tag:theconversation.com,2011:/au/topics/world-economic-forum-2200/articlesWorld Economic Forum – The Conversation2024-01-19T16:54:29Ztag:theconversation.com,2011:article/2215242024-01-19T16:54:29Z2024-01-19T16:54:29ZWhy billionaires should take the lead and declare their own emissions cutting targets<figure><img src="https://images.theconversation.com/files/570352/original/file-20240119-15-87v17w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Samedan airport near Davos is dedicated to private jets.</span> <span class="attribution"><span class="source">Thierry Weber / shutterstock</span></span></figcaption></figure><p>The annual glitzy gathering of world leaders and billionaire CEOs in Davos, Switzerland, allows us to marvel once again at the <a href="https://www.theguardian.com/environment/2023/nov/20/twelve-billionaires-climate-emissions-jeff-bezos-bill-gates-elon-musk-carbon-divide">environment-wrecking</a> effects of private jets and lavish lifestyles. </p>
<p>Many believe it’s <a href="https://www.greenpeace.org.uk/news/private-jet-emissions-quadrupled-during-2022-world-economic-forum/">incongruous</a> that company bosses and world leaders speak passionately about climate change while travelling in the most carbon intensive way possible.</p>
<p>The high-flyers hit back with various counter-arguments. Tight schedules, security considerations and essential international networking all justify private jet use and the most opulent hotels, while “offsets” in theory undo the damage. </p>
<p>More broadly, they say, the behaviour of individuals is a distraction and an irrelevance. Instead we need political, systemic and technological progress – things they are <a href="https://www.euronews.com/green/2023/02/09/i-am-not-part-of-the-problem-bill-gates-says-his-private-jet-and-climate-activism-are-comp">working hard</a> towards.</p>
<p>Many in the climate movement actually agree that <a href="https://www.hachettebookgroup.com/titles/michael-e-mann/the-new-climate-war/9781541758223/?lens=publicaffairs">it’s wrong</a> to focus on the behaviour of individuals. They suggest the topic is divisive, causes paralysing guilt, and plays into the delay tactics of big oil companies. </p>
<p>We all cause some emissions, and focusing on individuals can quickly descend into an energy-sapping pursuit of unachievable personal purity. This undermines the coalitions necessary to transform our economies.</p>
<h2>Prestigious people shape society</h2>
<p>But there is a big problem with giving individuals a free pass. That’s because, as humans, we pay a huge amount of attention to how other people <a href="https://press.princeton.edu/books/paperback/9780691178431/the-secret-of-our-success">behave</a>, particularly those with prestige. </p>
<p>In my <a href="https://orca.cardiff.ac.uk/id/eprint/159995/">PhD research</a> I found leaders who maintain high-carbon lifestyles undermine trust and reduce everyone’s willingness to change their own behaviour. </p>
<p>Unnecessary high-carbon behaviour from leaders therefore actually slows down the fight against climate change. These people make the rules and shape <a href="https://www.nature.com/articles/s41560-021-00900-y">what we aspire to</a>, so the public expects and wants them to lead by example – because it is a fundamental part of leadership.</p>
<p>In a survey I conducted, 90% of the public agreed that “people with the biggest carbon footprints should make the biggest lifestyle changes to tackle climate change”, and only 3% disagreed. Some 86% agreed that “politicians, business leaders and celebrities should set an example by making lifestyle changes first”. </p>
<p>And I found that leading by example works in practice. Among people who stopped flying for a year because of climate change, 74% said they had been influenced by someone else who had done the same, and this rose to 85% if it was a high-profile person setting the example.</p>
<p>Avoiding a focus on individual behaviour might sound nice in theory, but it is simply unrealistic. The media will continue to highlight apparent <a href="https://theconversation.com/why-are-people-still-flying-to-climate-conferences-by-private-jet-218459">contradictions</a> between elite behaviour and climate concern, and the public will recoil from anything they see as hypocritical. </p>
