and struggles. By looking at these factors one immediately understands why the G20 context is so difficult. We have been able to create and to well establish these factors in our old settings; in the European Union, the Western world, the transatlantic community. But now we are sitting together with new actors rather unknown. The G7/G8 world – the OECD driven and the western driven global economy and global politics – has moved towards G20 since it was acknowledged that one cannot manage any global turbulence without emerging economies. The G20 was created or rather called to meet in 2008, a few days after the bankruptcy of Lehman Brothers when many feared the collapse of the world's financial markets. Most western economies were highly indebted, whereas the emerging economies, especially China, were holding large currency reserves. From a behavioral perspective we have to invest in these basic factors of cooperation in the G 20 context in order to create the essential preconditions of joint action to solve the big global problems. This represents a long-term project, and unfortunately many of these global problems are highly challenging from the time perspective: a tension derives from the gap between time pressure in many of these areas and the time it probably needs to build up these basic mechanisms of cooperation. In fact, the major feeling is that international cooperation is even weaker now than a decade ago. I usually visualize the current situation of the G20 as a round table with 20 seats but no one is sitting there. Charles Kupchan's "No one's world" or Ian Bremmer's "The G0 world" deal with the same problem: international cooperation, global governance is currently so difficult, although all these interdependency problems rendered the problem of managing the global commons fully obvious. If you talk to our Foreign Ministers or Finance Ministers or Chancellors and Presidents, they of course all know exactly what is out there in terms of globalization impacts. But organizing the necessary global consensus and the governance and cooperation structures is tremendously difficult.





How far is the discipline of development research affected by global change?



This is a complex question, to which I do not have a definite answer. The whole field of development research is currently about to get redefined. In the past, the concept of development was clear: On the one side, there was the developed world, the OECD-world, consisting of 35-40 countries and on the other side, the "underdeveloped" part of the world, all other countries. Understanding the differences between developed and developing, along with thinking about the basic drivers of modernization and wealth creation in less developed countries was at the core of development research for a long period. How can poor countries become rich and as developed as OECD countries already are?



Today, it is highly questionable if even the broader categories of "development research" still serve to analyze the new realities. Do we currently still need "development economists", and how would they differ from classical "economists" doing research in those European countries suffering most from the debt crisis, high unemployment and weak institutions? Situations in many OECD countries nowadays look like what one would expect from a still developing or emerging economy, and the other way around. So, what distinguishes development research? This is an important question. Studying non-OECD countries, do we still need development research based governance theories or democratization theories – thus, theories that are systematically different from those we apply in our research on OECD countries? The discipline of development research is under immense pressure. This debate is linked to the second wave of global change we talked about: the post-western world order, emerging economies catching up, convergence trends in the global economy.



If you look at the role of international technology transfer, the same scenario arises: the North-South, donor-recipient categories have dissolved. Technology transfer has lost its distinct direction, and it is much more reciprocal and diffuse than it used to be. There are several studies currently pointing to the fact that investment rates in R&D and in technology creation are growing fast in several regions around the globe, whereas in many OECD-countries, investment is stagnating, or even decreasing. The whole map of knowledge, if you like to say so, is about to undergo deep changes. This implies that the common assumption that knowledge is based in OECD countries and transferred to the South via development cooperation is just not working any longer. We need new patterns of cooperation between different countries in this area. And we need research on global development dynamics which will be different from classical development research which has been based on the assumption of a systemic North-South divide for a long time.







How do institutions such as the World Bank react to the emerging and redefined agenda of development?



The current reorientation of the World Bank as a Knowledge Bank originates from the assumption that knowledge is just as important as money for global development. The second point is that more and more of their partners in non-OECD countries, classical developing and emerging economies, are more and more interested in the knowledge pools of the World Bank and less in their experts. And: dynamic developing countries and emerging economies are even more interested in investments in their own knowledge systems and joint knowledge creation with the World Bank. The old North-South knowledge transfer model is eroding. You might say that there currently are two contradictory global trends: on the one hand via social media and the Internet, knowledge is being widely distributed – broader than ever before and actually, theoretically accessible at any point in the world –, on the other hand the proliferation of knowledge is accompanied with access restriction and control, and the growing privatization of knowledge. Aiming to play a constructive role in collaborative knowledge generation, the World Bank invests a lot in building up freely accessible data bases and open research tools, including the provision of governance or development indicators of any kind. However, this is a difficult process that is developing slowly.



