It’s Time To Bring The Economy Home

The Corona-crisis reveals the flaws in the hyper-globalized economy but opposed to the financial crisis a decade ago we have new tools and models for creating new efficient local economies.

James Bond has no time to die and postpones his premier till October, Jaguar Land Rover will soon lack spare-parts and have to stop manufacturing, football stadiums are closed, airline companies and hotels face disaster as people stay at home and 15 million Italians are in quarantine while consumers hoard toilet paper and tomato soup. This is just the beginning – each day we see new consequences of the Corona crisis while stock markets plunge.

We don’t know when and where the present crisis ends but we don’t have to hit the bottom before we start to plan for a better and more robust economy. We’ll get over the Corvid-19 epidemic like we overcame the Spanish flu a century ago so public and private decision makers can’t allow themselves to focus on crisis management only, they need to have their recovery plans ready when the crisis is over. Otherwise they waste valuable time, because we already know what is wrong: hyper globalisation is wrong!

Right now, we see the butterfly effect of a Chinese virus disrupting the entire global supply chain and with it putting everybody’s daily lives at risk. We don’t want to fix the existing industrial infrastructure because we have been dissatisfied with it for a long time. Globalisation has removed investments, jobs and welfare from Western societies and made people vote in strange ways.

Nobody knows what the long term consequences of the Convid-19 epidemic will be on the economy but I believe we are far better off than we were in 2008 when we had the previous mega crisis: In the last decade, we have developed a new set of financial tools and technologies that have grown out of an already broken global economy. This new economy is based on communities and not huge global markets.

Already, we see a new generation of young businesses that rely on crowdfunding. Entrepreneurs of all kind go to their community when they need investments and funding and their backers become committed owners and at the same time customers in the new businesses. These new businesses grow out of communities and very often they also manufacture locally.

We see vertical farming emerge in cities, so vegetables no longer need to be shipped in lorries from countries far away but can be grown sustainably where people live. Craft breweries have popped up in practically every neighbourhood and new manufacturing technologies such as 3D-printing enable industries to re-structure the supply chain and create products where they are bought: For instance, Adidas are increasingly setting up urban speed-factories that manufacture sneakers on-site.

For a century, since Henry Ford developed the assembly line and Frederick Taylor created scientific management we have talked about economies-of-scale, if we could make it big, we could make it cheap. That’s no longer the case. Now we have started to talk about economies-of-unscale. You can buy most of what you need to create a business “as a service in the cloud” – all you need to succeed in business is a ‘dream and a crowd’.

This new community economy or local economy is not mainstream yet. But it is there, waiting behind the scenes for an opportunity to take over. This opportunity may be now. For the last 10 years millennial entrepreneurs have refined a new set of financial and industrial tools so I believe it’s time to bring the economy back home where it belongs.

By Nils Elmark – futurist and author of “The New Local Economy”.