Commentary: Ready or not, Globalisation 4.0 is upon us

Commentary: Ready or not, Globalisation 4.0 is upon us

New global norms, standards, policies, and conventions are needed to safeguard public trust, says Klaus Schwab.

International Monetary Fund warned world leaders that protectionist measures will not work
International Monetary Fund warned world leaders that protectionist measures will not work. (Photo: AFP/Jewel Samad)

GENEVA: After World War II, the international community came together to build a shared future. Now, it must do so again.

Owing to the slow and uneven recovery in the decade since the Global Financial Crisis, a substantial part of society has become disaffected and embittered, not only with politics and politicians, but also with globalisation and the entire economic system it underpins.

In an era of widespread insecurity and frustration, populism has become increasingly attractive as an alternative to the status quo.

A COLLISION

But populist discourse elides – and often confounds – the substantive distinctions between two concepts: Globalisation and globalism.

Globalisation is a phenomenon driven by technology and the movement of ideas, people, and goods. Globalism is an ideology that prioritises the neoliberal global order over national interests.

Nobody can deny that we are living in a globalised world. But whether all of our policies should be “globalist” is highly debatable.

After all, this moment of crisis has raised important questions about our global-governance architecture. 

With more and more voters demanding to “take back control” from “global forces”, the challenge is to restore sovereignty in a world that requires cooperation.

Trump supporters are likely to be anti-immigration and anti-globalisation, analysts say
Trump supporters are likely to be anti-immigration and anti-globalisation, analysts say. (Photo: AFP/Jeff Swensen)

A NEW SOCIAL COMPACT NEEDED

Rather than closing off economies through protectionism and nationalist politics, we must forge a new social compact between citizens and their leaders, so that everyone feels secure enough at home to remain open to the world at large. 

Failing that, the ongoing disintegration of our social fabric could ultimately lead to the collapse of democracy.

Moreover, the challenges associated with the Fourth Industrial Revolution are coinciding with the rapid emergence of ecological constraints, the advent of an increasingly multipolar international order, and rising inequality.

These integrated developments are ushering in a new era of globalisation. Whether it will improve the human condition will depend on whether corporate, local, national, and international governance can adapt in time.

Meanwhile, a new framework for global public-private cooperation has been taking shape. Public-private cooperation is about harnessing the private sector and open markets to drive economic growth for the public good, with environmental sustainability and social inclusiveness always in mind.

IDENTIFY INEQUALTY’S CAUSES

But to determine the public good, we first must identify the root causes of inequality.

For example, while open markets and increased competition certainly produce winners and losers in the international arena, they may be having an even more pronounced effect on inequality at the national level.

Moreover, the growing divide between the precariat and the privileged is being reinforced by Fourth Industrial Revolution business models, which often derive rents from owning capital or intellectual property.

READ: Explaining the rise of the top 1% super rich, a commentary

Despite some success in reducing poverty, wealth inequality remains high and the country has several
In Brazil, despite some success in reducing poverty, wealth inequality remains high and the country has several thousand impoverished "favela" areas (Photo: AFP/YASUYOSHI CHIBA)

Closing that divide requires us to recognise that we are living in a new type of innovation-driven economy, and that new global norms, standards, policies, and conventions are needed to safeguard the public trust.

A NEW ECONOMY, DISRUPTED

The new economy has already disrupted and recombined countless industries, and dislocated millions of workers.

It is dematerialising production, by increasing the knowledge intensity of value creation. It is heightening competition within domestic product, capital, and labour markets, as well as among countries adopting different trade and investment strategies.

And it is fueling distrust, particularly of technology companies and their stewardship of our data.

The unprecedented pace of technological change means that our systems of health, transportation, communication, production, distribution, and energy – just to name a few – will be completely transformed.

Employees work at Samsung Bioepis labs in Incheon
Employees work at Samsung Bioepis labs in Incheon, in this handout photograph taken on May 7, 2014 and provided by Samsung Bioepis. (Photo: Samsung Bioepis/Handout via Reuters)

READ: The future of work looks like unwanted jobs and higher inequality, a commentary

Managing that change will require not just new frameworks for national and multinational cooperation, but also a new model of education, complete with targeted programmes for teaching workers new skills.

A NEW NARRATIVE NEEDED

With advances in robotics and artificial intelligence in the context of ageing societies, we will have to move from a narrative of production and consumption toward one of sharing and caring.

Globalisation 4.0 has only just begun, but we are already vastly underprepared for it. Clinging to an outdated mindset and tinkering with our existing processes and institutions will not do.

READ: We now live in a ‘science fiction world'. We need to boost STEM education, a commentary

Rather, we need to redesign them from the ground up, so that we can capitalise on the new opportunities that await us, while avoiding the kind of disruptions that we are witnessing today.

As we develop a new approach to the new economy, we must remember that we are not playing a zero-sum game. This is not a matter of free trade or protectionism, technology or jobs, immigration or protecting citizens, and growth or equality.

Those are all false dichotomies, which we can avoid by developing policies that favour "and" over "or", allowing all sets of interests to be pursued in parallel.

To be sure, pessimists will argue that political conditions are standing in the way of a productive global dialogue about Globalisation 4.0 and the new economy.

READ: The global economy’s three chess games, a commentary

In France a majority of people surveyed judged that globalisation had been bad for the country
In France a majority of people surveyed judged that globalisation had been bad for the country. (Photo: AFP/PHILIPPE LOPEZ)

READ: It's disingenuous for us to accept no or low growth, a commentary

But realists will use the current moment to explore the gaps in the present system, and to identify the requirements for a future approach.

And optimists will hold out hope that future-oriented stakeholders will create a community of shared interest and, ultimately, shared purpose.

A GLOBAL RESPONSE

The changes that are underway today are not isolated to a particular country, industry, or issue. They are universal, and thus require a global response. Failing to adopt a new cooperative approach would be a tragedy for humankind.

To draft a blueprint for a shared global-governance architecture, we must avoid becoming mired in the current moment of crisis management.

Specifically, this task will require two things of the international community: Wider engagement and heightened imagination.

The engagement of all stakeholders in sustained dialogue will be crucial, as will the imagination to think systemically, and beyond one’s own short-term institutional and national considerations.

These will be the two organising principles of the World Economic Forum’s upcoming annual meeting in Davos-Klosters, which will convene under the theme ofGlobalisation 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution.

Ready or not, a new world is upon us.

Klaus Schwab is Founder and Executive Chairman of the World Economic Forum.

Source: Project Syndicate/nr(sl)

Bookmark