The World Bank is currently undergoing several basic re-orientations. The structures inside of the World Bank are about to become less hierarchical and more horizontal. Originally, the World Bank has been a much more western dominated organization as the Bretton Woods institutions were formed by the United States and its allies. If you look into the governance structures of the World Bank today, it is still largely dominated by OECD countries, but you can notice that this is changing. It is a global organization but 90 % of people working there have been studying at Anglo-Saxon universities. Actors especially from emerging economies have been criticizing that for long, claiming that the World Bank as a global organization should have to be represented by a global citizenship. Although this had slowly started to change already, all the knowledge and all the qualification procedures still remained very western dominated. So they asked the World Bank to diversify its partner structures, to reach out and cooperate with research institutions from around the world. This is what the World Bank is trying to do at the moment, which is really a break with its culture. Because even though the World Bank is a global organization, it has always been a very inward-looking organization. The World Bank was strong, with fantastic professionals and researchers inside, but without cooperating tools. Now they are trying to broaden their cooperation structures and to learn from and together with other institutions.





What are the opportunities and difficulties of big data analysis for global development?



Access to any kind of data is important for any kind of knowledge creation. It has been very limited for many developing countries over a very long time. So, thinking about how to assure access to serious data is significant. This would be my first point. My second point is that, when it comes to big data and the question of managing large amounts of indicators on, for example, cross-country or cross-sector modeling, I think the new technologies are opening up new research possibilities and opportunities. Big data provides the opportunity to identify patterns. Looking for similar dynamics in very different systems is a very interesting exercise, because you get deeper insights into the basic dynamics of systems. This is what I have learned from my colleague Nakicenovic, whom I have mentioned before, and who is working on the Global Energy Assessment, or from Juergen Kurths, from the Potsdam Institute for Climate Impact Research, who is studying basic structures and dynamics of very different complex systems like air traffic networks, global infrastructures and social media networks. Managing big data allows you to see patterns which cannot be seen if you only work with case studies. However, to understand the dynamics of countries and sectors, new actor constellations or communities, you need to go into detail and in this specific moment, big data is only the starting point, the background: you also need qualified, serious, very often qualitative data on the ground. Big data and qualified, specific data: they complement each other.



For sure, an important aspect of big data is that for the most part, it is gathered and stored by private businesses. We started this interview talking about global commons and we actually just defined a global commons: data on development should be a global commons, and we need standards and rules of managing those. Private actors could play a role, but within a set of rules defined by societies and policies, and not the private business sector.









Dirk Messner is the Director of the "German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)" since 2003 and teaches at the Institute of Political Science, University of Duisburg-Essen. He is Co-Director of the "Käte Hamburger Kolleg / Centre for Global Cooperation Research (KHK/GCR)", University Duisburg-Essen, which was established in 2012. He furthermore is Co-Chair of the "German Advisory Council on Global Change (WBGU)", member of the "China Council for International Cooperation on Environment and Development", member of the "Global Knowledge Advisory Commission" of the World Bank and member of the "European Commission's Scientific Advisory Board for EU development policy". Dirk Messner's research interests and work areas include globalisation and global governance, climate change, transformation towards low carbon economies, and development policy. He directed many international research programs and thus created a close international research network.



related links:


Profile at German Development Institute
Messner, Dirk / Guarín, Alejandro / Haun, Daniel (eds.) (2013): The Behavioural Dimensions of International Cooperation, Global Cooperation Research Papers 1, Centre for Global Cooperation Research (pdf)


Read Jing Gu, John Humphrey, and Dirk Messner's (2007) Global Governance and Developing Countries: The Implications of the Rise of China here (pdf)


Messner, Dirk (2007): The European Union: Protagonist in a
Multilateral World Order or Peripheral Power
in the »Asia-Pacific« Century? (pdf)


Print version of this Talk (pdf)

