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OIE Forum 2010 Thailand Industry Transformation: Thriving in the New Age of Global Capitalism S uvit M aesincee Sasin Institute for Global Affairs (SIGA) Civilization in the Making Between 1000-1800 21 st Century 19 th Century Society Static Growth Dynamic Centricity Local

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OIE Forum 2010

Thailand Industry Transformation:

Thriving in the New Age of Global Capitalism

SuvitMaesincee

Sasin Institute for Global Affairs (SIGA)


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Civilization in the Making

Between

1000-1800

21st

Century

19th Century

Society

Static

Growth

Dynamic

Centricity

Local

International

Transnational

Community

Rural

Urban

Virtual

Pace of Change

Months

Days

Seconds


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Globalization changes the State of Nature

Country A B C

Nation-State

Company

People

Solid Modernity

Liquid Modernity

  • Connectivity

  • Interactivity

  • Mobility

  • Virtuality


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Required New Mindset & Skill Set

  • New Axioms

Philosophy

Conceptual

Design

  • New Set of Critical Issues

  • New BIG “P”

Paradigm

Principles

  • New Economic Architecture

  • New Industry Portfolio

Mechanism

Design

  • New Business Model

Practices

  • New Bundles of Competencies

  • New Enabling Infrastructure


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Thailand Industry Transformation:

Thriving in the New Age of Global Capitalism

  • Global Structural Change

  • Challenges & Issues Facing Industry

  • Action Agenda for Driving Change


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Thailand Industry Transformation:

Thriving in the New Age of Global Capitalism

  • Global Structural Change

  • Challenges & Issues Facing Industry

  • Action Agenda for Driving Change


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Perpetual Crises are a Normal State of Being

The

Commodity

Price

Bubble

The Global

Financial

Turmoil

The Dot

Com

Burst

European

Sovereign

Debt Crisis

The Global

Economic

Crisis

The Asian

Financial

Crisis

The Real

Estate

Bubble


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For much of the next decade following the

economic crisis, we can reasonably expect to see

  • A rise of economic

  • nationalism

  • A more expanded role

  • for governments

  • A much larger burden

  • of regulation

  • Weak global growth

  • Pressure from overcapacity

  • Persistently high unemployment

  • Volatility in the financial markets


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Three Major Shifts

  • The Age of Philanthro-Capitalism

  • A New Global Middle Class

  • An Emergence of the Asian Century

  • Offshore Farming

  • Extreme Poverty

  • Wall Wide Web

  • Cyber War

  • Food & Fuel Security

  • Nuclear Terrorism

  • A Shift from the Century of Ideology to the Century of Identity

  • A Shift from the Century of Individuality to the Century of Commonality

  • A Shift from the Century of Prosperity to the Century of Security


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From Century of Ideology to Century of Identity

Century of Ideology

Century of Identity

Socialism

State Capitalism

The World

Economy

Capitalism

Market Capitalism


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Identity/ Representation Issues

Capitalism

  • Washington Consensus Vs. Beijing Consensus

  • North South Trade Vs. East West Trade

Citizenship

  • National Citizen Vs. Global Citizen

  • Local Culture Vs. Cosmo Culture

Corporations

  • Indigenous Firms Vs. MNCs

  • Glocalization Vs. Grobalization

  • Closed Vs. Open Collaborative Platform

Civil Society

  • Globalization from Above Vs. Globalization from Below


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From the Century of Individuality to the Century of Commonality

Regional

Society

Local

Economy

Global

Environment

Economy

Society

Environment

Local

Regional

Global


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These Multiple Realities are Multifaceted, Commonality

Multilayered and Multi-Domained by Nature

Economy

Society

Environment

Local

CSR

New Growth Engine

Low Carbon Society

Multifaceted

Food & Energy Security

Asean Economic Community

Regional

The New USA

Multilayered

BRIC

The Rise of the Rest

G20

Global Civil Society

Copenhagen Accord

Global

Multi-domained

Philanthro-Capitalism/ Citizen Philanthropy

Global Standards


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From the Century of Prosperity to the Century of Security Commonality

National

Security

Freedom & Equality

Human Security

Security

Construction & maintenance of

social & political order

Management of uncertainty, risk & insecurity

Laissez-faire

Precaution


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Globalization of Risk &Threats Commonality

  • Financial Turmoil

  • Economic Crisis

  • Pandemics

  • Climate Change

Global

  • Terrorism

  • Mass Production

  • of Refugee

  • Extreme Poverty

  • Genocide

  • Civil War

Local

Local

Global


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The New World Order in the Making Commonality

  • Financial Turmoil

  • Economic Crisis

  • Commodity Price

  • Offshore Farming

  • New Global Middle Class

  • Extreme Poverty

  • Etc.

