Who Will Win the European Inflation Game Competition of Inflation Rate Differences?

Jari Kaivo-oja:

Inflation Advantages and Disadvantages of Finland in Relation to the EU Member Countries and U.S.A.

Data-based Analysis from July 2022 to April 2023 with Key Eurostat Inflation Index Numbers.

Future economic developments in Europe depend very much on the strength of inflation. If inflation is not contained, it could lead to a deep recession in Europe. This situational picture is such that it requires continuous monitoring in Finland and its economic decision-making. The positive thing for Finland is that we have been able to curb inflation despite the fact that we border Russia. This blog post presents a data-based situational picture analysis of Finland and the European Union, which shows that Finland has so far succeeded reasonably well in fighting inflationary pressures. 

Inflation is a real problem for consumers and investors

Almost all economists are agreeing about the negative effects of inflation. Inflation, hyperinflation, and deflation have all had profound effects on societies, especially during periods of war and crisis. As noted recently by Stephen D. King (2023): “We Need to Talk About Inflation”. Stephen D. King is a very influential economist who has published many popular books, He is the author of “Losing Control: The Emerging Threats to Western Prosperity” (2010), “When the Money Runs Out: The End of Western Affluence” (2013) and “Grave New World: The End of Globalization, the Return of History” (2017) and “We Need to Talk About Inflation”. All these books are interesting and professionally written books. He was the Chief Economist at HSBC for 17 years (Stephen D. King – Wikipedia).  

Today’s approach to managing inflation has been shaped by these episodes and informed by debates between different schools of economic thought from Irwin Fisher (Irving Fisher – Wikipedia) and Friedrich August Hayek (Friedrich Hayek – Wikipedia) to John Maynard Keynes (John Maynard Keynes – Wikipedia) and the monetarists. There are two major economic theories to explain the inflation process. (1) Demand-pull inflation and (2) Cost-push inflation.

While low and stable inflation can be beneficial for an economy by stimulating spending and investment, high and volatile inflation rates can have detrimental effects on economic stability, growth, and the overall well-being of individuals and businesses. One key problem of inflation is reduced purchasing power. When consumer and producer prices rise, the value of money decreases. This means that individuals and businesses can buy fewer goods and services with the same amount of money. As a result, people’s purchasing power is eroded, which can reduce their standard of living and limit their ability to save and invest.

Inflation has always negative impact on savings and investments. Inflation erodes always the value of money over time. When the inflation rate is higher than the interest rate earned on savings accounts or other low-risk investments, real returns become negative. This discourages ordinary people from saving and can lead to a decrease in investment, as individuals seek alternative ways to protect their wealth from inflation.

These kinds of facts are a fundamental reason to monitor the inflation rate trends of national economies. In this article, the main focus is on the difference in inflation rates between countries, which is important for price competitiveness. The differences are calculated relative to Finland’s monthly inflation levels. After all, the difference in price level always produces the possibility of arbitrage, which is considered very significant in economics. Large differences in inflation levels also create a price-based regulatory mechanism to contain inflationary pressures in Europe and maintain price competitiveness in the euro area. Price competitiveness and real economic competitiveness are key issues for regional and national competitiveness.

Inflation in Finland and in the EU-27 region in July 2022-April 2023

In this blog post, we assess recent inflation developments in Finland and Europe. There has been a worried public debate about rising inflation, both in Europe and around the world. In this sense, this blog post provides a timely insight into the debate on inflation developments in Europe.

First, I will present a figure 1 of inflation in terms of HICP consumer price development in Finland.

Figure 1. Inflation, HICP – monthly data index in Finland, July 2022-March 2023 (2015=100).

We can clearly see from the figure that consumer prices have risen significantly in Finland, but the development has been similar almost everywhere in Europe.

In Figure 2, I have compared consumer price developments with some other European countries and the United States.

Figure 2. Inflation, HICP – monthly data index in Finland, and in the U.S.A., Germany, Sweden, Poland and European Economic Area, July 2022-March 2023 (2015=100).

In this comparison, Finland fares surprisingly well. The development of consumer prices has been more moderate in Finland than in the European Economic Area, Germany and the United States.

Figure 3 shows a statistical indicator of monthly changes in inflation. The changes have been increasing to November 2022 (rate of change was 9), but after this peak month the speed of change has decreased to the level of 6. This is positive signal of change in inflation in Finland.

Figure 3. Inflation, annual rate of change, measured with HICP – monthly data (annual rate of change), All items of HICP, in 2022-07 (July 2022) – 2023-04 (March 2023) in Finland (Source: Eurostat 2023).

Figure 4 shows a comparative analysis of the rate of change in inflation in Finland and certain EU countries and the United States of America. This figure also shows positive developments in terms of inflation changes in Finland compared to these relevant peer countries.

Figure 4. Inflation, measured with HICP – monthly data (annual rate of change), All items of HICP, in 2022-07 (July 2022) – 2023-04 (March 2023) in Finland and some key European countries.

In Figure 5 I report inflation of producer prices in industry, domestic market – monthly data in Finland, for July 2022-March 2023. This figure shows that Finland has succeeded in significantly damming the growth of producer prices during this period. Inflation has fallen for these producer prices.