We've mentioned this before. The correct amount of subsidy to Jingye and Tata over their steel plants and plans is nothing. Zero, zip, nada.Now of course we would say that, wouldn't we? But this is not based on our general abhorrence of spraying taxpayers' money up the wall. There's a specific technical reason why. One that does not depend upon our or anyone else's opinions about anything. It's one of those simple facts. The argument in favour of subsidy is that without it Britain will have no primary steel making capacity. Primary steel is when we use iron ore to get to iron and then steel. The old method, with coke and blast furnaces and the like, is not very green. There are greener alternatives possible, direct reduction say. Moving from BF-BOF to DRI could indeed be very expensive. OK. But the argument for government to be picking up part of that cost is that there's a strategic interest in Britain having primary steel making capacity. Now, we don't think that's a compelling interest. But note that that's our opinion on this. As an opinion it's obviously arguable, disagreeable with. That's fine. We don't think there should be subsidy largely on the grounds that we're complete tightwads with other peoples' money.But, note that the only justification for the subsidy is that preservation of the primary steel making capacity. If that's not preserved - either some updating of BF-BOF, or subsidy of the move to DRI or the like - then there is no argument for, justification of, subsidy. Because not having primary steel capacity would obviate the argument that we should subsidise so as to have primary steel making capacity. At which point: Both companies want subsidies to help them to pay for a switch from the traditional carbon-intensive method of steel making — firing iron ore with coking coal in blast furnaces — to something greener. British Steel wants to go for an electric-arc furnace, where scrap steel is melted using electricity. Tata is also tipped to go down that route…This is the other way of making steel, EAF. Scrap steel is melted. More details here. EAF is not a perfect solution to the production of all sorts of steel. It's useless for nuclear applications, as one example, because you never do use scrap in making something nuclear. There are other constraints too.A move to EAF could indeed make sense. We're not claiming detailed knowledge of the costs and benefits - we're happy to leave that to the industry professionals. But we do absolutely insist that EAF is a method of producing secondary steel, not primary. Therefore there is no strategic justification - dependent as that is upon the preservation of primary steel making capacity - for a subsidy to EAF steel making.The claim for subsidy is to preserve primary steel making. The proposal is to abandon primary steel making. Therefore no subsidy. This really is simple. As we say, we don't think that the preservation of primary capacity is worth £1 billion and more of your and our money. But that's an opinion. Claiming £1 billion to preserve primary while actually not preserving primary is, well, it's one of those requests that should be met with a volley of the riper Anglo Saxonisms.No Matey, you don't get the cash to not do what we're giving you the cash to do.Just Say No to steel subsidies. You know it makes sense. Or, at least, you do now.

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Raufu Alaka, chief in the fishing village of Orimedu (Lagos State). © Photo: Arne Hoel, World Bank






















Digital technologies offer new avenues for economic growth in Africa by accelerating job creation, supporting access to public services and increasing productivity and innovation. However, major challenges remain. The lack of connectivity in remote and rural regions and the low use of digital technologies in connected areas is further disadvantaging the poor, women, and small businesses. Increased cyber risks and lack of data protection have brought new risks and vulnerabilities to businesses, governments, and people.

Government policies and regulations are key to enable greater use of digital services while mitigating risks. But how to intervene in a timely manner in a changing technological environment? Agile enabling regulations are needed to quickly respond to market developments, facilitating entry of new competitors for the benefit of consumers. In Kenya, collaboration between the competition authority, the central bank and the telecom regulator allowed digital financial service providers to access telecom services to offer mobile money services along mobile network operators. Consumers benefitted with greater availability of options for mobile payments. Later, the collaboration also facilitated interoperability between mobile money providers and banks, allowing consumers to seamlessly transfer funds between providers, top up saving accounts or use digital credit.

Such new approach is required to support the development of agile and collaborative regulations. A shift from planning and controlling to piloting and implementing policies in a multi-stakeholder setting for rapid feedback and iteration is necessary. Feedback loops allow policies to be evaluated against the backdrop of the broader ecosystem to determine if they are still meeting citizens' values and needs and considering the impact on the industry and private participation. To implement this approach, a change of mindset is first needed. This approach is particularly appropriate for dealing with digital transformation, which by its nature is changing and evolving, and would otherwise be hampered by rigid policies and regulations.

Some African countries are already implementing agile regulation principles to address various issues. Ghana and South Africa responded swiftly to COVID pandemic demand for higher bandwidth by quickly adjusting current regulations and made it easy for companies to offer higher bandwidth to citizens. Kenya and Zimbabwe were quick to remove roadblocks and supported the roll-out of applications that allowed citizens to quickly access mobile money transfers and other financial apps. The African Union has consulted perspectives from businesses, civil society and academia to develop policy frameworks on data and on digital identities. This inclusive multi-stakeholder approach resulted in workable frameworks that encourage innovation through data sharing and cross-border data flows for African eCommerce while protecting rights of individuals. These African Union frameworks on data and on digital identities are important cornerstones to build an African Digital Single Market – the vision of the Smart Africa Alliance that is endorsed by all members of the African Union.

The African Union's Agenda 2063 envisions a people-driven development for Africa, relying on the potential of African people, especially its women and youth. That's why digital skills are prioritized in the African Union Digital Transformation Strategy 2020-2030, where the goal is to "build inclusive digital skills and human capacity across the digital sciences […] and technology policy & regulation". African leaders recognize the pivotal role of policies and regulations in shaping societal and business practices and - if done correctly – how policies can support and encourage digital transformation.

