Time For A Newer Deal?
Here at Karve, because of our close ties with the United States, we've always had a keen interest in the American New Deals of Frederick D. Roosevelt (FDR) from the 1930s and early 1940’s. It was such a pivotal period for the US economy, and society at large. What emerged from then was a bold and confident America, the pre-eminent global economic, cultural and political superpower it’s famous for.
It was through bold and decisive action that the Government leadership of the day led by FDR focused on new opportunities and challenged the political and financial zeitgeist of the time, transforming the fortunes of the American people forever.
The lessons of this moment in our shared history seem to be ever waning from our memories. So much so that a crowdfunded society has been established in the US named ‘The Living New Deal’, aimed at documenting the “massive legacy” these initiatives had across America and ensuring they aren’t just consigned to the history books.
There’s an argument, too, that the socio-economic lessons are ever-further from modern political leaders' thinking, particularly in the West, much to the detriment of us all it seems. This is best demonstrated by nearly two decades of slow economic growth and predictions from the Financial Times that Millennials may be the first generation to have worse living standards than their parents.
Learning from the lessons of the New Deal
Faced with a challenging economic climate, how can we learn the lessons of the New Deal, today, and how can we apply it to modern infrastructure?
Over 100 years ago, navigating a decimated economy during the Great Depression, with spiralling unemployment estimated at 25% in the early 1930s blighting the lives and communities across the country, FDR set about a New Deal for the American people.
Through the prism of the three Rs; ‘relief’, ‘recovery’ and ‘reform’, FDR was able to shape nearly a decade of mass infrastructure investment to put the American people to work through capital investment, during, and after, the great depression.
Key infrastructure improvements
For infrastructure alone, that meant building dams, roads, tunnels, bridges and 800 airports, that the modern American still depends on today. The Hoover Dam alone still generates enough electricity to power 1.3 million homes today – a decent return from the US dollar invested over a 90-year period.
Unleashing the American workforce
FDR took the bold and conscious step to unleash the potential of the American workforce on a near decade of civic investment to kickstart the economy. Which, granted was a significant risk, but the risks of not acting and continuing the economic turmoil were surely greater. FDR knew the status quo simply wasn’t sufficient to change the fortunes of America.
The reforms were so widespread that they are certainly not best served condensed into a few paragraphs. Beyond the nuts and bolts of new world class civic infrastructure, the New Deal had a broader legacy. It unleashed a new modern coalition of skilled American workers more diverse than its past, for example bringing many more women into the new energised workforce.
Civil rights reform progress
In addition, many see the origins of the Civil Rights movement rooted in the 1930s with FDR relying on African-American voters supporting his economic reforms. The African-American too wanted a new deal from FDR and activism prevailed in the period not least of which began to put an end to ‘last to hire, first to fire’ practices which had led to close to 50% unemployment (some estimate as high as 70% at peak). It wasn’t just the economy that had a spring in its step with music moving from Jazz to swing as a new era of optimism lay ahead.
The pandemic-induced global pressures
Today, the world faces enormous global pressures. We have hopefully emerged from a global pandemic that challenged everything from our healthcare systems to the global economy. In Europe we have the tragedy of Putin’s war disrupting global markets and energy supply lines.
A complex landscape indeed, but are these actually new challenges?
Historical similarities with key events
The 1920s saw a global influenza pandemic, and the 1930s the onset of War in Europe. Let’s just hope the scale is different to today. The main difference of course is despite facing similar economic pressures to the past, unemployment is actually far lower than the 20s and 30s. In fact, we face enormous workforce pressures, an ageing population that has got Elon Musk worried we are going to ‘die in our nappies’ and a declining birth rate that has seen South Korea provide every family of a new born child a monthly allowance of $740.
Leveraging technology for efficiencies
If we need to use AI and robotics to fill in our workforce gaps to make it happen then so be it, the need is too great to put our head in the sands about this. It’s a painful reality, but with the right controls and parameters new technology will add to our existence rather than detract.
We might just need it if the birth rate continues to slow as well. After all, I’m not using a quill to write this article; technology has generally made things better for us for generations from the computer to the electric toothbrush. We need to get real.
How the next generations can succeed
Today, there isn’t the untapped potential of a dormant workforce in the way Roosevelt had in the 1930s to lever a new generation of economic growth. We face the small challenge of our world not actually existing as we know it for future generations. So, either we abandon ship to Mars or we take the opportunity to radically change the way we eat, move, work and live. Our sense is Mars might be a bit on the warm side, so we are probably going to have to do the latter!
