Future Agenda Initial Perspectives Full Text

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The full text of all 16 initial expert perspectives used to kick off the future agenda programme. Covering the future of authenticity, choice, cities, currency, data, energy, food, health, identity, migration, money, transport, waster, water and work, these provide a great perspective which we invite you to build on via the futureagenda.org website

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Future Agenda Initial Perspectives Full Text

  1. 1. Initial Perspectives
  2. 2. Copyright © 2009 Future Agenda www.futureagenda.org Edited by Tim Jones and Caroline Dewing Designed and typeset by Julie Bartram All images sourced from iStockphoto Sponsored by Vodafone Group Plc All rights reserved. Permission should be sought from the copyright owner before any part of this publication is reproduced, stored in a retrieval system, or transmitted by any other means. Agreement will normally be given provided that the source is acknowledged. The copyright owner does not accept any responsibility whatsoever, in negligence or otherwise, for any loss or damage arising from the possession or use of this publication whether in terms of correctness, completeness or otherwise. The application, therefore, by the user of the contents of this publication or any part thereof, is solely at the user’s own risk. The copyright owner furthermore expressly states that any opinions given in this document are the opinions of the individual authors which are not necessarily supported by the views of their employers, the copyright owner or any company forming part of the Vodafone Group of companies. A CIP Catalogue record for this books is available from the British Library ISBN 978-0-9549853-1-8 Printed in the UK To keep the environmental impact of this document to a minimum, we have given careful consideration to the production process. The paper used in the production of this document is 55% recycled from de-inked post consumer waste. It was manufactured at mills with ISO 14001 accreditation and printed in the UK by a FSC accredited supplier in accordance with the ISO 14001 environmental management system.
  3. 3. Contents Vittorio Colao, CEO Vodafone Group 5 About Future Agenda 7 Authenticity Diane Coyle OBE 8 Choice Professor José Luis Nueno 14 Cities Professor Richard Burdett 20 Connectivity Jan Färjh 26 Currency Dr. Rajiv Kumar 32 Data D J Collins 38 Energy Leo Roodhart 42 Food Jim Kirkwood 48 Health Jack Lord 54 Identity Professor Mike Hardy OBE 60 Migration Professor Richard Black 66 Money Dave Birch 72 Transport Mark Philips 78 Waste Professor Ian Williams 84 Water Professor Stewart Burn 90 Work Chris Meyer 96 Biographies 103 3
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  5. 5. We have all heard enough to know we live in a world that is facing some significant, potentially life-threatening challenges and yet, as a society, we lack clear direction and seem ill-prepared to do anything. What is evident is that individual, corporate and even national action is not enough. Issues such as climate change, population increase and the development of socio-economic infrastructures all require a co-coordinated, urgent and focused approach. The Future Agenda provides a forum for discussion on how to address the challenges we face and gives you the opportunity to share ideas, visions and solutions and ultimately seed change by contributing to the debate via the website www.futureagenda.org This booklet is the beginning of that discussion with experts from academia and industry establishing initial points of view on a range of issues. The opinions expressed in this document are not ours but those of independent experts whose views we respect even if we don’t always agree with them. I thank them for their wholehearted support. They have important things to say that should be of interest to anyone concerned with creating a sustainable future for us all. Mobile technology can offer many socio-economic benefits but I believe that the most important contribution that the industry can offer is the power to allow people to communicate. Never has a conversation been more important. Vittorio Colao, CEO Vodafone Group 5
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  7. 7. About Future Agenda Supported by Vodafone Group, the Future Agenda is a unique cross-discipline programme which aims to bring together thoughtful people from around the world to address the greatest challenges of the next decade. In doing so, it is mapping out the major issues, identifying and debating potential solutions and suggesting possible ways forward. We hope, as a consequence, that it will provide a platform for collective innovation at a higher level than has been previously been achieved. As the world responds to accelerating challenges, organisations are seeking to gain clearer and more informed views of the future so that they can place intelligent bets in terms of business strategy and innovation focus. In order to understand emerging opportunities, we believe organisations should look, beyond their traditional horizons, and use new combinations of insight and foresight methodologies. The Future Agenda programme has already gained the support of a range of corporate, government and third sector organisations keen to share perspectives, challenge each others views and identify ways forward across the topics being addressed. As all participants are free to use the material as a source for ongoing research and innovation, we invite you to add your views into the mix to build and share a unique view of the future we need to collectively address. 7
  8. 8. Diane Coyle OBE Founder, Enlightenment Economics and Member, BBC Trust Future of Authenticity 8
  9. 9. The Global Challenge Authenticity has great salience in our times because new information and communication technologies have The technologies greatly expanded the scale and scope of the inauthentic. For example, they have made identity fraud possible which seem to protect the bad and also playful; many of us now have multiple personalities online. When it is easy to choose an identity, what guys - the identity does that imply for the underlying reality? How do I know who I am, and how do you know who I am, and how thieves or does my bank know who I am? spammers - also seem able to lead repressive It is now so easy to make imitations that the value of communication in the past 20-30 years, copying and authorities to the authentic has been enhanced. This phenomenon sharing information has become easier and cheaper clamp down on was pointed out by the critic Walter Benjamin long ago than anybody of an earlier generation could have the good guys. This is a genuinely (in The Work of Art in the Age of Mechanical imagined - especially when so many goods and services difficult dilemma. Reproduction). Furthermore, given the historically are digitally delivered. Managing this explosion in unprecedented declines in the cost of computing and imitation is one of the real challenges of the digital age. Options and Possibilities People can be authentic or not. Online identities can reflect the multiple ways we think about ourselves: A work and a home email; Several different sign-ups for accounts; a Twitter account; perhaps Facebook profiles, or a character in World of Warcraft. These are the benign possibilities. There are malign ones too. Thieves will seek our log-ins and passwords to bank accounts. Malicious spirits will hide behind fake identities to spread rumours, attack other people, incite violence even. What are we to think about the cloak of anonymity online? It seems to encourage intemperate comments, rudeness and viciousness in online forums. On the other hand, it is essential to protect whistleblowers, or those who post information in a country affected by violence or a repressive regime. The technologies which seem to protect the bad guys - the identity thieves or spammers - also seem able to lead repressive authorities to clamp down on the good guys. This is a genuinely difficult dilemma. Things can be authentic or not. Fakes are proliferating in the online world. Fake What’s more, the majority of reasonable people don’t drugs are sold over the internet, to the great harm of seem to believe there’s much wrong with intangible piracy the customers. ‘Fake’ music, films, software are - it’s a different matter in the tangible world of medicines sold too, to the benefit of customers but not of or aircraft parts. What is the authentic reality that the full copyright owners. Piracy in this metaphorical sense force of the law and the state should be protecting? After is absolutely rampant. all, an online copy of a song is no different from the original. Future of Authenticity 9