German Development Cooperation and the Digital Development Partnership of the World Bank, in partnership with Smart Africa, have started piloting this agile approach under the Agile Regulation for Digital Transformation program (AReg4DT), a program linked to the Smart Africa Digital Academy, the digital skills vehicle for Smart Africa, and atingi - an online learning platform developed by GIZ, the implementing organization of the German Federal Ministry for Economic Development and Cooperation. The pilot is equipping policymakers and regulators in Africa with the knowledge and tools to regulate digital markets in Africa to support digital transformation. The results so far have been promising with a combination of online and face-to-face training events to allow for learning and knowledge exchange within and for Africa. This partnership is testing the development of capacity building activities in an agile and iterative way and tailoring the content to the local context, as well as gaining a practical understanding about implementation challenges and the training ecosystem in Africa. Prof. Dr. Yeboah-Boateng from Ghana's National Communications Authority also appreciated the chance for peer-to-peer exchange during the event in Abidjan. In particular, he noted the "value of better harmonization of policies and regulations across Africa that would benefit the continent as a whole."








Regulators across the world are developing and testing new policies and regulatory tools, while also adapting existing ones for new purposes, particularly in face of the COVID pandemic. In many cases, the same technologies that challenge traditional regulation also offer many opportunities to reinvent rule making, oversight, inspections, and enforcement.

The AReg4DT program supports the implementation of the Digital Economy for Africa (DE4A) initiative and aims at facilitating regional integration through a common understanding of challenges, opportunities and solutions that can be implemented at the national and regional level, thereby ushering Africa, into the dawn of the single digital market.









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https://www.linkedin.com/in/boutheina-guermazi-8699a35a

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Boutheina Guermazi
Director for Regional Integration for Sub-Saharan Africa, the Middle East and North Africa, World Bank
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https://www.linkedin.com/in/birgit-pickel-556b5673/

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Birgit Pickel
Director-General for Africa in the Federal Ministry for Economic Cooperation and Development (BMZ)
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Lacina Kone
Director General and Chief Executive Officer, Smart Africa
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What appears to be the signature initiative of
Bossier Parish's new school superintendent threatens to bring controversy if
not implemented correctly and for the right reason.

Last
week, the Bossier Parish School Board unanimously awarded the job to
assistant superintendent for administration and personnel Jason Rowland. Oddly,
he was the only applicant in contrast to the last several occasions when the
district hired a superintendent, perhaps because the district over this span only
promoted from within and this discouraged outside candidates and in-home
potential candidates who considered Rowland's ascension as inevitable.

In
the months leading up to his promotion Rowland worked on establishing school-based
health clinics, both permanent and rotating, on the belief that this would discourage
absenteeism. Indeed, since the onset of the Wuhan coronavirus pandemic and lingering
beyond that, nationally truancy (defined as a student missing at least 10
percent of class days) has
doubled to about one in five.

In Bossier, where the state defines "chronic absenteeism"
as 15 or more days absent, counting students once at the state level, once per
school system, and once per site, the district's rate last academic year was 21
percent. Unfortunately, these statistics weren't kept prior to the
pandemic, and the initial foray in AY
2019-20 wasn't done at the district level. Still, then most of the district's
non-high schools than had rates below 10 percent and no high school had a rate
as high as last year's average across all of the district's schools.

He reiterated
that policy upon securing the job, which apparently won't come to fruition
until perhaps the next academic year. Bossier will join a growing number of districts in Louisiana
operating these (Caddo Parish has had these for many years, operating four
this year). Their purpose
is to provide basic primary health care resources to students, which may also
include mental health, immunizations, and counseling. Typically, a district provides
space and often durable equipment and then contracts operation to a local or
state/regional/national health care provider.

Growth in the number of these has spurted higher in
the past couple of years, not only because some districts used federal pandemic
money fueled by record debt growth to get these started but also when Democrats
controlled all of the federal government as the pandemic waned they pushed through
legislation granting more dollars in particular for this purpose. Along with
that expansion, however, has come questions about whether their presence usurps
parental authority to direct their children's health care.

While SBHCs need consent forms to service children,
some employ broad language that authorizes wide-ranging interventions of which unmindful
parents may object. For example, some push the Human Papillomavirus Vaccine
that prevents sexually-transmitted pre- and cancerous diseases, but which some
parents fear encourages sexual activity and causes adverse effects that have
landed the only U.S.-approved maker of the immunization in court. And, of
course, coronavirus vaccinations remain a sore point for many.