Figure 5. Inflation of producer prices in industry, domestic market – monthly data in Finland, July 2022-March 2023.

The figure 6 shows a comparative analysis of producer price developments. That, too, offers a very positive result for Finland.

Figure 6. Inflation of producer prices in industry, domestic market – monthly data in Finland, July 2022-March 2023.

Inflation Advantages and Disadvantages of Finland

We now turn to a comparative analysis of the inflation indicators for Finland and the EU countries. The aim is to assess the differences in the trend development of inflation developments between Finland and the rest of the EU. We look at differences in general consumer price HICS developments, HICS inflation change rates and producer price index developments. This section provides three different benchmarking analyses.

First, in Figure 7, inflation advantages of Finland in relation to some European countries and the U.S.A., July 2022-April 2023 based on HICP – monthly data (index) are reported. This figure 7 shows positive advantages in relation to consumer price levels in Finland.

Figure 7. Inflation advantages of Finland in relation to some European countries and the U.S.A., July 2022-April 2023 based on HICP – monthly data (index).

Figure 8 shows a clear picture that differences in consumer price inflation are quite large in the EU region. This figure reveals inflation advantages of Finland in relation to some European countries and the U.S.A. (July 2022-March 2023 based on HICP – monthly data, index).

The figure 8 shows that HICP consumer prices have developed strongly in the Baltic countries and Poland.

Figure 8. Inflation advantages of Finland in relation to some European countries and the U.S.A., July 2022-March 2023 based on HICP – monthly data (index).

In Figure 9, I report Average Inflation Advantages, minus index numbers and disadvantages of Finland, positive index numbers with HICP Index of Finland minus HIPC Index of other country, in July 2022-April 2023.

Figure 9. Average Inflation Advantages, minus index numbers and disadvantages of Finland, positive index numbers  (HICP Index of Finland minus HIPC Index of other country) in July 2022-April 2023).

The figure 9 shows that the development of consumer prices in Finland has been more subdued than in most EU countries. This figure shows that only Switzerland has succeeded clearly better than Finland.

Figure 10. Average Inflation Advantages, minus index numbers and disadvantages of Finland, positive index numbers  (HICP Index of Finland minus HIPC Index of other country) in July 2022-April 2023).

In Figure 11 I report Average Inflation Advantage of Finland, Measured with HICP – monthly data (Annual rate of change) with all items of HICP, in 2022-07 (July 2022) – 2023-04 (March 2023).  This Figure 11 of the pace and change in consumer market inflation also tells a similar positive story about the successful containment of Finland’s inflation rate.

Figure 11. Average Inflation Advantage of Finland. Measured with HICP – monthly data (Annual rate of change), All items of HICP, in 2022-07 (July 2022) – 2023-04 (April 2023) in Finland.

In Figure 12, I report Inflation Advantage of Finland, Measured by Average Domestic output price index – in national currency (July 2022-March 2023). This Figure 12 of  domestic output price inflation also tells a similar positive story about the successful containment of Finland’s inflation rate. In this comparison, too, Switzerland fares clearly better than Finland.

Figure 12. Inflation Advantage of Finland, Measured by Average Domestic output price index – in national currency (July 2022-March 2023).

Summing up

It is good to be aware that economic trends in inflation can change the competitive landscape in Finland, in the European Union and in the world. Finland should, of course, take inspiration from Switzerland’s monetary and economic policy. Benchmarking and results support this policy recommendation. See also How Switzerland beat high inflation; Why the Swiss economy is strong (cnbc.com)

The comparative benchmarking calculations now presented show that Finland’s current position in this comparison is not so bad at all. That is why we should continue to act rigorously in promoting consumer and producer price competitiveness in Finland.

We know that high inflation rates make it challenging for businesses and individuals to plan for the future. When prices are rising rapidly, it becomes difficult to accurately predict costs, revenues, and profits. All kind of economic biases arise because of high inflation rates. This kind of fundamental uncertainty can discourage long-term investments and economic growth as businesses become hesitant to commit resources in such an uncertain environment.

If inflation in one country, for example in Finland, is higher than in its trading partners, it can make the country’s exports more expensive relative to imports. This can result in a decrease in export competitiveness and a deterioration of the trade balance, leading to a negative impact on economic growth. The results of this blog text show that in recent months from July 2022 to April 2023, Finland has kept its inflation in control. However, there is always a risk of wage-price spiral.  Inflation can trigger a wage-price spiral, where workers demand higher wages to keep up with rising prices. As businesses and industries increase wages to meet these demands, production costs rise, which can further fuel inflation. This spiral can create a cycle of increasing prices and wages, making it difficult to control inflation and maintain stable economic conditions.

This kind of negative inflation wage-price spiral process can now be found, for example in Turkey, Hungary and Romania, Latvia, Estonia and Lithuania.  Baltic countries are now fighting back against inflation pressures and for example, Estonia has been quite successful (Estonia Inflation Rate – April 2023 Data – 1999-2022 Historical – May Forecast (tradingeconomics.com)). Also Latvia and Lithuania have shown more promising result in the battle against inflation (Latvia Inflation Rate – April 2023 Data – 1998-2022 Historical – May Forecast (tradingeconomics.com) and Lithuania Inflation Rate – April 2023 Data – 1993-2022 Historical – May Forecast (tradingeconomics.com)). Behind the inflationary pressures in the Baltic countries has, of course, been the Russia-Ukraine war, which has increased direct and indirect cost pressures in these countries, which border Russia.  

