Source: Economist
You say power has changed. How?
Power has become perishable, transient, evanescent. Those in power today are likely to have shorter periods in power than their predecessors. I’m talking about military power and power in business, politics, religion. One of the most perplexing arenas in which this is happening is in the world of business where the conversation centres on the concentration of wealth in a few large companies. Of course there are large, powerful companies but a study by NYU professors shows that the probability of a company in the top 20% of the business sector remaining in that category five years hence has halved. The turnover rate of business executives is also increasing significantly. It is far more slippery at the top.
Why?
There is more competition and business models are changing. You no longer know where the company that is going to dislodge you will come from. Recently Kodak—almost a monopoly in photography in the 1970s—went bankrupt. At the same time an app called Instagram with 13 employees was sold for a billion dollars. Kodak could never have imagined that a competitor would come in this form. Challenges and rivals are coming from improbable places. Also, the probability that a company will have a brand-damaging catastrophe has gone from 20% to 82% in two decades.
Because of information technology?
No. The fact that power is easier to get, harder to use and easier to lose is driven by tectonic changes in the nature of humanity today, in terms of demography, where and how we live. Micro-powers are challenging and constraining the mega-players. I’m not saying that a bunch of guerrillas in the mountains are going to win against the Pentagon, but I am saying that they might deny the Pentagon victory. A study by former Harvard scholar Ivan Arreguin-Toft on asymmetric conflicts shows that between 1800 and 1949 the weaker side won 12% of the time, but between 1950 and 1998 the weaker side won 55% of the time. Pirates in the Gulf of Aden in rickety boats with old Kalashnikovs are successfully hijacking incredibly sophisticated ships from the most modern fleets. The Taliban is another example of how the weaker army is able to deny the behemoth victory.
What has changed? Why couldn’t they do this before 1949?
There have been three revolutions. The powerful are shielded by barriers of money, technology, sheer size or whatever. Those barriers are less protective now as a result of three revolutions: the more revolution, the mobility revolution and the mentality revolution.
The more revolution describes a world of abundance. There are more people—2 billion more in the last two decades. There are more young people and they live in cities—65m people a year move to cities and more than half of the human population now lives in urban settings. There are more weapons, more medicines, more political parties, more companies, more NGOs, more religions, more communications. There is also more money—global GDP has increased five-fold and per capita GDP by three and a half times.
People also move more. This is the mobility revolution. The number of people living outside their country of origin has increased 37% according to the United Nations. Therefore, people are becoming harder to govern. As Zbigniew Brzezinski says, it’s easier to kill a million people than to control a million people.
All this change has an impact on people’s mindset. This is the mentality revolution. The number of divorces of senior citizens in India is soaring, mostly initiated by women. They are more affluent, better informed and no longer willing to put up with authoritarianism. This change in cultural norms is corroborated by the World Values Survey which shows a clear movement towards openness, gender equality and increased tolerance of difference.
This is generally a good thing?
I celebrate what’s happening. Dictators, monopolies and authoritarian governments are weaker and less able to impose their will. My only point of caution is that there are arenas in which this creates paralysis. Look at the Italian elections; Italy was always an example of the weakening of centralised power, but now the recent elections has taken that to an extreme. There is such a fractured mandate that nobody can form a real government. And the massacres in Syria; the world understands that it needs to stop but nobody has the power to intervene. For 30 of the 34 members of the OECD, the head of state is opposed by a parliament controlled by the opposition.
So what if you have power and want to hang on to it?
In business you need to be obsessive about what you do but you have to be careful not to let your peripheral vision be dimmed. The New York Times and Washington Post could never have imagined that their main competitors would be Craigslist and Google. Beware of situations where everyone has a little bit of power; where everyone can constrain and veto but nobody has the power to get things done. Also, beware of assuming you’re secure. Barclays under Bob Diamond was one of the few banks that thrived in the financial crisis but he lost his job anyway. The world had 89 dictators in 1977, now we only have 23. The world has become a less secure place for authoritarian regimes.
