EP 243: Understanding How the Future Unfolds with Mark Esposito

5 interrelated megatrends will continue to change the face of society. Our guest today introduces a holistic framework to make sense of those trends, which he calls DRIVE. D for demographic and social changes, R for resource scarcity, I for inequality, V volatility, complexity, and scale, and E for enterprising dynamics. He's a changemaker, he's an academic outcast, and he's author of Understanding How the Future Unfolds Join me and Mark Esposito as we discover Drive.

Stay hungry, stay foolish.

Mark Esposito, welcome to the show.

Thanks so much, PhD. I love being here. It's phenomenal.

You've kindly offered a copy for the listeners of The Innovation Show, which I'm very grateful for. So just sign up to theinnovationshow.io newsletter and you can be in with a chance to win a copy of Understanding How the Future Unfolds. Let's get into it, Mark, because we have loads to go through. Apart from your great work and apart from what you talk about in this book, I was attracted to something you start the book with where you and your co-author Terence call yourselves outcasts in the academic world. I'd love you to explain that a little bit further.

You know, it didn't get any better since we published the book. We're even more outcasts now than before. I think we both came from a very traditional academic journey going through the rankings, the publication, the peer reviews. And this is great. It provides you with a sense of validation of the work you do, but it's quite insufficient to really make a dent. And so we started to feel we have to break loose and we have to make sure we reach out there people and make sure we work for the advancement of knowledge that people can use. So we started to write more and more applied work. We were looking at how managers and executives think, or people working in the policy field, and we started to write differently. We wanted people to say, "I can read what you write and I can use it." And the academics don't like that too much. They tend to be very much in what we call the ivory tower, So over time we became, as we said, outcasts. We are a bit of outlaws and outcasts at the same time. We kind of be breaking some of the rules. We've been engaging with different kinds of stakeholders. Yeah, we're not typical academics. And you know what? I would never go back to what I used to be before.

You're in great company, man, because most people that listen to this show are in the same book it as you. So that's why we collect here. It's a community. But I wanted to stay on education before we get into the DRIVE Framework, because you talk about ability specialization, and it's something we focused a lot on the show with people like Ed Hess in the past, and the idea of sticking to one swim lane no longer being the way forward. And you say this beautifully in the book. You say curriculum from children to postgraduate often favors processing things rather than building them. It often gives preference to force-feeding knowledge over raising curiosity. I thought that was a lovely way to talk about the problem with education today.

You know, I, I think that you and I have both been feeling since quite some time that the educational system is not designed to do what it was supposed to do before. It's not creating opportunities or giving people toolkits to really face the complexity we have right now. We have an expectation of education that doesn't match the world out there. And I think we started to feel more and more that whatever we were doing in the traditional sense was not really preparing them. It's pretty much a jungle out there. It's a very complex world. There's so many variables that are happening every single day. The world is no longer just binary, or let's say two colors, black and white. There's so many nuances, and I fear that the education system is not designed to help us with that. Most of the great stories we hear, they happen outside of the educational domain. So that should tell us something. So we start thinking we have to help people think much more in what we call the entropy of everyday. You know, things are in a flux, they're constantly evolving. we can no longer just train them like they were product from a factory line.

This is why you put this DRIVE Framework together, because you want to educate the world, you want to educate business leaders, you want to educate young people up and coming. You talk about all this throughout the DRIVE Framework. So let's get into that. But before we do, let's give some context of what you mean by megatrends. I love how you put this. You say megatrends are the undercurrents that drive where we are going. If we were going down a river in a boat, the megatrends would be the currents that carry us along. Macroeconomics is more like the wind, the temperature, or the sky. If the weather is bad, the currents will be affected, just as they would be if the weather is favorable. What carries us from one point to another is the river itself. We like to think of megatrends in the same way. The water in the river is a physical entity. You can reach your hand over the side of the boat and feel it. The sky is much harder to touch because it's an abstract concept. I love how you do that to give context to what you mean by megatrends.

Yeah, so I, I remember that part, and, uh, it's actually nice to hear it again from you, right? I, I, I revived a bit of the moments where Terence and I were writing the book. Um, I, I think the, the major benefit of understanding megatrends is to understand that these are large-scale trajectories. They're really happening already, right now. And so sometimes we have this very distant look at the future, but we don't understand that the future is happening right now as it's developing and it's becoming this, as again, I think trajectory is what I use the most when I try to explain it. And I guess what we wanted people to understand is that the future is not distant from us. It just is like a daily, daily experience of the present that over time becomes a future. So if I understand the stream, mainly the current of the river, I can also understand which way I want my, let's say, boat to go, my raft. I can start changing the direction of my, to some extent, journey. And I also can understand that some of the events that are currently happening, they started in the past, and they are designed to continue in the future. So a big question is, what role do I want to play when I understand and I see these trends occurring in front of me? So to tell you in a nutshell, we think of trends or megatrends as the greatest opportunity we have to architecture our future and also to empower us to do something now. Believe it or not, Aydan, the more we wrote about the future, the more we were actually in love with the present and on the opportunity of what we can do right now.

