Exploring The Challenges We Face Today

Deepening income inequality...

Inequality is one of the key challenges of our time. Income inequality specifically is one of the most visible aspects of a broader and more complex issue, one that entails inequality of opportunity and extends to gender, ethnicity, disability, and age, among others. Ranking second in last year’s Outlook, it was identified as the most significant trend of 2015 by Network’s experts. This affects all countries around the world. In developed and developing countries alike, the poorest half of the population often controls less than 10% of its wealth. This is a universal challenge that the whole world must address. While it is true that around the world economic growth is picking up pace, deep challenges remain, including poverty, environmental degradation, persistent unemployment, political instability, violence and conflict. These problems, which are reflected in many parts of this report, are often closely related to inequality. The inherent dangers of neglecting inequality are obvious. People, especially young people, excluded from the mainstream end up feeling disenfranchised and become easy fodder of conflict. This, in turn, reduces the sustainability of economic growth, weakens social cohesion and security, encourages inequitable access to and use of global commons, undermines our democracies, and cripples our hopes for sustainable development and peaceful societies.

According to the 2014 Pew Global Attitudes Survey, in the seven Sub-Saharan African nations polled over 90% of respondents regard the gap between rich and poor as a big problem; in the United States, almost 80% do. Political leaders increasingly share these concerns. We are already seeing better policies in some countries, such as Rwanda, Brazil and Mexico, where access to resources are being shared more evenly, and where effective targeting for cash transfers have changed behaviours and bolstered progress in the lives of marginalized groups. But to do this on a larger scale will require stronger national institutions in many countries, adequate resources, more responsive leadership, and better policy making. Some countries have made progress in addressing the structural drivers of inequalities through a range of equityfocused and rights-based policy, legal and programme initiatives, which they have kept in place over time.

In order to effectively address inequality, countries need to embrace an integrated agenda that looks at the problem across the social, economic and environmental dimensions, including access to education, healthcare and resources. Central to these solutions is a basket of interventions that promotes equitable access to resources and services, as well as inclusive growth with decent jobs and livelihoods for all people within society. To enhance impact, disaggregated, high-quality and more transparent data is needed in order to target investments and channel resources where they are needed most. The role of business cannot be overstated in the drive towards greater equality. Data from Pew shows people tend to believe governments are responsible for the wealth gap – but governments cannot solve the problem on their own. Addressing inequality is not only a responsibility but also an opportunity. Addressing inequality is good for business as it creates a new demographic of consumers, thus widening the market for profits and services and increasing profit opportunities, especially for women. Efforts to reduce inequalities and achieve inclusion are a multistakeholder responsibility which will require concerted action at all levels, from local to national, and regional to global. We are all aware of the vulnerabilities and perils that define daily life across the world. We know what we need: inclusive economies in which men and women have access to decent employment, legal identification, financial services, infrastructure and social protection, as well as societies where all people can contribute and participate in global, national and local governance. It is now time for action, in order to leave no one behind and bring everyone forward with a life of dignity.

Persistent jobless growth...

The term ‘persistent jobless growth’ refers to the phenomenon in which economies exiting recessions demonstrate economic growth while merely maintaining – or, in some cases, decreasing – their level of employment. The scale and significance of this problem is evident in the high placing of this trend, an increase even over last year’s report, when persistent structural employment was ranked as the third most concerning trend. The transformations and job displacements associated with technological progress are happening faster, and may even be more dramatic in their impact than anything we’ve experienced before, and the task of providing a meaningful, substantial role for everyone is going to be hugely important. But we believe that this presents us with a huge opportunity to take advantage of current low costs of borrowing and under-utilized labour resources, and embark on large-scale projects to build and repair essential infrastructure in our developed and emerging economies.

If we look at the data on workers aged 25 to 54 – the group we think of as a backbone of the workforce – the percentage of those who are not working has risen by a factor of more than three over the course of our lifetime, and that trend seems inexorably upward. If current trends continue, it could well be that a generation from now a quarter of the middle-aged demographic will be out of work at any given moment. Even China, which has enjoyed unprecedented growth in competitiveness and exports, has seen manufacturing employment decline over the last 20 years, thanks to its rapid industrialization and use technology and automation. This is a long-term trend and we are likely to observe these phenomena across the world, even among emerging economies as they travel the well-trodden path of industrialization. The robotics and 3D printing revolutions could accelerate this trend still further, as the comparatively low entry cost for these disruptive technologies makes them widely accessible to everyone, including developing economies.

