Is the EU one of the greatest social experiments of our times?
I love Europe – who doesn’t? But lately I have come to realise that I love Europe in the way that people more easily love things they don’t really understand. Knowing about Europe’s peppered and challenging history is one thing. Understanding its future, is another.
I have found, whenever I have been in Europe, a kind of charm sprinkles the air. Incongruence of many kinds is obscured by the magical prettiness of old world architecture and vestigial custom. What a cute alley with the chiming clock and little German figurines that sing national songs every quarter hour. How delightful the pub from the 1600s with the Moor’s head above the door (though, really, how is it that this hangs without irony in the 21st century?)
How wonderful the vineyard that may have first been planted by the Romans, still producing wine under the toil of fifty Benedictine nuns, living today much as they might have lived 100 years ago. What a beautiful setting for the castles of the Rhine River Valley. Hard to imagine them as the feared tollways of the rich and powerful, as today, barge after barge ferries goods unimpeded from one end of Europe to the other.
As we pass through the German countryside on our travels, I reflect that it’s possible the entire landscape were made by Ravensburger and we are in nothing more than a VR jigsaw for adults, where the puzzle is to remember where you are in time. Fields of wind turbines remind one of the century and yet also of Don Quixote. Who’s tilting at windmills today, one wonders, with Brexit as a backdrop?
A painterly panorama, a hot pot of culture and language, a grand arc of historical narrative, a towering of forefathers who formed belief systems that have dominated the first three industrial revolutions and bled out to the edges of the far flung colonies. Perhaps this is why to the Australian eye everything seems superficially familiar in Europe. Europe seems to be to be a place forever bound to the past that it exported through colonisation: every cobblestone witness to epic clashes, bloody conquests, the might of wealth, fates given over to God’s will.
Yet it starts to dawn on me that the gateway that Europe offers is not just to charming cobblestones, but to an incredible social experiment: the EU, an unprecedented union of disparate peoples, an overcoming of seemingly insurmountable disputes. This may be a union of trade, but it is bound by a belief in the Euro as a force for social good and a fearful remembrance of things past. Could the EU, for all its challenges, one day serve as a template for global optimism due to the unlikeliness of its existence at all?
How then does the fourth industrial revolution mark its arrival in the region? This imposter is not European made. It lacks German quality. It has no old world charm. It’s not respectful of boundaries. It is neither ordered nor predictable. The fourth industrial revolution has arrived as Amazon did, like the Borg in Star Trek, its hive-like collective mind assimilating people and their stories in the pursuit of perfection. To welcome or not to welcome such a beast, that is the question for European leaders.
In the fourth industrial age, three-D printers print themselves, machines learn from each other, innovation happens at the speed of data exchange and augmented human biology may well start to split society into irreversibly divergent species. With advent of the internet of things, services of all kinds are set to become so personalised that Henry Ford may roll in his “any colour as long as it’s black” grave. Your car, your home, your DNA – these could all be sources of income or personal and social benefit, or equally, an opportunity for a dominant enterprise or bad state actor to exploit for power and profit.
Merkel may rue the impact of “Industrie 4.0” on the car industry. Still, the question is pressing for her nation: what to do if the car is no longer a car? Soon, what used to be the car will be a subscription to a set of services in which comfort, commutation and entertainment are just a few of the experiences offered. As biology melds into technology, personhood becomes similarly challenged. In this world, some jurisdictions may require one to give up one’s personal data for the grater social good, others will exploit personal data purely for commercial gain. On the pathway set by the GDPR and other EU legislation, Europe has decided to handle data privacy differently from other markets, with an emphasis on individual rights over the claim of the shareholder. Taking a firm stance to cap tech firm profits and to protect competition through measures such as interoperability and data sharing, the EU hopes to counteract the potential dominance of any one company and prevent competitive lock-outs from powerful tech giants. A major test of the future of Industry 4.0 will be watching whether other international jurisdictions follow the EU’s lead.
The fourth industrial revolution is a strange combination of the deeply personal and assimilated connectedness that is in the process of changing everything in our known ecosystem. Winners and losers will be decided by it, if there are still to be opposing sides to that coin. Unanswered, of course, is the question of whether the fourth industrial revolution will threaten or strengthen the post-war EU peace experiment.
While they might sound like something out of the story of St George and the dragon, this is where Germany’s Hidden Champions come in. Hidden Champions are a cornerstone of the German post-war economic success. Researched and so-named by Hermann Simon, these companies hold globally leading positions in their markets, are small by comparison with the giants of the business world and enjoy an almost negligible profile. Most surprising about this group of extremely successful companies are their counter-cultural practices, at least by traditional business school edicts: long tenured CEOs, privately owned for generations, narrow in their product focus, long standing and deeply embedded customer relationships, a balance of market and technological innovations, located outside of urban cities in small towns where they are frequently the largest employer, making an outstanding contributing to the social fabric of Germany and beyond. The Hidden Champion recipe is different from the Fortune (Cookie) 500. What’s more, the Hidden Champion recipe has been outstandingly successful – at least so far.
Intriguing combinations of Germanic quality and industry at its 3rd revolutionary best, particularly in manufacturing, it’s not hard to see that the Hidden Champions are a bellwether for the impact of the fourth industrial revolution on societies everywhere, not just Germany. In a best-case scenario, these companies integrate the lessons of Europe’s and Germany’s fractured past, retain their balanced market and technological driven strategies, and supplement this with the best of fourth industrial innovation. This combination, given the strength and size of the EU economy, may produce some of the most important technological developments that this century will see, benefiting citizens the world over. An alternate scenario is just as possible: Hidden Champions could be headed for extinction, unable to adapt to the skills, mindset and pace of their competitors, losers to a shareholder-dominant worldview, victims of their own, narrowly focussed past successes.
Whether or not you are German or European, we all have a stake in the outcome of this story. Hidden Champions contain secrets that have not been learned yet in the global commercial community. Their success is predicated on people, job security, respect, science and proven innovation. They have quietly balanced what Silicon Valley has chosen often to break. One only has to think of Theranos to feel the cautionary edge of the dangerous counterpoint to this approach.
As I express my love for Europe’s charm, I have come to see that I love it for all the wrong reasons. Hidden in this incredible region is more than yesterday’s story and today’s sensory delight. Europe could also be tomorrow’s pathway: proof of the possibility of international political stability through trade, economic and monetary union; a place for the growth of counter-cultural examples of commercial success where customers, employees and the social good are delivered in equal measure.
This delicate petri-dish of penicillin may be discarded or disrupted before we realise what we really have. Will the EU defend itself against the overruns of fourth industrial excess, the folly of Brexit and the challenges of a new world order, yet still grab hold of the opportunities that digitisation and the Internet of Things (IOT) will herald? If it does, as the BRIC economies rise and the fourth industrial Borg attempts to assimilate all, Europe may hold the perfect balance of individual rights and remembrance of atrocities past; an ability, in other words, to forge social good out of the fourth industrial revolution.
Europe, a place of history and legend, often considered a has-been in the Asian century, may indeed have what it takes to draw the world a navigable map to the real treasures of the coming age.