In a special inflation case of Turkey, we can talk about superinflation Is Turkey on the brink of hyperinflation? | Financial Times (ft.com). Future economic developments in Europe depend very much on the strength of inflation. If inflation is not contained, it could lead to a deep recession in Europe. This situational picture is such that it requires continuous monitoring in Finland and its economic and political decision-making.

The positive thing for Finland is that we have been able to curb inflation despite the fact that we border Russia. One of the reasons why we in Finland have succeeded in curbing price inflation may also be related to Finland’s recent NATO membership, but the matter should be investigated in more detail later. I’m not going to speculate on this in this blog post, but it might be worth exploring.

Jari Kaivo-oja
Research Director (Finland Futures Research Centre, Turku School of Economics, University of Turku)
Adjunct Professor (University of Helsinki, University of Lapland and University of Vaasa)
Professor, Kazimiero Simonavičiaus University, KSU, Vilnius, Lithuania

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This blog post is related to the R&D project ”Sustainable competitiveness through productivity and digitalisation in Satakunta” (ProDigy), which has received ERDF funding (European Regional Development Fund) in 2023.

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Background reading and references

Akerlof, George A. , Dickens, William T. , Perry, George L., Gordon, Robert J.  and Mankiw, N. Gregory  (1996) The Macroeconomics of Low Inflation. Brookings Papers on Economic Activity, Vol. 1996, No. 1 (1996), pp. 1–76.

Anderson, Chad (2023) The Space Economy: Capitalize on the Greatest Business Opportunity of Our Lifetime. A Guide for Investors, Entrepreneurs and Aspiring Professionals. 1st Edition. Hoboken, New Jersey: Wiley.

Barro, Robert J. (1995) Inflation and Economic Growth. Working Paper 5326. October 1995. National Bureau of Economic Research. Washington. The USA.

Desai, Raj M., Olofsgård, Anders & Yousef, Tarik M. (2003) Democracy, Inequality, and Inflation, American Political Science Review, Volume 97, Issue 3, August 2003, pp. 391–406. Cambridge University Press.

Eurostat (2023) Source dataset(s) from PRC_HICP_MANR, PRC_HICP_MIDX and STS_INPPD_M.  HICP – monthly data (index) [PRC_HICP_MIDX$DEFAULTVIEW]; HICP – monthly data (annual rate of change) [PRC_HICP_MANR$DEFAULTVIEW]; and Producer prices in industry, domestic market – monthly data [STS_INPPD_M$DEFAULTVIEW]

Fisher, Irving (1977) [1930] The Theory of Interest. Philadelphia: Porcupine Press.

Gillman, Max (2023) The Spectre of Price Inflation. Newcastle: Agenda Publishing Ltd.

Hayek, Friedrich August (2008) Denationalisation of Money. Reissued Edition. London:  The Institute of Economic Affairs. 

James, Harold (2023) The Economic Crises that Shaped Globalisation. New Haven and London: Yale University Press.

Keynes, John Maynard (2007) [1936]. The General Theory of Employment, Interest and Money. Basingstoke, Hampshire: Palgrave Macmillan.

King, Stephen D. (2010) Losing Control: The Emerging Threats to Western Prosperity. New Haven CT and London: Yale University Press.

King, Stephen D. (2013) When the Money Runs Out: The End of Western Affluence. New Haven CT and London: Yale University Press.

King, Stephen D. (2017) Grave New World: The End of Globalization, the Return of History. New Haven CT and London: Yale University Press.

King, Stephen D. (2023) We Need to Talk About Inflation: 14 Urgent Lessons from the Last 2,000 Years Kindle Edition. Yale: Yale University Press.

Romer, Christina D. & Romer, David H. (1996) Reducing Inflation. Motivation and Strategy. University of Chicago Press. Chicago.

Monetary Policy Generates Poverty: Unchecked it will be our Nation’s Ruin

Skillen M.D., Richard D. (2019) Monetary Policy Generates Poverty: Unchecked It Will Be Our Nation’s Ruin. USA.

Mankiw, N. Gregory, Romer, David & Weil, David N. (1990) A Contribution to the Empirics of Economic Growth. National Bureau of Economic Research. Washington. USA.

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Cover picture: pixabay.com

Good Business in Industries Needs Good Human Factors Knowledge and Management

Jan Dul & Jari Kaivo-oja:

Grand challenges in the industry in the Industry 4.0 era

Under the banner of ‘Industry 4.0’ a new industrial revolution is unfolding. New technologies and digital transformation force manufacturing companies to prepare for the future and to utilize new technologies for ensuring their competitiveness in markets. The road to a successful end result crosses a jungle of different new technologies, new possibilities of digitalization, and changing roles of humans. For survival, companies need new strategies and plan to reach their targets. Is the Finnish industry ready for this?

