The post pandemic World | Mark Esposito

Mark, hello. Sorry for waiting.

No, don't worry, how are you?

Well, I'm good, as you know, relatively as one can be. Yeah, we are, you know, setting things up. I think I will turn on my video soon. I will introduce you and then, and then you'll just give us your brilliant lecture. I apologize in advance, you know, if the turnout is not very high because our students right now, some of them, you know, they're engaged in volunteering, they're doing stuff, but we will post this on YouTube. So later they will watch it.

No worries. I mean, I'm the one who, you know, is honored that You know, I can do this and it's the least I can do, right? Anyway, it's a way of giving a voice to Muffin.

Absolutely, we really appreciate it and I will stress it in my short introduction, but in fact you were the first one to contact us. Yes, so we do contact a lot of people and they're very kind, they all agreed to participate but you were the person who addressed us, so, and we appreciate it.

Oh, and it's just, uh, it's, it's, it's what happened to be the, the choice in front of me, and I'm happy I did it. Thanks.

I will wait for a couple— yes, minutes. I guess we just need to set up a few things with our IT guys. And yeah, just bear with me and I will introduce you. And yes, yes.

So you will tell me when to turn on the screen, right? Or do I have to? Or you tell me, I'm okay with it.

Uh, I think our IT guy is now adding this option. So for instance, I cannot turn on my video now, but once I can do it, this also implies that you will be able to do your stuff as well.

Of course, of course, no worries. Yeah, yeah. Okay, so see you now.

The video is here. I think you can turn on your video. And, uh, hey, hey, uh, you can try, you can try the share screen option now, and if it works—

Yeah, yeah, sure, I, I can do that. And, uh, let me just, uh, find it. It was with me before. Uh, I had so many things open at the same time.

Here you go. I can, I can understand.

You can relate?

Yes.

So I have a question to you, Timofey. Would you like this to be some of my presentation and then some questions, some engagement with me? How would you like to run?

Yeah, also, so we set up, I think, like 90 minutes, but maybe, I don't know, it really depends on your availability. So it's maybe 60 minutes, maybe 90 minutes. So it would be best if you can start with a lecture And then I will either ask questions myself, or I will moderate Q&A by reading questions from the chat. Uh, my friends are helping me. We're also checking Facebook page. Some people can post on, on the Facebook page.

Yeah, you can try the share screen if I can. Um, here we go. Can you see the slides?

Yes, I can see the slides and, uh, great. So I think we're ready. Just give me, you know, this, um, 1 minute of formal introduction and then I will pass the word to you. Yeah, yeah.

Do you want me to stop the share now or that's, uh, no, it's, it's fine, it's fine.

People can adjust, you know, they can watch. And also, uh, when we upload, uh, the video on the YouTube, we will cut it so people are not going to be bothered by our chat, you know. Okay, okay, good.

Let me just— one sec, before you start, I'm just making sure I have the right file. I don't know how to stop. Okay, of course now I'm the one that gets stuck with this stop and share. One second, I lost my mouse, my cursor, so I don't know how to stop the share from my side. Do you think you can try to stop? Oh, here it is. I got it. Sorry, just one sec. Make sure I have the right template. I want to actually write one thing that I saw on Twitter, which is, yeah, Global Minds for Ukraine, and use it as a hashtag on the presentation.

So it's, uh, absolutely, that would be great.

Yeah. And today is March 8th, right? Yes, March 8th, 2022. And of course we're gonna write that we are in Kyiv. That's where we are. So exactly, yeah, I learned something that there are two different ways of pronouncing, uh, Kyiv, right? Depending on where it's coming from. So how do you say in Ukrainian?

So the way we spell and pronounce it, so it's K-Y-I-V.

Yeah, and how do you pronounce it?

And we pronounce it Kiev.

Kiev, okay.

Yeah, so it's like deep E.

Yes, uh, all right, let me— okay, I think I'm ready now. Uh, here I just decided to do this.

Okay, yeah, great, good. So I'm, I'm starting with the introduction. Yes. Hey, So everyone, thank you for waiting, for bearing with us on Facebook and Zoom. And as always, thank you very much for joining us. My name is Timofey Brick. I am assistant professor at Kyiv School of Economics, and we broadcast this lecture from Ukraine. I stay in my apartment in Kyiv in relative safety. As always, I advise to my students and coworkers, and alumni, if you watch us from Ukraine, please be careful, listen to alarms, and proceed to your shelters if necessary. You can always watch this lecture then on YouTube. And I have to say that right now, many of our students volunteer and help other Ukrainians to deliver supplies or to coordinate displaced people or to support army. So this can affect our attendance rate, but we will post this lecture on YouTube for our students to watch it. This is the 13th day of Russia's invasion, and while Russian rockets and air forces attack civilians, hospitals, kindergartens, they also bombed universities and campuses. So this war is also against knowledge and science and education. Our organization, our university, we want to show that we stand strong, and we are resilient, and we're operational, and we want to keep going, doing what we do, doing research and doing education. That's why we initiated this series of lectures called Global Minds for Ukraine. Our guest today is very special. Dr. Mark Esposito, he was the first person who actually contacted us. He volunteered to give his lecture, you know, to, to comfort our students and to share his knowledge, and we are very grateful for his solidarity. Dr. Mark Esposito, he's a professor, he's a best-selling author, and co-founder of Nexus Frontier Tech. He, he wrote the book The AI Republic, and he presented it on many venues. I watched his presentation on YouTube at the Google office, which was very interesting. And of course, he has held many academic appointments. He worked at Harvard, at Cambridge, and Arizona State University. He's a very established academic, and we are very honored to host him. And his lecture will be on you know, on a wider topic which is not necessarily, necessarily related to, to war in Ukraine, uh, to the Russian invasion. He will be talking about the pandemic and the post-pandemic world. But I think this is very important to keep in mind that, you know, we live in this global world and we want to rebuild it to make it a better place. We have to think strategically and globally, and we have to understand how to behave in this global post-pandemic world. And, you know, we'll be very interested to learn from Dr. Esposito about his perspective on this big, important question. So, Mark, I, I'm very grateful, and this virtual floor is yours. Thank you.

