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BFI Capital
February 15, 2021

The Coming Global Industrial Transformation

Looking at the World through the lens of technological innovation…

To understand the World, you must understand the trends in technology and innovation that has brought us to this point and look to identify those that will carry us to the next stage.

In our MSI Vintage Paper Series we have shared a visionary paper written by Dr. Malmgren in 1983 titled; ‘The impact of advanced technologies on West West Relations.’ In it he speaks of what he calls thrusts, “which forms when an alignment of adjacent technologies that mature and are combined in new ways and as a result brings real paradigm change to industry and society”. It’s the unleashing of the adjacent possible in new and dynamic ways. To see it you have to understand developments and constraints in multiple spheres at the same time. You must sift through the entropic exhaust of the evolution of science and technology and identify their potential applications and how that will change the whole framework in the industries and societies it touches.

We consider the power of innovation, technology and ‘an idea whose time has come’ as historically proven catalysts for both change and for offsetting and overcoming some of the otherwise sturdy trendlines one can glean from the inherent fundamentals that a nation’s geographical and demographical realities provide. As such, it must be part of your thinking, and as it is dynamic it must be monitored thoughtfully and continuously, or you may find yourself lost in the paradigms of the past or in a misleading hall of mirrors.

Real innovation driven paradigm changes in technology, business and governance processes drives increases in productivity, cost reductions, demand growth, quality of life and cuts across sectors and geographies. It acts as both a catalyst and a foundation for further innovation and its effect are lasting.

Change is a process, not an event. Understanding the framework of the process can be rewarding. It is the framework that changes with each new innovation and not just the picture within the frame. Innovative leaps are rarely instantaneous, evolution is a creative grind of trial and error. The most difficult opportunities to identify and harness are the ones that arise slowly and continuously over time. Such large-scale broad societal, economic and technological trends tend to emerge gradually and can easily be overlooked, but they are the ones to watch as they tend to create the dynamics for lasting changes that in the scope of time leaves a lasting impact on whole industries, nations and global balances. Such trends are often irreversible once they get under way and can shift societies in ways that makes a return to the old practices inconceivable.

In the moment It’s rarely obvious what minor gradual developments will eventually combine into the basis for major thrusts onwards. It can be instructive to reverse the process and look at what the current big problems are in key industries as technological breakthroughs often spring from human ingenuity and effort being applied to such issues.

In the historical context it is also important to note that most of the major shifts are achieved in times of challenge, not comfort. War and economic hardship tend to sharpen minds and focus resources on the real obstacles that needs to be overcome. It could be argued that the Great Depression, WWI & WW2 and the Cold War was the catalysts for most of the major breakthroughs in the last 100 years.

In his seminal work; ‘Civilization & Capitalism 15th-18th Century; The Structures of everyday life’, Fernand Braudel states: “In the realm of technology, co-extensive with the whole of history, there is no single onward movement, but many actions and reactions, many changes of gear. It is not a linear process. The history of inventions, taken by itself, is therefore a misleading hall of mirrors. In other words, there are times when technology represents the possible, which for various reasons – economic, social or psychological – men are not yet capable of achieving or fully utilizing, and other times when it is the ceiling which materially and technically blocks their efforts. In the latter case, when one day the ceiling can resist the pressure no longer, the technical breakthrough becomes the point of departure for a rapid acceleration.”

Let’s look at where “the ceiling can resist the pressure no longer, and the technical breakthroughs becomes the point of departure for a rapid acceleration” in order to identify the evolving thrusts that has the potential to coalesce and profoundly transform the global economy and its societies.

The Malmgren Strategic Institute (MSI) is an intellectual hub with practical applications with a mission to develop the optimal blueprint for the path ahead. Our principal, Dr. Harald B. Malmgren is known for his ability to take the complexities of human societies and distil the essential lessons across a comprehensive range of factors, avoiding the trap of narrow siloed thinking so prevalent in today’s world.

With these insights in mind one can begin to glean the path ahead, and instead of constantly reacting to change with no cohesive strategy one can anticipate it and develop a range of solutions ahead of time.

It is our mission to deliver insights and advice required for devising an optimal strategic position.

We work with policy makers and business leaders who are seeking a broader set of perspectives and a depth of wisdom that only real-world experience can deliver.

We aim to deliver lasting change by helping to inspire and educate tomorrow’s leaders in both the civic and commercial spheres.

BFI Infinity’s Sune Hojgaard Sorensen is a Partner with the Malmgren Strategic Institute.

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