To be able to answer this question we need to ask if our “national machine” (ministry, decision-makers in industry, education institutes, politics, and the public opinion) is prepared for this inevitable change in industries. We already know that the industry sectors must acquire new technologies and make steps towards digitization. We also know that there is a huge need for increasing people’s skills and competencies in the industry to work with these novel technologies like Industrial and Service Internet of Things, AI, AR/VR, Cloud computing, Digital Twin tech set, Blockchain, sensory technology, 3D printing of different components, cobots for helping humans at work, Food security. Nanosensors in packaging to detect salmonella and other contaminants in food etc.

We also know the challenges of an aging workforce and the awareness that technologies take over many human work tasks, and at the same time, new roles and work tasks are coming for humans. Technological and human challenges go hand in hand and the human factor will remain a core element of a successful Finnish industry. Now there is a need for integrated humans and systems approach in the design and management of production systems and of future work. This allows to maximally use of the potential of humans as being part of the production system. This knowledge is largely available in the human factors and ergonomics field and can readily be applied in the Finnish industry.

In economic terms, low quality of integration of human factors creates a negative effect on the national economy e.g. due to inefficiency of the systems and cost of bad working conditions. Although we are economically and socially developed we are ergonomically undeveloped. This is not only a question of money but attitude and capability to utilize HFE (Human Factors Engineering) knowledge in general. The critical question is who will compensate for this kind of broad-scale negative effect in society or are just sending a high-cost bill to taxpayers?

For being successful we need to nurture this unused human potential in the right way. When designing or changing production systems we must ensure a mutual development of technology and manufacturing processes by using human factors in design for ensuring a good fit between the two human and the work systems, not only in large companies but also in small and medium-sized companies.  Do we have capabilities for making this happen at the national, industry, and company level? The simple answer is “no”. At the national level, industrial policies for technological development by the ministry of economic affairs (e.g. Renewing and Competent Finland 2021−2027 Program, TEM industrial sectoral reports, AI 2.0 Report etc.) are quite isolated from social policies for human development by the ministry of health and labor (e.g., future of work where integration of HFE in the design of systems and processes is neglected.) At the industry level, separate national policies are being discussed and implemented for specific industries in separate initiatives. At the company level engineers and other technical experts work on changing production systems separately from occupational health and safety (OHS) experts.

In Finland, Industry 4.0 is fully technology-driven, and attention to the human factor at work is fully driven by occupational health and safety. For example, the guideline of the Ministry of Social Affairs and Health intends to help Finnish companies with health and safety issues only but is not taking into account optimizing the interfaces between humans and the other parts of the manufacturing process for improving the performance of the entire system, humans included. The same holds for the health-driven activities proposed in The Occupational health 2025 – In cooperation workability and health.

We can also wonder if the “Work 2030” vision and strategy take an integrative approach to link technology, economy, and human factors for enhancing the cooperation and development between these three core actors in the industry. The skill of HFE makes it possible to combine all needed collaborators and stakeholders together for integrating the HFE into engineering and management work. As a multidisciplinary field, HFE is a must and while respecting the identity of different fields we need to recognize the existing barriers to be able to do cooperation between different fields of knowledge.

The policy is needed for combining technologies, business, and people in workplaces

As a production system consists of all activities that are either produced by humans or by machines, the design of a production system is about designing both activities in concert. This means that even when technologies and digitalization are made for improving the performance of the manufacturing process, humans make the final impact on how things will go in reality – in good or bad. System performance can only be realized while taking into account the human factor. If human factors and ergonomics (HFE) are not orchestrated professionally in companies, large-scale negative effects are created in the whole society on the company and national level.

A ‘human factors’, the HFE approach ensures a fit between humans, technology, and the entire production process. It maximizes system performance while maintaining good standards of ergonomics. It means that systems, work, and works environment are realized for maximizing what technology can do, and what people can and want to do. In this approach technology, organizational and human expertise are combined and optimized for maximum output in terms of the economic and social goals of the system. International evidence shows that designing work processes in such a way can serve both goals simultaneously.

How can this be realized in Finland? What is our policy that combines the development of performance of the production processes and well-being of workers at the same time?

The Finnish Human Factors Engineering way  

What is the status in companies of the integration of HFE in the design and management while preparing for Industry 4.0? Now, according to the law, OHS-driven activity is a must for companies. In Finland, occupational health services and professionals help companies to develop the workability of the workers and ensure healthy and safe work environments. They focus on optimizing the load of the work for the worker throughout the whole work process and the work life. Good so far, but how will this be possible without HFE expertise in an era of Industry 4.0 where human-system integration is essential? HFE refers to Ergo Nomos = Work Laws of nature which is the science and theory for designing work processes. This internationally accepted definition of HFE and ergonomics is largely absent in Finland. Companies do not get this HFE knowledge from current OHS services and professionals when searching for and choosing new solutions to modern Industry 4.0 production. In Finish public opinion there is a common understanding that occupational health services offer ‘ergonomists for workplaces’, but this idea of ergonomics is limited to the health and safety of workers, and does not deal with system performance.