  10. 10. What do you think? Add your views to the global perspective on www.futureagenda.org The internet Information can be authentic or not. Finally, experience can be authentic or not. and modern communications, This has always been a fundamental issue in how we Authenticity has an existential value. In rich countries, amplify the navigate the world but is overwhelmingly important now where most people have lots of stuff, experience is questions of that so many people have access to so much more valuable. Activities that take time - ballooning, veracity and reliability which information. The internet, modern communications, cooking lessons, a holiday, book club meetings - are have always amplify the questions of veracity and reliability which considered good presents, treats. Representations of affected the have always affected the mass media. Urban myths experience have value too. Street style sells - as does mass media. Urban myths move with the speed of light down fibre optic cables. home made jam or hand-made crafts. But of course move with the Rumours and incitements to violence are spread, as being packaged and sold makes the authentic instantly speed of light always, person to person - but each person can now inauthentic. down fibre reach many others, very quickly. A flash mob can be optic cables. These reflections contain an enormous range of assembled either to dance in the streets of London or challenges and trade-offs. beat up and stab neighbours in Kenya. The skill of verification has become fundamental. Can you identify spam email? Can you recognise bias in your source of news? Is Wikipedia a good source for homework? The Way Forward A number of steps will have to taken so that we can establish some form of order in the digital world. These are 1) The establishment of credible, digital identities. This is essential for trust - and hence any economic and commercial activity - online. But conversely it is equally important to protect privacy - and anonymity too where it’s needed. 2) The protection of intellectual property in the online world while continuing to protect civic space, an intellectual commons - what James Boyle has entitled The Public Domain in his recent book of this title. 3) The continued provision of widespread access to communications and information. This brings enormous benefits especially to people largely excluded from the privileged information access of the past (libraries, print media). At the same time we must build in verification mechanisms, ensuring the reliability of widely-accessed online information. 10 Future of Authenticity
  11. 11. The issues raised in all these different contexts are the more so when it can be spread rapidly via the The most effective varied, and difficult. For some of them, it is quite likely internet, email and mobile and potentially change way to counteract falsehoods in that there will be many technology-based solutions people’s behaviour. While SMS messages have been future will forthcoming in the near future. used to positive effect to spread correct information and probably come encourage positive action - as in elections from the from the pooling There are key areas where technology is already playing of many Phillipines to Zimbabwe - there were concerns that a major role in authenticity: Digital Right Management messages and messages containing misinformation and lies were reports so the (DRM) uses technology to limit access to certain content being used to encourage and incite the violence after people can see - technology having created the potential for access in where there is a Kenya’s December 2008 election. The most effective the first place. Equally biometric identity uses technology consistent story. way to counteract falsehoods in future will probably to limit the potential to form multiple identities. If my come from the pooling of many messages and reports avatar can always be traced back to the me of my DNA, so the people can see where there is a consistent story. is there any point in having it? The aggregation of different sources - which can be I predict technological ‘solutions’ will be commonplace done using new social media applications such as in the next few years. Sellers of content, government Ushahidi - could be a powerful tool for verification. agencies, airlines, and others will put up hurdles For reasons of food safety as well as personal designed to identify individuals. The world of ‘Minority preferences - for organic food, or fair trade food perhaps Report’ will lurch closer. But taken too far, this is a - traceability has become an important issue. The dystopia. The technologies ought to open up the world of prototype Fair Tracing Project uses online maps to follow information and creativity. If the full potential of the products on their journeys from farmers to consumers. information and communication technologies for the Tracing will involve ‘tagging‘ individual products with majority of people is to be recognized, technology can information readily accessible by both producer and not be used to build mechanisms which protect existing consumer. The information that may be attached to interests or structures and prevent change. ICTs are tagged products is virtually limitless, beginning with disruptive technologies. Printing was ultimately absolutely details of the product’s date and cost of creation, as well revolutionary - it’s why we all (in the rich west and many as its individual creator and his/her working environment other countries too) have an education and the vote. The and pay, through the various steps of its transport internet is revolutionary too. This is uncomfortable for to the eventual point-of-sale to the consumer.” those who were previously comfortable. (http://web4.cs.ucl.ac.uk/students/v.shah/fairTracing/) So although technology can certainly in the short or Another example is Sourcemap, a new tool which medium term clamp down on its own effects, it is at the permits the researching and optimization of supply expense of restricting some of the positive potential. chains, using transparency to deliver sustainability. In the longer term we need to look for better solutions. (http://ow.ly/rgRs) The most promising will depend on greater Finally, online security and encryption are ways of transparency of information and reputation. Here are protecting personal information and safeguarding some examples. personal identity. That identity is created offline. The Misinformation is dangerous in any context, including likely next step in establishing identity is likely to be misinformation spread via conventional media. It’s all biometric technology which will link the physical person Future of Authenticity 11
  12. 12. What do you think? Add your views to the global perspective on www.futureagenda.org The fact isthat to the digital environment - a thumbprint pad on the The fact is that virtual identity and "physical" identity virtual identity and computer screen, perhaps. But a person’s online, are not the same thing, and they differ in ways that "physical" identity are not the same connected identity could potentially be impossible to we are only beginning to take on board.” thing, and they copy when it consists, as it eventually may, of all the (http://digitaldebateblogs.typepad.com/digital_identity differ in ways that accumulated patterns of their digital activities. Each /2009/09/what-identity-is-important.html) we are only individual’s activities and conversations and searches is beginning to take Technological solutions are likely to need changes to on board as unique as a fingerprint. Dave Birch, who runs the social and legal institutions as well. Thus it is feasible to Digital Identity Forum, says in a recent blog post: “the imagine identifying a person through the pattern of their "common sense" notion of identity, rooted in our pre- communications and online activities, but this ability will industrial social structures and pre-human cortex, is not be irrelevant unless government authorities in particular only not very good at dealing with the properties and will accept alternatives to the present paper-based implications of identity in an online world, but positively proof of legal identity. misleading when applied to system and service design. 12 Future of Authenticity