Thank you very much, and tonight I am in Kyiv with all of you, and the whole point about me reaching out is that we all have one option always ahead of us to make a difference. And in my case, make sure that I could do what I always do, which is lecture to the students of your university, was, I think, normal. So not only I send you my support, I am there with my mind, with my soul, and, and I am, of course, I'm despising what is currently happening. I would never imagine in my lifetime to see a war in Europe on absolutely no pretext or no reason. Like, there's never a reason for war, but if there is a moment in which we really are struggling and understanding why this all is happening, why so much suffering. So you have my love, all of you currently going through this. And I have to say, Timothy, I admire so much that of the many options, the university decided that continuing to do what the mission is is actually more important than hiding, because that's what people terrorize wants us to do, right? They want to terrorize us, and the best answer is to continue to do what we do best. So thank you for having me. We have agreed together with Dr. Brick to maybe have a conversation first on an important topic that, as you notice, I haven't developed by myself. There are 3 more people next to my name into the conversation. I'm the one representing them, but clearly this has been a collective effort and what is going to be our next work, our next book, which will be published by MIT University Press. But the idea is not just the book itself. It's the findings that we found as we were going through this research. And I look forward to the discussion that we'll have and to the question that we might actually see coming our way later on. So if that's OK, Timofey, I will start. You should be able to see my screen. And first of all, why the Great Remobilization? The input or the impetus started right after, I would say, the first few months after COVID, when we realized that the fragility of our system was so clear that we were dealing with a groundbreaking moment, to some extent, a watershed moment. We realized that most of our institutional frameworks were actually struggling. Our economic foundations were based on a stock of theory that are coming from the 20th century. So I'm an economist by training myself, and I have to tell that until the modern monetary policy from Stephanie Kelton, very little was really added to the conversation in economics. We were heavily relying on a body of work that still made a lot of sense in academia, in the practice, in policy, that was coming from the last few decades. But the events in 2020 until now really demonstrated that we could not just depend greatly on those foundations anymore. We had to think that these next few years, the decade from 2020 to 2030, will be a foundational change from what we actually are currently imagining. So that's kind of to give you a bit of a sense of where we started this conversation. The Great Remobilization is rethinking how are we engaging at the public policy level, how we're engaging at the corporate level, how we're engaging on the financial level, how we're engaging on the technology level, just to give you a bit of context. With redefining some of our tenets. There are a few things that I need to share before running a few slides. The first one is we are in deep need of a new narrative. The narrative we used to have at the end of World War II, when we saw the rise of the Western heritage becoming predominant with the North Atlantic Alliance, was based fundamentally on two major principles, democracy and free markets. And that was also the sparkle that initiated the Cold War later on, in which we could really see a contrast of ideology between two different forms of narrative, the narrative based on a free world and the narrative based on, let's say, a non-liberal world. The narrative built our economic prosperity. It built the idea that markets are driving economic activities. It built the idea that countries are competing. It generated industrial policy that really helped countries go from farming to manufacturing all the way down to services. And they started to think that this constant challenge of innovation is at the same time a stressor, but equally a propeller towards economic prosperity. And we have seen part of Europe going from poor and devastated from World War II to prosperous and rich over time. We started to think about social welfare. We started to imagine universal rights. So the 20th century was a century based fundamentally on the narrative of growth. That was driven by the economics of free markets and the allocation of power in democratic exercises. The 21st century does not work that well anymore with the same narrative. There's a number of reasons for that. Our increasing pressure on the socioeconomic fabric is leading some of the larger inequality we have ever seen in history. Globalization 1.0, or capitalism as being responsible for lifting millions of people out of poverty, But the purpose of taking them over and distribute them on social mobility standards to the point in which we can imagine them generating equal distribution— not equal in terms of everybody the same, but distribution that has equal opportunity depending on where you are— seems to be challenged fundamentally by the way the financial markets are operating. And the rise of a financial economy on steroids, which grows at least 400% larger than the real economy, started to create this unique phenomenon in which the reality of the market does not reflect the reality of the people on the ground. So a number of reasons that COVID has simply exposed showing that our previous model was really not working. So what have we been observing in the work on the Great Remobilization? So first of all, I'm going to give you a bit of a poster. This is not our cover yet, but this is also to show you Olaf and Terence who are working with me on this. Forget the big test. It's actually really unfriendly to read. It just gives you a bit of a conversation about where this is really going. But the smart— the great revolution led to fundamentally this, which is really where I'm going to spend some of my time now. So during the research, we started to notice that the entire operating system of society was upgrading itself to what we call Global 2.0. Now you will notice there is an umbrella on top of it, which is what we call the cognitive era, right? This is really where a large part of what you were saying before, Timothy, on The Every Republic, and Olaf has written another book called The Solomon's Code, help us to really understand that the relationship between technology and humans was fundamentally changing. It was changing because, first of all, technology was no longer a means to efficiency like we tend to speculate in economics, But it was replacing the surrogacy of value creation. The moment we were actually building automatic processes entirely driven by machines to create value, we bypassed the principle of labor that in many parts of the world is foundational to the idea of a constitution. There are countries that basically say that their republic is based on the foundation of labor. But what happens when labor suddenly becomes ambiguous or blurred? We don't really have a clear— cut between this. So the cognitive era is something that we have seen rising at a very faster pace. We don't consider it to be a specific factor by itself. We consider it to be much more of an overarching factor in which, regardless that we're dealing with geopolitics— and we're going to have a conversation, and I'll try to make equally a reference to the current war in Ukraine. The conversation with technology starts becoming so predominant that a large part of our decision-making these days are taking technology almost like an asset class on its own. I'm going to give you an example, and I'm going to bring it really down to the conflict in Ukraine. One of the interesting stories, interesting to the point in which you have to observe it with the eyes of history, that is happening through this events of these last few days is how technology companies became major players in the picture. Not only there were requests, for example, to stop doing business in Russia, like it has happened in many fintech banks, but equally technology companies. But also there was— and I don't know his name, Timofey, but I think he's the Minister of Digital Transformation— on Twitter asked for help to Elon Musk for having coverage of communication through Starlink. And suddenly, interesting on that, a country like Russia hacks the Ukrainian system, but a billionaire is able to send satellites out to space to cover that. I mean, that was an interesting moment to understanding that technology today has an entirely different taste and place in our society than what we actually have ever before. That's the first part of the conversation. The other part of the conversation is relating to how much this will redefine the foundation of work and labor, and how will we be capable of integrating technology for the better. One of the sentences I love quoting from one of the co-founders of Siri, Gruber, who actually said, we spend a lot of time augmenting technology. What if we spend equal amount of time augmenting humans? I think there is a clear direction towards technology augmenting humans in the next few years. Imagine the power technology gives us on challenges like climate modeling and climate policy, to helping in healthcare. Look at vaccines and the wonder of having vaccine after a few months from a pandemic because of the amount of work we have done in the past few years in