Brexit lessons

Published 25.06.2016 01:00

As expected, Britain voted to exit the EU in Thursday's referendum. Britain's secession from the union certainly indicates that the EU is not as it was before and cannot progress on its way as before.

I explained how the EU has reached this point in a previous column. However, I must touch on the dynamics that go beyond Europe. As I noted before, this is not a development concerning Britain and the EU alone, but also a historic turning point indicating that the hierarchy in the global system, which was established under the United States leadership with Britain's support following World War II, is changing.

The essence of the matter is that the period that started with the 2008 crisis indicates that an era has ended. Both developing countries like Turkey, and developed ones, had a certain part in this period. The losers of World War II - Germany and Japan - were integrated into the system as two developed countries; however, they would never have the same position as the U.S. and Britain. All economic and political unions, with the EU taking the lead, were organized in accordance with such a hierarchy.

London and Washington indisputably maintained their determinative and central positions. However, this structure was firstly shaken by the Fall of the Berlin Wall in 1989 and neared the end after the 2008 crisis. Germany and Japan opposed the positions that were set for them after World War II, and developing countries began flourishing, starting in Asia. This being the case, the balance was disrupted in two directions. First, the balance of developed countries started collapsing to the detriment of the Anglo-Saxon bloc. As German Chancellor Angela Merkel was striving for EU leadership, Japanese Prime Minister Shinzo Abe was determined to amend the constitution that dragged Japan into a tight corner after World War II. So, Japan began exporting its economic power and technology to the Pacific region and beyond and practicing a new and "independent" economic policy. Meanwhile, Germany also strove to undertake a pioneering role in the new industrial revolution, known as Industry 4.0.

The concept of Industry 4.0, which firstly emerged in Germany, does not have a transformation in the limited number of sectors unlike the previous industrial revolution, but points to a sharp transformation in all areas of the economy. One of the most distinctive features of Industry 4.0 is that it will make use of artificial intelligence technologies as much as possible. This issue, on which German companies predominantly focus, leads to systems with a learning capacity.

Even though the U.S. and Britain started going around in circles, Japan rapidly kept up with Germany in Industry 4.0. This was mainly because the Japanese had extensive valuable experience in robotics for many years. Under Shinzo Abe's rule, Japan is literally undergoing a revolution in robotics. This means that the restrictions that the U.S. imposed on Japan after World War II do not work in the new period.

On the other hand, Britain approached a possible German-Russian alliance with suspicion and the standards of Industry 4.0 were determined predominantly by Germany, which was the determinative force in a vast territory spanning from Eastern Europe to the Caspian region. Therefore, it brought a German-centric EU up for discussion and paved the way for Brexit. This also means Britain is aware that the game is over. An era is over and we can say the EU project is over in this regard. Actually, this is a conflict of European Land's Anglo-Saxon bloc and a new era is on the horizon.

Despite the 2008 crisis, the U.S. still hosts many of the global companies that determine the world economy. According to Forbes Global 2000's data for 2015, the U.S. hosts 580 giant companies that can be regarded as global players, and this figure drops to 232, 219, 104 and 341 in China, Japan, Britain and BRICS (Brazil, Russia, India, China and South Africa), respectively. As Europe-based technology companies regress, Asia is coming to the fore and keeping up with the U.S. In this case, Germany tried to close this gap by giving a great support to Industry 4.0 in recent years and started directing traditional industrial investments to Eastern Europe.

During the period that followed World War II, which was the beginning of a golden era in the U.S., the U.S. received 40 percent of global nominal gross national product. This figure fell to 24 percent in 2015. The share that the U.S. lost due to the recession over the past 50 years did not move to Britain or Germany, but to Asian countries with China taking the lead. Moreover, these countries no longer increase their share of global product depending on traditional industries. On the contrary, they produce high technology independently from developed countries and attract the income of new technology.

The number of people connecting to the Internet will have reached 7 billion by 2035. Some say 50 billion, and others say 250 billion devices will run on the same network via the Internet. It is estimated that this will create a market worth of $19 trillion. The current struggle is on who will control this huge market and its economy and where this capital will accumulate. The deepest goal of all current political conflicts, wars and terror concerns the determination of the new owners and markets of this new economy.

Developing countries, particularly Turkey, can catch up with this new industrial revolution. To this end, they must correctly use their production power and human capital potential, as well as carry out radical reforms in key strategic areas like education. Beyond any doubt, we have stepped into a new era.

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