Also, allowing SBHCs to offer much beyond the traditional
school nurse model without limited consent and with consent interminably rather
than on a case-by-case basis opens the avenue for medical counseling without
parental involvement, much less knowledge of it that could escalate to
interventions to which parents object. For example, if mental and behavioral
health counseling is allowed, this could be abused to sway children who
complain about depression to believe this is a product of gender dysphoria.

Finally, it's not at all certain that going much
past, and spending all the money necessary to go beyond that point, the
traditional school nurse model will solve for the absenteeism problem in a
significant way Rowland claims the expanded model will address satisfactorily. The
causes of absenteeism are complex, and Bossier schools may not even fit the
typical pattern. For example, typically black, Hispanic, and low-income
students accumulate unexcused absences at a significantly faster rate than others,
but in Bossier racial differences in rates are negligible, except that Asian
students have a much lower rate of absenteeism.

Plans have been to have the two permanent clinics
at Bossier High and Rusheon Middle. The former has the highest rate although
the latter has a couple of other higher, and were chosen because they were
located in a "medical" desert. Four other schools by the same criteria, which doesn't
include some schools with higher rates, were chosen for frequent visits by a
mobile clinic. Still, relatively speaking, it seems commitment of serious grant
dollars plus ongoing commitments annually to operate would be a costly
intervention given the value it would bring and alternative uses.

In a way, schools
themselves on the issue of health can be blamed for the rise in absenteeism.
For a couple of years until recently, schools were telling students to stay home
if they had the least symptom of ill-health. Building expensive infrastructure
is much less cost effective than expanding school nursing capabilities and using
incentives to get students who might have a minor ailment to school and using
those facilities (especially when the incentives to stay home increasingly become
more attractive, principally through technology that makes self-entertainment
far more possible and rewarding in the short run).

Rowland's policy needs a serious vetting before
proceeding further if Bossier taxpayers want assurance that this won't be an
expensive solution that hardly moves the needle. High quality data need to
demonstrate a major reason why students at a few select schools don't show up
is because they don't have access to health care resources that otherwise would
put them in the classroom. Analysis needs to show the extent of the problem
cannot be addressed satisfactorily by the school nurse model. And if these data
and analyses support the clinic concept, then rules must be put in place that
ensure maximal opportunity for parents to be informed and participate in
decisions made about their children's care every step of the way.

Bossier parents and taxpayers need to have assurance
that this idea is driven by a good likelihood of a solid payoff and not by tides
of political fashion and resources, which has yet to happen.