Individual

Identity

Prosperity

  • Terrorism

  • Organized Crime

  • Pandemic

  • Cyber War

  • Pirates

  • Nuclear Proliferation

  • Food & Fuel Security

  • Etc.

Global

Common

Security


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The New CommonalityNormal

Management Paradox

Competition

Conflict

Crisis

Stock

Unilateral

Passive/

Reactive

Collaboration

Coherence

Co-prosperity

Flow

Multilateral

Proactive/

Preactive

Level of Uncertainty

Low High

Low High

Level of Complexity


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Thailand Industry CommonalityTransformation:

Thriving in the New Age of Global Capitalism

  • Global Structural Change

  • Challenges & Issues Facing Industry

  • Action Agenda for Driving Change


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Change in the World Economic Structure Commonality

World Economic Structure

Global GDP* %

75

Developed Countries

The Rise of the Rest

The Triad

50

Developing Countries

The Rest of the World

The Rise of Asia

25

1820

70

1913

50

73

2005

The Rest of Asia

China/India


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The spending power has already shifted away from the richest countries towards a growing middle income bloc

By 2050, China and India will together, account for nearly

50% of the global GDP


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The New USA countries towards a growing middle income bloc

3,284 mil

(50% World Population)

12,250 bil US$

(22% World GDP)

ASEAN + 6

2,068 Mil

(31% World Population)

9,901 bil US$

(18 % World GDP)

ASEAN + 3

ASEAN

585 Mil

(9% World Population)

1,275 bil US$

(2 % World GDP)


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As of 2007, India had more cell phone users than the United States, while China had twice as many


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Car ownership rises as income grows as televisions and mobile phones throughout Asia

  • Automotive industry is growing at an

  • unprecedented speed in developing Asia,

  • with China, India, and the ASEAN economies

  • as the major growth markets for the Asian

  • automotive industry

  • By 2025 China could overtake the US as the

  • country with the most cars in the world—

  • around 200 million in all

  • Moreover, there will be flow-on effects across

  • the board--More cars mean more roads, more

  • demand for demand for insurance, more

  • service stations; more tourists mean more

  • aircraft, airports, customs officers, metal

  • detectors, hotels, and demand for souvenirs

Number of Cars Owed

From January through August 2009, more passenger cars were sold to Chinese consumers than to their American counterparts


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Demand more and better services-- Education, Health, as televisions and mobile phones throughout Asia

and International Tourism

World Tourism is expected to

double between 2004 and 2020

  • International travel: as income increase

  • so does the incidence of leisure activities,

  • including international travel

  • Already in 2004, 20 percent of all

  • outbound tourism came from East and

  • South Asia

  • By 2020 the overall number of tourist

  • arrivals is expected to double to 1.5

  • billion, with growing share coming

  • from developing regions


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The Demographical Imbalance as televisions and mobile phones throughout Asia

Developed

Countries

The

First

World

The

Second

World

The

Third

World

Developing

Countries

Aging

Society

Dynamic Young Society


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Demographic Challenges & Issues Facing Thailand as televisions and mobile phones throughout Asia

Potential

supportive ratio

Shortage of Labor

7

Economic

6

5

Lower potential

supportive ratio

Socioeconomic

4

3

2

1

1:2:4

Sociological

0

2000

2020

2050

Source: Kua Wongboonsin


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Four Southeast Asian countries are likely to face more severe consequences than the global average due to limited adaptive capabilities


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Climate-Related Multilateral Arrangement severe consequences than the global average due to limited adaptive capabilities

Mexico Accord

  • Reduction of GHG Emission by both developed & developing countries;

  • Low Carbon Development Pathway;

  • Reduction of emissions through deforestation and degradation (REDD+);

  • Copenhagen Green Climate Fund & Technology Transfer.