  13. 13. Impact and Implications The journey is unlikely to be easy. A comparison between the valuation of any company and its physical assets There will be shows that the vast majority of value in the economy is intangible and based on an understanding of what it an ‘arms race’ between efforts is - whether or not it is authentic. Intangible value can evaporate overnight - and we’ve seen many examples to market of that, for instance in banking recently, in the case of Enron before that. This makes reputation everything, products or and the only way to sustain a reputation is to live it constantly. create or shape a reputation and resistance to Reputation is fragile - taking time to build but able The triangulation of information from different sources any message to vanish overnight - it and will be more robust the will become an essential skill, an aspect of ‘media which is not more it is the product of personal experience and literacy’ without which consumers and citizens will be wholly authentic. recommendations. Personalization will, paradoxically, unable to navigate daily life. become increasingly important even as new Trusted guides will come to play an increasingly technologies stretch the range and geographical spread important role. These could be social networks, media of connections between people. organizations, certain connected and well-informed However, there will be an ‘arms race’ between efforts individuals, or companies or other organizations. For to market products or create or shape a reputation and these guides, too, reputation will be all-important and resistance to any message which is not wholly will require constant vigilance. authentic. This is a pattern familiar from the world of A long, collective conversation about authenticity, in at fashion: the cool people move on from a certain style as least some of its aspects, is needed. Personal identity, soon as many others take it up because it’s cool. We verification of information, piracy - there are huge can already see this expansion of the dynamics of challenges in this list. They will be best addressed by fashion in the evolution of social networks as means of creative thought about the potential of the technologies word-of-mouth recommendation. Trends such as which are amplifying the challenges of authenticity to Facebook or Twitter are subsequently taken up by provide solutions too. companies and other organizations as a means of conveying messages, but this ‘official’ and inauthentic use of a social medium in turn leads to resistance amongst users of networks who move on to another online location. Future of Authenticity 13
  14. 14. Professor José Luis Nueno IESE, Barcelona Future of Choice 14
  15. 15. The Global Challenge The world has changed: Product supply and demand is globalized and there is no putting the genie back in Consumers are the bottle. The flow of goods from Asia to the west has created an economic dependency over the past ten making a trade-off in a smart years that will be exploited over the next ten. As China and India and other fast-developing economies become way and cost the primary global marketplaces, the needs and wishes of the 4bn new consumers will dominate those of the is winning. 800m old ones in the US and Europe. The days where the US set the pace in the consumer mindset are over and this is not going to change. In addition, choice is being threatened from the Why should we continue to build brands when China expropriation of freedom of choice launched from and India can buy them ready-made off the shelf? Just regulators, media, and the general public. Tobacco, as Lenovo bought IBM and Tata bought Jaguar Land candy, alcoholic beverages, speed, late hours, Rover, with the financial reserves now available, why advertising, food… all are being subject to regulation should any established brand not be for sale? The that limits choice and how we get to know about it. Chinese production model is all about the right products - good quality at a low price and the brand is a The way forward is for all to get used to the new world secondary issue. Yes, there is the luxury sector - the and operate by the new rules. While a few of the usual Gucci, Prada, Louis Vuitton segment of the fashion suspects may put up national or regional protectionist industry and its like in electronics and automobiles, but barriers, the realities of global trade are all too clear and that is, by its very nature, niche - and increasingly Asian we can see the end of variety. In fact we can see a in production. Moreover, culturally intensive products, a changing balance between variety and cost. traditional refuge of variety, are under threat by Consumers are making a trade-off in a smart way and consumer unwillingness to pay. cost is winning. We therefore face the challenge of how to deal with a reduction in the number of options in the In the next ten years I see the rise of Asian retailing categories of consumption but an expansion in the driven initially by the sheer size of the associated number of categories. domestic markets and then a move into the international arena. The Aldi model will win over the Hypermarkets and department stores will all struggle in Wal-Mart one, but what about a Chinese Aldi selling the next decade: They may reduce their product mix products made by a Chinese P&G? Who could down from 26000 SKUs (stock keeping units) to 16000, compete against that combination? I believe that this but continuing to provide consumers with such choice is will occur without any significant backlash. Consumers unsustainable when discount stores only have to provide will follow the mainstream and quickly get used to less 1000 SKUs - an increase in the assortment from the 800 choice given the benefit of lower cost. This will apply they offer today. Commoditization is the way forward for across the board. the mainstream majority and in many sectors this will mean a race to the bottom in terms of margins. The only categories where I see an alternative future Department stores need a continuous stream of new are those that are affected by time; perishable products ideas and innovation to keep their mix fresh and so attract (food), live content (broadcast) and extreme time to high-end consumers, but in a world of less variety where market goods (those that respond to latent consumer high quality, low cost Asian products dominate, why will needs) will be relatively immune. Indeed, if the quality the majority seek out the niche brands? of the staple products is to improve and local production Future of Choice 15
  16. 16. What do you think? Add your views to the global perspective on www.futureagenda.org We can foresee increases to ensure security of supply, we can see destinations, or hundreds of lifestyle drugs. We will see a world in which rising costs on the horizon - but still with less variety of more of these and, in addition, many disruptive and Zara and H&M are more choice. In 2020 how many of us in Europe will eat complex new products, services or solutions will grab successful than strawberries in December? the attention of an already over-solicited and less Gap and Neiman affluent consumer. As the number of categories Marcus and Choice will also be limited by our ability to process expands, choice will have to be shared among, rather the Aldi model information. Ten years ago we did not have MP3s, wins over the than within, categories of consumption. PVRs, thousands of interesting websites, travel Wal-Mart one. Options and Possibilities With the certainty that variety will lose out to speed and cost, we can foresee a world in which Zara and H&M are more successful than Gap and Neiman Marcus and, as mentioned earlier, the Aldi model wins over Wal- Mart one. Hypermarkets and department stores will lose out to discount stores and the speed merchants. This is clear. The shape of retailing has changed and the consequences over the next decade will be driven by a clear-out of the also-rans. One likely development is in the food sector which is increasing health costs and long-term disease risks, I fast-becoming the tobacco of the 21st Century. We are see that regulators will act. The industry will have to sort progressing towards a model where no single itself out and we will see more transparency on organization can have as much influence as they have ingredients. More variety in food is nonsense. We will had in the past and we will become accustomed to a see a shift to less. Less choice maybe better and restriction in our freedom of choice. As suggested hence, by 2020, again I see less choice within previously, the obesity epidemic has not been categories but more choice between categories. This adequately moderated by the food industry and so will benefit the leading companies (a winner takes all governments will increasingly intervene to limit choice. proposition) as well as the most flexible, pragmatic, and Healthier foods will cease to be an option but instead adaptive followers. will become the norm. Portion size will be reduced and The other certainty I see is a reduction in the number of low fat and low salt will be the new default standards. players within each category. The top mega-brands will Although some companies, such as Mars and Coca- survive as will some of the most efficient non-brands. Cola, have been proactive in cutting back on advertising But there will be a clear out of the middle market - the and taking away vending machines from within schools, me-too brands will become ex-brands and will disappear. and PepsiCo especially has shifted towards lower fat products, the majority of the food sector has not made Some may see that there is uncertainty in how a sufficient move over the past decade. So, faced with consumers will react to less variety. I see that, if they 16 Future of Choice