<p>It’s a question of fairness – and repeated research shows that <a href="https://cast.ac.uk/cast-report-reveals-that-substantial-behaviour-change-is-required-across-society-to-reach-uks-net-zero-2050-target/">fairness</a> is essential to achieving emissions reductions and maintaining <a href="https://www.sciencedirect.com/science/article/pii/S0959378015000953">support</a> for climate policies. </p>
<p>Therefore avoiding the topic of individual behaviour change serves mainly to protect the lifestyles of the wealthy, <a href="https://www.nature.com/articles/s41558-019-0402-3">who have the most choice</a> to act in lower-carbon ways.</p>
<h2>But how should leaders do it?</h2>
<p>Leading by example sounds great in theory, but what about the realities of everyday life? Surely we can’t expect leaders to switch to ultra-low-carbon lifestyles overnight, and some of their activities will naturally incur more emissions than the average person. </p>
<p>The answer again comes down to a fundamental element of leadership: direction of travel. Leaders (and the rest of us) don’t have to make an instant switch, but they have to move clearly in the right direction, and be seen to do so.</p>
<p>This is why an idea such as personal emissions targets could work. As part of the Paris agreement, countries sign up voluntarily to nationally determined contributions (<a href="https://www.un.org/en/climatechange/all-about-ndcs">NDCs</a>), where each nation sets ambitious public targets to reduce their own emissions. The veracity of these targets can then be discussed and negotiated. </p>
<p>The same could be done by climate leaders – we could call them “personally determined contributions”, or PDCs. They could clearly set out how leaders are going to reduce their personal emissions over time – not by using offsets, which are well understood to be <a href="https://theconversation.com/worthless-forest-carbon-offsets-risk-exacerbating-climate-change-211862">highly problematic</a>, but by publishing how they will continually decarbonise their lifestyles. </p>
<p>PDCs could include: getting rid of the private jet, optimising travel, changing diet, reducing household size and energy use. High-carbon investments could be addressed too.</p>
<p>This would send a signal to the world that leaders really are serious and counteract the widely held perception that others aren’t willing to change. Crucially, PDCs have the benefit of maintaining freedom of choice – a high political priority. </p>
<p>They would likely supercharge leaders’ drive towards low-carbon solutions, and might even change their mindsets about climate change as a problem. After all, we are what we do, not what we say.</p>
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Read more:
<a href="https://theconversation.com/how-world-leaders-high-carbon-travel-choices-could-delay-climate-action-162784">How world leaders' high-carbon travel choices could delay climate action</a>
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<p class="fine-print"><em><span>Steve Westlake receives funding from the Economic and Social Research Council (ESRC), part of UKRI. </span></em></p>Research shows prominent individuals can influence the rest of us.Steve Westlake, Research Fellow, Climate Leadership, Cardiff UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2208762024-01-15T00:01:48Z2024-01-15T00:01:48ZAs the billionaires gather at Davos, it’s worth examining what’s become of their dreams<p>Gathering for their annual World Economic Forum at <a href="https://www.weforum.org/agenda/2023/12/davos-2024-what-to-expect-and-whos-coming/">Davos</a> in Switzerland this week, the world’s business and political elite will be digesting some unpleasant reading courtesy of the aid agency <a href="https://www.oxfam.org/en/research/inequality-inc">Oxfam International</a>. </p>
<p>Oxfam’s annual report on global inequality released this morning shows the wealth of the world’s five richest billionaires has <a href="https://oi-files-d8-prod.s3.eu-west-2.amazonaws.com/s3fs-public/2024-01/Davos%202024%20Report-%20English.pdf">more than doubled</a> since the start of the decade, while 60% of humanity has grown poorer.</p>
<p>Among the findings of the report entitled <a href="https://oi-files-d8-prod.s3.eu-west-2.amazonaws.com/s3fs-public/2024-01/Davos%202024%20Report-%20English.pdf">Inequality Inc</a> are that</p>