Emission Trading

Adaptation

Linkage to trade measures

Nationally Appropriate Mitigation Actions (NAMAs)

CopenhagenAccord

Carbon Off-shoring

Carbon Credits

Numerical targets of emission reductions

Finance

REDD+

Carbon Leakage

Sectoral Approach for Heavy Emitters - e.g. Steel, Cement, Electricity , Paper pulp …(possibly including agriculture sector)

Technology


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Global Forces & Trends Towards Low Carbon Society severe consequences than the global average due to limited adaptive capabilities

Citizens

Government

Business

  • Improvement of energy

  • efficiency to reduce costs

  • Voluntary emission reduction

  • for “green” image

  • Low Carbon, Technology-

  • driven

  • Environmentally Awareness / Go Green

  • Health Concern

  • Green Growth as a new economic growth engine

  • Stricter rules on “less green” imports & provision of adaptation support to maintain competitive edge of domestic industries.

Change in consumers preferences - “Eco-buying”

Manufacturing  Services

Carbon leakage/off-shoring to developing countries??

Examples

  • Korea To become the World 7th Green Power by 2010 and 5th by 2050

  • Japan Carbon Minimization in All Sectors

  • Toward a Simpler Life Style that Realize Richer Quality of Life

  • Coexistence with Nature

  • US, UK, China, India etc.


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Environmental Climate Dimension (+) severe consequences than the global average due to limited adaptive capabilities

Climate Change in the Sectoral Context

Double

Winners

Beneficiaries from Climate Change

under Government Control

Construction&

Associated Sector

Tourism

Chemical

Industry

Mechanical

& Electrical

Engineering

Renewable

Energies

Building Materials,

Paper Industry

Metal Industry

Auto-

motive

Regulatory

Market

Economy

Condition

(+)

Energy Sector

(Fossil Fuels)

Textile

& Clothing

Agriculture

& Forestry

Finance

(-)

Transportation

Food

Industry

Beneficiaries from Government

Measures with Climate Risks

Double

Losers

(-)

Source: DB Research


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Are Thai’s Companies still fitting in ? severe consequences than the global average due to limited adaptive capabilities

Thai’s Companies ???

Green

Green

Green

Green

Global Supply Chain


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TheThree Great Waves of Outsourcing severe consequences than the global average due to limited adaptive capabilities

The First

Wave

The Third

Wave

The Second

Wave

Manufacturing

Services

Food & Agriculture

The Resources Battle

--The world will demand

70 % more food by 2050, outstripping population growth


The third wave of outsourcing global land grab l.jpg
The Third Wave of Outsourcing-- Global Land Grab severe consequences than the global average due to limited adaptive capabilities

  • China is buying up large tracks of land throughout Africa to produce bio-fuels and food

  • Indian companies have formed a consortium to invest in corporate farming of oilseeds in Latin America, most notably Uruguay and Paraguay

  • Cash-rich Arab and Asian governments are buying up arable farmland all over the developing world


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Sectoral severe consequences than the global average due to limited adaptive capabilities Shift

GDPComposition (%) 2004

Source: DTN


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Challenges & Issues severe consequences than the global average due to limited adaptive capabilities

Agriculture

  • Offshore Farming

  • Food & Fuel Security

  • Frugal Innovation

  • Scale Out

Manufacturing

Services

  • Service as Enabler

  • Service as Infrastructure


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A company as a Bundle of Competencies severe consequences than the global average due to limited adaptive capabilities

System Lock-In

Best

Product

Total Customer

Solution

Source: The Delta Project, MIT


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Options for Strategic Positioning severe consequences than the global average due to limited adaptive capabilities

System Lock-In

Dominant Exchange

eBay

Proprietary Standard

Microsoft, Intel

Exclusive Channel

Rural Wal-Mart

Low Cost

Southwest Airlines

Horizontal Breadth

Fidelity

Best

Product

Total Customer

Solution

Redefining

the Customer

Relationship

Saturn

Customer

Integration

EDS

Differentiation

Sony Wega

Source: The Delta Project, MIT


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Amazon.com severe consequences than the global average due to limited adaptive capabilities