On the positive side, the Finnish law recognizes the difference between OHS professionals and OHS experts. The physiotherapist is one of the OHS professionals and the ergonomist is the OHS expert. However, the OHS field does not make a distinction between physiotherapists (who is called `occupational physiotherapists ‘in public) and ergonomist. In Finland `Occupational physiotherapist` represents narrow health and safety based definition of ergonomics. This has led to the situation that companies get most often an occupational physiotherapist for tackling true ergonomics issues instead of the ergonomics (HFE) expert that is mentioned in the law. This is an obvious problem in the Finnish work life at the moment. For these reasons, the multidisciplinary approach to the development of working life is thin from the broader system perspective.

Ergonomics is a science, theory and principles that takes a system approach and deal with the interfaces between human and other parts of the system. This means engineering kind of work for optimizing the work for human. HFE takes into account the physical, cognitive and organizational aspects of the work and work system. This approach is helping to integrate human via HFE knowledge as a part of the process proactively on macro and micro levels. In Finland, unfortunately, we see only reactive micro level OHS activity because of health problems of the workers. We cannot survive a long time with this kind of one sided and siloed OHS approach with health and medicine sciences. We need a national level policy that notice the need for fixing the gap between OHS activities and performance and productivity development activities in companies and public sector organizations for combining HFE and performance knowledge.

Figure 1. The Gap problem. Source: Jan Dul´s lecture in ERGO2030 Webinar, in the Palace, Helsinki, Wednesday 10.11.2021.

Innovations for integrating HFE for improving performance of the companies

For being able to succeed in this change in the industry for ensuring the competitiveness of our companies, the productivity of the work, and wellbeing at work, we need an integrated policy that leads OHS, HFE experts, and performance developers to define the performance factors to be noticed, studied, analyzed and designed for ensuring the fit between human and work system. It is good to be aware that part of the recent poor productivity development of work in Finland is due to poor human ergonomics knowledge in design. Solving this big problem needs understanding of the system approach where existing theories and practices are offered to the use of the companies in this industry and technology change process.                                                                                       

ERGO 2030 project brought as an example, facts and factors to be noticed for this systemic and organizational approach by creating a road map to be utilized in different industries and companies. However, this roadmap does not help unless we do not have a policy in Finland that facilitate the OHS and business/technology actors to work together and especially if the education and services of design ergonomics for work systems are not in place and available for companies and technology suppliers.

Let`s bring the key stakeholders around this topic of human, work, productivity, and well-being at work at the same table and listen to the needs and requirements for creating a mutual understanding how shall the national level roadmap looks like for ensuring the capability of our industry and wellbeing of the workers at work. In another case, we are not able to implement efficient digital and new technology transformation in the industry. This negative alternative will lead us to very slow organizational adaptation processes in industries, low work productivity levels, and to huge negative externalities to society. This big financial cost and bill will be paid by taxpayers.

And last but not least. Industry 5.0 is said to be human-centered but can it be realized without having HFE in place in Industry 4.0? The answer is `no`. Using HFE skills already in Industry 4.0 phase makes us better prepared for Industry 5.0 phase. If this is not taken into account now problems maybe even bigger in industry 5.0 what comes to HFE and phenomena related to that in work-life practices.

Jan Dul
Professor, Rotterdam School of Management, Erasmus University, the Netherlands

Jari Kaivo-oja
Research Director, Finland Futures Research Centre, University of Turku

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About the ERGO 2030 project

ERGO2030 project was funded by the Anita and Olavi Seppänen Memorial Foundation, founded in 2018 in Helsinki, Finland. The Foundation actively supports Finnish art and culture, and national orthopedic research as well as maintains the historic church and its environment of Tuupovaara in Eastern Finland.

ERGO 2030 report was published in 2021: Reiman, A., Parviainen, E., Lauraéus, T., Takala, E-P., & Kaivo-oja, J. (2021) ERGO 2030 – a roadmap for human consideration in the design and application of new technologies in industry. Tutu ePublications 3/2021: https://www.utupub.fi/handle/10024/152322

About the authors

Professor Jan Dul is a professor of Technology and Human Factors at the Rotterdam School of Management, Erasmus University, the Netherlands. He has a background in the technical, the medical and the social sciences. His is a specialist in human factors and ergonomics (HFE) and studies the interaction between people and the physical and social-organizational environment to maximize business performance and human well-being. His research contributes to the design of successful products and services, and to the development of work environments for high performance (creativity, innovation, productivity, quality, health and safety). He is the winner of several national and international awards including the Human Factors NL award, the Hal W. Hendrick Distinguished International Colleague Award of the USA human factors and ergonomics society, the IEA Distinguished Service Award of the International Ergonomics Society, and the Liberty Mutual award for the paper ‘A strategy for human factors/ergonomics: developing the discipline and profession’. He has advised the EU and national governments about work environment policies, is a regular speaker at management events worldwide, and has shared his insights with companies on how to improve performance with HFE.