Automation is certainly the biggest single contributing factor. Technology can, of course, help with the creation of jobs – but we don’t think there is anything automatic about the process. In United States history, the two Roosevelts and Wilson recognised the challenges and brought about a transformation in the role of the federal government in addressing the needs of average and less-than-average income workers. Influential factors ranged from the creation of the Tennessee Valley Authority to the pervasiveness of electricity, from the building of interstate highway system to fibre optic networks. They all contributed to making progress possible.

If we consider the totality of it, we are much better off thanks to technological progress. But if we do not act, we run the risk of enjoying fewer improvements in the standard of living and more people will be left behind. There could be a greater sense of loss of legitimacy and confidence in government, greater recourse by political leaders to nationalism and surlier and angrier populations, who are more likely to turn on minorities within, and perceived enemies without. This is likely to be one of the reasons we see many of these interconnected issues appearing in the remaining global trends.

We don’t think any of us fully know what kind of policy our governments should be undertaking – We're not sure that this era has yet seen its Bismarck or its Gladstone, someone who will rise to this challenge and transform government policy to meet the needs of this age. Among the key areas that will have to change is education, so that our schools, colleges and universities place a premium on doing the tasks that machines cannot do: collaboration, creation and leading. And at the same time, they must place less emphasis on the tasks that machines can do: the monitoring, calculation and execution. The upside of this trend is that those losing jobs due to increased productivity will be freed up to do things in other sectors.

There is, for example, a huge opportunity here to use this period to remedy infrastructure deficiencies. On the one hand we have decaying infrastructures across the West – airports, rail systems, pipelines and systems of telecommunications. And on the other hand, we have record low interest costs of borrowing, near record high levels of construction unemployment and unused resources. Ultimately We're an optimist, but We're a believer in optimism through raising the alarm. We don’t take a position that is automatically optimistic, because we believe history teaches us that complacency is a self-denying prophecy.

Lack of leadership......

A startling 86% of respondents to the Survey on the Global Agenda agree that we have a leadership crisis in the world today. Why would they say this? Perhaps because the international community has largely failed to address any major global issue in recent years. It has failed to deal with global warming, then barely dealt with the failure of the global economy, which has caused such severe problems in North America and Europe. Meanwhile violence has been left to fester in the Middle East, the region our Survey showed is most affected by, and concerned about this problem. So why are we suffering such a lack of leadership?

Well, as our governments have grown, their mechanisms have been plagued by decades of factional alignment, dynasty and deep corruption. In China, for example, 90% of people surveyed by Pew said corruption was a problem; separate studies found that 78% of Brazilian respondents and 83% of those in India regard dishonest leadership as a serious issue. The deeper you go into these endemic failures, the harder it is for anyone to emerge as a strong leader; one is forced to play the game the way it’s built – which is inevitably in the interest of the system, and rarely in the interest of the people. In many countries, the only people with the institutional power to break through are strong military leaders or radicals like Narendra Modi in India. Yet, given the rise of independent and social media, populations with democratic experience swiftly become disillusioned with the excesses of these military authorities.

Why is this happening today, when we’ve had universal suffrage for over a hundred years in many countries? Perhaps we’ve finally realized we can do better. We have a surge of incredibly smart, enabled people coming out of education, building great companies and showing us the radical pace of innovation; this could explain why Survey respondents ranked business leaders second only to non-profit organizations in our Global Leadership Index. By contrast, when we look at our governments and international institutions, it is tempting to only see ritual, politics and little progress, and to wonder if these systems are just holding us back. Indeed, the only people to rank lower than government leaders in our Survey were religious leaders. 58% of respondents had concerns that religious leaders would abuse their positions, and 56% thought that they were unlikely to be of help in addressing global problems. I think there’s been such a swell in religious violence recently, with the rise of terrorism, that people are becoming wary of religious leaders and are pushing for religion to be a personal matter.

The question, then, is what skills do our leaders need to win back the confidence of their populations? The Survey respondents identified several virtues: a global interdisciplinary perspective; long-term, empirical planning; strong communication skills; a prioritization of social justice and well-being over financial growth; empathy; courage; morality; and a collaborative nature. Looking at the person emerging from this profile, it’s not enough to simply be inspirational; the best leaders know they must mediate, listen and include the opinions of others before making a decision.

Execution, team-building and delegation are key, as is the ability to remain positive in the face of adversity – the power of optimism is inspiring in itself. Ultimately, these leadership qualities have to be cultivated. In the Survey, four out of the five regions prioritized training, coaching and mentoring as the best way to develop tomorrow’s leaders. There is a consensus that improved education of our polity will result in better leadership. African respondents also highlighted a need to involve youth more strongly in leadership development.

To Be Continue...