  17. 17. are not given so much choice, the mainstream majority who will be interested in the hundreds of non-electric Europe with will follow where they are led. Take, for example, what alternatives? Regulation, public opinion and financial around 200m active consumers will happen when the first Renault, Citroen and VW incentives will all accelerate the migration of the will become a electric cars are launched into the European market in consumer vehicle fleet to electric and we will not care secondary 2012. When consumers are given an option to buy one about the reduction in choice. influence to Asia with 4bn. of, say ten efficient, zero emission, zero-tax vehicles, The Way Forward Given the impact of the global downturn, in the retail arena I don’t think that we will be returning to a business as usual world. Consumer attitudes have changed to shift many of us away from wanting increased variety. In addition, the framework within which we consume has changed: Governments, the big brands, the acceleration of China and retail efficiency are all creating a new landscape within which our choice will become more limited: Less will be less not more. Variety is increasing across categories not within them. Over the next ten years we will see a reduction in the supermarkets like Aldi demonstrates, variety will be number of players per category. As variety is reduced substituted by budget. I see that, in the forthcoming and commoditization increases, only the #1 and #2 decade, many retailers will struggle to compete and fall brands will survive. So what about #3, #4 and #5? The down in between the leaders in providing low cost playing field for the future will be increasingly commodites and trend setting. As the continued growth determined by whoever sets the standards. And the of fast-fashion chains such as Zara and H&M reveals, standards will be set by the category leaders and the providing a limited but fast-changing product range is biggest marketplaces - the US, China and India - it is more profitable that holding a broad portfolio to cover a numbers game. Europe with around 200m active the full range of potential consumer choice. We have consumers will become a secondary influence to Asia now entered a world in which the distinction between with 4bn. Therefore, as products and services are prediction and following of trends has become blurred. configured to meet the global consumer, who will be Given the speed with which Zara changes its product increasingly Asian, the variety of choice will become mix, we are no longer certain whether media leads less influential than scale and speed of delivery. fashion or vice-versa. But who leads who is irrelevant when we, as consumers, don’t have to choose. The Back in the 1950s William Starbuck developed one of decisions about what we can buy are made for us and the few ideas in retailing to have lasted: Every retail so variety again reduces. The most important capability model is substituted by a more efficient one. This has for any manufacturer seeking a decent margin will be been the case for the last 50 years and I see no reason the ability to produce faster than the diffusion of a for change in the future. As the success of discount trend. Scale will dominate over choice. Future of Choice 17
  18. 18. What do you think? Add your views to the global perspective on www.futureagenda.org It may seem In addition, we are facing greater intervention of an reduction in variety in the consumption of products counterintuitive increasing number of influential bodies and groups and services. As they have in the past impacted but fewer choices provide into the world of retailing which will all align to reduce alcohol and tobacco, so in the next decade they will higher levels our freedom of choice. The media, public opinion and impact other areas of consumption from food and of satisfaction government regulation are moving us towards a fashion to transport. Impacts and Implications As variety reduces some may question whether consumers will miss the old days. I don’t believe so. Some of our recent research at IESE has explored choice from a number of dimensions. It may seem counter- intuitive but fewer choices provide higher levels of satisfaction: People like to have lots of variety, but when faced with too many choices, we tend to vacillate and delay decisions. We may want 31 options instead of six, but we find it easier to choose one of six than one of 31. In a series of experiments with men and women from a range of different cultures we found that the greatest level of satisfaction, both with the final choice and the decision-making process, was reached when people chose from an intermediate number of alternatives as opposed to large or small choice sets. These findings have practical implications for people offering many choices to customers, consumer and employees today. Going forward, I see that this supports my notion that we will see little consumer backlash against a reduction of variety. Moving to the wider impacts of how I see the future of path or finding their own way forward which creates and choice, it is clear that, although some may see my view sustains a unique position in the marketplace. Yes, my as being a little negative from a Western perspective, it views on choice and the mainstream may sound alarm does highlight the dynamics at play across the retail bells for many in the middle market today, but they environment of the next ten years. As we are cognizant should also provide a stimulus for others to think of a world in which less variety is the predominant shift differently about the new competitive landscape. for most, if not all, categories, then, as manufacturers The future of choice is about less variety, but this does and retailers, we can prepare ourselves for a new not mean less interest. The products that will succeed paradigm. With good quality, low-cost, mass in the future will be the ones that offer global customers commoditization the norm for the mainstream, we either what they want, even if it is before they have recognized need to compete on these terms or else migrate to the what that is. The successful retailers of the future will margins. I have highlighted the successful approaches provide consumers with a smaller portfolio of products taken by Spanish Zara and Swedish H&M in the fashion than their predecessors did in the past, but the portfolio industry where they have both developed fast-fashion will be higher selling products. Less variety means fewer as a core capability. There is nothing to stop other SKUs but fewer SKUs mean more efficient retailing. companies in other categories from following the same 18 Future of Choice
  19. 19. The future of choice is about less variety, but this does not mean less interest. 19
  20. 20. Professor Richard Burdett Centennial Professor in Architecture and Urbanism, London School of Economics Future of Cities 20
  21. 21. The Global Challenge The big issues facing cities are clear: Think globalisation, immigration, jobs, social exclusion and sustainability: Although cities Given that global urbanisation is taking place at an unprecedented speed with a scale, diversity, complexity themselves have a remarkable and level of connectivity that challenges all existing perceptions, questions regarding the size, speed of growth, ability to innovate, shape and land use of cities have become increasingly complex and politicised. Although cities themselves there are broad have a remarkable ability to innovate, there are broad disconnects between urban change and urban policy. disconnects between urban The priority, therefore, must be to identify ways in which policy makers can create a regulatory environment change and that provides a framework for sustainable forms of urban development. urban policy. Urban growth is being fuelled by new levels of mobility Even the most advanced firms need cleaners, lorry and migration of diverse populations within and across drivers, and secretaries. How must cities adapt to fit nations especially in China, Brazil and India. These the needs of all? Also how do we adapt to the possibility rural-to-urban migrants are pulled by the tantalizing that we are seeing an internationalised labour market prospects of jobs and opportunity, driven by the harsh for low wage manual and service workers? How do we realities of rural life. Cities like Mumbai experience 42 adapt housing design and create neighbourhoods that people moving into the city per hour. Where do you will benefit local communities and encourage urban house them and what infrastructure do you provide for integration? them? Transport, electricity, sewers and water systems Technological innovation has shrunk the world reducing - these are technical issues that need