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Squeezed? You've felt nothing yet

Richard Digard | Published:

HOW long can the States of Guernsey, your government, last? At least, as it is I mean. And you can blame our political boss, Gavin St Pier, for raising the question, much as he didn’t mean to.

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Let me explain. While talking to the Chamber of Commerce last month he said, ‘…I am also acutely aware that we must recognise, and if possible address, the fact that many in our community have felt remorselessly squeezed over the last 10 years…’

Well, hurrah for our leaders finally recognising that, I suppose, but Deputy St Pier put this down to the 2008 global financial crisis – but it actually goes beyond that.

We can say this with confidence because Klaus Schwab agrees. You’ll recall he’s founder and executive chairman of the World Economic Forum and he and his Davos pals have rather more of ze leetle grey cells than most of us.

Ask him about the rise of populism – just wait for island-wide voting in 2020 if you’re not sure what that means – and he’ll attribute it to the ‘angry quarter’. That’s the roughly 25% of the electorate who are furious, disillusioned, and divorced from mainstream political parties and allegiances. Sound familiar?

While politics can be volatile, this is more about long-term trends. The past epic, society-transforming narratives are dead. The old socialist dream a myth, much as Comrade Corbyn and Co pretend it isn’t. Why? A growing middle class that would have been in poverty just a couple of generations ago now makes up the backbone of a society that Guernsey largely mirrors.

Where we are now, however, is that those who thought they were on the winning side of history now fear they are among the losers. Again, sound familiar? Hence Gavin’s ‘remorselessly squeezed’ islanders comment. The consequences of that elsewhere has been a radical shift in politics and Guernsey’s are altering too. ‘Nascent tribalism’ is emerging in the States, says Deputy St Pier, and we can see it happening too.

My own view is that there’s more at play here than the hangover from the global crash and, consulting Mr Schwab, I’m pleased to say he agrees – while also predicting that things will get worse.

What we’re missing, you see, is our chronic under-preparedness for the fourth industrial revolution. You’re already benefiting from it in many ways, with cheaper prices, a wider range of goods and services and way more control over when and how you transact with people, businesses and bureaucracy.

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If, that is, you can afford a smartphone and a data contract for it. Uber, Airbnb, challenger banks, robo financial advisers, instant translations… you name it, it’s there. But it’s evolving faster than anyone really appreciates.

Ponder for a moment: we billions of folk connected by mobile devices with unprecedented processing power, storage capacity and access to knowledge are about to experience emerging technology breakthroughs such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage and quantum computing.

Just to give that some perspective, when was the last time you or (if you’re of a certain vintage) your kids used a telephone directory? The old Yellow Pages slogan, let your fingers do the walking, has a different meaning now we all have iPhones. And we didn’t even notice the change.

Two things are relevant here in a Guernsey context. As this revolution sweeps all before it, talent more than capital (in the sense of the cost of starting a business) is likely to become the critical factor.

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So the job market is becoming segregated into low-skill/low-pay and high-skill/high-pay. Firstly, how does our education system prepare young islanders for that when its current focus is tearing down the Grammar School and designing new school uniforms?

Secondly, how does this society, already failing to help those in relative or in-work poverty, let alone assisting the squeezed middle, cope with the social tensions this will cause?

I think we can already see the jobs market has strong demand at the high and low ends, but combined with a hollowing out in the middle. If not, it’s coming. Separate analysis by PwC has already identified transport, admin and support services, the public and financial services sectors as prime targets for disruption from artificial intelligence — and all are substantial employers here.

This helps to explain why so many islanders are disillusioned and worried that their standard of living, and that of their children, will continue to deteriorate. They are already detecting the winds of change.

Which is why Deputy St Pier made that reference to the remorselessly squeezed when he spoke to the Chamber of Commerce, while Mr Schwab warned that a ‘winner-takes-all economy that offers only limited access to the middle class is a recipe for democratic malaise and dereliction’.

Responding to these things is what governments are there for, of course – at the same time as not even its best friends will have this Assembly marked down as one of history’s high achievers.

This matters because the fourth industrial revolution means governments have to change their current approach to public engagement and policymaking because the old top-down model no longer works.

A minor example, but States members are already criticised as many of them don’t engage on social media. Too scary and rude, they say. Nonsense, say electors, you’re simply aloof, out of touch and don’t listen to us.

Speed of policy making? Your taxi fare’s predicated on something called the Halcrow formula, put in place before electric and hybrids entered the fleet, so you’re probably paying too much because they’re cheaper to run. But how long would it take to put that right under the current system, even if the will to do so was there?

We kind of laugh that ‘the States’ takes 10 years to amend animal welfare legislation, but not only are technological and business changes happening at a frightening rate, we don’t understand half of them anyway.

As the WEF says, ‘Today’s decision-makers… are too often trapped in traditional, linear thinking, or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation shaping our future.’

In other words, yesterday’s thinking applied to tomorrow’s challenges. At risk of repeating myself, sound familiar?

We should worry about this because, just as horticulture was in the ’60s and ’70s, finance is the bedrock of the island’s prosperity and we pride ourselves on having a knowledge-based economy.

Yet the fourth industrial revolution is redefining knowledge, where it’s based and, thanks to artificial intelligence and algorithms, what (in place of who) provides it.

As the WEF has it, ultimately, the ability of government systems and public authorities to adapt will determine their survival. ‘If they prove capable of embracing a world of disruptive change, subjecting their structures to the levels of transparency and efficiency that will enable them to maintain their competitive edge, they will endure. If they cannot…’

Which camp do you place the States of Guernsey in, I wonder?

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