And one of the things you talk about, Mark, is the interconnectedness of these megatrends. And you give the example of an auto insurance company which faces multiple challenges in the future, especially as innovation accelerates around autonomous vehicles. And you say, you ask this question, who is responsible for the insurance if the individuals are no longer literally in the driving seat? Is it the car owner, the driver, the software manufacturer, the remote IT operating company? This is the point about these interconnected trends and the questions they pose.

Absolutely. I think the, um, the connecting the dots or the connection of this, uh, what we call recognizing the white spaces, right? All of these areas that are sometimes not filled with anything, but they have so much meaning. Understanding them really reveals a different unfolding of the future, which is what gave the title to the book. And I think these are questions that can be asked right now, and our ability to provide an answer to those questions is pretty much the kind of future we're going to have. And the reason why this is a very, I think, present part of the work we do is that we sometimes talk to people that would like to have a certain kind of future. And you ask them what kind of future would you like to have, and they come up with a story. And then I— we always ask them, what kind of present do you have? And of course, the present they have and the future they want to have are very different. And I always tell them, why don't you do now what you would like to be your future tomorrow? And I think that that's really the power of connecting information, looking at foresight, configuring things, futuring a little bit more So again, it's the ability that if we see and understand these trajectories, we can make sense of the reality around us and make proper choices, or at least we can empower decision-making to be accountable.

I always do this, Mark. I'm sorry for this. I find a little piece in a book and it really intrigues me. And one of the things you talked about, and you kind of glossed over a little bit, but you said it was really important, was a concept that came from a guy called John Overton. and it's called the Overton Window. And I just want to share that with our audience because it's something I hadn't heard about before, and I'm sure many wouldn't have heard it. I'd love if you'd share about it.

So, you know, it was mainly related to public opinion and how public opinion rapidly changes if the condition in which we have also changes. This is the part of the book where we were, I'd say, advocating some geopolitics, mainly because we were talking about inequalities and the volatility scale and the complexity. And so the Overton Window mainly says that you pretty much have two forms of polarization, a radical opinion on the left, a radical opinion on the right, and a moderate opinion in the middle. And if public opinion shifts towards either one extreme or the other, it becomes radical. So that's the idea of radicalizing public opinion. If you have anyone running for office that is able to perceive the Overton window, whenever this person will be able to build a political message that goes in sync with the Overton window, he'll find a lot of momentum, so to say. And I think we were writing, we published the book right after the events of 2016, where both in the US and in the UK, two major events had happened. And we found that what really drove that decision was the idea of the Overton window, where public opinion had radicalized so that the anti-establishment choices were made. And that's why we bring it up. And we try to be more politically correct as much as we can. But, you know, we wrote the book when we were finishing the book, when the world was really coming to an inflection point.

I tell you what, the timing of this book is just incredible, especially you talked about the volatility of the world. We'll come back to volatility when we hit V, but the idea of the global pandemic hitting after all this geopolitical landscape that's in turmoil at the moment is just incredible. And this is why the DRIVE framework is so important. But I wanted to share another thing you talked about, falling in love with the present, and you share a concept of present casting as opposed to backcasting, forecasting, or even benchmarking. And here you say, we don't spend enough time looking at the present. If something is going to happen in the future, if the seeds of that activity are already taking root today, in the absence of an appropriate existing term, you refer to this practice as present casting. The intention is to bring people's focus to what is happening today.

So I think we wanted to play a little bit with the words. We said a lot of emphasis on backcasting. We want to see what we did in the past. And we think that the past validates everything. People will ask you from backcasting to forecasting, and we'll try to look at the future as some form of marginal optimization of the present or the past. So we imagine that tomorrow will look a little bit like yesterday with some variation. And then we said, what about right now? What is your sense of immersion in the present? How do you understand that what you do today is much more responsible than what you think tomorrow might look like. And so I think in English it's easy to play with things like that because you say back, for, and present casting, and here you go. You got the concept. But I think we wanted to say, why don't we do present casting? Why don't we have organizations capable of engaging into present casting? And if in 2017 this was to some extent, I would say, aspirational, today with the pandemic, I mean, that's what we do every single day. We can do future casting. Anymore because the future might look so different and the past is so different from what tomorrow will look like that all we have is the decision we make right now, almost like we have a determinism in the present right now that we can't run away from. And to some extent, we were lucky with the concept back in time because it became much more viable and real 2020. But that's the nature, I think, of what you said. The book was— I think it was a personal journey for Terence and myself, and it happened to be released at the right time. So sometimes time is a factor of luck, and we can't run away from it.