It is hard to overstate the impact of digital transformation on democracies and the daily lives of citizens around the world. The developing world is coming online at an extraordinary pace; there are places in which NDI works that are receiving the most significant innovation of the 20th century – electrification – at the same time as that of the 21st – instant global communications. Past technology revolutions such as the printing press or broadcast media have transformed democracy and politics in rapid, profound, and hard to anticipate ways. While disruptive, innovations can reinforce existing power structures: dominant languages are magnified; usage reflects traditional gender imbalances surveillance is automated. Recognizing this incredible rate of change, NDI is changing the toolkit of approaches we use in our programs, embracing new forms of political engagement, and changing the ways we manage the nuts and bolts of international development.
Technology is as much a social, economic, and political phenomenon as it is code or engineering. The democracy community, therefore, cannot afford to treat it as a single issue and must approach it with a nuanced understanding of the range of ways it is changing society and democracy:
The internet has become critical infrastructure for democracy, – and it is under attack. Organizing, advocacy, and political communication are increasingly digital, and so preserving a democratic internet is core to the success of all other social change goals - however, many of the trends are negative. The internet needs to be accessible and available to all, free of unjustified censorship, surveillance, or punitive taxes. Organizations need to be able to maintain a digital presence without fear of having their content destroyed or confidential data shared. An information space choked with disinformation and the chilling effects of hate speech robs individuals of informed choice. The digitization of all human activity as data creates new potential for authoritarians to track citizens and perpetuate discriminatory systems. Incredible power is now vested in the hands of the major technology platforms. Through NDI's work with the Design 4 Democracy Coalition, grassroots civic groups around the world are working together to ensure that the technology sector plays a role in supporting democracy.
Policymakers and citizens need to be better informed. Making the internet safe for democracy requires supportive digital policy at the global, corporate and domestic level. Legislators and political leaders are often lacking in basic knowledge of technology to regulate them appropriately or to procure tech; easy solutions often include subsidized Chinese surveillance state-in-a-box tools or commercial offerings that may turn around and monetize citizen data. Tech companies may not understand the impacts of their products. Too often, new regulation is used as a trojan horse for anti-democratic legislation, as with cybersecurity or "fake news." Successful political engagement in the internet age requires digital literacy of citizens: effectively using tools, understanding rights, keeping themselves safe, and to be intelligent consumers of information. As with most things in the technology space, the details of the topic may be new but the concept is not; NDI has always focused on education on citizen's rights in a democracy and how to engage with existing power structures.
New forms of democracy, governance and citizen engagement are possible. There are radically new capabilities for partners who are pillars of democracy using new communication systems, more data applied in radically different ways, and new ways to gather and sort citizen preferences. Further, new forms of human organization have emerged, such as Hong Kong's leaderless protest movement, that would have been impossible without the internet. Any new innovations, even if well-meant, will have unintended consequences that NDI and partners need to be able to foresee and if possible avoid. Other technologies will may provide compelling features for citizens or governments -- but entrap them with built-in surveillance capabilities, the monetization of citizen data by corporations, or new forms of government control. NDI works with civic innovators around the world, including shepherding the Code for All Network and engaging with leaders who are building new forms of citizen engagement such as Audrey Tang in Taiwan.
Tech specifics matter but there are no easy solutions. The difference between an accurate understanding of how a technology works instead of a general one can make the difference between having a positive impact and an extremely negative one. Often, emergent technologies are misunderstood based on conceptual oversimplification or slick sales pitches. Given the trend toward integrated data, mass surveillance, and ever more powerful analysis tools, it is critical for organizations that hope to make change or mitigate democratic harm to have the ability to understand technical specifics. Conversely, changemaking organizations must be wary of tech solutionism and create internal capacity to tie technology to mission. The complexity of technology requires cultivating relationships with new actors, including academic institutions and corporations – but communicating with them requires mastery of the technology under discussion, the ability to speak to them in their language, and to engage at their cadence. The internet is privately owned, from cables in the ground to the servers on which systems run to the devices in our pockets and the apps sitting on them. Therefore, tech firms are critical to the conversation -- though engagement does not imply approval of all their activities.
Change will continue. A new range of technologies such as AI, augmented reality, voice assistants and ubiquitous sensors are here today. When widely applied, this new generation of tools will continue to reshape politics and the relationships between citizens and their governments. In the period when they are emerging, there is time to mitigate foreseeable negative consequences and aid positive ones.
Conclusion. It can be tempting to ignore the technology transformations sweeping the world in the context of international development and democracy, attempting to continue with traditional programs. Alternatively, one can look at technology as an unalloyed evil, focusing on the negatives and attempting to push back in as many ways as possible. NDI has taken a more realistic approach. The tech revolution is here to stay, and the pace of change will only continue. As our lives change based on the tools we use, so does the nature of democracy – and the threats it faces. NDI will continue engaging with our partners on the ground and helping them build more just societies based on the realities of life in the digital age.


Women in Zambia during the 2016 General Elections.

Democracy and Technology, #NDI #National Democratic Institute #democracy #technology