System Lock-In

Dominant Exchange

  • Just in time procurement

  • No sale tax

  • Very small return rate

  • The broadest

  • discounters in the world

  • Proprietary computer

  • systems

  • Information broker

  • between publishers

  • and readers

Low Cost

Horizontal Breadth

  • More than 1

  • million titles

Best

Product

Total Customer

Solution

  • Virtual bookstore

  • Massive books

  • and information

Differentiation

Customer

Integration

Redefining

the Customer

Relationship

  • 24/7 availability

  • Book review and Recommendations

  • Eyes & Editors (personalized services)

  • Associate

  • Program

Source: The Delta Project, MIT


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Thailand Industry severe consequences than the global average due to limited adaptive capabilitiesTransformation:

Thriving in the New Age of Global Capitalism

  • Global Structural Change

  • Challenges & Issues Facing Industry

  • Action Agenda for Driving Change


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Vision-Action Gap severe consequences than the global average due to limited adaptive capabilities

  • Mindset

  • Skill Set

Liquid Set

  • Governance Structure

  • Institutional Framework

  • Capacity Building

  • Operating Models

Solid Set

Solid State

Liquid State


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Thailand’s Trade & Industry Architecture severe consequences than the global average due to limited adaptive capabilities

Trade & Industry Policy

Agriculture

Market

Access

Manufacturing

Capacity

Building

Market

Penetration

Global Dynamics

Services & Tourism

Market

Facilitation

Enabling Infrastructure


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Regionalization of Thai’s Industry severe consequences than the global average due to limited adaptive capabilities

Production

Service

Resource

Singapore

Thailand/ Malaysia/ Indonesia/ Philippines/Vietnam

  • Rubber

  • Automotives

  • Tourism and Aviation

  • Fashion

  • Food

  • Education

  • Logistics/Transportation

  • Agriculture and Fisheries

  • Wood

  • ICT and Healthcare

  • Electronics

  • Financial Services

  • Energy

  • Construction

Brunei

Cambodia

Laos

Myanmar


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Thailand as a Regional Hub severe consequences than the global average due to limited adaptive capabilities

Cultural Tourism

Jewelry: THA,MYN,CAM

Land Transportation: THA,MYN,

LAOS,CAM,VIET,MAL,SING

Food & Restaurant: THA

Textile

Automotives

Rubber/

Leisure Tourism

Aviation/

Education/

Healthcare


Using aec as a stepping stone to enhance thailand competitiveness in the global markets l.jpg
Using AEC as a stepping stone to enhance Thailand competitiveness in the global markets

  • The US/Canada

  • Western Europe

  • Japan/South Korea

  • China/India

  • Russia

  • Argentina/ Brazil/ Chile

  • Mexico

  • South Africa

Advanced Countries

Dynamic

Countries

AEC

Emerging Countries

  • African Countries

  • Middle East

Thailand


The new market space l.jpg
The New Market Space competitiveness in the global markets

Advanced

Developing

Frugal Innovation

Under-developing

Scale Out

Upper

Middle

Lower


Industry space the convergence of human technology l.jpg
Industry Space: the Convergence of Human & Technology competitiveness in the global markets

Sector

Business

Level

Product

Agriculture

Manufacturing

Services

Industry


The new division of labor l.jpg
The New Division of Labor competitiveness in the global markets

Competencies

Markets

Products

Ministry of Industry

Ministry of Commerce

  • Sector Development

  • Business Development

  • Product Development

  • Market Access

  • Market Penetration

  • Market Facilitation


Industry space the convergence of human technology48 l.jpg
Industry Space: the Convergence of Human & Technology competitiveness in the global markets

Sector

Level

Business

Product

People

Agriculture

Manufacturing

Services

Private

Industry

Public

Partnership


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Transforming towards a Balanced Industry Portfolio competitiveness in the global markets

