Key points are presented from the first of a series of LinkedIn articles where JSR Board Chairman Mitsunobu Koshiba (‘Nobu’) provides thought provoking insights on business strategy in the context of trends in three time horizons. The short term is dominated by an increased acceptance of Modern Monetary Theory. The mid-term is a shift in the attitude to globalization from general cooperation to one of a battle for technological domination with accelerating advances. Long term holds a risk for geopolitical recession and China challenging the global economic hegemony of the dollar. Throughout all, technology is advancing at an accelerating pace.
Author: Charlie Cosad, M.Sc., CMO
It is critical for businesses to develop strategy in defined time horizons aligned to global trends, which are both now rapidly and unpredictably accelerating, driven largely by digital technologies and expertise.
When developing business strategy, executive management in highly technical industries must periodically take time to reflect on long term trends – global, political, economic, and particularly technological. A lesson from COVID is that what was thought of as a long-term plan may well be accelerated to months or weeks, invariably enabled by digital technology. Adding complexity, many science driven companies will increasingly find their long-term future highly interdependent with that of their parent country. All this points to the need for technology experts to play a greater role in strategy development and business leadership.
In a series of LinkedIn articles JSR Board Chairman Mitsunobu Koshiba (‘Nobu’) provides thought provoking insights for technology driven businesses within a global and ‘arc of history’ context. Presented here is a look at trends in three time horizons from Nobu’s first article on the topic.
Trends in Three Time Scales
The global business landscape was undergoing significant change before COVID-19 was part of our vocabulary, with many business transitions forecasted for the coming years fast-tracked in a few short months as the pandemic swept the globe. And the future today is less predictable than ever. Nobu proposes thinking strategically in three time scales with key trends in each.
Short-term trend: For a number of years countries have steadily been moving to accept Modern Monetary Theory (MMT). MMT is a theory advocated by the American economist Stephanie Kelton, which states simply that “there is no problem with the issuance of government bonds (= printing money, or in today’s world ‘strokes on keyboards’) as long as they can be financed domestically.” The key for governments is more controlling inflation and unemployment through money supply and taxation, rather than obsession over national debt.
Key takeaway: The highly uncertain risks associated with the increasing acceptance of Modern Monetary Theory must be managed in how the world’s markets and economies move forward and how the pandemic evolves.
Medium-term trend: Advanced technologies are making good on their name by advancing at lightning speed, often accelerated by the pandemic. The battle for technological dominance, particularly between the United States and China, is rooted in the shift from labor-intensive to knowledge-intensive societies resulting from an overabundance of goods beyond their demand. As advanced technologies accelerate throughout the 2020s, societies will be shaped by an industrial-like revolution resulting from the penetration of quantum computers with near-mystical processing power, tremendously advanced secondary battery technologies, and transformational 5G infrastructure.
Key takeaway: Corporate strategies must be shaped to envision the impact of escalating and accelerating technological advances, particularly for space and biotech enterprises, suggesting a need for technologists in leadership positions.
Long-term trend. Global geopolitical momentum has been on a positive trend from post World War II to the late 2010’s. The world is now in a negative trend where global competition for technological dominance will eventually lead to regional hegemony of advanced digital and electronic technologies. The 50- to 60-year cyclical challenge to the world’s reserve currency, which was secured by the United States after World War II, will create global conflict that leads to fragmentation and instability during the transition. That reserve currency challenger is China.
Key takeaway: The strength of winning nations will be reflected in the breadth, capabilities and insight of its technologists in areas of space, biotechnology, quantum computing, cryptography, and diagnostics, among others. There will be an intensification of the confrontation between the United States and China.
Leadership in Uncertain (and Digital) Times
Globalization is at an inflection point with the world marked by division, instability, and confrontation, with change accelerating. To survive – and thrive – companies must embrace advanced digital technologies and use them strategically to their competitive advantage. But to do so, corporate executives must understand these advanced technologies before they can be utilized fully and effectively. That’s where technologists, not MBAs, take center stage.
As Nobu describes the situation, “Many technologists tend to be stereotyped as the people who do not excel in finance or legal matters, or who are not interested in such administrative and non-technical jobs. However, as will be discussed in Chapter 3, I believe that the MBA approach is out of step with the times in these early days of instability, uncertainty, and accelerating change. Whether you work for a domestic or international company, you will need to formulate corporate strategies with good understandings of geopolitical, geo-economic, and geo-technical perspectives. This knowledge is a “must-have” for anybody regardless (of) your background …”
A future blog article will look at insights from Nobu on how technology companies develop strategies and manage their business in this uncertain environment.
For those interested to learn more about Modern Monetary Theory, see ‘The Deficit Myth’, by Stephanie Kelton or visit her website.
About the Author
Charlie Cosad, M.Sc., CMO at Enthought holds a B.Sc. in Mechanical Engineering from Syracuse University and a M.Sc. in Aerospace & Mechanical Sciences from Princeton University, where his research focused on gas dynamics, compressible flows, and high speed flight.