<ul>
<li><p>billionaires own US$3 trillion more than they did three years ago, meaning their wealth has grown at three times the rate of inflation</p></li>
<li><p>even in Australia, the wealth of billionaires has climbed 70%</p></li>
<li><p>five billion other people can’t afford what they could three years ago.</p></li>
</ul>
<p>Progress in Africa, which seemed promising for much of this century, has stalled since COVID. </p>
<p>And large parts of the populations in wealthy countries, feeling left behind, have been lured by the appeal of rightwing populism – ironically, largely promoted by billionaires and their advocates.</p>
<h2>Dreams of Davos past</h2>
<p>This isn’t how things were supposed to turn out.</p>
<p>In its glory days in the 1990s, the Davos forum was the driving force promoting the idea of <a href="https://www.weforum.org/agenda/2021/01/klaus-schwab-on-what-is-stakeholder-capitalism-history-relevance/">stakeholder capitalism</a> in which corporations controlled by shareholders were supposed to advance the interests of everyone who had a stake in their activities: workers, consumers, communities and the environment.</p>
<p>The Forum still <a href="https://www.weforum.org/about/world-economic-forum/">promotes the idea</a> on its website.</p>
<p>Back then, as communism collapsed, everything seemed possible. </p>
<p>Pundits like Thomas Friedman spoke of a <a href="http://www.herinst.org/BusinessManagedDemocracy/government/international/straitjacket.html">golden straitjacket</a> in which universal prosperity could be achieved if only the world embraced liberal capitalism, overseen by an <a href="https://www.thomaslfriedman.com/the-lexus-and-the-olive-tree/">electronic herd</a> of fund managers making investment decisions.</p>
<p>With appropriately-constrained policies, governments could ensure a rising economic tide lifted all boats. </p>
<p>In the UK and the US the so-called <a href="https://www.britannica.com/topic/third-way">Third Way</a> policies of Tony Blair and Bill Clinton were seen as delivering <a href="https://www.jstor.org/stable/jcorpciti.28.113">capitalism with a human face</a>.</p>
<p>Three decades on, that vision is looking increasingly threadbare.</p>
<p>From the left, there is increasing pressure for radical alternatives; from the right, there is increasing pushback against the Forum’s brand of “<a href="https://www.theguardian.com/commentisfree/2022/jan/30/woke-capitalism-new-villain-of-the-right-only-way-forward">woke capitalism</a>”.</p>
<p>Financial managers remain as powerful as ever, but in the aftermath of the global financial crisis and multiple exposures of <a href="https://www.reuters.com/world/us/wall-street-criminal-enforcer-urges-whistleblowers-come-forward-2024-01-10/">criminal</a> <a href="https://www.economist.com/finance-and-economics/2020/10/03/jpmorgan-chase-faces-a-fine-of-920m-for-market-manipulation">wrongdoing</a> by their firms, there is less and less faith in their beneficence and collective wisdom.</p>
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Read more:
<a href="https://theconversation.com/brian-schmidt-my-five-days-in-davos-22154">Brian Schmidt: my five days in Davos </a>
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<h2>Billionaires are becoming the problem</h2>
<p>Billionaires were not important enough to be seen as a major problem back in the early 1990s. In 1991, as communism collapsed, Forbes Magazine assessed the total wealth of the world’s five richest people at less than <a href="https://www.washingtonpost.com/archive/lifestyle/1991/07/08/2-japanese-top-forbess-rich-list/88637f38-1b78-4525-ac1b-f6cd24906c58/">$US70 billion</a>.</p>
<p>And the most prominent billionaires at the time were relatively appealing figures like <a href="https://www.gatesnotes.com/Bio">Bill Gates</a> and <a href="https://www.britannica.com/biography/Warren-Edward-Buffett">Warren Buffett</a>.</p>
<p>But since then, while US prices have doubled, the wealth of the top five has climbed tenfold. And they have become less interested in the idea that others should benefit from the system that has benefited them. </p>
<p>A case in point is <a href="https://www.forbes.com/billionaires/">Jeff Bezos</a> who is number three on the rich list with net wealth of US$114 billion and runs Amazon whose brutal working conditions and anti-union stance are detailed in the Oxfam report.</p>