So Mark, let's dive into the framework and start with D, as you do in the book, demographic and social changes. You start the chapter with a series of questions, and you ask, what would happen if none of the governments in the world were able to support the multiple and varied needs of social and of senior citizens through social assistance, etc., etc. Because I thought about this deeply, and it's something I think about quite often, that even with technological joblessness through artificial intelligence and through automation, many people will lose roles in the future, and those people who are supporting pensions and the economic systems within countries are the working classes. And if the working classes are getting replaced by automation, the whole system starts to fall down. And you talk about a triangle, and I often think about it as a kind of a Ponzi scheme. And I was writing about this, that it's like a game of musical chairs where if there's less and less jobs and there's more and more joblessness and there's more and more older people because of demographic changes, Who's going to be supporting those older people? And this is where we see the DRIVE framework start to interconnect more and more.

That's a great intro to the D, Aydan. And I think what we wanted to say is the following. We are changing our chemistry of what the human DNA used to be that was organized over a pyramid with the base of the pyramid primarily populated by children. It's now changing. With the exception of the low-income countries, we no longer have more kids than seniors around the world. So the pyramid that for so long was almost like an institutional shape is now becoming a very different model, almost like a column or a beehive. And I think the problem we're seeing now is that a society that is transforming so much is equally transforming the algorithm of what being a society is all about. And I fear that we're not talking about this. Sometimes we try to play catch by saying we gotta work maybe an extra year, two more years, but it's not by playing catch. We have to redesign what the social infrastructure is all about. We have to redesign the ability for us to think about families with children. You know, fertility rate around the world is dropping. So we have to imagine what will it look like, a society in which children will no longer be the larger part of our society. And seniors is another big conversation. What will we do with the part of the population that retires but is no longer productive? But thanks to advancement in healthcare, they tend to live 20, 30, 40 years more, which is great. Life expectancy has increased, but we haven't redesigned, we haven't designed our system to take them into account. So to me, the drive at the D-level is this profound conversation about who are we becoming? And that's the example of the current. Population trends are so subtle that you can't see them. You notice something, but they tend to be almost irrelevant. But we are profoundly changing. I was shocked when I was doing the research that in my lifetime, population doubled. But I didn't have the perception that things were doubling simply because they happen in such micro moments. And this reflection to me is critical. One thing that Terence and I learned in the book is that the strongest predictor of the future is population. We understand population, we clearly understand the future in a much more scientific way. And that's kind of the motivation behind—

I was thinking deeply about this because there's a, a feeling that we're overpopulating the world at the moment, and this is where the data becomes really useful when you start digging at this, because You understand this fertilization rates, etc., and you go deeply into why this is happening. I'd love for you to share this because it's a concept that whenever I talk about this to people and students, for example, they think I'm a conspiracy theorist. And I go, no, the data are teaching us this. The data are telling us this. And I'd love you to share this, Mark.

It's, it's exactly what you say. We're becoming older. We're becoming less productive because technology is doing what technology was designed to do. We haven't yet figured out the system in which our life expectancy, our increased degree of automation, and the fact that we're shrinking our families, but we are at the same time adding people to the world population because of the uneven distribution of populations in the world. We're becoming a very different kind of civilization altogether. And I don't find that we are seriously understanding that we used to be working by design so that we come to life, we go to school, we go to work, well, we settle down, we go to work, we retire, and we die, right? It was a very linear representation of life. Today, there's so many more elements to that journey that has profoundly changed. And the data is showing that no matter if you're in Sub-Saharan Africa, your average age is 15, In the next 15 years, the average age will become 17. Or if you're in Japan, average age is 49. It will become 51 or 52. We are all aging. And a population that is aging will profoundly change the way we are. And I think what we— I love to see more is a true reflection on what is the operating software or organizing principle. Actually, probably is a better choice of words, that really will define that we can live harmoniously together in civilization. Otherwise, population will become one of the equalizers that will drive even more inequality and divisiveness and immigration and, and things that are— we're not capable of doing. One of the things that I guess 2020 taught to us is that we're really not ready for anything that is systemic or systemic failure. We have no mechanism in place.

Part of D is social changes. And one of the huge social changes we're seeing is urbanization. And again, it's a term a lot of us hear thrown around, but we don't actually know what it means. And we don't know how it interrelates with other trends, because urbanization and fertility gaps start to play with each other. And the results are quite intriguing. I'd love you to share a bit about this as well, Mark.

