The Great Reset, book review by John Hagel

I have no doubt we are in for a new Kondratieff and a new “reset”, as I have argued on occasion myself.

But will it take the form described here by Richard Florida and John Hagel, who are just assuming a continuation of “globalization as usual” and do not take into account any energy and resource challenges for the next period?

Just seems like superficial and naive, but I have to admit I have yet to read the book to form a sound judgment.

Excerpted from John Hagel:

Richard Florida “has just written a compelling new book, The Great Reset, that takes a longer term historical view of changing patterns in the settlement of people and places. In fact, he makes a strong case that we are entering a third major reset . From his perspective, Great Resets are precipitated by economic crises and set into motion a remaking of the economy in ways that allow it to recover and begin growing again. So far, the US has had three major resets over the past 150 years, once in the 1870s, once in the 1930s and now today.

As Richard explains it:

– A true Reset transforms into simply the way we innovate and produce but also ushers in a whole new economic landscape. As it takes shape around new infrastructure and systems of transportation, it gives rise to new housing patterns, realigning where and how we live and work. Eventually it ushers in a whole new way of life . . .

He goes on to emphasize that

– Economic systems do not exist in the abstract; they are embedded within the geographic fabric of the society – the way land is used, the locations of homes and businesses, the infrastructure that ties people, places and commerce together . . . . A reconfiguration of this economic landscape is the real distinguishing characteristic of a Great Reset.

For Richard, economic landscape is not just a metaphor, it is quite literally the way we organize ourselves across the land. “Every major economic era gives rise to a new, distinctive geography of its own.”

He further elaborates:

– Great Resets are defined not just by innovation but by massive movements of people. . . . These are times when talent flows out of some places and into others. . . . These talent Resets thus shift the balance of power among cities and regions as well as among nations. Locations rise or fall based on their ability to attract, retain and productively use talent of all sorts – from brilliant innovators to unskilled laborers.

The first Great Reset in the 1870s was defined by a revolution in transportation technology and energy systems which in turn led to a fundamental shift in the organization of production, known as the “American system of manufacture.” As result, industrial cities grew bigger and more complex, segmenting into specialized neighborhoods and business areas.

The second Great Reset in the 1930s was similarly fueled by the deployment of new transportation and communication infrastructures. The introduction of modern assembly lines combined with much more efficient wholesale and retail distribution channels led to even more scale in business activities. As companies moved production activity to new locations outside the urban center, residents followed suit, moving farther and farther out into suburban sprawls, prompted by government subsidies to home ownership. The Sunbelt also emerged as an area of great population growth.

Richard draws on the work of David Harvey to make the case that Great Resets result in “spatial fixes” that ultimately help to resolve economic crises through large-scale movement of people and channel capital into more productive uses. But these spatial fixes tend to be temporary, ultimately leading to further spatial fixes down the road.

Where we are now

The current economic crisis is precipitating the third Great Reset, as the growing imbalance between the movement of manufacturing offshore and suburban mass consumption supported by growing consumer debt became too precarious to sustain. Richard notes that we are in the midst of yet another major economic transition, driven by new infrastructures and global competition:

– Our own collapse, in the early years of the twenty-first century, is the crisis of the latest economic revolution – the rise of an idea-driven knowledge economy that runs more on brains than brawn. It reflects the limits of the suburban model of development to channel the full innovation and productive capabilities of the creative economy. The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, and the highest rate of metabolism. “Velocity” and “density” are not words that many people use when describing suburbia.”

More commentary at the original article.

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