<p>Another is <a href="https://www.forbes.com/billionaires/">Elon Musk</a>, number two on the rich list with US$180 billion, who could once have been seen as merely eccentric, but his recent embrace of neo-Nazis goes further.</p>
<p>And, appropriately for what Oxfam calls the <a href="https://oi-files-d8-prod.s3.eu-west-2.amazonaws.com/s3fs-public/2024-01/Davos%202024%20Report-%20English.pdf">gilded age of division</a>, another is the very richest man in the world, <a href="https://www.forbes.com/billionaires/">Bernard Arnault</a>, whose family owns luxury goods brands including Louis Vuitton and Sephora. </p>
<p>Arnault embodies the resurgence of what Thomas Piketty has called <a href="https://insidestory.org.au/the-coming-boom-in-inherited-wealth/">patrimonial society</a>. </p>
<p>He took over the management of his father’s business and intends to pass his business on to his sons.</p>
<p>All have benefited from what is sometimes called neoliberalism: the mix of ideas including privatisation, financial deregulation and tax cuts that was meant to deliver stakeholder capitalism.</p>
<p>What neoliberalism has given us instead is greater division – something the billionaires gathered at Davos ought to consider this week as they reminisce about forums past.</p>
<p>A reasonable set of fresh ideas would be that put forward by Oxfam: direct government intervention to reduce inequality including but not limited to reasserting the roles of governments as regulators and service providers abdicated on the advice of gatherings such as the one in Davos.</p><img src="https://counter.theconversation.com/content/220876/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Quiggin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The World Economic Forum was once about spreading wealth. But in the past three years, the wealth of the world’s top five billionaires has more than doubled while 60% of humanity has grown poorer.John Quiggin, Professor, School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2151062023-10-11T21:27:03Z2023-10-11T21:27:03ZIt’s time to banish the notwithstanding clause, the slow killer of Canada’s rule of law<iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/its-time-to-banish-the-notwithstanding-clause-the-slow-killer-of-canadas-rule-of-law" width="100%" height="400"></iframe>
<p>I have written before that <a href="https://theconversation.com/trumps-hint-that-he-may-not-concede-election-is-americas-tipping-point-143124">the far-right populist nationalism of the sort that fuelled the events of Jan. 6, 2021 in the United States</a> and the so-called <a href="https://theconversation.com/candice-bergens-nod-to-trump-is-a-sign-of-canadas-descent-but-the-charter-may-save-us-176785">“freedom convoy” of February 2022 in Canada</a> are not outlier events.</p>
<p>We live in a period in which the validity of constitutional norms and democratic consensus can no longer be presumed. </p>
<p>In the U.S., we’re watching a former and possible future president try to avoid criminal liability and win back his old office while ducking civil and regulatory liability at the same time. </p>
<p>Donald Trump as a president was anathema to the rule of law but inspired his followers. NATO allies <a href="https://www.cnn.com/2022/09/26/politics/europe-far-right-what-matters/index.html">like Italy</a>, <a href="https://www.washingtonpost.com/world/2022/08/04/orban-hungary-far-right-international-cpac-conservative/">Hungary</a>, <a href="https://chicago.suntimes.com/columnists/2023/6/2/23745973/trump-recep-tayyip-erdogan-authoritarian-conservatives-steven-roberts-column">Turkey</a> and now <a href="https://www.cnbc.com/2023/10/01/pro-russian-ex-pm-fico-wins-slovak-election-needs-allies-for-government.html">Slovakia</a> have far-right governments that emulate the Trumpist model and traffic in conspiracy theories. </p>
<p>Even the largest European democracies, <a href="https://www.theatlantic.com/international/archive/2022/04/macron-wins-french-election-marine-le-pen/629666/">France</a> and <a href="https://foreignpolicy.com/2023/07/03/germany-afd-far-right-politics-populism-election/">Germany</a>, now have far-right parties that could one day form governments.</p>
<h2>Poilievre stokes outrage</h2>