You know, we urbanizing at a faster pace than ever before, but not in countries that are already urbanized. You know, the West, North America, and some parts of Asia are already quite, you know, well urbanized. But, you know, countries like China, India, Nigeria, Pakistan, this country, they are 3, 4 billion altogether. They're still really under-urbanized. Which means that the number of people that will move to the cities in the next few years is an inevitable trend. It's going back to the idea of the river, right? It will happen. What my— the problem that I see with that is that the resources, the conversation on the climate will continue to exacerbate because this trend is already happening. Countries like China built their GDP on the ability to build cities. And people moving in and becoming, you know, consuming society. You know, China is only urbanized by 50%. Imagine urbanizing to 60, 70, 80, how many more people will move into the city? And take India, which is the big promise in terms of, you know, the population, the large population on Earth right now. Well, not now right now, but it will become soon. India is urbanized only by 30%. And you're looking at Nigeria, which now has 200 million people and is expected to become 750 by 2100. They are urbanized at 40, 45%. So I'm just worried that we're not understanding that urbanization is happening because that's where people, especially when they're becoming emerging economies, they try their best chances. But that will bring a significant input on resources and the environment. So for me, the conversation on climate and demographics is so intimate. And sometimes we don't see that.

There's an interesting one you picked out, Mark, as well, which was if you think about workers within organizations, and I see this quite a bit where you have somebody based on their tenure, how long they're in the business, and they hold a position, but they hold that position without continually skilling up and reskilling and unlearning importantly as well. They don't do that. And therefore they curb innovation within the company because you might have somebody coming through from a different organization, or maybe they've come through the organization and they have fresh ideas, but they get blocked by that person who's stuck in that position. So that's one thing. And the other then is the opposite for younger generations. You say they can become more productive but not well compensated. These older people are richer than the younger, and they have more spending power. So the older people have more spending power, and you give this example for Exactly. For instance, in 1981, a French 33-year-old had the highest purchasing power of all age brackets, but now it's 46-year-olds.

That's exactly this. And 46 being my age, it's exactly what it is, right? Uh, people in the mid-40s now, they have more opportunity than people in their 30s. Um, and the interesting part about that is that millennials that we so much have been celebrating and glorifying They're great from a cultural revival perspective because they gave us some fresh vibrancy, but they're quite inconsequential from a financial perspective. They don't own much of the economy. And I think this is actually one of the very first group of, for first generation in which the chances that their best chance might be their parents' wealth. It's kind of sad. You know, I remember growing up that I knew that there was a responsibility from my parents that I will be better than them. And I think Generation Dream about you do what I can't do because you just shifted one inch more further down. And I was thinking, how does it feel to be a generation in which your best chances is your parents' resources? I think this is, to me, this is again a combination between the D of drive in which we're really changing the chemistry, the lack of resources, the increasing tension between those who have, those who don't really have. And later in the book when we talk about I, that's really what I told us in the inequalities, that in the world, in a world where we have so much more access than ever, we have one of the most, I would say, staggering inequality we have ever had in the world. And to my understanding, the question why is the only question that I can ask myself.

The one about the parents, you know, it's like, while we may look at people of wealth and coming from wealthy backgrounds as being very lucky, which they are, and they're privileged, etc., is there's often mental health issues because the second generation or the third generation or the fourth generation often feel they're living off the reputation of the previous generation, and they have this lack of meaning. And lack of purpose and often a drive to do things for themselves. And to your point, when that's taken away from you because it's your only hope, there's mental health issues that kind of fall out of that as well.

100%. 100%. In fact, the number of people that are resorting now to some form of counseling or they are trapped into some form of mental disease, uh, is increasing. And, and the, the pandemic did not really help. He has amplified even more, right, the, the insularity that we have built around this. And I guess, again, it's in our hands, the possibility to change this and to design systems that start working in a more equitable way for everybody. I always say this when I'm in the classroom, that whoever brings a trade-off between economic opportunity and social and environmental chances doesn't understand neither economics or environment or society. You know, so don't believe in trade-off. We can be a society that are inclusive in which economic opportunity and social and environmental benefits exist. But, you know, it's a mindset. In the past, it was about trade-off, and this generation is still in many cases leading or in power, right? And it's so hard for them to see the world differently because it worked pretty well for these guys, right?

Mark, we better keep moving on to the next, which is ore. So resource scarcity. And with regards to resource scarcity, you say the resource The first that comes to mind for people is often energy, but you tell us the two global resources that are in immediate danger are food and water.

