In the face of the pandemic, the world public has learned important lessons in exponential thinking. However, in order to be prepared for the future, it is necessary to identify the whole ranges of different exponential patterns and to decipher how they work in combination. A social, political, and economic challenge.
The corona virus as a practical course of exponential thinking
The corona virus, which was still a novelty at the beginning of the year, has not only spread globally within a few weeks on a threatening scale, it has also radically improved the understanding of exponential developments worldwide. In other words, the understanding of developments that are initially barely noticed, only to lead to unexpected outcomes a little later and change the world significantly. That this practical course of exponential thinking has had an effect can be seen from the widespread opinion that mankind must not simply return to the old routines. A new normality is needed. A normality in which decisions and actions are taken with more foresight and in which the major social challenges, above all climate change, are tackled more consistently. The fact that the practical course was able to have an effect was probably due to three factors in particular: it was a man-made problem, the overall course of the exponential curve was very short in comparison to other phenomena, and at the same time the personal impact was high.
Exponential developments: Opportunities and risks
COVID-19 painfully shows that often a change in thinking only occurs when those involved become those affected. Even longer running exponential curves such as those of climate change have become clearer and easier to understand as a result of the corona crisis. At the same time, the understanding of new economic realities has improved: While the global economy is sliding into the worst recession in almost a hundred years, it can be observed that a group of companies is isolating itself and continuing its successful course unabated: ExOs, exponential organizations. These include the technology giants and pioneers of the digital transformation such as Microsoft, Apple, Amazon, Alibaba and Tencent. While Daimler, Siemens & Co. went into short-time work, the Alphabet Group, to which Google belongs, for example, achieved quarterly sales of 41 billion US dollars and again grew at double-digit rates compared to the previous year. Once the so-called tipping point has been passed, the growth of an ExO can hardly be stopped and succeeds even from the home office.
However, pandemics, climate change and ExOs are not the only exponential developments. The future is an exponential mix. More than ever, it is necessary to focus on social and political issues. In the “Age of Anger”, author Pankaj Mishra points out that the number of superfluous young people who have to wait in the antechamber of the modern world has grown exponentially in recent years. At the same time, an exponential increase in tribalist hatred of minorities can be observed worldwide. All this is taking place in a world marked by digitalization and multimedia in which the public sphere has expanded exponentially and in which the free individual finds it difficult to orientate himself or herself and to deal with the responsibility that weighs upon him or her. Populists, demagogues, despots are experiencing a threatening – or should one say exponentially growing? – level of support. As Ivan Krastev and Stephen Holmes thoroughly investigate in “The Light that Failed: A Reckoning”, an anti-liberal revolt ensues.
Understanding exponential patterns and effects
The social, political and economic challenges posed by the current crisis will only be successfully overcome if the exponential patterns that determine them are understood, explained well enough and if the opportunities they present are explored. Even more than in the past, this requires cooperation in interdisciplinary teams in companies as well as in the public sector. An important basis for the understanding of exponential patterns is then the conscious demarcation from typically human, linear thinking. Visualization and simulation techniques can help here, for example by showing how exponential developments provide a “calm before the storm” and, in the beginning, either fall short of expectations or are not sufficiently perceived. It is also important to accept that future conditions or even goals may not be recognizable today. Because one cannot know the concrete results of a development, it is all the more important to understand the underlying mechanisms. These are mainly network effects. Ultimately, attention must be paid to the interdependencies of exponential developments. The Corona crisis illustrates very clearly how the network effects of the COVID-19 virus, the development of companies like Google and the influence of populists can influence each other.
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Article by Prof. Dr. Dirk Nicolas Wagner, Professor of Strategic Management.
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Mishra, P. (2017): Age of Anger. London: Penguin.
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