In the 20+ years since the establishment of
the WTO ushered in the era of free trade, the world has become more prosperous.
And, that prosperity has been spread far and wide. Billions of people in the developing world have
moved out of extreme poverty. The free
exchange of goods, capital, and labor has created these opportunities under the
umbrella of globalization. Innovation,
political leadership, social activism, entrepreneurship, and technology have
all contributed.
As nations grow prosperous, their values change. First, as economies
industrialize, the population moves away from “traditional values” in which
religion, and deference to authority are important, and become more open to
change. Second, as they grow wealthier, nations move away from values that
emphasize the security of one’s family, or community, toward “values” that
emphasize individual rights, not just for one’s own community, but also as a
matter of principle, for everyone.
Of course, wealth creation does not
automatically result in an equal distribution of rewards. Popular support for
globalization has always rested on the premise that most would benefit, some
could succeed beyond their wildest dreams through their own efforts, and a
social safety net would protect temporary losers.
Among nationalists, those left behind economically see these
trends as threats to normative values. Their shared sense of identity, norms,
and history promotes trust within their cohort but not beyond.
This divergence in values has led to tribal behavior and
polarization in developed countries.
Populist politicians – from Trump Republicans in the U.S. to the AfD in
Germany and 5-Star Movement in Italy -- appeal to the emotions of those left
behind with impossible promises of policies that will return to the good old
days, while those with more cosmopolitan attitudes eschew the values that would
support those policies.
“If you don’t behave according to your values, you will constantly be at odds with yourself. You’ll be in physical distress, treat others badly and destroy the relationships that you value most.” -- Excerpt from "The Reluctant CEO: Succeeding Without Losing Your Soul"
Today’s polarization is a result of how
we, as a society, have chosen to manage globalization and technology. Both political and business leaders share the
blame. However, in this
environment, business leaders -- who normally view themselves as problem
solvers -- can no longer afford to view these circumstances as someone else’s
problem. Too many of our citizens feel
we are off on the wrong track and socialism is now the preferred economic
system among 44% of Millennials, an attitude that threatens our prosperity.
The right response lies in addressing these challenges head
on. For example:
- The era of cost-based offshoring will be succeeded by geographically dispersed, technology-based systems, like 3-D printing, to broaden the base of people who can benefit from a capitalist system.
- Technology platforms have evolved to support entrepreneurship that will decentralize the concentration of economic value in large, global enterprises.
- Most importantly, as we approach full employment, businesses can address their biggest challenge (lack of qualified employee candidates) by investing in human capital. An education system that focuses on point in time certification (degrees, certificate programs, etc.) could be replaced by continuous education and training. Technology platforms, like EdX and Coursera, can support an initiative like this today.
Even if successful, these efforts will not be seen as a path
to societal economic success unless business leaders own the narrative. A national – or perhaps global – business
alliance should take on the task of economic renewal, telling and retelling
their story in order to overcome current political trends and societal
attitudes that will, over time, undermine our economic foundation.
The only question…
WHO WILL LEAD?
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