Yes. So to me, they're connected. I, that's again, another of those trajectories that I see unfolding every single day, increasing demand of water, relatively poorly designed agricultural processes and financing. And we still do agriculture like we used to do agriculture back in time, but the weather, the climate, the environment have completely changed, the demands have changed, and I don't see enough efforts to change the narrative on water. So we should actually start thinking that water will become critical at one point in time unless we change the way we preserve, conserve, process, recollect, by utilizing any form of technology that we currently have to make sure we're not necessarily facing a period in history where water will become our problem. So I think water and food are connected. In fact, one of the things that we did in the research started to say, if you want to find a proxy that will tell you that we got a problem with water, if you start noticing that the price of food goes up, you should start wondering what's going on. And one of the answers of that question will be we might really struggle with access to water because that's what food needs more and more. And that is one way to talk about it. There are many ways, but that's how we started to really creating the tension between resources and, of course, food. Because food scarcity or food insecurity is another of those challenges that are connected to the D because we are unevenly growing our population, and it's connected to the I. We're not growing it in an equal way, so the inequality will create even more pressure to the system. Interesting on that, it's all in front of our eyes.

One thing I wanted to say about the book, because you and Terence really focus on this, where you call out disturbingly honestly so many of these trends that are— they make for disturbing reading in some ways, but you do it with a positive lens. And I think that's really important because there's a term called gainsaying. It's when you call things out for the right reasons, and I really feel this. But you also then go, by knowing where things are going, by understanding the present, you can take advantage and create opportunities. And one of the ways I wanted to emphasize this was There's a great quote by famous Canadian hockey player Wayne Gretzky, and it's overused and well-worn. And it's basically, he was asked, how did he always know where the ball was, the puck was going to be? And he said, I skate to where the puck is going, not where it is right now. And a way you bring that to life in the book is that if climate change continues the way it is, for example, by 2080, they reckon that their ski resorts in France will all be melted. One of the ways to understand that is, well, we're— you're already seeing this where French and Italian vineyards are buying land in places like the UK because they know climate change is going to increase. So that's the place now to plant new vines.

Yes, absolutely. And as much as I really appreciate the fact that ingenuity is shifting to understand geographies will change, climate will change also, opportunity for agriculture. I also would like at the same time people to say, "Is there anything we can do right now to recover, repair, reinstate what we currently have?" And the answer is we actually have a lot of room for that. We can shift to agricultural technology when we can, We can start using simple technology to save on water and irrigation. You know, I think there are two trends. I think one is the one where I will go and follow the puck, right, where the puck is going, because I understand, right, that the future will nonetheless happen regardless of what I feel about that. And the other one is that I can empower myself to think right now where I currently am, what can I do to try to mitigate all of this? And I think a combination of these pull and push factors is really what would save us, is the ability to say upfront, let's transition some of the resources towards the future. At the same time, let us not discount the present. Let's work right now. To me, eventually they will happen. It's the same concept. It's just that it's applied to a way of hedging the risk in two different ways. And I guess it goes back to maybe the way I feel these days It's like we're not hedging against anything. We're just taking risk that is not measured. And I'm thinking again, why are we doing that? Why are we not careful with some of the things that we know that could really hurt us? And I guess it's part of why we want to push the message out there. The project is not about disarming you, it's about empowering you right now of what you can do. So it goes back to what we were saying before.

Brilliant. And one of the most sobering, in a way, elements is the one right in the middle, which is I, which is inequalities. And the structures— the structure of inequalities is varied and multi-layered, so it's kind of complex. But the megatrends, as you say consistently throughout the book, all interact, interact. And you cannot talk about inequalities without also talking about demographics, societal changes, social changes, and resources. I'd love if you gave us a bit of context on this one.

Yes. So, you know, when we're looking at the transformation, we're really looking at multiple domains or vertical transformation. And so clearly, if we were clear on the demographic, which took a large part of our book writing, by the way, it was a large section for us. The resources are, in our way of looking at things, very connected to this trends of more and more people going to the cities. How they will eventually exacerbate resources at the city level. Then we went into the infrastructure of water and say, are we ready for extra demand? So the pipes, the leakage system, the infiltration into the way we are currently processing waste. And that was, you know, another big vertical. Then we went into the management of waste and said, are we capable of managing waste? Well, we aren't because we think of waste as the end of life. Cycle rather than reintegrating back. And that's when we link it to then the more financial perspective or distribution of opportunity through capital and income. And that's when we go into the inequalities where we really start looking more and more about the fact, why do we have so many gaps that we're currently seeing emerging more and more? And again, without necessarily having an answer for this, we were mainly mapping these gaps. This is why at the very beginning of the book, we were thinking about inequality and later on we had to change it to inequalities because there were more than one. So just a bit of an example how we were thinking and connecting the different vertical so that we could make sense of it in a way that is almost like a way of telling a narrative because the future is to some extent connected. The fact that we don't see the different elements is just our own limitation. It's not a limitation of the future.