Dr. Jari Kaivo-oja is an Adjunct Professor and Research Director working at the Finland Futures Research Centre, University of Turku. He is a researcher in the Manufacturing 4.0 project funded by the Strategic Research Council of the Academy Finland. He was scientific expert in the ERGO2030 project. He has worked in various European research and development projects serving among others the European Foundation for the Improvement of Living and Working Conditions (European Foundation/Eurofound), the European Agency for Safety and Health at Work (EU OSHA), the European Commission, the European Parliament and the EU DG Enterprise and Industry (DG-ENTR).

Articles

• Reiman, A., Kaivo-oja, J., Parviainen, E., Takala, E-P. & Lauraeus, T. (2021). Human factors and ergonomics in manufacturing in the Industry 4.0 context – A scoping review. Technology in Society. 65, https://doi.org/10.1016/j.techsoc.2021.101572
• Reiman, A., Kaivo-oja, J., Parviainen, E. Lauraeus, T. & Takala, E-P. ”Human work in Industry 4.0: A road map to technological changes in manufacturing”. Journal manuscript in review 

Chapters:

• Reiman, A., Kaivo-oja, J., Parviainen, E. Lauraeus, T. & Takala, E-P. ”Human Work in the Manufacturing Industry 4.0”. Book chapter in review for textbook: Operator 4.0 by Springer.
• Takala, E-P. & Reiman, A. Ergonomia. Article to Fysiatria. 6. edition 2023. Duodecim.

Conference papers:

• Takala, E-P., Reiman, A., Parviainen, E., Lauraeus, T. & Kaivo-oja, J. (2021). ERGO 2030 – A roadmap for the implementation of human factors within the newest technology. In: Black, N., Neumann, P.W., Dewis, C. & Noy, I. (Eds.), Book of Extended Abstracts, 21^st Congress of the International Ergonomics Association, Vancouver, Canada, 14-18 June 2021, pp. 389-392.

The final ERGO report:

• Reiman, A., Parviainen, E., Lauraéus, T., Takala, E-P., & Kaivo-oja, J. (2021) ERGO 2030 – tiekartta ihmisen huomioimiseen suunniteltaessa ja sovellettaessa uutta teknologiaa teollisuudessa. Tutu eJulkaisuja 3/2021: https://www.utupub.fi/handle/10024/152322 

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Picture Stefan Keller Pixabay 

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BioEcoJust Open Horizon Scanning #2

Nicolas A. Balcom Raleigh & Amos T. Taylor

The Bioeconomy and Justice futures team continues its Open Horizon Scanning process with this second batch of found items. We thank readers who gave us positive feedback on the launch of this endeavor. We feel encouraged to continue this experimental series of blog posts.

The BioEcoJust project is concerned with the ethical challenges humanity will face in the development of the bioeconomy between now and the year 2125. As part of a larger multi-method research process, we are conducting an ongoing horizon scanning process to inform, develop and test our research findings as we go. On any given week, we encounter a dozen or more items relevant to our research topic. These items can be anything, ranging from academic articles to internet memes. Our project’s futures team has established a practice of documenting, sharing, and reflecting upon these horizon scanning items as we find them. From these discussions, we develop sensemaking tools which we then use to notice new items and interpret them in relation to our project.

Usually, organizations and teams do their horizon scanning privately, in many cases seeing it as a source of competitive advantage. We, however, decided to do some of our horizon scanning work openly. Our reasons are:

• To more rapidly share our emerging insights with our research communities including our FFRC colleagues, the rest of the Academy of Finland BioFutures 2025 programme, and other futures studies scholars and practitioners;
• To deepen our interpretations and analysis of the items by communicating about them and listening for feedback;
• To provide an ‘in process’ view of how we are approaching our research topic;
• And, to invite discussion about the items we present and their implications for the future of the bioeconomy.

Our goal is to share 3–5 horizon scanning items in somewhat frequent and easy-to-read blog posts. To analyse the presented items, we apply the sensemaking tools we’ve developed so far: the human-technology-nature triangle, three socio-technical domains, and our five BioWorlds (see our launch announcement for detail). To be somewhat systematic in our analysis, we will generally include the following elements about each presented item:

• A short headline conveying the item’s essential meaning;
• A reference and link for the item;
• A brief description;
• How it relates to other items we’ve encountered;
• Meanings of the item in relation to our existing sense-making tools (e.g. BioWorlds, Human-Technology-Nature Triangle, and Three SocioTech Domains);
• And, perhaps most important — the potential futures we see in the item.

This batch of items all share a cross-cutting theme of bioeconomy and it’s potential to address climate change. They include an interactive article conveying the ranges of impacts of global warming, the role of climate change interventions by the wealthy philanthropists, the new global land-use degradation indicator announced by UNCCD, and the launch of a scientific debate regarding how suitable wood-based sources for energy are for reducing CO2 emissions.

Horizon Scanning Items

1. The many ways 1.5C is less than 2.0C

Carbon Brief (2018) Impacts and Uncertainty of 1.5C & 2.0C. Climate Change.  (Accessed 10 October 2018).