The new Energy Secretary has only had a few days in the job but long enough to discover that her department's nuclear strategy, if it has one at all, makes no sense. This critique has three parts: what we know, rumours, and why we are in this situation.We know that, in a net zero carbon 2050, Great Britain's energy needs will be at least as high as now and they will almost all have to be met by electricity. Based on average demand, electricity capacity will have to increase by 6 times to 226GW. Total energy demand in 2022 was the equivalent of 1,968 TWh of electricity, and electricity only supplied 320.7 TWh, i.e. 16.3%. However capacity will have to be even higher than this to deal with periods of peak demands which can be 50% above average demand.Renewables are all very well but the wind does not always blow nor does the sun always shine. Existing nuclear supplies about 6.5GW, but that will shrink to 3.26GW as Hinkley Point C comes on stream and all other reactors close. The Department for Energy Security and Net Zero(DESNZ) thinks 25% of electricity needs for nuclear would be 24GW, which is clearly too low. 25% of 226GW would be 56.5GW, a more reasonable 2050 target for nuclear, or 53.2GW of new nuclear excluding Hinkley Point C.DESNZ now recognise that small nuclear reactors (SMRs) are cheaper and better value for money than the traditional big Giga-reactors and they refer to the former as "low cost nuclear". With a capacity of about 300MW each, we would need about 177 SMRs to be operating by 2050, an average addition of 6.8 per year.Contrarily, the DESNZ approach is "too little, too late." A competition to select SMRs has been set up with a view to deciding on which two SMRs (one of each of two types) should be ordered over the next six years, specifically expressed as "the government's commitment to take 2 Final Investment Decisions next parliament". The two needs to be 41.Contributing to the confusion is the DESNZ's "hire a dog and bark yourself" policy. "Great British Nuclear" (GBN) was announced three Prime Ministers ago, and confirmed by successors. GBN has a chairman and CEO, autonomy and "is responsible for driving delivery of new nuclear projects." Meanwhile DESNZ, no doubt playing games with HM Treasury, appointed "a Senior Responsible Owner (SRO) of Phase 2 of the Low-Cost Nuclear Programme with effect from 8th February 2021 (the "Effective Date)", directly accountable to Jeremy Pocklington under the oversight of the relevant Minister of State." Whilst Pocklington has doubtless told his new Energy Secretary that this is merely oversight or liaison, the memo makes it very clear that the SRO is in charge, i.e. it duplicates the GBN Chairman's.What is probably correct but not independently verifiable must be described as "rumours", One is that while GBN is doing its best to run the run competition fairly, DESNZ has rigged it so that Rolls Royce, as the only British SMR manufacturer, is bound to win. The SRO appointment letter only mentions Rolls Royce. As some degree of apparent competition must emerge, General-Electric-Hitachi will also win. This decision is remarkable as the latest date for entering the competition was 23rd August. Several leading SMR developers are believed not to have bothered because certain failure is not good for business.The UK seems to be breaking ranks with the US and Canada on SMR support and licensing. The North Americans are adopting a non-prescriptive, all ideas welcome, approach. They provide licensed land for prototype development and encourage utilities to build FOAKs (first of a kinds). They are doing this in the full knowledge that some technologies will fail and that those investors will lose money. But at the end of the day they will have a smaller number of the best value SMRs. We could learn from SMR developers setting up in Britain and we should. Chasing away nuclear investment at this stage is daftThe last question, "why?", is simply baffling. We need all the help we can get and not artificial barriers created by Whitehall civil servants keeping out the best and the best value SMRs. Doing so is bad for Britain and will prove expensive for energy users if the government is serious about a net carbon zero 2050.

One of those little stories that bolsters our faith in the basic underpinning of our society - that free market capitalism. This:French miner Imerys to help develop UK's largest lithium depositNote what we're not praising - the FT's reporting nor understanding. Imerys owns the deposit. It is allowing someone to have a go at exploiting it. But, you know, they got the name of the metal right.Lithium is often found in granites and the like. Granites can, sometimes, weather down into clays - kaolins, kaolinites maybe (yes, our lack of really detailed knowledge will shock geologists but this is part of the overall point here). China Clay is a form of such weathered down granite. So, it's possible that the China clay pits of Cornwall might have lithium in them. You know, maybe?Ah: The granites of South-West England are a potential source of lithium which is generally found within the mica mineral, zinnwaldite. It is mainly found in the central and western end of the St. Austell granite. When kaolin extraction occurs in these areas a mica-rich waste product is produced which is currently disposed of in tailings storage facilities. In this study a tailings sample containing 0.84% Li2O…0.84%, if someone else has already done the grinding the rock down to get it out, is pretty good for an Li source (1.3, maybe 1.4%, is something that you're willing to grind down the rock to get, like all those spodumene mines).Imerys took over English China Clay, therefore owns all those slag piles (maybe gangue pits, again, the technical language slightly escapes us) where that lithium enriched zinnwaldite sits unloved and awaiting attention. So, what next? The statist (we'd possibly say Mazzo) idea is that government then plans everything and so - but that's ludicrous. It is true that government is feeding some cash into this but that's also ludicrous. Because there is no way, no way at all, that this potential source of lithium is not going to be explored given that the lithium price is $50,000 a tonne and the like. We can also prove that. There are two - at least - companies quoted on the London Stock Exchange (Zinnwald Lithium, European Metals) that have raised private sector money to extract lithium from zinnwaldite under the village of, umm, Zinnwald. The same sort of mica - hey, it's even got the same name! - which is sitting there as waste in the old China clay pits. Well, yes, that's an exploration that's going to happen then, isn't it? But here's our real point here. So, we all decide that EVs are the very thing. This means much more lithium is required. So, what happens then? Well, there used to be two methods of gaining lithium. Extraction from salt brines and mining spodumene. Mineral reserves around the world were of those two that were already licensed, already proven to be profitable at then current prices. Mineral resources were those that we were pretty sure could be so but hadn't bothered to fully prove.At which point some say we can't have EVs because mineral reserves weren't enough. Or, the slightly more awake, that resources weren't. Umm, well, yes. We've seen one list of 200 companies looking for traditional - brines and spodumene - lithium sources. Yes, they're finding them. But there's more than that. As with Cornish Lithium there's the idea of extraction from geothermal waters. Or, here, from mica in the wastes of old processes - or as in Germany/Czechia, from new mining of that same mineral. That is, we're not just finding new deposits of those old minerals, we're working out new minerals to get our target from.And how has this happened? Well, the price of lithium changed. So every geologist, capitalist and general wide boy started to think about how to produce more lithium. Ain't free market capitalism great? And this really does work. In fact it is working.Because what's really happening here at British Lithium. The change in price has meant people are going looking for that change that slipped down the back of the sofa. We've known for decades the lithium is there, it just needs that push of the price change to do something about it. 'Ere, Jethro, there might be money at the bottom o' that slurry pit. Best be we look. It's a hell of a system, isn't it?