Yeah, and there's so much to comprehend as well. There's so many moving parts, and as you say, because of this volatile world we're living in, they're going to get faster as well. So, but one of the things I wanted to bring it back to in the inequality chapter, which was interesting, was we talked about curbing innovation with the, the aging workforce. But one of the ways that inequality starts is because of that. So labor laws in the UK and throughout Europe favour older workers. For example, if I run a legacy organisation, and I need to launch into redundancies, letting go of older people is going to cost me more money. So decisions are made like that, not, well, if I keep on the younger people, they're going to bring fresher ideas, and I'm going to have a fresh new fresh blood, fresh wood coming through the system. And they're let go. And then the younger people tend to go for lesser jobs. And therefore, the inequalities start.

Yes, absolutely. You know, inequalities is also generational, a generational problem. You know, you can say the fat cats or the baby boomers have a system that works so well for themselves. They were really looking after themselves. The way they designed the system was designed for a specific set of rules and a specific group of people to participate. Now, that system is extracting so— has been extracting so much value that it has shifted the cost to the future generations. That's why younger people have more cost to take into account. And it has internalized the benefit for the older generations. I would say, for me, income inequality is a little bit of a combination between poor government policy that was not designed to really help It was maybe well-intentioned but not properly executed. And a generational problem of where the concept of growth and value and risk and opportunity in baby boomers, it's so much within the tribe rather than other generation where we're much more collaborative. We tend to look at the societal part, the community. So to me, there's also a conversation about, and this is not my area, so, I did not explore it too much, but culturally, the baby boomers were much more tribal than how millennials are, which were more community-driven. And clearly, if you are that way, you're going to think always about looking after your own interest. But in your own interest, it means that the environment is not your interest. It might be somebody else's interest. You know, in your own interest, your wealth is all you need to look after without considering someone else's deprivation. Is a problem that will threaten your wealth also over time. Just mindset, you know, sometimes I feel quite emotional about this, but then I am reminded by several events that many of them were never trained to think the way we think right now. And the transition from their world to our world is so painful, no matter which direction you go, that we just have to mitigate and let them, let them eventually rule out from, from their position of power by replacing them with people that are much more compassionate in thinking, because casting stones at them does not work anymore.

Mindset is a huge part of change. And you say about this throughout the book that it's, it's innovation and is change. It's change on so many different aspects. But we better keep moving, Mark, because we're going to run out. We're getting to V. And the word V stands for volatility, scale, and complexity. And for so many, that conjures up a negative connotation. It conjures up a challenge for so many, but you see it as a huge opportunity. And I always, I love your idea of the currents because I think about if a ship sets sail and you don't know where you're going or you don't get with the right currents, you could be brought totally off track. And by harnessing the currents and understanding them, you can be brought to a future that you can be in control of. I'd love if you gave us a bit of context on V.

You know, I actually, believe it or not, I have relearned about V recently when I was listening to somebody that read the book, and I was saying, this is a really interesting way of understanding what we wrote. And this person said, "We are so complex in our own life that if I have to think about my life being simple, I would say, 'What are you talking about? My life is not simple.'" Our lives are not easy. Relationships, friends, dynamics, looking for a job, health. We constantly live surrounded by complexity. But then we go into the workforce or we're going into a job or the economy and we expect that to be simple. We expect that to be something that we can easily control. And I think volatility in our own personal life is what defines our life. Opportunity that are coming, relationship that are popping up, people that suddenly do something to us, children growing up and building a whole set of new relationship for us, events happening every day. So in our personal life, we come to terms with volatility, but why don't we come to terms with volatility at the socioeconomic level? And I think that's why we see hope and opportunities. We still thrive individually. We still find a way to navigate all of that. We still find a way to get at the end of the day to say, I'm happy about my life because I am building something. But that act of building doesn't happen in a structured linear way. So why don't we apply the same mechanism? There is a reason for that. We've been financializing, mathematizing, structuring economics and finance for too long. Terry and I, we came respectively from economics and finance. So we were trained to think in structural form. That's why we're a bit of outcasts. We can't believe that story anymore. The world show us that it's not the model that you're doing from an economic perspective that will give you the answer. It's how do you make decision out of the information you have and take risk. So I think that's why I see volatility as a great way to humanize processes. To make processes much more human-alike than factory-alikes. It's still an old sign of the industrial times where we wanted to structure everything because it's a way to control. So that's what we mean by volatility. It's a much more closer look. And then you can go into models don't work, financial models don't work, the idea of risk is not properly expressed, but then it's more of a granular look when you're trying to express it to an audience.

You shared this about the financial models being outdated essentially, and I'd love if you share this because you talked about outdated bell curves, but again, yes, not just recently, this is going back for nearly a century.