developing technology capable of replicating memories inside the DNA, which is really the wonder of these vaccines. All of this shows you that we are on the onset of one of the greatest transformations. If we manage this correctly, the cognitive era will be an era of equality and opportunity, equality and equity for everyone. If we mismanage this, it will become the greatest divide. Not only will it be a major economic divide, it will generate incredibly difficult gaps to surmount. but equally economic asymmetries that will continue to generate more and more pressure on countries that won't have the technology know-how. So that's to give you a bit of a sense on this. When we try to bring it down to the other 5 C's, they happen to all start with C. And you know this as well, Timofey, right? When you are a business school professor, you start feeling a bit of a romance with frameworks, and you come up with something that you can easily remember, because that's easy. So goes for the 5 forces that we all learned somehow, to the marketing piece. And now we decided to come up with the 5 Cs. Well, 6, but let's call it 5 in terms of that's really what is emerging from our work. So we divide into COVID, crypto, cyber, climate, and China. And I'd like to spend some time on each one of this, just for you to understand where we are with this. I'll do a brief overview on this, and then I'll try to go a bit deeper into that. What we think the operating system of the globalization 2.0 are really about to see is what we put in the book, the idea of zeroth principle. Now, this is a slide that my colleague Olaf knows much better than me. He has been working closely with the idea of zero principle. But fundamentally, just to give you a brief gist of that, when we're looking at zero principle, these are principles that are creating entirely new foundations. When you're looking at first principles, you're looking at principles that are generating significant forms of disruption, because they fundamentally change the way we operate. But while first principles, they have an impact on an established boundary, zero principles, they are creating an entirely different set of boundaries. So imagine that you're dealing with something that is creating disruption into an x and y-axis. That is within the boundary of x and y. Zero principles, fundamentally, they change the way we are. So we are, I think, clearly not only in the very beginning of zero principles. I'm going to give an example, bringing it back to geopolitics. Even if I work in the intersection between technology, policy, and business, in my heart, I'm much more of a political economist, at least the way I like to see myself. In terms of geopolitics, We are about to see in these days, through the sacrifice happening in Ukraine, an entirely redefinition of the geopolitics in the 21st century. Believing that a country like Russia will ever be the same after this is actually naive. Imagine what it means like a country with the geography of Russia having an entirely different set of course that will profoundly change the next few years in ways that are fundamentally zero principle in geopolitics. And so goes for many of the conversations we're having. So goes for the NATO. So goes for the revalidation of the EU. There are extremely interesting moments for us that are currently happening. So this is for you to basically see what we saw in our work, that while we do believe there is some form of specular relationship between the past and the future, in some degree of anticipation of the future by looking at the present, We also started to notice that the transformation we were going through right now were not all incremental, or optimal, or suboptimal. We were not looking at an efficiency language. We were looking at an entirely different form of transforming value elsewhere. And that's, I think, important for us to bear into account. So that's for you to have a sense. When you're dealing with zero principles, you require zero principle leadership. We are seeing this in the ability to thrive and move forward in the creation of an entirely different economic systems, social systems that are capable of understanding where this foundation is really going about. So that's to give you a bit of a sense. Back to the 5 C's. Why do we think this is so— well, let's call it 6 for the sake of introducing some element onto the, the cognification, but in the book we are focusing more on the application of the 5. So what do we see happening at a faster pace? I'm going to go and have some slides. I won't go too deep in this, because what I'd like is to have time for questions. So in cognification, what I think we'll see more and more, as I mentioned before, is this predictive ability for us to think about technology and society at a much more intertwined level. We see this similar to the premise of the Fourth Industrial Revolution, where technology was becoming multi-domain— biological, digital, and physical. We see this building fundamentally different any form of mimicking human behavior. We see this as a way for us to reframe the role that we have as humans in society. When technology fundamentally takes such a large part of the decision-making, if we use this as a mechanism of supporting humans in the loop, this is a conversation that we need to have no matter what. This is not about replacing humans. This is more about understanding how do humans integrate digital components in their ability Quick note, I'm connecting from Dubai where I'm currently based. Among the work that I'm doing for currently with, with the government, there's the idea of rethinking jobs into the 21st century. And so there is a, there is a term that my colleague Olaf has been using extensively called symbiogovernance, which is the idea of how do we integrate technology into public servant jobs. That's an example where cognification will play a major role. Where we are redesigning jobs by taking into account digital components, by taking into account technology no longer as a means to efficiency, but technology as a form of architecture that largely shapes value chains. So that's to give you a sense of the first C that we consider to be more of an umbrella. This also will create an entirely different need for us to rethink about the internet, rethink data, rethink markets, And just to give you a bit of a sense of that, in a world in which technology becomes much more predominant— and I know that many of you are economics students— where we're moving from bilateral markets to multilateral markets by defining data as an asset class on its own that will generate its own mechanism of supply and demand. And similar like what happened with petrochemical oil and gas, where suddenly they became traded onto the market independently on manufacturers, sometimes independently on the currency of the country that is extracting this, by using a neutral currency like the dollars, for example, for oil. It shows you similar data likely will become an asset class on its own that will possibly mushroom the idea of markets into some form of multilateral market rather than bilateral market. So to give you a sense of context why economically this will also fundamentally change our principle on supply and demand pricing mechanism, a mechanism of arbitrage, and all of that. The second C that we talk about is COVID. Well, we don't talk about COVID in terms of public health. I think we have largely talked about it in many parts of the world. We talk about COVID as a propeller of the internet in ways we've never seen before. And what this slide shows you is how much more internet traffic was really being experienced as we were kind of looking into the rise of a larger dependency on digital. You notice the numbers here are quite significant. It shows you that ahead of us, we'll see internet to the next generation. Some are currently already speculating on Web3 as a different kind of internet from the Web2 or Web1, which was historically just about communication and emails. Then it became more about search and messaging. Now Web3 is really moving us into a different form of decentralization, which is really more about where the internet is going to go in the next few years. Rethinking access differently from before is one of the silver linings of COVID that has really provided us with an internet on steroids that has really created access to data that we have never seen before. So we are right at the beginning of, I would say, almost a zero principle in moving into a different form of quantum internet that will also be largely related to energy. We're not talking about energy specifically right now, but energy is another of the elements that likely will be within the data sphere. Because consider that most of the technology we see today in the alternative form of energy are technology that work much closer to the internet than on the extraction of raw materials. So we will see more and more that the effort on renewables will be fundamentally a data conversation rather than natural resources and extraction, or what in economics we tend to refer to as factors of production. The third C is the one related to crypto. Now, again, all of these are fundamentally critical for anyone into economics, because we see this change in the principle of financial transaction. Not only cryptocurrency will continue to be something that we'll see. I think it was news of these last few days, President Biden was about to announce something about crypto. It shows you it's now getting into the balance of powers across countries that talking about cryptocurrency has become insignificant. Why? Because now cryptocurrencies are in the size of