Where Europe is, is forward - Part 1 (The Challenge)

The year 2020 is seen by several studies as the most "nervous" year in history. While that might be difficult to measure for ancient times, it does feel correct for the more recent decades. The factors that participants in these studies mention most often as a source of their anxiety are geopolitical uncertainty, the impact of Digitalization, Climate Change, and pandemics. Let us decompile those factors.

Pandemics

Throughout humankind's history, there have been two primary triggers for pandemics: prolonged economic success and wars. The first brings the extensive exchange of resources, goods, and people, allowing diseases to tag along and spread. The latter, often the result of a real or perceived economic imbalance, carries germs around with troop movements and weakens civilian populations by depriving them of food and shelter. The current Covid-19 pandemic started at a time of unprecedented global trade activity and wealth. Compared to historical occurrences, humankind is equipped with far superior technology and medical systems. We will learn to control the spread and live with this virus.

Geopolitical uncertainty

Geopolitics is never based on an intrinsic mechanism. It is the result of events in other areas. That can be the emergence of a new civilization that challenges the status quo, as witnessed throughout history. But for a globalized, space-faring species like us, that is rather unlikely. Thus nowadays, most of the tension is triggered by the advent of new technologies or progress in one of the four realms of technological innovation. Or, a paradigm shift within or the departure of incumbent technology that significantly impacts stability. We are in the middle of two such paradigm shifts. One is the advent of Digitalization, called the 4th Industrial Revolution. The other is the final stages of the hydrocarbon-based 2nd Industrial Revolution, which we call Electrification. To be clear: the future will be even more electrical. But the second Industrial Revolution took place within the Realm of Energization and brought forward the Internal Combustion Engine and its many variants, powered almost entirely by fossil fuels. Electrification will continue but be based on renewable energy. That includes the production of synthetic gases from surplus renewables, or as we say, Power to Gas. Such hydrogen gas serves as storage, fuel, or further reformed to fluid fuels, for example, for propelling aircraft. For large scale applications, we might have clean fusion technology available sooner than some think.

But let me come back to Digitalization. The anxiety this revolution generates stems from two aspects. The first is the typical teething problems that any new technology has. Innovation outpaces human ability to grasp, regulate, and control it. We see this nowadays in the shocking side effects of Social Media. Similar fears are centered around AI and cryptocurrencies. The second frightening aspect for most of our population lies in job security amid the vast shift that Digitalization will trigger in the labor market.

In other words, the world as we know it is shaking in its foundations. Not just individuals, but also provinces, nations, even continents question their role in that new world. From a historical perspective, this has happened over and over. Each time with the result of even more humans living even more secure and prosperous. With even more jobs, even better paid, and even more purchasing power for superior products. It is the adjustment that causes anxiety, then pain, change, and finally, reward.

Climate Change

The end of the 2nd Industrial Revolution is one of the two primary drivers for geopolitical uncertainty. And it is the solution to our struggle to prevent Climate Change. For that, we need abundant carbon-free energy for heating, cooling, motion, and material conversion. The most important material to convert in this circumstance is the one that makes our planet so unique: water. Climate Change will displace more people than any other natural or humanmade disaster ever unless we can provide abundant energy and fresh water for every population. Carbon-free energy and water will allow humankind to live on a far smaller physical footprint and a vastly reduced CO2 footprint at the same time. We will still see some overshooting effects in the weather, triggered by that part of Climate Change that we cannot stop any longer. But that we might be able to mitigate and live with. The same water will play a center-stage role for the next energy revolution, hydrogen as its core ingredient. Splitting water into oxygen and hydrogen makes it a perfect energy storage medium. No degradation, fast conversion, easy to transport, store, and transact. When adding dreaded CO2, it converts it into renewable hydrocarbons, allowing further applications. That is big business with attractive business models for new companies and incumbent players alike. Huge investments are needed to make it a reality. And that is good, since billions of pensioners, small time savers, and large scale investors are urgently looking for ways to secure a return on their cash.

Digitalization

Every revolution in the realms of innovation strikes fears into the hearts of even the bravest. Digitalization challenges traditional jobs and, at the same time, changes the way we operate in all spheres of our life. Let us assume that regulations and common sense catch up with the speed of innovation in this area, we regain control and start to feel back in charge. That transition - history shows - will take about two to three decades. Wind forward to say 2050 and look back. What will Digitalization have achieved for humankind? Since this 4th Industrial Revolution started in the 1950's, it has been the enabler for the 3rd Industrial Revolution, which we call Robotization. That includes not only automatic machines, industrial robots but especially automated information handling. In other words, computers. And that is indeed the essence of Digitalization. It allows us to use computers, electronics, and chips to run processes. The key advantages are speed and optimization. Decisions can be taken in a fraction of the time that a human alone would need. And those decisions can incorporate enormous amounts of information to improve the quality of decisions. In our struggle to feed and care for a population of humans that will peak one day around 11 to 12 billion, we need optimization—doing more with less, on a smaller footprint. That allows us handing back space to nature and reducing our impact on the environment. In other words: Digitalization will enable us to compensate for the damage we had to inflict during the first two Industrial Revolutions. We will be able to pay back the loan that we got in the form of hydrocarbons to propel our civilization.

Summary

Climate Change and Digitalization are a source of anxiety today but will lead to our salvation within the next three decades. The pandemic will then be a chapter in the history books. Through this time of turmoil, geopolitics will be an essential instrument as either an enabler and facilitator for the inevitable progress or as a chaos generator that could slow us down for a long time. For too long! In the second part of this blog article, you will read about Europe and Africa's role in this.