to be addressed the cost of transmitting to virtually nothing. Internet in a way that is environmentally smart. users in developing countries could constitute more Migration and in-migration has also created an urban than half the world total within 5 years if trends persist. underclass which is often allocated to specific areas of The reality of urban connectivity taken to its logical the city. Paris is a perfect example. The physical conclusion will create a network of interlinked cities infrastructure, with the beauty and qualities that we all connected, and soon to be even more connected, by admire, has frozen. This means that all its growth (with modern rails and technology. Consider also the effects increasing immigration from 1945 and onward) has of mobility and transport systems on social cohesion created ghettoization. This kind of imbalance in social and economic viability. mobility must be addressed. Lastly, any future urban model must of course be The changing nature of work will also impact on the sustainable. If we are to make up for past failures, physical form of cities. The global economy was born cities will have to produce more energy than they need, out of the power of trans-national corporations and become net carbon absorbers, collect and process global communications technologies. How does it affect waste within city limits and collect and clean recycled the way we live? If we focus on the fact that power water. All this should happen in parallel to the creation and communications capacities need to be produced, of wealth and the promotion of social wellbeing and implemented and managed, it becomes clear that cities individual health. still have an important role to play but their layout and functionality may be different. Future of Cities 21
  22. 22. What do you think? Add your views to the global perspective on www.futureagenda.org Options and Possibilities Can planners Can planners adapt with sufficient speed to create policies which address the challenges we face? There adapt with seems to be a disconnect between the complexity of challenges of the urban age and our current set of urban sufficient speed to create policies solutions. Planners and urban governance must consider re-evaluating how they address the problems they which address face and consider multi-dimensional, integrated interventions rather than specific policies covering specialised the challenges issues (education, health, housing etc). If, for example, housing is going to be a platform for opportunity, then we face? housing policies must connect with education, transportation and childcare; if transportation is going to There seems to be a disconnect promote mobility and advance sustainability, then transportation policies need to expand choice and embrace between the dense, transit rich corridors of mixed residential, retail and employment use. Ultimately, to be successful, we complexity of also need to share innovations across networks of urban researchers, practitioners and policy makers across challenges of the the developed and developing world. urban age and our current set of solutions. We should also consider how we manage the dramatic Can cities address the environmental crisis of global upturn in immigration and address the fight against warming and climate change? Rapid urbanisation has poverty. One billion people live in disease spreading no doubt exacerbated environmental pressures but slums characterized by inadequate housing, unsafe cities offer the best promise of developing in ways that drinking water and open sewer systems. This makes are environmentally sound and energy efficient - a pre- the builders of informal housing the largest housing requisite of global prosperity. The need is to develop developers in the world and it is they who are carbon reduction policies - such as London’s creating the cities of tomorrow. We can plan for this congestion charge, for example, at the same time as “unplanned” inevitability. There are already noticeable improving infrastructure. This is why the planners in success stories; take for example Ciuadad Neza in London are focusing on improving the transport Mexico City where, as hundreds of thousand infrastructure and have committed to reduce C02 immigrants arrive each year, an open-ended and emissions by 60% by 2050 focussing on existing networked community is succeeding in establishing a housing stock which accounts for nearly 40% of lively economy out of literally nothing. Yet cities offer today’s emissions. the promise of ultimately connecting hundreds of millions of workers to the expanding job opportunities offered by the global economy. 22 Future of Cities
  23. 23. Proposed Way Forward You can become very depressed about cities of the future when you look at all the challenges facing us. There is little But, the more I go and visit cities and through the work we do at The London School of Economics, the more doubt that, seen through the lens I think that there are solutions. They depend on people rather than policies - it could be a mayor making a of efficiency, decision or a community activist. more densely populated, compact cities New Delhi, for instance, holds 13-14 million people series of young men and women who have worked such as Hong depending on the time of day. It used to have the together to create a communal bathroom (toilet). Kong and highest pollution rates in the world but then overnight all Where people don’t have water and don’t have toilets, Manhattan are the auto-rickshaws and the buses were made to change this place is important because it’s where people meet. inherently more sustainable from diesel to natural gas. If you can use natural gas in They have created a moment of pause in the city. This places to live New Delhi, then why can’t you use it everywhere? is one of many projects that I saw in Mumbai, New than the likes of Delhi and elsewhere which are fantastically powerful Houston and In London we use congestion charge, which is very Mexico City. and are done by individuals. effective in re-prioritizing the traffic. There are clear environmental benefits but a radical social difference is Cities are often at the forefront of the delivery of cultural a 100% increase in bus use by the middle class. If you richness In Mexico city, for example, there is a fantastic get the middle class onto public transport you are initiative which is called the ‘Fallon’, The Lighthouse, winning, and that’s a great example. signifying hope; a stunning project designed by an architect called Callas. Next to it is an area of Tokyo is the largest city in the world. Its transport approximately a million people living under the poorest system, integrated by overhead and underground rail conditions, a lot of them using the nearby rubbish tip as systems, means that the average commute is around a way of living, recycling whatever is there, living at the one hour. Compare that to Los Angeles where the bottom. The Lighthouse is a cultural centre where kids average commute is about two hours and at least 80% learn how to paint and do art. Mexico City is a city of of the population takes the car to work. In Tokyo, 80% enormous violence; people don’t feel safe going out of the population use public transport. There is little and whenever there is a crowd of people together the doubt that, seen through the lens of efficiency, more police try to break it up. So an outdoor music area is a densely populated, compact cities such as Hong Kong no-go area. Outside the Lighthouse they have built a and Manhattan are inherently more sustainable places simple amphitheatre out of earth where they hold music to live than the likes of Houston and Mexico City. concerts in the summer. This does more to lift the However, across the scale empowerment becomes spirits of the community than any policy I ever saw the significant; you need to have a system which allows mayor or the politicians do. At the centre of this is the people on the ground to solve the problems where they physical environment. By designing spaces you can need to be solved. I go through the tiny streets of a make an enormous change. small slum area of the outskirts of Mumbai and I see a Future of Cities 23