trillions. So we suddenly have a major economic impact that we need to take into account. Cryptocurrency also becomes some form of psychological safe haven. Right at the beginning of the sanction, if you remember, with the fear of the market opening on Monday, we saw a number of people largely investing into crypto. So what used to be back in the days on natural resources, namely gold, now seems to be operating on crypto. Now, there's a different conversation on that. We don't think crypto is actually a safe approach. You had a lecture with with Dr. Taleb, I think openly talks about crypto as being— I don't know if he ever mentioned to be in a Ponzi scheme, but I don't think he's far from doing that. But thinking that crypto is not different from high-yield equity indexes that are by design with high degree of volatility. But more interesting than crypto for me in the crypto conversation that is going to generate the uprising institutional framework on finance is DeFi, decentralized finance. We see this more and more powered by how technology companies like fintech or tech fiends are driving fundamentally the difference on that. And on the distributed autonomous organization, the DAOs, where we see, for example, ledgers and blockchain driving specific processes that equally have voting mechanisms in place. These are wonderful examples that if applied to things like, for example, supply chains, inventory, even microtransactions. There could be a wonderful donation of charities, wonderful forms of having technologies that is using algorithms to dramatically automate some of the processes. So we see this being a different kind of a wave from what crypto used to be at the time in which it was a challenger to the central structure of money. We don't even think that crypto today is about money anymore. It's much more about the blockchain technology that has so much potential in redefining the storage of value. Because like the internet, who owns the ledgers, right? It's a much more open conversation. Going back to a conversation on geopolitics, I don't want to forget what is currently happening. When you're hearing of Russia moving away from the internet, It shows you that this country will go into a degree of isolation. It will not necessarily be able to integrate itself into any of this, which means that if the effort in many parts of the world is to increase transparency, a system that is actually decoupling itself from that will become less and less transparent over time. It's really challenging to imagine what will really be in the next few years when you're just looking at this from a pure macro and geopolitical perspective. The fourth C is cybersecurity. Now, I think we started to notice this already. I'm sure you see how Anonymous on Twitter is announcing every time it's hacking some of the websites in Belarus and in Russia. Guys, this is the reality of cybersecurity challenges right now. We have a system that is directly rethinking security in digital form. In a way that we have never seen before. So the reason why we think cybersecurity is the center of our attention is not only because of the specific characteristic of cybersecurity, but also on the severe lack of security capability we have right now for us to be able to protect ourselves. So the estimates go into the amount of billions that every single year, countries are basically losing because they can't protect themselves. In the next few years, we imagine that the effort at the central level will continue to rise to start building cybersecurity structures that are going to be worth it of the kind of asset we have in, and the kind of equity we have in the digital world. So again, it's a form of, I think, a form of upgrading our understanding on security considering that the large majority of the assets are now generated on digital transaction. The number 5 is climate. I think this is where we're going to see the rise of the carbon economy at the level we've never seen before. A dear colleague of mine, Dr. Cagram, who is the dean at Thunderbird, has a wonderful slide in which he shows how carbon sequestration, carbon mitigation, and climate adaptability is now generating trillions of dollars in net revenue. So very likely in the next few years, we'll see economic activity rising from the carbon economy. Smart carbon trading, how we're rethinking carbon in supply chains, how will we track emission and eventually generate a market for that, how do we do a cost-benefit analysis, how do we understand the flow, how do we integrate in technology for us to generate the traceability required for carbon, to be understood better. So we are at the very beginning of the rise of an entirely different set of economic ideas around climate. And let me tell you this, climate change as a paradigm has failed because the idea of reversibility of the climate is very naive and quite romantic. Entropic systems, systems that are naturally evolving, they don't reverse back. The question is not the reversibility of the climate. The question is the adaptability of our system to a climate that is in constant transformation. And that is much more of a human geography than anything else related to that. And I think the carbon emission conversation that is shaping the carbon economy today is much healthier than I think what was the conversation on climate change that was working on binary system of incremental/decremental by trying to reduce emissions. Clearly, you can't do that because in game theory, we learn that what you do if you're having a problem and two different parties with asymmetrical information, you try to minimize adversarial forces. So climate change was foundationally a game theory exercise that could never find an equilibrium. We think that the equilibrium is not in zero-sum game, is in building entirely different economic model that are based on carbon neutrality. I think this is fundamentally where we see the fifth trend. Final, and it's not just, as they say, the last one or the least one. This is big. China. What will be the role of China as a country where data, currency, people, intellectual property, goods and services, natural resources, DNA, and today the ambiguity with Russia continues to be a problem? I'm not saying that is a problem as countries per se, but it's a country that is fundamentally challenging international cooperation the way we know about it, is building a form of informal alternative to our system. We saw this already with the digital RMB. We see this already with the creation of the Asian Infrastructure Development Bank that became the first challenger to the World Bank in 2015. We see this with the large infrastructure project that China has been running with the Belt and Road Initiative, and we see this with The trade volume that China is increasing with Africa is for— we were learning through one of our interviews that for the 12th consecutive years, the trade volume China is exchanging with Africa is much larger than US or EU combined. So it shows you that clearly it's a country we need to understand. We need to engage. I don't think it's a country we need to directly antagonize, but it's a country we need to understand at a deeper level than what we understand right now, because we clearly are not understanding what is the role of China. Neither China is making much of an effort to make that clear either. So I think clearly in the next few years, rethinking the relationship with this country will be an important one, because across so many different dimensions, the country is far from being neutral. And how will we reconcile from trade to data to protection to IP is really the essence of the So what I wanted to do, Timofey, in this time with my slides, not to bore too much our viewers, is to give us a bit of a conversation on where we see this eventually going, where it's coming from, the research we have done. We interviewed over 100 people, some of them prominent, to basically understand where we are heading. Nobody gave us one answer, so we had to recalibrate them into what we thought could be making some form of sense. The 6C with codification as the umbrella, as I bring it back for us to basically my final slide, really represent what we see the operating system of globalization 2.0. We think that around the area that I mentioned throughout this short conversation through my slides, will see significant transformation moving forward. All of them, they are aspiring to become zero principles across different dimensions. So that's kind of where the idea of the Great Remigration is all about. To finish on that, can we build a world that is going to embrace this conversation in the right way? Rather than expecting that will happen for us, can we rethink it more proactively So we're becoming what we call design activists, directly designing this infrastructure, this institutional framework, these ideas, these theories. And I'll finish on this, Timothy. Myself, I've been trained with the stock of theory coming from the 20th century that are my legacy and my heritage. And I honor them. They gave me an opportunity to think and to choose. My conceptual frameworks. But we need theories of our own in the 21st century, because we're facing challenges that we have never seen before, in a combination that no other civilization have ever seen before. I'm not saying we're special as a generation, but we have our own package of problems that we need to address. And I think resorting to the past to understand the future in this case might not take us very far. So that's to give you a bit of context. I'm going to stop my share, Timofey, and I look forward to our conversation. I hope it makes sense. Sure.