Despite the aforementioned outlook, we're optimistic in nature and perhaps that’s why the New Deal appeals to us. We believe through concerted action that we can do things to change our course. We just need to lean towards action. That means not just tinkering around the edges, but the sort of bold forethought FDR envisaged to take us forward.
A bias towards action is required
When it comes to the infrastructure and our precious environment, we need to talk a little less and deliver a little more. We must continue to be bold with infrastructure and transportation, and rather than resting on our laurels, think as FDR did in the 1930s. How is the world changing? What do we need to do to not just keep up with that change but capitalise on it? What do we need to do to make that happen? Some of the solutions are right at our fingertips. They aren’t necessarily even novel, although some are. They just require pace and delivery.
Karve’s innovation roadmap
We see the future pretty clearly: domestically, it means drawing on new nuclear energy to give increased energy security, marking a step change in our planet's finite and sadly damaging fossil fuel dependence and doing so en masse. Practically speaking, that means deploying the massive opportunities of solar energy including giga-factories, and new heat pumps in our better insulated homes.
Simple practical steps to make a difference.
The mobility of people and things
In travel, we must maximise the opportunity of vehicle electrification and new battery technologies underpinning everything from logistics to private transport. In order to do that, infrastructure is of course absolutely key. We need to ensure people don’t have to wait an hour to plug in at a petrol station as you see every time you pull into a motorway services forecourt (before you even plug in). We simply need more fast charging ports available, and much longer life batteries to achieve that.
Railway technology enhancements
We need new, faster, ideally international, railways to connect economic hubs in ways that are cleaner and cheaper to use than other modes of transport. ‘Railway usage is down’ we keep hearing. Let’s get moving on high-speed rail much faster than we are doing in the UK; we haven’t built a north-south railway since the Victorian period after all.
It shouldn’t be quicker to travel from the south of England to Spain than it is to get to the Lake District and political wrangling does nothing but to slow programmes like HS2 down, and of course to add to delivery costs by reviewing things every few months at a cost of a £100m (in the case of the review of the best way to get high-speed rail into Leeds). Spend the review money on some track instead.
Personal mobility via bicycles
Cycling networks vary broadly from country to country, many placing them at the heart of infrastructure design processes like in Holland, to enable active (tackling an obesity crisis) and cleaner travel – look at the bicycle parks on the outskirts of suburban Amsterdam rail stations as an example packed to the rafters.
In other countries you have to take your rosary beads with you in the hope you make it safely from A to B on 2 wheels. The bicycle has been a mainstay for 150 years, the fact we haven’t weaved cycling safety into town planning universally and globally kind of surprises me.
E-scooters in urban areas
We are making some progress in forward thinking cities. Take for example electric scooters underpinning micro mobility plans from Tel Aviv to Santa Monica. If you haven’t been on an e-scooter yet, please do. They are super fun to use.
The benefit of the Santa Monica plan is they can actually farm data from scooters to enhance design and consumer experience – e.g., simply moving more e-scooters to where the need is greater so people can both rely and depend on them as part of their urban transportation. People can also use them safely, which we should rather take as red.
Driving a newer deal from the ground up
So, the assumption that there isn’t a need to be new and bold with our infrastructure and transportation today is misplaced. In fact, by not investing in our crumbling and largely outdated infrastructure we are missing gigantic opportunities, not just for growth but to improve the lives of citizens.
Just as FDR saw the future of aviation technology and harnessed this as part of his economic growth plans, we need to do the same today to move forward from our economic stagnation and rebuild our towns, cities and transportation networks for a new era. The time to be bold is now.
One of the barriers to this bold action, is that many people tell us new and innovative SMEs feel access to government markets is a closed shop for them, despite their capability to disrupt markets in a very positive sense, and improve the way we live, work and travel.
Karve work in partnership with your teams to learn about the opportunities ahead, stacking the odds of securing big contracts in your favour. Having specialised in Defence we are now moving into the Transportation and Infrastructure space to help smaller innovators get access to larger government contracts across the world.
Just as smaller enterprises shaped New Deal America, the time to unlock the potential of smarter technology, data and modes of transport to shape a new era is right now. If we are talking your language, we’d love to hear from you – let’s be bold and drive a newer deal from the ground up. We all desperately need it.