Economic

Wealth

Environmental

Wellness

Economic

Wealth

Environmental

Wellness

Social

Well-beings

Human

Wisdom

Social

Well-beings

Human

Wisdom


Slide50 l.jpg

Economic Wealth competitiveness in the global markets

  • Profitability

  • Return on investment

  • Growth

  • Customer satisfaction & retention

Rebalancing Capacity

Environmental Wellness

  • Resource/ energy use

  • Waste management practices

  • Water & air quality

  • Integrity of supply chain

  • Compliance with standards

Economic

Wealth

Environmental

Wellness

Social Well-beings

  • Labor Practices

  • Maintenance of human rights

  • Impact on the Communities

  • Taking responsibilities for products

Human Wisdom

Human

Wisdom

Social

Well-beings

  • Human value

  • Human creativity & value creation

  • Intellectual independence

  • Individual autonomy

  • Free culture


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Balanced Industry Portfolio competitiveness in the global markets

Environmental

Centric

Industries

Economic

Centric

Industries

Human

Centric

Industries

Social

Centric

Industries

  • Manufacturing

  • Alternative

  • Energy

  • Recycle

  • Business

  • Creative

  • Economy

  • Service

  • Industries

  • Knowledge

  • Industries

  • OTOP

  • BOP

  • Social Production

  • Peer Production

  • Distributed

  • Creativity

Resource

Spending

Content

Resource

Saving

Content

Knowledge/

Creative

Content

Social

Content

Efficiency

Sustainability

Creativity

Co-Prosperity


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Strategic Engagement competitiveness in the global markets

Environmental

Centric

Industries

Economic

Centric

Industries

Sector

Level

Business

Product

People

Agriculture

Manufacturing

Services

Private

Industry

Human

Centric

Industries

Social

Centric

Industries

Public

Partnership


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New World Order uncovers new sources of legitimation and options for action for states and civic movements

Public Private

Partnership

Civil Society

Multilayer

Polycentric

Network

Governance

Third

Sectors

Nation-

State

Social

Enterprises


Slide54 l.jpg

Global Reaches, Local Links options for action for states and civic movements

Cluster

of Province

Province

Village

Global

Regional

Social

Cohesion

Internalization

International

Competitiveness

Internationalization


Slide55 l.jpg

Industry Pyramid options for action for states and civic movements

MOP

TOP

BOP

Agri.

Manu.

Serv.

Sect.

Bus.

Prod.

Public

Private

People


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Industry Optimization options for action for states and civic movements

Equity

Agri.

Manu.

Serv.

Sect.

Bus.

Prod.

Equality

Public

Private

People


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The New Strategic Thrusts options for action for states and civic movements

Prosperity

Return

Performance

Macro

Legitimacy

Responsibility

Security

Risk

Compliance

Micro


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Gearing towards the Philanthro-Capitalism options for action for states and civic movements

Corporate

Social

Responsibility

Corporate

Social

Entrepreneurship

Global

Corporate

Citizenship

Corporate

Philanthropy

Corporate

Governance

Source: Global Corporate Citizenship, Klaus Schwab


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A Set of Reform Initiatives options for action for states and civic movements

  • Alternative Model of

  • Global Capitalism

  • International Legitimacy

Regimental Reform

  • Social Inclusion

  • Socio Economic Security

  • Social Empowerment

  • Social Cohesion

Cultural

Reform

Institutional Reform

  • National Ideologies

  • People Empowerment

  • Education

  • New Social Contract

  • Economic Transformation

  • Social Protection

  • Community Building

Instrumental

Reform

  • Land

  • Tax

  • Welfare

  • Infrastructure


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Every morning in Africa, a gazelle wakes up. options for action for states and civic movementsIt knows it must run faster than the fastest lion or it will be killed.

Every morning a lion wakes up.It knows it must outrun the slowest gazelle or it will starve to death.

It does not matter whether you are a lion or a gazelle.

When the sun comes up, you had better start running.

African Proverb


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“If You want to go quickly, options for action for states and civic movements

go alone;

if you want to go far,

go together.”

African Proverb


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“It is not the strongest of options for action for states and civic movements

the species that survive,

nor the most intelligent,

but the one most responsive to change.”

Charles Darwin


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