Well, thank you. Thank you very much. It was such a deep lecture, and you presented everything from game theory to qualitative sociology. So that was excellent. I had written several questions while I was following your presentation, but I think I will start with the last one. Because it is a very intriguing one. Yeah, you provoke us to think about these new challenges and searching for new conceptual frameworks and theories. And of course, this is so difficult because how can we, how can we do it? Yeah, we have socialized in certain world intellectual traditions, and it's, uh, and we're trapped there. Yeah, so it's so difficult to, to develop these new conceptual frameworks. And you also have emphasized that the role of China is significant now, and it will be even more significant in the future. So maybe one of the, you know, um, ways of, uh, thinking about our future would be, uh, to borrow some intellectual tradition from this country, you know, like to understand their culture better, their intellectual tradition. How do they see the world? Try to understand them and also try to adjust— not necessarily adjust, but at least to get some inspiration from them. Or maybe you believe that this poses certain threats in a way that you have said yourself, that China poses certain challenges to the world. So maybe adjusting our worldviews to their tradition could be wrong. So can you somehow speculate about it, about, you know, the opportunity to learn from them, but also to be careful with what— how far can we go?

Yeah, Timo, thanks for this wonderful way to start. The way we see this is that China started to decolonize itself from the West. There was a time where China was going after the Western icons, right, the Western brands and all that. And I think over the years a bit of a combination between the Cultural Revolution that happened that brought the Communist Party to power, to the fact of the one-party system that, of course, believes in surveillance and control as the only way for the degree of complexity you have in a country like China, we start to notice the rise of Chinese alternatives to the Western ones. And over time, you have a generation of people that are born only exposed to that. You kind of get, allow me the term, indoctrinated into a Chinese way of thinking. I have a friend called Ted Sun, who wrote a book about 10 years ago called Inside the Chinese Mind. I think we really have to go inside the Chinese mind to understand. Back in the 1950s, no matter whether you were American or not, you had to understand the Americans to understand the way the world was about to be designed. We had to. All of us became colonized to the American idea one way or the other because we had to. I think it's the same now. We have to get closer to the Chinese way of thinking for us to understand where this country is currently headed and going. And what you said is correct. Can we borrow ideas? Can we work with them? I always find that in the ability to have a conversation with a party, you can say, my way versus your way, you can say, can we create a third way that is reconciling some of this? So I think there is one of the comments that we learned from Parag Khanna, who is somebody that we know, and we know his work. He said, the world is converging in a number of different ways, but is culturally diverging as well, because of subculture tribalism. We have to, I think, make a step towards integration somehow, because thinking that we'll ever be able to simply antagonize China, that's not going to go working. So I think moving closer and understanding is really— and let me finish with this— the way we have been colonized to the American principle, the Western principle, for most of our 20th century, we have to colonize yourself, you know, intellectually also to the Chinese principles, not because we have to embrace them, but because we have to understand them. I think that's clearly one area of intervention.