That's right, that's right. You know, because it gives you a lot of power in the institutional framework. If you come to me and say bell curve distribution within the range, this is a delta, this is the probability, this is the requirement. So it's actually easy to create a story. But bell curve have been designed with one assumption, but I always remind myself that the world is much smarter than anything that we can think in our mind. So how can we ever think of outsmarting it? By thinking that the future will look like what we want it to look like within a range. So I guess these are great tools that needed to show discipline and rigor when you're controlling the variable and the environment in which you are. And it worked great if it was introduced in the '30s, in the '40s, when we needed to structure. But in 2020, all we need is actually models that are flexible, adaptive, tweaking reality all the time, constantly adjusting to the context in which we are, much more contextually intelligent that they can learn from what is really happening. And I think this is why we struggle so much with formulas that we still teach in finance that completely exclude the external environment, like it doesn't exist. And Terrence, as a finance professor, always tells me, whenever you're doing that exercise, people are so busy in just making the equation right, but that equation by themself doesn't take them any closer to a more profound understanding of reality around us. And so imagine raising a group of really smart people on the wrong problems, asking them to do the wrong exercise. And I don't want to feel contrarian, although I know I am in many ways, but I think it's really a sense of saying, learn finance, but do not think that that's self-containing the answer to the problem. It's just a way for you to shape some form of confidence in dealing with numbers. But I guess that's what we meant by the— by cities as one of the greatest opportunities we have to humanize processes more than ever and humanize education.

It's so important, and I think, you know, one of the ways to do this is educating because we change people's mental models. They see the world differently. They see opportunities differently. They see problems differently. I think it's so important, and I am so delighted to be able to share your work. One of the things you, in this chapter, you talk a lot about automation, Moore's Law, how Moore's Law is coming to an end. But one of the things I wanted to emphasize was you talked about robotics and how robotics And robots seemed a thing of science fiction. And, you know, always have empathy for the changemaker because people like Asimov or science fiction writers of the past, Jules Verne, all got deemed as these crazy nutjobs, but they all were proved right, you know. And da Vinci, everybody who was predicting these things, of course, were predictions. You don't know when it's gonna happen, but Eventually it did. But you talk about how two recent breakthroughs have unleashed the long-awaited arrival of robotics, cloud robotics and the belief space. I'd love if you'd share this.

Yes. You know, the interesting story about that part of the V, Aidan, is that that was the reason why we have then written the other book. You know, none of us were interested in technology until we started to write on V. And then we started to say technology feels different this time. It doesn't necessarily feel as it was before. It's not just a means to an end. It's much more because it's changing us. And in the part about robotics, what we're mainly saying is that we are rapidly replacing a lot of the function that we used to have through some form of automation. We're changing the tenets of what define a value creation. And if we do this, we're gonna find ourselves with a major societal crisis because our systems were designed on the foundation of labor. So we could see already when we were doing the research that robotics was profoundly changing the way we're going to think about producing things in the future. What I think is worrisome from that conversation is that from the time we wrote the book until now, it didn't go any slower. On the opposite, and COVID-19 has simply accelerated that even more. So I guess that's what we wanted to talk about when we're looking at robotics, on the fact that a large part of our jobs designed many decades back were not designed with the assumption of technology. So people used to do those tasks, but now that we can automate most of the tasks, what happened to the concept of labor that was so much part of the industrial model And I think this is where in the V— I think that's the part of the V where we have— there's a part of V that is very optimistic, which is, as I said before, reshaping it towards a foundation of human centrism. And the other part of V, when we talk about robotics, the different form of digital and exponential technologies, that we start feeling more of the bleak weight and burden that technology could bring to us if we mismanage it. And I think we are mismanaging it. But that's a different— that's another conversation for another time.

But we could have a show purely on this, man. Um, and I mean a series of shows, not just one, not an episode. But, uh, we better, we better conclude now. So we'll, we'll go to enterprising dynamics, which is the final megatrend of the DRIVE Framework. To give context, you say vast changes are occurring in how we do things and how commerce operates. The speed of change has not only given birth to new types of businesses, but also existing companies of all ages and sizes are rethinking their propositions and how they do things.