  24. 24. What do you think? Add your views to the global perspective on www.futureagenda.org Impacts and Implications Cities are notjust Perhaps more than ever before, the shape of cities, how much land they occupy, how much energy they a concentration consume, how their transport infrastructure is organised and where people are housed - in remote segregated of problems - but they are also environments behind walls or in integrated neighbourhoods close to jobs, facilities and transport - all affect places where the environmental, economic and social sustainability of global society. Cities are not just a concentration of problems can problems - but they are also places where problems can be solved. be solved. Cities of the future have to be organic, flexible and Creating more compact urban environments generally versatile. As society and aspirations alter over time, the will result in more efficient infrastructures: One direct city has to adapt to change. Utopian cities have never consequence of variation in population density is the worked. The people that created Rome, New York and associated energy demands: Tighter, more compact London certainly didn’t think of them as fixed artifacts cities have far lower energy use per capita than more that wouldn’t change over time. We have to be clever spread out ones: So, as energy costs continue to enough as urban designers to design the city like a escalate and energy security becomes even more of an metabolism, like a body. When it gets older and weaker, issue over the next decade, this inherent design you do corrective surgery. Cities need to be versatile; relationship will come more to the fore. otherwise they fossilize and die. For example, many The quality of a city does not only concern the cities of the last 50 years have been designed around environment. We mustn’t forget that cities are about the needs of the car. But as oil costs soar and the city people coming together. Ultimately a city may be very of the future will increasingly need adapt to modes of efficient in terms of CO2 emission but if the places transportation that are not petrol-dependent. This will where we come together are not beautiful (a word have a significant impact on the shape of the city. which is rarely used in this debate) and if the places In order to be versatile and responsive to change the don’t have a wonderful relationship to urban nature - a sustainable city will also have to be compact. A city like river, water or views that compensate for this human Mexico City, which goes on for 100 kilometers in one closeness, this is not a city that people will want to live direction and 150 kilometers in another, has hardly any in. The qualities I am looking for in a city that is chance of actually becoming sustainable. On the other sustainable, that embraces the notion of versatility, that hand a city like New York or Copenhagen and a city like is compact, that offers bounds of beauty in its buildings London which has highs and lows of density, has the and the quality of its open spaces. potential to become sustainable within the next 30 years. 24 Future of Cities
  25. 25. The qualities I am looking for in a city that is sustainable, that embraces the notion of versatility, that is compact, that offers bounds of beauty in its buildings and the quality of its open spaces. 25
  26. 26. Jan Färjh Vice President and Head of Ericsson Research Future of Connectivity 26
  27. 27. The Global Challenge The internet has finally gone mobile. Today over 300m of us access the web using mobile technology. In 2010 In a couple of the number of subscribers reaches 1bn, surpassing the number of fixed internet users. In a couple of years years the number of mobile the number of mobile broadband connections will be in the order of 4 to 5bn - with the majority of new broadband consumers coming from China and India. By 2020 there may well be as many as 50bn devices connected connections will to each other. These devices will work across different networks which, in turn, will be connected to each be in the order of 4 to 5bn - with other. This global, pervasive connectivity will facilitate new types of services and opportunities for people, the majority of industry, and society but it won’t be an easy journey. Delivering this vision is a major commercial and technical new consumers challenge for the ICT sector, but on the other hand very exciting. coming from China and India. Technology in itself will not be a restricting factor. the potential to bring extraordinary benefits, for some it Transport, access, storage, and processing will all thrive will be a real challenge to adapt to this. Information on on the continued effects of Moore’s law and almost everything is now widely available making miniaturization will continue where beneficial. High industries and markets much more transparent and performing systems are of course an absolute necessity efficient. However, the way consumers share information but the implementation challenge is not straightforward. and communicate with each other, utilizing a variety of We need to consider how to deal with the phenomenal online social networking tools, IPTV, images and video, increase in capacity both in terms of number of devices means that how we give and receive information is to be handled but also in terms of the amount of becoming increasingly personalised. This, in turn, means information that will be exchanged between these that individuals, more than ever before, have to manage devices. Power consumption will also still be an issue their own public identity. This indicates that concerns because of battery lifetime and sustainability concerns. around cyber crime and data protection will continue to So, how can we develop a system that is cost - rise. As a result, security and consumer protection effective, adaptable, easily deployed and, most related issues will become increasingly important. importantly, simple to use? How can we develop Business will also have to adapt to a changing networks that are self-deployed, self-operated and self- environment as their services are increasingly delivered maintained? These questions cannot be answered by online. In a world of endless choice and seemingly technology alone; in order to achieve success we need complete transparency some will be hard put to collaboration between network providers, device differentiate themselves. Of course, communications manufacturers and, of course, policy makers both technology is not in itself a limiting factor for the nationally and internationally. diffusion of new products and services - in fact What will this mean for consumers? Essentially evidence suggests quite the opposite - those who are ubiquitous connectivity will continue to change the basic successful will have made the most of the opportunity. structure and conditions of our lives and, although it has This is why brand identity will continue to dominate. Future of Connectivity 27
  28. 28. What do you think? Add your views to the global perspective on www.futureagenda.org Options and Possibilities Machine to By 2020 the majority of the world’s population will have access to basic telecommunications services. machine and However, even though the current development pace is high, with more connected devices and availability of process to process internet access “everywhere”, it is still uncertain how fast this will really impact and change conditions for other communications value chains, industries and daily lives. This depends on many factors including the rate at which networks as well as can be rolled out and the connection speeds that will be possible. Where there is connectivity, smart phones tools leveraging and devices will enable people to leapfrog a generation of technology, especially for those who never had a data mining will all flourish as land line phone. Mobile voice increase in developing economies may slow down but these markets will add sustainability local innovation and stay in the forefront with overall growth consistently higher than in mature markets. It is efficiency also likely that Broadband access penetration will increase primarily by means of radio solutions in developing measures will markets outside areas where fixed broadband is economically feasible. be taken across the board and in all We face rising populations and increased dependency represents 2 percent of global CO2 emissions, it has a enterprises. ratios which will be exacerbated by scarcities of clear role to play in reducing the remaining 98 percent resources and environmental requirements. In order to from other sources. Therefore expect a boom in maintain standards of living with substantial and innovation of services to meet this emerging continued global productivity improvements will demand; e-government, e-health, e-education, e-work, be needed. This will partly be enabled by the telepresence, logistics and energy management communication industry and, particularly when services will all increase. Machine-to-machine and combined with other vital industries such as process-to-process communications as well as tools transportation and healthcare, will play an important role leveraging data mining will all flourish as sustainability in addressing this need. For example, scarcity of labour efficiency measures will be taken across the board and can, to an extent, be mitigated if machine to machine in all enterprises. (M2M) communication is used to address labour In the corporate world, there will be a blurring of borders intensive tasks; automation is specific vertical industries between large and small enterprises with