Published by: Forum Agenda, December 4, 2013
In 1914, exactly 100 years ago, the First World War wreaked havoc across the world. It not only resulted in unimaginable suffering, it also ended an extraordinary era of economic globalization, fuelled by technological progress and imperial ambition.
In The Economic Consequences of the Peace, John Maynard Keynes wrote that shortly before the war’s outbreak, “the inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep.”
It was even more astonishing to him that the average Londoner regarded this state of affairs as normal, certain and permanent. “The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion”, he noted, “were little more than the amusements of his daily newspaper.”
Today, conflicts from Syria to the South China Sea seem far away to many of us; economies are recovering; Europe has not fallen apart; stock market indices are climbing; and all sorts of products from all around the world arrived on our doorsteps in time for Christmas.
However, then as now, strong economic, political and social interconnections are not a guarantee for lasting peace and prosperity. Geopolitical rivalries are one but not the only potential risk: rising income inequality, eroding confidence in business and government, the impact we’re having on our climate and resources, as well as the economic and societal effects of disruptive technologies are critical issues of global concern.
It is against this backdrop that the World Economic Forum will hold the 44th Annual Meeting in Davos-Klosters, under the theme “The Reshaping of the World: Consequences for Society, Politics and Business”. In addition to pertinent geopolitical questions, this year’s Meeting will be structured around four themes: achieving inclusive growth, meeting society’s new expectations, sustaining a world of 9 billion and embracing disruptive innovation.
Achieving Inclusive Growth
If 2013 was characterized by the Eurozone crisis, and the years before that by the global financial crisis, 2014 is conspicuous for the fact that no acute crisis is so far dominating the agenda.
However, the recovery remains sluggish and its fruits are unevenly distributed: in the United States, 95% of the gains of the recovery since 2009 have gone to the top percentile of the income distribution. Europe struggles, too, with rising income and opportunity gaps as a result of the economic crisis and austerity measures. All around the world, high youth unemployment poses a significant challenge to long-term stability and economic vitality.
It is hard to deny the benefits of economic openness: over the past two decades, the global economy more than doubled whilst international trade tripled. This shifted millions of people out of poverty in emerging economies such as Brazil, China, India, Mexico, or Africa’s “lion economies”.Today, half of global growth is produced in these economies. However, if excessive inequality and insecurity are not addressed, nationalist sentiments will rise and popular support for economic openness will decline. Barack Obama has rightly described inequality and the lack of upward mobility as defining challenges of our time.
Meeting Society’s New Expectations
Are decision-makers in business and politics willing and able to meet society’s new expectations? Joseph Stiglitz, Nobel Laureate and former chief economist at the World Bank, has a clear answer: the world is divided not just between the haves and have-nots, but also between those countries that do nothing about it and those that do.
According to Moisés Naím at the Carnegie Endowment for International Peace, the answer is more complex. As a consequence of globalization and technological change, he argues, the ability of decision-makers to exert power is in decay: “In the twenty-first century, power is easier to get, harder to use – and easier to lose.” National protests, often organized through social media, challenge government authority. Globally, many players have sufficient power to block, yet few have enough power to come up with solutions. At the top of global companies, the tenure of executives has sharply decreased.
If caused by a lack of political will or power, the erosion of confidence in business and government leaders is alarming. Decision-makers need to respond to society’s new expectations to restore trust and confidence.
Sustaining a World of 9 Billion
The expectations that are most at risk of being side-lined are those of future generations. As a result of robust growth, millions of people are wealthier, healthier and living longer than 20 years ago. And this is only the beginning: by 2030, a study of the US National Intelligence Council predicts, the global middle class will grow from 1 to 3 billion whilst the global population will grow from 7 to 9 billion. The environmental and climate implications of this trend are huge, and are likely to get worse if nothing is done.
At the Rio+20 environmental summit, advanced and developing economies agreed to put in place a successor to the Millennium Development Goals that recognizes the interlinkages between development and environmental sustainability. Combining both issues intelligently and effectively will be essential to sustain a world of 9 billion.
Embracing Disruptive Innovation
Lastly, attention must be paid to the consequences, both foreseen and unforeseen, of disruptive science and technology. Advanced manufacturing, digital health, robots connected to the cloud, autonomous drones: the digital revolution is not over, it has just started. The opportunities are huge. But in the age of data leaks, cyberattacks and drone warfare, we must also ask how we can make sure that the development of new technologies is accompanied by an evolution of principles, rules and values that guide their use.
This week, leaders from the world of business, government and civil society will explore these themes. The sessions at the Annual Meeting 2014 are as diverse as they are numerous, covering topics such as the economic outlook in regions from Europe to theBRICS; geopolitical issues both globally and in areas including the Middles East and North Africa; the risks and opportunities facing emerging economies like India and China; and how to deal with ongoing challenges such as the gender gap, youth unemployment, public health, threats to privacy and climate change.
With over 60 of these sessions broadcast live, and another 40 live tweeted, I encourage you to join in the discussions to map and shape the profound political, economic, social and technological forces that transform our lives, communities and institutions.