31 May 2024. Future design | Wealth
Using Future Design to improve future outcomes // Channelling the Great Wealth Transfer for positive change [#577]
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1: Using Future Design to improve future outcomes
Future Design is a futures method that emerged in Japan that seems to have the power to make people imagine more transformative futures. My colleagues at SOIF, Suzette Brooks Masters and Karthick Ramakrishnan, have just published a report, called ‘The Promise of Future Design’, that explores what it is and what it does. (The usual disclosure: I helped with the production of this report.)
It’s quite a long report, so I’ll only touch on the highlights here. It’s also quite well-referenced, so you can follow their intellectual journey if you want to:
The crux of Future Design is the use of imaginary future persons to serve as proxies for members of future generations. These are people ordinarily unable to express their ways of thinking and problem solving and their preferences for decisions in the present that can have significant implications for outcomes affecting future generations.
In effect, it makes the future more immediate by having people embody the role of future generations. This is made more tangible in the room through the use of ceremonial clothes to make the shift in perspective. This seems to improve the consideration of the future by making choices and constraints more visible.
The intellectual history is that Future Design (the report capitalises this throughout, so I’m following suit here) was developed initially by Tatsuyoshi Saijo, then at Kochi University of Technology. He has since founded Future Design Research Center at Kyoto University of Advanced Science. Since then it has spread to other Japanese universities, including the Future Design Lab at Osaka University, Sophia University, and the Future Design Research Project at Shinshu University.
The Future Design practice involves elements that emerged from planning, design thinking, social psychology, and behavioural economics. The report summarised some of the approaches likes this:
Perspective taking: Assignment to a future generational cohort that leads to explicit consideration of long-term futures on a specific topic or issue;
Role play: Real people play the role of members of different generations, including imaginary future generations, typically differentiated through the use of distinctive attire or markers; and
Direct engagement across generational perspectives: Deliberation and negotiation among participants who have been assigned one or more generational roles.
It draws on thinking from outside of Japan, such as the native American ‘Seventh Generation’ principle, imagining the world seven generations into the future. It uses behavioural economics to address the well-known human failing that we are poor at assessing longer-erm outcomes and tend to discount the future too heavily:
The more people are able to connect with their imagined future selves or future others, the more likely they are able to feel empathy towards them. With greater empathy towards future selves or future others, people are more willing to take action for the benefit of future generations, even if that results in some personal sacrifice in the present.
(And hence the role play and the costumes.)
Projects haven’t just been confined to Japan. Future Design has been applied in primary school systems in the Netherlands, and it has also been trialled in Wales.
The article includes a description of a couple of the Japanese pilots, which also show the method evolving as it is tested. The first took place in Yahaba, a town of 28,000 people. Participants were invited to consider the future of the town in 2060:
(H)alf the participants were invited to consider the future of their town in 2060 from their present context. The other half were instructed to put on special ceremonial robes and play the part of people from 2060. They were asked to consider the present from the future vantage point in order to inform town planning. Both groups were then asked to deliberate, in essence to negotiate, over policy priorities and choices. These discussions physically embodied generational trade-offs—like whether to invest in infrastructure or child care, renewable energy or industrial farming.
The researchers returned to Yahaba later, but revised the method slightly:
all participants (considered) the policy from the perspective of both the current generation and the imaginary future generation. The method enabled the shift in perspective to occur within all individuals and activate their futurability. This mechanism is now widely used.
(Wearing the future, in Yahaba. Photo: Tatsuyoshi Saijo and Yahaba City Office)
The method has since expanded to larger cities, such as Kyoto, and Japan’s Ministry of Economy, Trade and Industry has created a Study Group on Future Design Policies.
One of the benefits seems to be that the future role play also improves the creativity of the participants. Saijo reports of one of their projects,
The current generation saw the future as an extension of the present time, constructed visions that resolved current problems and issues, and produced ideas rooted within current conditions and restrictions. Meanwhile, the imaginary future generation was creative, giving the highest priority to the resolution of problems that were the most complicated and time-consuming and depicting the future freely, regardless of current circumstances.
This quote reminded me that one of the most difficult things in any futures project is to remove the weight of the present from people’s shoulders so they can have a better dialogue with the future. The robes seem to me to give people permission to step into a Horizon 3 future and look back at the present (as, indeed, a backcasting approach would also do.)
Suzette Brooks Masters and Karthick Ramakrishnan both work in the United States, and their purpose in writing the report was to improve futures thinking in the US context. They see three areas where it might have immediate benefits—community planning and infrastructure, broadening participatory democracy, and in more traditional areas of government.
But maybe more to the point, it might help with particular policy areas:
this technique can be particularly relevant to decisions involving short-term costs and longer-term benefits, such as spending on public infrastructure, early childhood education, and plans to decarbonize housing and energy sources. The method can also help to address simmering intergenerational conflicts on issues such as housing supply, quality jobs, climate change and energy transitions, solvency of social welfare programs, and debt burdens, to name a few examples.