large scale can be enabled by connected sensor networks. In companies deploying true global operating models, addition, self-service solutions will also continue to grow increased inter-company collaboration and workers far beyond today’s e-bank and e-retailer services increasingly tele-working and being loosely connected applications into areas such as government and to organizations. As creative knowledge workers healthcare; and, the increased global use of mobile, become strategic assets for companies, IT budgets will video and internet will mean that people can benefit increasingly be geared at making them effective. from the services they need more quickly at less cost. Increased connectivity will enable competitive Sustainability is certainly high on the agenda for the advantages and new business models to be sought next decade and here ICT can make a large from mining massive amounts of data. For instance contribution. As the world measures more or less real-time business intelligence and statistical everything by new sustainability standards, whether experimentation, real-time management of goods in quality of life, business success or government actions, world-wide distribution and logistics chains and targeted there is potential for connectivity to play a significant advertising solutions will all require data systems that role in areas such as carbon mitigation. A recent report will be enabled by falling prices on data storage, (SMART 2020) concluded that, although ICT merely communications and processing. 28 Future of Connectivity
  29. 29. User generated content will also probably continue to telecom services revenue streams at the current price Technology in grow strongly, increasing traffic and the abundance of levels. That said, as media consumption continues to itself will not be a limiting factor available information, However, the impact on media become more fragmented an interactive, the gap and there will be value chains and the commercial value of that content between the rapidly growing online share of media time, the introduction is unclear. The online advertising market will grow, but and the online share of the global advertising budget, of many more new products will not be of a magnitude sufficient to substitute will close. and services. Proposed Way Forward Looking to 2020, we see that, while the technology platforms that will enable global ubiquitous connectivity are clear, the way in which businesses, society and individuals use these could vary significantly. Some examples of scenarios that might occur can be described as follows: We see an increased separation between the content As with many scenarios, we see that the way forward and services that people use and the means by which will probably be a hybrid of these. An open application it will be delivered. Companies with strong brands will environment will enable new services and applications shape the communications industry and their services to combine adjacent scientific fields such as energy, could be delivered over the top of independent network food, water, transport, health and ICT - globally and providers and will be tightly integrated with devices. locally. Everything that could benefit from a wireless Simplicity and convenience is the driving force and network will have one. Industries will become brand loyalty will win over variety. increasingly mobilized and there will be an increasing share of services delivered online. Technology in itself The sustainability agenda comes to the fore and will not be a limiting factor and there will be the changes the conditions for societies, companies and introduction of many more new products and services. individuals worldwide. In order to reduce travel and Usability and simplicity will be in high demand, fixed and energy consumption there will be an acceleration of mobile broadband will converge and 50 billion devices new mobile internet services for health, government, will be connected globally. work and machine-to-machine (M2M) operations. Increased regulation will come into place to secure affordable services and drive industry players to pool their resources to ensure that networks are capable, reliable and robust. Future of Connectivity 29
  30. 30. What do you think? Add your views to the global perspective on www.futureagenda.org Impacts and Implications It is possible Full global connectivity is already well underway. It has already changed the way we communicate with other to suggest people and groups. The amount of information we can share and the speed with which we can share it is that access to advanced increasing rapidly. Indeed, it is possible to suggest that access to advanced communications will be come communications a “universal right” and that a wide and deep penetration of networks and services is a prerequisite for the will be come a continued struggle against climate change and poverty. This suggests that universal services requirements “universal right” will drive new investments in the industry, while measures to keep services affordable (e.g. price regulation) may reduce revenues and profits leading to increased pressure for lower cost and higher efficiency. In the next decade, addressing the major global Most other areas will to some extent be affected by challenges and a continued shift to wireless and online global connectivity: Money, authenticity, transport, travel, services will bring forward new societal vulnerabilities. mHealth, privacy, identity, energy, cities, migration, food, ‘Cyber crime’ and malware may be increasingly water, waste. For all these areas you can find a use for common, and dependencies on the availability of connectivity. Global connectivity can change, improve information and communication systems will increase. and be used to catalyze innovation in everything. Restricted online anonymity and privacy will also raise Real change, however, can only be made when integrity concerns. As a result, security and consumer communication technology is properly integrated into protection related regulation will increase and industries adjacent scientific fields. This will open up new services will move to capture these new opportunities. in a wide range of complementary industries such as IP will be the prevailing delivery vehicle for much of our healthcare, automation, positioning and information connectivity, and the vertical dependence between management. It is clear that everything that can benefit services and infrastructures may gradually disappear. from a network connection will have one. Not only will Users will access services and content independently of more people be connected, but devices for various the network provider to a larger extent. Business types of automated services and functions (e.g. energy models will vary, but lower entry barriers and innovation meters, surveillance, climate sensors, e-health sensors, globally will also increase the number of providers and industry process automation) will exchange data offering the same service - but at a reduced cost to and change lives. consumers of financed by alternative business models, such as increasing advertising revenues. 30 Future of Connectivity
  31. 31. It is clear that everything that can benefit from a network connection will have one. 31
  32. 32. Dr. Rajiv Kumar Chief Executive, ICRIER Future of Currency 32
  33. 33. The Global Challenge I see that greatest challenge for the next decade to be a fundamental one - what should the world’s currencies The status of the be? Over the last century we have seen the rise of the US dollar as the primary unit of global currency which US dollar as the global reserve we use to measure and value much of our relative individual, organisational and national wealth and currency is investments, and through which we exchange, trade and price commodities, businesses, goods and services. however under The status of the US dollar as the global reserve currency is however under enormous pressure and, with the enormous pressure rise of new currency blocs in the world, many have been asking whether the Euro will emerge as an alternative reserve currency. The 2008-9 financial crisis put enough pressure on the US currency to such an extent that many now see that we need an alternative, but the question is what? Will the US remain as the pre-eminent financial power or will its influence secularly decline stimulated by the recent crisis and its inability to achieve a major technological breakthrough or exercise the necessary conditions for it to remain a reserve currency? And, if we go for an alternative, why would this be the Euro? By 2020, will we, for instance, therefore see the ACU We also have the impact of replacing printed and (Asian Currency Unit) develop from an Asian Monetary minted money with electronic equivalents: The move to Union to become the third global currency alongside digital money will certainly raise a