Yeah, I cannot help myself but thinking about Russia and Ukraine now, and I think a lot of intellectuals also have noticed that this desire, or maybe attempt to understand Russia by Western intellectuals, has also created sort of romanticized narratives of Russia, yeah. And, and some people were lured into these romanticized narratives, uh, yeah. So I think this can be also a powerful, um, example to all of us. So, you know, to build some, uh, boundaries, yeah, when we want, and, and to have this clear strategy whether we want to understand someone, appreciate someone you know, have some cultural exchanges, but not to get lost into narratives and romanticized ideas, because it could be, yeah, it could be dangerous. It could be dangerous. Absolutely. National security.

Well, you, you are experiencing the, the price of having underestimated the narrative in the way it should have been, you know. And that's a critique to, uh, you know, the West for the last 20 years. We have fundamentally misunderstood Russia. On the contrary, we were thinking that Russia was leaning towards the West, not understanding that it was never leaning towards, right? It was creating leverage. I think across so many different US presidents as well, we have seen so many mistakes from Clinton to George Bush to to some extent even Obama, right, Trump, for us to really not having understood the thinking behind. I think a country like Ukraine, this conversation could have never been so easily done because you have the historical context to understand Russia better than other parts of the West, right. But outside of that context, we were all romanticizing, as you say, with that. I think, again, we cannot afford the same mistake with a country like like China. I think we have to remember, and I know I'm using this because I know in academic terms we have the ability to be intellectually free, right? Russia is economically quite inconsequential, but it's just because it's a military power. If it wasn't for the military power, a country like Russia would constitute roughly 3% of global GDP. So it's actually Russia with 145 million people has the same GDP of a country like Spain, And with the devaluation of the— depreciation of the ruble, likely a country becoming like Portugal. I think it was the same Taleb who wrote it on Twitter. So we have to imagine that the economic dissonance of a country like Russia is compensated exclusively by the military capabilities. And I think this is a mistake that we have made by thinking that just because it's a country with a relatively modest economic condition, it doesn't necessarily build the threat. And last on this, haven't we really paid a high price on underestimating the conversation on dependence on energy right now? Isn't Europe today understanding that if you are dependent by 50% of your energy intake from a country, that by itself is economic fallacy, right? But anyway, can you imagine the number of people who got elected on the promise of having more affordable energy? But that's really— it's sleeping with the enemy, so to say.

Yeah, absolutely. I agree. But also, it brings me, you know, to the next question. I think it's a nice segue. Because you have also mentioned this idea of new types of leadership in this world, and I want to ask you maybe about some specifics, because we live in this very complicated global world with these large-scale complicated international organizations, you know, like European Union, NATO, and sometimes these organizations, you know, they can be slow in their response and reaction to growing challenges. And obviously we have this these decentralized, uh, academics and intellectuals and businesses who, who have this alarm system. You know, they, they see new challenges, new opportunities, and they, like you do, you, you talk about them in, um, in your lectures, in your books. And also you have said that you advise, uh, to governments. Yeah. Uh, but nevertheless, I imagine that it's very difficult to, to have this, you know, to manage these quick changes, how to leverage leadership in this world which is so much regulated. Yeah, I can, uh, and I, I think a lot of Europeans, uh, also have experienced these negative, um, things with populism. You can say that populists are people who take, uh, leverage and who propose these dramatic radical ideas how to change world, and then everything collapses. So Europeans and Americans, they have built the system to protect against wild, crazy ideas. On the other hand, we want wild and crazy ideas to be heard and to elevate up to the, you know, top offices.

Yeah.

So is there any practical solution? How can we build the system? Maybe we should create one more organization that will be called International Office of Crazy Ideas. Maybe we should have some advisory boards, or maybe, I don't know, we should trust— not just trust to intellectuals, but have some offices with them. I, I don't know. Can you share your experience, how you advise to governments, and whether you, you and your colleagues have these ideas how to practically implement, uh, the structure of leadership?