This item caught our attention in relation to the widely covered IPCC Special Report 15 released on 8 October. It is an interactive article by Carbon Brief about the ‘impacts of climate change at 1.5C, 2C and beyond. Based on 70 peer-reviewed recent climate studies, it briefly sketches out temperature differences and their impacts for the future in ten categories: Oceans, Ice, Temperature, Rainfall, Drought, Storms and flooding, Crops, Nature, Economy, and Health. Rather than being a simple list, this quantified analysis is presented as ranges of possible impacts and uncertainties while conveying the complicated interrelations among the impacts. For example, depending on if we are talking about 1.5 or 2.0C global average temperature increase, the sea level will rise between 59 and 61 cm by years 2100 and 2300, and warm spell durations will range between averages of 17 to 35 days of continuously warm (hot) weather per year.

In 2015, a presentation by CICERO suggested that the IPCC scenarios of 2.0C increase were rather optimistic with one crucial factor hanging in the balance, the need for negative emissions through carbon capture. The technology and mechanisms for negative emissions are yet to be demonstrated and their viability at scale remains highly uncertain. Futurist’s ears perk up whenever uncertainty is discussed, as these are exactly the areas of the future requiring deeper exploration and bolder strategic action. This week’s IPCC report underlines the need to explore uncertainty to find solutions, to acknowledge the wide complexity of impacts, and the need for concerted and far-reaching action as soon as possible.

In this sense, this item signals a coming maturation in discussions about climate change in which frameworks like this enable discussion about the uncertainty of warmer futures by specifying the variety of combinations of possible impacts. This horizon scanning item may also signal a wider strengthening of our Bio-Equality world’s influence on how people conceive of and act toward an ideal relationships among Humans, Technology, and Nature. At the very least, it is another call for greater awareness of how bold transformative actions are needed today in order to improve the options for people living 100 to 200 years from now.

2. The downsides of “billionaire saviors”

Florida, Richard (2018) Real Change Won’t Come from Billionaire Philanthropists. 27 September 2018, City Lab.  (Accessed 17.10.2018.)

This item is an interview with author Anand Giridharadas who summarizes many key arguments he makes in his new book Winners Take All. The core of his argument is that the world’s wealthiest people are co-opting the concept of social change in their initiatives to do good. As wealthy people implement their own tools for social change, like social impact investing, change-driven invite-only events such as DAVOS, or personal ‘save-the-world’ pet projects, they simultaneously set the rules for how change should be enacted, closing out other options, and thereby reinforcing their economic power. We don’t necessarily agree or disagree with Giridharadas (we would need to read his book more closely), but we take his observation of this phenomena of what we’ll call ‘billionaire saviors’ as a starting point for exploring some fascinating future potentials.

His criticism of the present class-based influences on the future reminds us of arguments made by Moore (2016). Moore rejects the ‘it’s all of humanity’s fault’ logic of many Anthropocene scholars and instead places the blame for environmental devastation and the looming climate crisis on historical Europe-led colonialism. These past actions dehumanized many non-European people and severely devalued nature in pursuit of capital accumulation. Moore’s point emphasizes the significance of how a small group of powerful actors fundamentally perceive nature’s value.  In this light, how today’s billionaire saviors regard nature is quite important to how far we can go in righting the past wrongs of colonialism over the next 107 years.

Both Giridharadas and Moore are part of a growing list of authors who either call for or predict the need for a new economic system in order to avoid the worst possible outcomes of the global warming crisis. These criticisms link to a sensemaking tool our Bioecojust team is developing regarding the future evolution of the global economy. In our opinion, the often taken-for-granted assumption that the current economic order will continue indefinitely is highly questionable. The overall economic order has changed so profoundly and so many times over the last 100 years that it is highly unlikely it won’t continue to change over the next 100 years. Yet, how can we imagine beyond what we already know? What new forms of ‘valuation of value’ can we expect in the future? (e.g. see 99 These on the Revaluation of Value ) How frequently can we expect the overall economic order change over the next 107 years, due to what factors, and what forms will it take?

This horizon scanning item helps shed some light on these questions by naming a powerful mechanism shaping the present–that wealthy people apply their economic influence to produce change while perpetuating economic structures and systems that continue the destructive status quo. This phenomena of Billionaire Saviors intervening to make change cuts across all five of our BioWorlds as many actors in those worlds already are, or will soon be, mobilized by these types of funders. This phenomena is also present in the three socio-technological domains we are investigating–forests, soil, and algae–as private wealthy individuals play key roles in the development of all three domains. Billionaire Savior initiatives take the form of betting on single solutions to complex and nuanced problems. The motivations of these billionaire saviors are deeply linked with the human, nature, technology triangle as their expectations for how these relationships ‘should be’ profoundly structures the designs of their interventions. Even if these Billionaire Saviors can exert extraordinary influence on societal developments more rapidly than other types of actors, what happens when they are wrong? What other forms of change are overlooked? On a 107-year timeline, will their presence and influence increase or decrease? We note that the actions of Billionaire Saviors must be carefully watched in regards to the development of the Bioeconomy. We also note that doing something is better than doing nothing, even while we wonder what other forms of action could have a greater and longer lasting impact.

 3. Coming Soon: A global Land Degradation Indicator

UNCCD (2018) SDG Indicator 15.3.1. UN Sustainable Development Goal 15.3 Knowledge Hub. (Accessed 10 October 2018.)