2: Channelling the Great Wealth Transfer for positive change
I was looking for something else when I happened upon a recent article at the Joseph Rowntree Foundation’s website about the coming ‘Great Wealth Transfer’. Since the JRF is not neutral in this debate, Emma Shaw’s piece was about how best to channel this moment into positive social outcomes.1
The Great Wealth Transfer, as it is described, is about the transfer over the next 20 years of $70 trillion (worldwide) from the boomer generation to younger generations.2
JRF’s Emerging Futures team worked last year with the immersive change practice New Constellations to hold an extended series of conversations with interested parties in which they asked three sets of questions:
What is the landscape of wealth in the UK? How and where are money and resources held?... What scale of capital and which financing pathways are needed to meet the polycrisis?
How do others see the role JRF might play in growing the field and contributing to the transition?
What kinds of transformative spaces or experiences might be needed to collectively re-configure our view of wealth and investment?
It’s worth saying that not everyone they interviewed saw any need to channel the Great Wealth Transfer into some form of social transformation. Anyway, from these conversations, five themes have emerged. In her article Shaw writes these up mostly with an additional provocation. I’ve included the provocations in full here, since they represent weak signals of change.
(‘Money Pile’, by Kenny Cole/flickr. CC BY 2.0)
1. Re-framing core principles
The scale of the change that is required was described by one interviewee as being on the same scale as the rebuilding of the world economy after World War II.
An overhaul of the underpinning logic of the system would mean transitioning its central concepts, such as from binary to plurality, transactional to relational, maximisation to enough, accumulation to (pre)-distribution, shareholders to stakeholders, and ownership to stewardship.
Some of the levers for change here is quite technical, but it includes things like different sorts of asset classes, which might combine different time and risk horizons, and different types of reward—to enable community and ecological wealth-building. These might go with ‘alternative enterprise partnerships’ that support communities and commons.
Provocation: What would a 1,000 year investment instrument for community-owned assets look like?
2. Centring human values in what is valued
This is about what the economy is trying to achieve, and the value it is seeking to create—and the gap that has emerged between societal and economic values.
Money and financial flows become a means to an end, not an end in itself. Yet there is a challenge of scale and proportionality: the sheer quantum of capital needed to be reallocated for this transition needs to shift from 5% of money to 95%.
This involves changing some of the underlying ‘wiring’ of the financial system—including accounting standards, incentives, and indices—and some of the legal frameworks, such as the construction of ‘fiduciary duty’.
Provocation: Can we take inspiration from the ‘Seventh Generation Principle’ in how investments are designed, to consider the impact of current decisions on the next seven generations?
3. Reimagining the public balance sheet
This is about how to reimagine our resources and civic assets for public and common benefit.
At the very least, we need to be viewing capital beyond just financial resources to include natural, human, social and other capital (a useful framework is the Five Capitals Framework). Since as one person put it, “the issue is not a lack of money, it’s the disconnection of global finance from the real economy”.
This goes deep into the basis of our financial system. The leverage points here involve redefining the nature of capital assets, and finding ways to price external costs into value flows and accounting for profit.
Provocation: How does profit, as an indicator of value, change if we change what we value?...
4. Changing the societal narrative
Shaw says that the underlying theme in all of these conversations was about the highly social nature of the money system.
(W)hat is the societal conversation on wealth? How can we talk about money openly, its universal connection to us all, and our dreams for how it could help transform our futures? We heard from many people about existing cultural myths, norms and logics that people felt ‘trapped in’.
The leverage points here operate at the level of worldview—changing mindsets about money—and also some of the rules about things like property. This theme didn’t come with a provocation.
5. Mobilising private wealth holders
In the United States, the progressive wealth movement is well-developed, certainly compared to the UK. All the same they seem to have interesting conversations about the psychological effects of wealth.
Individuals we spoke to, such as those who have inherited intergenerational wealth or exited businesses, shared stories of their personal and spiritual experiences in coming to terms with the origins of their wealth. This manifested in their sense of self worth, status, purpose and belonging.
I liked here their notion of what they called the ‘Wealth Defence Industry’, which is designed to ensure that “wealthy people are not given the equipment to use their money. They are told how to minimise their tax, there is a disconnect between wealth managers and the wealthy”. One of the leverage points here involves unlocking the way that family Trusts are constructed.
Provocation: What if all wealth only lasted for one generation?
All of this goes deep into the heart of how capitalism works, at multiple levels. As I was reading it, it struck me that you could usefully reconstruct this analysis around the layers of Causal Layered Analysis—there are litanies, systems, worldviews and metaphors at play.
JRF sees its role here as convening this emerging field and helping to build it; resourcing innovation that disrupts the current system; and seeking to influence policy and politics. But its immediate next step is to continue the conversation at its Next Frontiers conference in London next month.
j2t#577
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Their mission: “ending poverty in the UK is a moral cause: to ensure dignity and respect for everyone, and to address exclusion and powerlessness.”
Measured by GDP, the world economy is currently worth about $110 trillion, depending how you measure it, of which $49 trillion is held in richer economies. But GDP is a flow, and wealth is a stock, more or less. So give or take, without going too far into assumptions about where wealth is held, over 20 years the Great Wealth Transfer is the equivalent of 3-5% of the economy changing hands every year. Not nothing, in other words.