oiled by a return of war in Europe, forgotten crises such as Afghanistan, and two years of the COVID-19 pandemic along with unchecked climate change, the world’s institutions, countries and companies, even those that enjoy fortress balance sheets, look decidedly enfeebled. And yet, amid the clouds, there is a silver lining with the emergence of the third generation of the internet, or Web3. Web3 is not only a new foundational layer of the internet, more importantly it is a fundamentally new approach to corporate governance, value creation and stakeholder participation, where my interests advance pari passu with yours. Bending the arc of Moore’s law in humanity’s favor presents generationally unique opportunities where people are not merely products or beneficiaries of technology-powered business models, with the attendant distortions this creates, but builders and owners of digitally unique assets.
During the globally paralyzing onset of the COVID-19 pandemic, which continues to wreak havoc on the global economy and the people who make it turn, a series of pre-pandemic vulnerabilities were revealed. These vulnerabilities, wherein technology and universal access to the internet as veritable digital commons offered the only semblance of continuity, amounted to nothing short of a Great Correction. Like past global crises, whether anthropogenic or naturally occurring, post-pandemic recovery will require reformulating institutional and global norms. Technology and how it is harnessed, especially with the emergence of an open internet of value, is the technological contest of our times. This is especially true and urgent, since the provision of even basic services riding on brick and mortar or fixed lines have reached a point of diminishing returns.
When coupled with record low rates of institutional trust, replenishing the wellspring that irrigates societal beliefs in democracy, peace, equity and equal access to prosperity, requires more than false promises and analog infrastructure. It requires delivery and results meeting billions of people who are on the margins but otherwise enjoy access to low-cost, device-centric internet connectivity. The perimeter of peace and prosperity cannot be stretched any further with institutions designed hundreds of years ago, riding on 50-year old technologies and led by risk-averse leaders incentivized with preserving status quo ante.
The economic creative destructive cycle that has created an embarrassment of riches in the world’s advanced economies, is borne from the minds of entrepreneurial challengers and a concerted transition from the agricultural age, to the industrial revolution, to the shift from services to an always-on internet economy. Whereas the entanglements of Web1 and Web2 made people products by monetizing their data, while socializing losses, Web3 strives for equilibrium, enabling people to read, write and own even their digital bread crumbs. After the sun and human aspiration, the world’s most abundant resource is data and Web3 gives us a new way to compartmentalize and monetize it.
The instinct to shut down the Web3 revolution for short-lived failures conforming with institutional norms across banking, traditional corporate governance, regulations and political inclinations, should be ignored. Not only would this be on the wrong side of history, it ignores the deeply democratic tendencies of Web3, as well as the fact that amid otherwise anemic or sclerotic growth in traditional sectors, Web3 is powering trillions in economic activity and we are only nearing the starting line. Of course, technology alone is not a panacea, but as with all emerging models of competition, it often shows where incumbents, their policies and regulatory frameworks have fallen short. How for example will the world attain the first of the United Nations’ Sustainable Development Goals of eradicating extreme poverty with so many billions of people out of the reach of the brick-and-mortar banking system that is the gateway to the formal economy? How will these gates to the bottom rung of the ladder of economic mobility be opened for the billion people who are functionally born in the shadows with no portable identity that is minimally acceptable to entering the formal economy?
Left unchecked, this state of economic inequity is a greater source of global risk than millions of people establishing peer-to-peer economic relationships with each other powered by public blockchains and Web3. In Thomas Friedman’s hot, flat and crowded world, we no longer send cross-border mail as the internet tore down national boundaries, creating trust-based, frictionless information exchange. In the future, will we still send cross-border payments? Or will we be able to freely engage (in a compliant, trusted and privacy-preserving manner) in the frictionless exchange of economic value? More than 200 million people and counting all over the world are taking the long bet on device-centric banking, payments and digital assets, while institutional adoption of Web3 has triggered nothing short of a pecuniary space race. Who wins, how winning is construed, if this is a zero-sum race at all, and which value systems are enshrined in conduct, code, bits and bytes, will be as deterministic to our future as arresting war, climate change, pandemics and institutional mistrust.
Rising to the technological contest of our times is about spurring more equitable economic growth, making people owners rather than technological serfs and harnessing otherwise stranded assets and aspirations. Like all economic corrections and cycles, progress comes with externalities. The carbon-hungry economic model of the Robber Barons of the industrial age accelerated man-made climate change, just like the data hungry Tech Titans have amplified cyber risk and societal misinformation. Web3 is a correction to these challenges, but it too must be rules-based and accountable for its full potential to be unlocked. The countries, companies and institutions who embrace this technological opportunity will advance their competitiveness and help shape an always-on, economically equitable future.
Copyright World Economic Forum 2022.
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The Technological Contest of our Times
Image via Pixabay.