number of major the Euro and the dollar? While Asia may not be ready issues. Especially as the banking and mobile for a common currency, the time is right to work telecommunications sectors see their interests towards a parallel currency. Furthermore, within this converge in developing more widespread electronic context, would the ACU be pegged to the Yuan or the transactions which will minimise the use of cash, or Yen? And will the Rupee be part of the basket that even traditional credit as we know it, digital money will determines the value of the ACU? These global have increasing applicability. As banks adopt new currency reserve questions are a primary challenge for software and the Bank for International Settlements the world’s economies for the next ten years. develops guidelines for electronic money, its movement across national borders will become practical. However, While I see that this is the main issue, I believe that what is the real pace of the related technologies and during the next decade we will also have to address two who either individually or collectively will emerge as the other significant issues along the way: real driver for this convergence? Given the access gap One of the most important of these is the continuation that still exists for significant proportions of the of money laundering that will increasingly impact the population in many developing nations, will we need to smaller economies as the larger ones take steps to wait for true, near ubiquitous mobile connectivity and minimize the impact on their own systems. Will such 24/7 energy supply before digital money can really countries as Switzerland and The Bahamas, as well as have global impact? other financial havens, finally be brought into the Both of these issues will have impact upon international financial mainstream and stop affording haven status remittances, inter-bank transfers and the many to residents of other countries? Will the advanced associated financial vehicles that are presently in place. economies come together and force the emerging economies to join in the move against laundered and ill gotten wealth? Future of Currency 33
  34. 34. What do you think? Add your views to the global perspective on www.futureagenda.org Options and Possibilities De-leveraging is It is certain that for the next decade the US dollar will remain as one of the reserve currencies. As such it will already happening still be a key currency for foreign exchange and a transaction currency for international trade and investments as individuals and governments in 2020. The US dollar will continue to be integrated into, and influential upon, the world economy. across Asia decrease their Over the same period, it is possible, but not highly sustainable in the long term and, as such, a leverage investments in probable, that the Euro will become a major reserve based model cannot continue. The 2008 shock to the the US dollar. currency. Although the European Monetary Union led to global financial system could have significant influence: the public introduction of the Euro in 2002, this was De-leveraging is already happening as individuals and twenty years after the first creation of the ECU as an governments across Asia decrease their investments in artificial basket currency used by participating countries the US dollar. as their internal accounting unit. It is unlikely that, That said, over the next decade, it is unlikely that we will another two decades later, the Euro will have become really see the emergence of the ACU as the third quite as significant a currency as the dollar, but it may currency block. This is because Asians cannot decide not be far off. A world where the Euro has equal status on either a viable collation or leadership by one of the to the dollar as a reserve currency is increasingly countries. As experts, including Jin-Chuan Duan at the credible. National University of Singapore, have highlighted: However, at the same time, it is certain that the Yuan although much debated, Asian Monetary Union looks is emerging as the central focus for economic and unlikely in the short term. Just as with the formation of financial activity in Asia with increasing number of the ERM and the Euro, the realisation of the ACU as a transactions occurring in that currency, though with single regional currency would demand cross subsidy limited convertibility. We have seen the rise of China to via taxation between countries, the loss of autonomy in become the world’s primary economic power. This is the conduct of monetary policy and the partial surrender accompanied by a similar rise of India and the of some national sovereignty: Right now the Asian associated rebalancing of wealth between the West version of the Euro is theoretically possible but and the East. Although the recent economic model has practically far from certain. However, dual currency largely been one where Asians produce goods that are systems are common and I believe that, although Asian bought by Americans using money that is lent back to Monetary Union is improbable by 2020, a parallel them by the Asians, this may not last much longer: As currency ACU that allows for exchange rate a number of commentators, including historian Niall adjustments is practical. But the ACU must be based Ferguson, have argued this ‘Chimerica’ balance is not on a wider basket than just the ASEAN countries. 34 Future of Currency
  35. 35. Proposed Way Forward Over the next decade, we will move unmistakably towards a multi-polar world which will be characterized by The introduction a much broader consultative process that extends to a larger number of jurisdictions. Greater coordination of a broad-basket ACU (Asian amongst major economies on financial sector regulation will be needed, and this can be facilitated by the Currency Unit) newly enlarged Financial Stability Board based in Basle. At its core, the coordination will have to be aimed as the third global at achieving greater trust in the transparent and universally applicable working of the financial system. This reserve currency will provide the will especially need to dispel the fear that the global financial system has a bias in favour of any one country world with the or group of countries or group of dominant institutions. As the G20 has superseded the G7, financial opportunity to management of the global system must become more equable: Within this it is possible that a more prominent more appropriately role is given to Special Drawing Rights - the international reserve assets managed by the IMF that currently balance economic influence and amount to over $300 billion. It was used to boost global liquidity in 2009, but additional ongoing and arguably trade. more proactive applications should be made more practical. In a similar manner to how Shell’s current global scenarios Many would correctly suggest that a true single world outline the future for the energy sector, I see that the currency is not practical: Differential interest rates and challenge in the financial world is to also ensure that we selective monetary policies make it impossible and try our best to follow the ‘blueprint’ and not the currency harmonization cannot readily be implemented ‘scramble’ approach: I suggest that we need to while different countries are in different stages of strengthen the global coordination mechanisms to economic development. The IMF is not a super central facilitate the monitoring of global financial flows and bank and turning Special Drawing Rights into a world enable the emergence of new technologies to help currency is neither possible nor practical. However, the balance the system. The major economies represented introduction of a broad basket ACU as the third global in the G20 need to agree to have some arrangement for reserve currency will provide the world with the a universally acceptable reserve currency, starting as a opportunity to more appropriately balance economic unit of account and then also phasing it in as a currency influence and trade. of exchange. I believe that we should adopt such a universally acceptable currency that does not face the risk of being debased as a result of the fiscal and financial indiscipline on the part of any one country. The ACU has the potential to be that currency. But to function as such it must include the Rupee: India is currently the largest economy of South Asia and plays a far more influential role across Asia as a whole than many of the ASEAN countries. The ACU has been seen as a precursor to a common future currency, just as the ECU was for the Euro. Therefore, it is important to focus on how the world will therefore look when this occurs - India is currently poised to be the third largest economy in the world over the next 30 years. Hence the inclusion of India in Asian economic monetary integration is prudent. Future of Currency 35

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