Yeah, that— thanks for this. Uh, that's a complex question, so I'll try my best with your question. Uh, I think what governments lack is the ability to pivot and experiment policy to the point in which you can learn about policy and policy failure, policy fallacy, assumption. We have this very static view that there is an input, which is the policy, and there is the output, which is the expected outcome. And of course, policies are nonlinear. So I guess it starts by understanding if we accept that complex systems with large degree of interdependency are nonlinear, we start rethinking that success rate is not based in setting the policy. Success rate is based on approximating the policy to what you're trying to achieve. That means that building what a colleague of mine called Andrei Siknev calls agile governance is really the essence of the future of the government. Timothy, in the years to come. Can we think of government in an entrepreneurial format? And I think, put it this way, private investors understand return on investment. We teach this in many courses we teach in universities. But government doesn't have the idea of return on public value in the same way. So I think if we are able to understand that return on public value happens by taking risks, then those crazy ideas can be eventually pivoted, tried. And how do we see this happening in practical terms? We're looking at a country that we all talk about, right, from Singapore to Israel to the UAE, now to some extent some part of the Saudi government, to a country like Estonia that did not exist before 1989, where I happened to know Ilves at the time I was at the World Economic Forum, or a country even like Finland, right? What they do, they fundamentally experiment. And they experiment without feeling the experimentation is a form of stigmatization or failure. So if we can see how this small country have been able to largely experiment, we understand that the role of government in the 21st century is not static and based on centralized ways of operating. It's much more decentralized, territorial, flexible. To some extent not symmetrical, because it's quite normal, but very agile and capable of learning from the experience how to move the policy. I would say that fundamentally is where I see this. These are some of the examples we see currently running. And Ilves, the former president of Estonia, has an anecdote. Says, it was the time in which Estonia was trying to integrate e-government. How do you do this? Well, he was able to say, how many times do we fill out the form and what is the cost for us to do that? So the moment we're able to convert traditional behavior into an economic cost, you can eventually try to remove the cost from the balance sheet. So rethinking, I guess, processes for government in a way that are going in the direction of what we need likely will see the rise of more innovative and radical ideas emerging. It goes from small things like technology, but Michael Porter, with whom I have worked at the time I was at Harvard, wrote something in 2017 called Why Politics Is Failing America. And his fundamental argument is that politics is failing America for the lack of competition. Because basically, either Democrat or Republican do not represent the majority of Americans, right? Either the majority of the intellectual capacity that a country like the US has. So I think these are where we have to experiment: governance, voting, technology, agile governance, and eventually moving government into return on public value.

And I feel you. I think this is a very powerful statement that I have to share my own experience. I was a bit hesitant myself and maybe a bit stubborn to appreciate these ideas. In Ukraine, I think, you know, the whole world is watching, and the whole world now knows our President Zelensky. But at the very beginning of his appointment of his office, a lot of, you know, intellectuals and technocrats were very skeptical about him because he was rather perceived as a populist with a lot of crazy ideas. And somehow he, you know, grew up to be a political leader who does experiments. And many of these experiments have succeeded. It is a thin line, yeah. It's, maybe this is just a combination of many idiosyncratic processes, so I'm not sure how to scale up this experience and to advise to other governments, but I hope we will be able to document very well everything what was happening in Ukraine, you know, to build up some advice from that.

Yeah, you know, one interesting thing I was reading at the very beginning of the war was the number of technological inventions coming from Ukrainian startup founders, right? It's huge. And these are not small companies. Some of these are multi-billion companies. I guess as a byproduct of that culture, Timothy, that's why you have innovation in Ukraine faster than what you have it in neighboring Russia. Right, in that case.

Yeah, yeah, I agree. So it's, it's a combination of many factors that what you just said, but also, um, yeah, it's, it goes deeper in culture as well. So I'm a sociologist, so I believe in this, you know, combination of institutions and culture. I know that a lot of economists don't really, uh, like this term because of it's not very tangible and, and it's more like an error terms in your regression models, but I, uh But I still believe that there is something there, in these models of behaviour and templates, and how people transmit certain behaviour over generations. And I think there is something very deep in Ukrainian culture, this idea of horizontal society, which does not always trust their leaders, but knows how to organise with neighbours and partners and create coalitions and shift these coalitions. So, and I think this has helped our society to be resilient in the times of crisis.

Yeah.

However, I'm not sure whether this is a sustainable strategy in the period of stability. Yeah, it helps you during the crisis, but it does not really help you during the stability. So we need to learn how to build this balance. And it brings me maybe to my final question. I don't see anything in the chat, but But I know, I think it's enough to have these several questions between us. So you were talking about, you know, building these new economies including smart, um, uh, smart economies, uh, related to carbon energy and climate change. And, you know, I'm, I'm an optimist. Of course, right now Ukraine suffers a lot and the war is here on our land, but I have been an optimist all my life, and I like to think about best-case scenarios. So in the best-case scenario, Ukraine survives this war. I imagine there will be some massive economic support to Ukraine. We can think about, you know, South Korea scenario or post-Second World War Europe. Yeah, so there will be some infrastructure support, financial support, and I think it's necessary immediately at at this stage to think how to design new economy. So maybe you can make some bullet points, like what would you like to see in this new economy which is going to be built from the scratch? You know, I think Ukraine will be a great playground for experiments, and maybe you can advise several, uh, points that should be— that we should note and, and try to implement while building things from the scratch.