May 29, 2022
A string of security, health, and climate disasters have stressed institutions, governments, and corporations - often near to the breaking point. Yet the emergence of Web3 could bring relief with new approaches to corporate governance and stakeholder participation, writes Circle's Dante Disparte.
R
oiled by a return of war in Europe, forgotten crises such as Afghanistan, and two years of the COVID-19 pandemic along with unchecked climate change, the world’s institutions, countries and companies, even those that enjoy fortress balance sheets, look decidedly enfeebled. And yet, amid the clouds, there is a silver lining with the emergence of the third generation of the internet, or Web3. Web3 is not only a new foundational layer of the internet, more importantly it is a fundamentally new approach to corporate governance, value creation and stakeholder participation, where my interests advance pari passu with yours. Bending the arc of Moore’s law in humanity’s favor presents generationally unique opportunities where people are not merely products or beneficiaries of technology-powered business models, with the attendant distortions this creates, but builders and owners of digitally unique assets.
During the globally paralyzing onset of the COVID-19 pandemic, which continues to wreak havoc on the global economy and the people who make it turn, a series of pre-pandemic vulnerabilities were revealed. These vulnerabilities, wherein technology and universal access to the internet as veritable digital commons offered the only semblance of continuity, amounted to nothing short of a Great Correction. Like past global crises, whether anthropogenic or naturally occurring, post-pandemic recovery will require reformulating institutional and global norms. Technology and how it is harnessed, especially with the emergence of an open internet of value, is the technological contest of our times. This is especially true and urgent, since the provision of even basic services riding on brick and mortar or fixed lines have reached a point of diminishing returns.
When coupled with record low rates of institutional trust, replenishing the wellspring that irrigates societal beliefs in democracy, peace, equity and equal access to prosperity, requires more than false promises and analog infrastructure. It requires delivery and results meeting billions of people who are on the margins but otherwise enjoy access to low-cost, device-centric internet connectivity. The perimeter of peace and prosperity cannot be stretched any further with institutions designed hundreds of years ago, riding on 50-year old technologies and led by risk-averse leaders incentivized with preserving status quo ante.
The economic creative destructive cycle that has created an embarrassment of riches in the world’s advanced economies, is borne from the minds of entrepreneurial challengers and a concerted transition from the agricultural age, to the industrial revolution, to the shift from services to an always-on internet economy. Whereas the entanglements of Web1 and Web2 made people products by monetizing their data, while socializing losses, Web3 strives for equilibrium, enabling people to read, write and own even their digital bread crumbs. After the sun and human aspiration, the world’s most abundant resource is data and Web3 gives us a new way to compartmentalize and monetize it.
The instinct to shut down the Web3 revolution for short-lived failures conforming with institutional norms across banking, traditional corporate governance, regulations and political inclinations, should be ignored. Not only would this be on the wrong side of history, it ignores the deeply democratic tendencies of Web3, as well as the fact that amid otherwise anemic or sclerotic growth in traditional sectors, Web3 is powering trillions in economic activity and we are only nearing the starting line. Of course, technology alone is not a panacea, but as with all emerging models of competition, it often shows where incumbents, their policies and regulatory frameworks have fallen short. How for example will the world attain the first of the United Nations’ Sustainable Development Goals of eradicating extreme poverty with so many billions of people out of the reach of the brick-and-mortar banking system that is the gateway to the formal economy? How will these gates to the bottom rung of the ladder of economic mobility be opened for the billion people who are functionally born in the shadows with no portable identity that is minimally acceptable to entering the formal economy?
Left unchecked, this state of economic inequity is a greater source of global risk than millions of people establishing peer-to-peer economic relationships with each other powered by public blockchains and Web3. In Thomas Friedman’s hot, flat and crowded world, we no longer send cross-border mail as the internet tore down national boundaries, creating trust-based, frictionless information exchange. In the future, will we still send cross-border payments? Or will we be able to freely engage (in a compliant, trusted and privacy-preserving manner) in the frictionless exchange of economic value? More than 200 million people and counting all over the world are taking the long bet on device-centric banking, payments and digital assets, while institutional adoption of Web3 has triggered nothing short of a pecuniary space race. Who wins, how winning is construed, if this is a zero-sum race at all, and which value systems are enshrined in conduct, code, bits and bytes, will be as deterministic to our future as arresting war, climate change, pandemics and institutional mistrust.
Rising to the technological contest of our times is about spurring more equitable economic growth, making people owners rather than technological serfs and harnessing otherwise stranded assets and aspirations. Like all economic corrections and cycles, progress comes with externalities. The carbon-hungry economic model of the Robber Barons of the industrial age accelerated man-made climate change, just like the data hungry Tech Titans have amplified cyber risk and societal misinformation. Web3 is a correction to these challenges, but it too must be rules-based and accountable for its full potential to be unlocked. The countries, companies and institutions who embrace this technological opportunity will advance their competitiveness and help shape an always-on, economically equitable future.
Copyright World Economic Forum 2022.