UN Sustainable Development Goal 15.3 aims to ‘combat desertification, restore degraded land and soil–including land affected by desertification, drought and floods– and strive to achieve a land degradation-neutral world’ by 2030. The custodian agency of SDG Goal 15.3 is UNCCD and they are maintaining a knowledge hub to track its progress. An infographic on the hub’s homepage shows how SDG 15.3 is linked to several other SDGs, including safe water, ending extreme poverty, ending hunger, and conserving ecosystems. This horizon scanning item includes both the Knowledge Hub and the Land Degradation Indicator 15.3.1 announced on it. This new indicator is good news for our project because Land Degradation due to human pressure and climate change is one of nine key influences on the year 2125 we’ve identified. Land degradation is a cross-cutting theme in our BioWorlds as well, especially BioUtility and BioRecovery which are at odds with each other in regards to land use. However, to date, there are many differing scientific approaches to assessing of how much of Earth’s land is degraded. So far, to understand the current status of this factor, we have been relying on the IPBES (2018) land degradation forecasts for 2050 and Gibbs and Salman’s (2015) harmonization of four land degradation measurement approaches. In the future, we look forward to having a standardized way to track land degradation. UNCCD plans to first publish Indicator 15.3.1 in February 2019 based on data gathered in 2018. After this, the indicator will be updated every four years. For key players in the bioeconomy (policymakers, business leaders, researchers, startups, etc.) this indicator will serve as a valuable metric by which to determine positive or negative impacts of their actions. For example, the key actors in our BioRecovery world, which features innovators deploying advanced technologies such as space-based monitoring, artificial intelligence, blockchain, and drones to rapidly restore critical ecosystems, could use this indicator to target their interventions, measure their successes, and communicate scientifically about their contributions.

4. Are biofuels renewable?

Searchinger, Timothy D., Tim Beringer, Bjart Holtsmark, Daniel M. Kammen, Eric F. Lambin, Wolfgang Lucht, Peter Raven, and Jean-Pascal van Ypersele (2018) Europe’s renewable energy directive poised to harm global forests. Nature Communications, 2018, 9 (1). (Summarized on Science Daily as “Europe’s renewable energy directive poised to harm global forests, experts argue”)

“Europe’s decision to promote the use of wood as a ‘renewable fuel’ will likely greatly increase Europe’s greenhouse gas emissions” states the Science Daily article about an academic commentary that summarizes a warning by 800 scientists about counting wood-based biofuels as a renewable energy source. With the pressures of climate change comes the urgent need to find alternative greener energy and fuel solutions that can replace global dependency on fossil fuels. The EU’s renewable energy directive has opted to identify wood and thus the forest sector as an attractive candidate. However wood as an inherent natural green solution is problematic when it comes to being utilised directly as a source of fuel because, as it is suggested in this item, it can produce more carbon emissions than fossil fuels, depending on the calculation methods and use of carbon offsets. Rather than focusing wood use on other areas like construction or new materials derived from cellulose, wood for fuel would push EU energy emissions over the limit, the scientists argue. This strategy also gives the green light globally for forests as a source of fuel, potentially resulting in dense precious forest areas of Brazil, for example, being cut at a large scale exclusively for biofuel. A potential impact is that using wood as fuel could become more profitable than applying it to other crucial innovative applications such as textiles, construction, chemicals, and medicines. Burning wood, or transforming it directly to fuel then, in this light, seems to be a primitive way to gain value from nature. It exemplifies the approach of some of the actors in our BioUtility world to maximise efficiency and replace fossil fuels with bio-based sources. An opposite value would be to see this precious forest resource as a valuable form of captured carbon and habitat for biodiversity, which is more in line with the values and motives of our Biorecovery and Bioequality worlds. However this commentary focuses the debate on an energy perspective that does not include other bioeconomy concepts, where convergences of added-value products cascade, and any energy is collected only after high value materials are extracted. The authors seem to overlook the emerging new conceptualization of bioeconomy as ‘circular bioeconomy’ which is emphasized in the new EU Bioeconomy Strategy, (EC 2018).

This academic commentary, in our view, represents a central debate that could continue over the coming decades. Furthermore, the industrial interests of various nations come into play–if forestry is your nation’s largest industry the issue may be seen one way whereas if you nation’s largest industry is oil, the issue may be seen another. The debate is driven by anticipatory assumptions about winners and losers: When wood is seen as a key renewable energy source who wins? Who loses? And what are the unintended consequences? This debate may continue as a permanent, recurring feature of the bioeconomy. As an ‘unfurled dialectic’ – two opposing futures perpetually locked in conflict [1] (see Ahlqvist & Rhisart 2015) – it could define the direction and characteristics of the future bioeconomy for years to come. The key will be to see what is outside its framing to identify alternative configurations.

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This concludes our 2nd installment of the BioEcoJust Open Horizon Scan. We welcome your feedback, either via comments (below) or as an email to nabara (a) utu.fi.

Nicolas A. Balcom Raleigh
MA, Project Researcher 

Amos T. Taylor
MA, Project Researcher

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[1] Technically, Ahlqvist and Rhisiart call this locked opposition variety of futures dialectic a ‘Parallax Gap.’