<p>Canada is part of the mix too. Pierre Poilievre, the current opposition leader who’s vying to become prime minister, famously <a href="https://thetyee.ca/Analysis/2023/04/05/Poilievre-Big-Bet-On-Convoy-Politics/">appeared with freedom convoy leaders</a>. He <a href="https://www.thestar.com/opinion/editorials/pierre-poilievre-is-flirting-with-the-far-right-by-pushing-great-reset-conspiracy/article_43f2ddd2-5501-514d-8b50-921844a888bc.html">peddles conspiracies about the World Economic Forum and the “great reset</a>,” code for an alleged plot by globalist elites to impose a new socialist order on the unknowing masses.</p>
<p>In increasingly obvious ways, he brings the cultural politics of America’s Christian nationalist far right to Canada. <a href="https://www.nationalobserver.com/2023/08/24/news/poilievres-base-gender-schools-children">The outrage on trans kids, pronouns in public schools and the cooked-up theory of “parental rights” is only the latest iteration</a>.</p>
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Read more:
<a href="https://theconversation.com/how-the-parental-rights-movement-gave-rise-to-the-1-million-march-4-children-213842">How the 'parental rights' movement gave rise to the 1 Million March 4 Children</a>
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<p>Not surprisingly, <a href="https://www.cbsnews.com/news/pierre-poilievre-canada-conservatives-elect-right-wing-populist-vs-justin-trudeau/">mainstream media outlets in the U.S. have reported on Poilievre’s ascent as a sign that American far-right populism and alt-right culture is plainly seeping over the northern border</a>. However, if elected, a Poilievre government could not rely on the institutional supports available to a President Trump.</p>
<p>For instance, his government would not inherit a <a href="https://www.npr.org/2022/07/05/1109444617/the-supreme-court-conservative">U.S.-style Supreme Court dominated by conservative judges prepared to turn the clock back on social progress</a>. It would take decades of concerted effort by successive ultra-right conservative governments <a href="https://news.uoguelph.ca/2022/07/why-canadas-supreme-court-isnt-likely-to-go-rogue-like-its-u-s-counterpart/">to transform Canadian courts — and even then it might not work</a> <a href="https://theintercept.com/2022/05/10/roe-v-wade-federalist-society-religious-right/">as it has in the U.S.</a></p>
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Read more:
<a href="https://theconversation.com/why-canadas-supreme-court-isnt-likely-to-go-rogue-like-its-u-s-counterpart-186020">Why Canada's Supreme Court isn't likely to go rogue like its U.S. counterpart</a>
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<p>As much as he might try, a Prime Minister Poilievre would similarly be unable to rally rural voters around gun rights in the same way as Republican presidents because <a href="https://www.newsweek.com/canada-gun-ban-u-s-constitution-1711790">Canada does not have an equivalent to the Second Amendment</a>. </p>
<h2>Weaponizing Section 33</h2>
<p>However, if Poilievre or some other future Canadian leader wished to break with past tradition and takes steps toward a more authoritarian society, they could do so surprisingly easily <a href="https://www.justice.gc.ca/eng/csj-sjc/rfc-dlc/ccrf-ccdl/check/art33.html#:%7E:text=33.,to%2015%20of%20this%20Charter.">using Section 33 or the “notwithstanding clause” of the Canadian Charter of Rights and Freedoms</a></p>
<p>Section 33 lives within the Constitution itself and can short-circuit social progress and shield legislation from constitutional review. Expanded usage of Section 33 is becoming increasingly normalized at the provincial level — Saskatchewan’s Scott Moe <a href="https://www.cbc.ca/news/canada/saskatoon/experts-consider-sask-jump-to-notwithstanding-clause-1.6984702">is vowing to use it to cement its new policy</a> that all youth under the age of 16 will have to get parental consent to use their chosen name and pronouns at school.</p>
<p>It could one day be used routinely at the federal level as well.</p>
