No. 42



Which Scenarios  Are We Heading For?

09 December 2020


RiTo No. 42, 2020

In 2017–2018, the Foresight Centre created three sets of scenarios: on governance and e-governance, labour market, and productivity. What could we conclude from these sets today – can we already see where we are coming from, and where we are going?

Two years and one corona crisis later, we have moved far from the Talent Centre Tallinn scenario of rapid technological development, open borders, and Tallinn becoming an important attraction centre in the Northern Baltic region. The corona crisis and the decisions made in its wake have practically stopped the cross-border movement of people. Although this is probably only a temporary interruption, the future of migration is by far not clear. Unemployment has also skyrocketed with the corona crisis.

The current situation is strikingly similar to the New World of Labour, which describes high and long-term unemployment in combination with closed borders. Immigration from third countries is blocked, and automation and digitisation eliminate more jobs than are created. However, the unemployment caused by the corona crisis is different in nature and hopefully for the most part short term. But the accelerated course towards automation and the transfer of business activities into the internet as a result of the crisis means that unemployment could stay above the pre-crisis level in the long term, and the desirable skill sets change.

In the productivity scenario analysis from 2017–2018, one of the crucial question was whether global economy would continue globalising, or would it become regionalised. With the escalating trade wars, disconnecting of global supply chains based on the origin of the capital (the cases of Huawei and TikTok), or also the possible incompatibility of new digital technology standards around the world (such as 5G base technologies), it becomes clear that in only a few years we have taken quite a big step towards a more fragmented and regionalised global economy.

Among the governance scenarios, the idea of a minimalist state, i.e. the Night Watchman State, has currently been put on hold, but it would be too early to say if it would remain that way. Will the current overspending force us to tighten our belts in the future, and streamline the functions of the state?

The corona crisis has taken us somewhat closer to the scenarios Entrepreneurial State and Caretaker State. In the first one, the state behaves like a large company, making investments and prioritising the development of certain fields. The second one includes an improved social safety net for the population but also increases government intervention into the lives of the citizens, preventing and taxing vices, and protecting people from their own potentially harmful decisions. We can draw a clear parallel here with protecting the people from the virus – how strict should the restrictions be, or to what extent could the state rely on the individuals’ ability to adequately assess the situation and protect themselves?

It is general knowledge that crises have the potential to change the ruling political paradigms. Although the corona crisis is quite a testing stone for governance, it could help to break out of path dependence and look at the options with more openness, combining these into the best possible portfolio.