That is, that was actually a very, uh, I think, rookie statement back in time. Now it's even more, you know, I think the geostrategic and the geopolitical competition are changing rapidly the strategic landscape. We see emerging economies innovating at a much faster pace than the traditional Western economy that were heavy on R&D. And we start noticing reverse innovation. Business models that were originally, let's say, copied, inspired in the East, reverse and brought back to us. So we lots of Chinese, lots of Chinese models are now getting into our market. India will rapidly go there. Some rise of frugalism where we have a frugal economy and frugal innovation. Such a wonderful time to look at a business model and digital transformation, which I know is what you, you write about, where we see technology enabling so many different players around the world not only to compete, but to profoundly change the way in which competition is defined. To bring stories that create entirely different form of business models and create the narrative on consumption, on identity, on price, is fascinating. It's the most marginal part of my work where I still find so much learning curves ahead of me, but how much are this new business model transforming our own identity It's quite something, man. And I think it's— and I always say this in every class at the end of the class, and as we're wrapping up, you know, what a phenomenal period of history to be alive, right? It's just crazy. But it's also— I feel very blessed that we can tell the story.

Yeah, I suppose one of the things I always think about, and people say it to me when they look at my LinkedIn profile, they're kind of going, what do you do, man? You know, because there's a sense that you're all over the place, you know. But it's one of the things I talk to my students about is you got to let go of the old way of doing things because, you know, this concept that our parents worked in one company for all their lives, we may have 5 jobs in our lives, but they'll have 5 at the same time. And I think it's worth experimenting with that and using, if you're on down time or half time during COVID try to find other plates to spin, you know, other ways to find a living, but something related to your passion in some way. But I, I say that to say, what, what is your message for people out there in this time of flux, where from a mental perspective, from a mindset perspective, what would you say for people?

I would say, and then that In every, in history, I mean, again, history doesn't repeat itself, but it rhymes, as they say. In every major transformation in history, people felt pretty much like we feel right now. The ground is shifting, we can't go back, and anything ahead of us is still very blurred. And the best image I have in my mind to understand where I am right now in my life is on a suspended bridge, in which if I look down, I get scared. If I go forward, I know it's the only way to go, but it's kind of, it's kind of difficult because every step there is a lot of risk attached to it. And I can't, and I don't want to go back because there is nothing waiting for me over there. So if we are in a suspended bridge, we might experience fear, but to some extent, it's the required step for us to actually land and migrate into a much better place. Our society was accumulating a lot of systemic problems before. Right now, I think those problems have culminated into a sense of crisis that is perceived to be semi-permanent. We have to go through, navigate, use ingenuity, understand foresight, engage into this phenomenal power about architecture in the future. And I think we're going to be a generation that will transition us from the '20s to the 21st century. We were chronologically in the 21st century, but we were not culturally in it. I think we are now finally getting culturally in it, but any transformation is actually painful. If there is no pain attached to growth, it's hard to imagine it's a real growth. I see this, hopefully one day, that's my real final message. Let's call it post-traumatic growth, is how we grew out of this and how we're going to be able to really utilize resources we have But there is so much energy in the conversation that we had that if people see this as an opportunity to create the same degree of energy wherever they are in conversation and in form of inspiration and that cultural vibrancy, I think we're really going to be that generation that will embody what we want to become. And I'm very optimistic, man. I mean, there's no day where I don't feel that whatever we'll be able to become will be of a much better way, a journey than what we have been ever thinking of. So that's my message to everybody. You know, we have to be that architecture of the future. We can no longer stand by and look at things happening in front of our eyes because it would be a form of surrendering. We have to actively do it, and I think we're going to be able to do that.

Well, and the more Mark Espositos in the world out there spreading the message, the better. So where can people find you, Mark? Find out more about the books, your courses, your writing, where can they find you?

Amazon is where you have my books. LinkedIn, I do a lot of my work there and I think it's easy for everybody to follow the work I do. And I will say that I have a website which is mark-esposito.com that I use just to, like, I would say showcase some of the work that I have done. But, you know, it's, it's easy to follow the work I do. The question is whether people want to engage with it and see whether they want to be part of it as well, which I think is what I'm looking forward to the most. Yeah. And I look forward to people getting in touch as on the offset of this conversation. And listen, I have to tell you, this is really cool, man. I mean, what you're doing And the fact that you're building these places where we feel comfortable in expressing hope and optimism for the future, it's exactly what we need to create. So I'm really thankful that you brought me to the show, thankful to my friend Alessandro who made the original introduction and you have covered his work on Clever. And you know what? I can only wait for the next email of yours to say, let's do another one.

Well, the good news is, so there's a, there's a copy of this bad boy up for grabs if you sign up to the innovationshoutout.io newsletter. But also we are going to cover The AI Republic because I know you, you actually decided which book we're going to cover through a survey and narrowly Understanding How the Future Unfolds won that race. So Mark, it's been an absolute pleasure. Author of Understanding How the Future Unfolds: Using Drive to Harness the Power of Today's Megatrends. Mark Esposito, PhD, PhD, thank you for joining us.

Thank you so much for The Innovation Show. This was— it's too much fun. What should I do now?

Nothing will match this.