We are probably near the end of the most disruptive phase of the Digital Revolution. The economic and social changes accumulated during the last few decades are comparable, for their relative magnitude, to those of the Neolithic Agriculture Revolution and the modern Industrial Revolution. But they are slowing down. A possible new landscape with more widely distributed prosperity appears on the horizon.The biggest signal for the end of
a period with Big Tech's huge profits is the wave of layoffs in the last few weeks.
Tens of thousands have been fired from Google, Microsoft, Amazon, Twitter,
Facebook, and other companies. Last year's revenues were much smaller than before.
Distracting world-change projects, such as moonshots, delivery drones, the
metaverse, or self-driving cars are discreetly put aside. The golden years are
past.

Meanwhile, the labor market seems
to be self-restructuring and employment rates go up. Do these troubles announce
the end of an "Engels' pause" with stagnated standards of life? If so, it would
mean that improved labor conditions, and higher average and better-distributed
levels of economic well-being might emerge in a foreseeable future.

The Digital Revolution of computers,
the internet, and the World Wide Web have produced fantastic advantages, such
as making possible instant communication via email, smartphones and social networks,
easily available information via digitalized media and TV streams, or dynamic
economic activities by means of e-commerce and professional and business
services.

On the other hand, the new
technologies have fostered the concentration of capital in a few big firms and a
surge of new billionaires. Many jobs became obsolete and unemployment increased
temporarily. The purchasing power of most employees was frozen, or even
diminished. Indirectly, those technological and economic changes have also fostered
territorial cleavages and unparalleled migrations.

It is common knowledge that in
periods of technological innovation, the first who buys a new gadget whose
production has required a huge initial investment pays more. It has happened
for a few decades to eager early consumers of new versions of computers,
smartphones, and any chic novelty. As the industry develops, it can reduce the
costs of production, which permits lower consumer prices and increased sales
and profits. Yet, at some moment, only new technological inventions could
sustain further growth. We may be already in this phase.

These basic mechanisms and stages mimic
the ones of the Industrial Revolution two hundred years ago. For the firstcomers,
a "primitive accumulation" of capital was akin to the colonial system,
including pervasive and highly profitable slavery. Then, a technological
upheaval that was mostly labor-replacing generated huge corporate profits, the
emergence of wealthy tycoons, and a surge in economic inequality.

In Britain, in the first half of
the nineteenth century, productivity or output per worker expanded and the
profit rate doubled, while many people lived in abjection and poverty.
Friedrich Engels, Karl Marx's co-author, described how the British workers' real
wages stagnated and their living conditions worsened in his book The
Condition of the Working Class in England, initially published in German in
1845. However, when Engels' book was published in English, more than forty
years later, the conditions had already changed for the better. The
overexploitation period was over. Between 1840 and 1890, real wages multiplied
by nearly two and a half, in line with productivity. This led economic
historian Robert C. Allen to call the previous period "Engels' pause".

Some economic historians have
suggested parallels with the most recent period of technological innovation and
wage stagnation. The Great Recession initiated in 2008 can be seen as the
beginning of another "pause" in which the condition of workers has
lowered, there has been an extensive redistribution of wealth, and traditional
ways of economic and social development have failed. Yet, the Big Techs'
slowing down and their humble self-revision of unbridled projects may indicate
that the Digital Pause may be over soon.

Like the social benefits derived
from the diffusion of the steam engine, railroads, electricity, and
mechanization, also the dissemination of the digital revolution benefits takes
different times and rhythms in different parts of the world. But, globally, a
new, less unfair and asphyxiating stage seems to be in view.In Spanish in El Pais - click