So I'm happy you're asking this as your last question. I think thinking about the future this way gives us the power of imagination, right? That is important. So I think there is a number of different things that come to my mind. The first one is, of course, rethinking energy in a different way. The carbon economy pushes us to think of energy as a way of empowering people to have energy, not as a way of controlling energy because of limited supply. Supply. So I think, you know, I would like to imagine Ukraine playing a major role in rethinking a carbon economy that works for energy without the consequential geopolitics of energy that we had, no matter if you are Russia, if you are the petrochemical countries who are extracting oil and gas. The second thing, considering the geography and considering that it's likely that Ukraine is on a path to an EU membership or something like that. You know, it's, it's so like difficult to imagine this will not necessarily happen in the future, right, Timothy? I think the country demonstrated that it's more European than some of your other European countries, right? I think that will create maybe an opportunity for supply chains, considering the fact Ukraine was a major trade partner in many ways. I was reading about the relevance of wheat and other kinds of grains that Ukraine is pushing across the world. Rethinking about what we call in our book the smart data supply chain, which starts thinking about supply chain by using technology to optimize the process. And I think it would be fantastic because of the natural geography that serves the north, the center, and the south, which is actually— it's a major region that needs reforming. It's also a region that needs reforming in light of a different kind of infrastructure project that is coming from China, which I think is not necessarily going to be fully compatible to other ones. So I consider it to also be a way of generating leverage. The last way for me to see this is rethinking decentralization, decentralized autonomous organization, decentralized finance, as a form of empowering the many small-medium enterprise Ukrainians that will actually need to rebuild the country. But back in the '50s, you rebuilt the country by physically building. Rebuilding the country now is empowering the millions of Ukrainians, no matter where they are, to build organizations that will work because of the access we can have with technology. So the same power of decentralized ledgers or structures is really what will define grassroots movement the likely would generate value. And that will mean that we are going to outgrow the physical boundary of what the country can be all about. I think if we are focusing on these three areas, among the many that we have, the future definitely is Ukraine at the center of important conversation that can really lead the way. And there is one thing for sure, as sad as what is currently happening, clearly one country will continue to be isolated for years to come. Sanctions don't disappear over time, and sanctions are not just about sanctions, it's just about redefining the space that a given country has in the world order. And if there's a country that definitely has grown in size on a global level, it's a country like Ukraine. So clearly, there is a role that Ukraine must play, because Ukraine has been able to do what countries would have never envisioned Ukraine to do. Right? Therefore, you know, that comes with the responsibility also in the reconstruction.

Yeah, thank you. And by the way, just when you were saying that, one question appeared in the chat. Okay, I will, I will read it. Um, okay, so it's, uh, the question comes from Aaron. Yeah, it's about energy. How should we look at energy independence in the future? Uh, I think you have covered this question already, but maybe you can just reiterate some of the key points from your perspective.

Yeah, so Arun, I love your question, especially the part you say about over-evangelizing solar. I think you're right, we have been over-evangelizing because that's all we have to start with. I guess, Arun, the question will be building portfolio of energy in which we can see multiple energy part of a portfolio in the same way as the best way to hedge risk in finance was to have a portfolio of investments, right? Not because you're dependent on one, but because the collective performance is larger than the individual performance of any given energy supply. So I think there are opportunities for us to think of energy as more of a portfolio, so to say. Why am I optimistic about my answer? Because if you're looking at Who has been driving green or clean energy in the world? It's been fundamentally the technology companies. They acquire energy for themselves because they have huge energy expenditures, but they also are playing or toying with the idea of getting into the energy market. So if energy becomes a platform, if we basically make it a form of greed, not necessarily dependence on the extraction itself. I think energy will become part of a data transaction, and I think maybe that's a way to not necessarily bypass— I don't think the idea is bypassing, the idea is to integrate and embrace. You know, I finished in this room, the idea is to expand the pie, not necessarily to replace it, because I, I think that's where we are making mistakes in terms of understanding. Can we do that? Of course we can do it if the concept is about replacement, but we can do it if we're conscious about expansion. And I think that's really where the thinking goes, in my, in my humble opinion.

Hey, thank you. Well, we don't have any questions. Um, I think what we can do now, maybe you can just repeat and plug in your book and remind us, uh, the title and, you know, when is it coming, and then I will have some closing remarks. And of course, it in.

So, um, the book is called The Great Remobilization. Uh, it's a book that is supposed to come at the end of 2022. Uh, we're now going into, uh, what I'm going to do is just, uh, the COVID of the book, if that's okay with you. Uh, not the COVID that's the poster. We don't have the COVID yet, but I think it provides with a little bit of a story, right? This is— we're going to have it with MIT Press. It's coming hopefully end of the year, beginning of 2023. We're now into our final round of reviews with the publisher. And it's meant to be a book that should help from business executive to policy leaders to engage in the conversation and see, Timothy, we don't have the secret recipe for everything. But what we have is a groundwork in understanding where we think some of the major tendencies will go, and how we actually are calling for leadership in designing these institutional frameworks, rather than expecting this to be done for us. And I guess if we can get out of the book this major takeaway, I think over 2 years of work on this have been worth it.

Great. Yeah, I think this is a very good way to put it, and I like your philosophy. And from my side, for closing remarks, I will also put a link to the chat now. So here at Kyiv School of Economics, we are doing fundraising We have organized this fundraising page, and you can donate to support Ukrainian civilians by sending donations in crypto, in dollars, in European Union. Our donation fund is registered in Washington, D.C., so it's transparent, it complies with American laws. So you can expect some exempts on your taxes. And we have raised already some significant amounts, but you know, when it comes to humanitarian aid and support of lives of people, it is important to donate even more. So we appeal to our audience to donate and to support Ukraine. And thank you very much for your time, Mark. This has been A very pleasant conversation and an honor to have you, and I hope that soon, you know, we'll see you in peaceful Kyiv, and you— and we will invite you to our business school to talk with us more, and, uh, you know, we'll walk around Kyiv together, and we'll have more pleasant time.

I take that as a personal pinky. You know when kids do pinky to that? Promise, the promise, right? So it's a pinky, okay? And hopefully by the time that happens, I— the book is out, and maybe we you can do a book talk, and we can say when this book was being cooked in the oven, we were together in Kiev virtually, and now we're here in person, right?

Perfect. Absolutely. Let's, let's do that. So thank you very much. I will disconnect now. And, um, thanks for everyone who watched this.

Thank you again. Bye-bye.

Bye-bye. Bye.