<p>When asked to comment directly on any actual or potential uses of the notwithstanding clause, <a href="https://thewalrus.ca/the-notwithstanding-clause-is-it-time-for-canada-to-repeal-it/">Poilievre won’t weigh in</a>. However, <a href="https://www.cbc.ca/news/politics/charter-rights-notwithstanding-clause-constitution-1.6472317">he has a history playing politics with Section 33, and has suggested amending the Criminal Code, particularly on sensitive criminal justice matters like parole eligibility</a>. </p>
<p>There’s also the possibility Poilievre could openly encourage the notwithstanding clause’s use at the provincial level as a matter of “provincial rights,” as <a href="https://www.cbc.ca/news/politics/poilievre-lgbtq-pronouns-schools-1.6950029">he recently has on the topic of gender pronouns</a>.</p>
<h2>Thwarts other rights</h2>
<p>Section 33 is called the “notwithstanding clause” because it permits the federal Parliament or provincial legislatures to make laws “notwithstanding” the fundamental rights guaranteed by <a href="https://laws-lois.justice.gc.ca/eng/const/page-12.html">Sections 2 and 7-15 of the Charter</a>. </p>
<p>Its increasingly routine use is alarming because these sections contain protections that guarantee the rule of law. Section 2, for example, contains a four-part guarantee of:</p>
<ol>
<li>Freedom of conscience and religion;</li>
<li>Freedom of thought, belief, opinion and expression, including freedom of the press;</li>
<li>Freedom of peaceful assembly;</li>
<li>Freedom of association. </li>
</ol>
<p>Sections 7 to 15 cover an array of fundamental rights. They include:</p>
<p>— The rights to life, liberty and security of the person;</p>
<p>— The right against unreasonable search and seizure;</p>
<p>— The right against arbitrary arrest and detention;</p>
<p>— The right to legal counsel and bail upon arrest and detention;</p>
<p>— The right to a fair trial and the presumption of innocence;</p>
<p>— The right against cruel and unusual punishment;</p>
<p>— The right to an interpreter in a criminal trial and;</p>
<p>— The guarantee of equality.</p>
<p>Recent efforts at the provincial level hint at the ways Section 33 can be used to attack Section 2 and Section 15 rights in particular. <a href="https://theconversation.com/first-ontario-now-quebec-the-notwithstanding-threat-104379">This poses a grave threat to Canada’s social contract</a>. </p>
<p>If Poilievre’s Conservatives win the next federal election, will it result in the notwithstanding clause being employed even more often to avoid Charter reviews of contentious legislation?</p>
<p>Will it be used by a government led by a prime minister inclined to break convention — or perhaps, even more predictably, to encourage Conservative provincial premiers to use the clause to roll back the clock on human rights victories of the past? </p>
<h2>Along the same path as the U.S.?</h2>
<p>If that happens, it might lead Canada down a road similar to the one the U.S. is currently on. </p>
<p>It’s a path that respected international human rights organization, Freedom House, describes as a <a href="https://freedomhouse.org/report/freedom-world/2022/global-expansion-authoritarian-rule/reversing-decline-democracy-united-states">“dramatic shift in Americans’ perceptions of acceptable political behaviour over the past several years, and an increased willingness to sacrifice democratic institutions for the sake of partisan gain.”</a></p>
<p>The only solution to the ominous threats posed by Section 33 is to amend Canada’s Constitution. While that wouldn’t require the unanimity of all provincial legislatures and Parliament, it would trigger the general amending formula under <a href="https://laws-lois.justice.gc.ca/eng/const/page-13.html">Section 38 of the Charter</a>. </p>
<p>The formula requires the assent of Parliament and “resolutions of the legislative assemblies of at least two-thirds of the provinces that have … at least fifty per cent of the population of all the provinces.”</p>
<p>Realistically, many provinces, including populous ones like Québec and Ontario, would never give up the power to override the Charter now guaranteed to them by Section 33 voluntarily. To actually amend the Constitution would require both Ontario and Québec to do just that — and they would need some incentive from the public.</p>
<p>That means it’s now up to voters to begin demanding that premiers stop using the nothwithstanding clause. Younger voters should also consider whether they want to inherit a Constitution that can be so easily shirked. </p>
<p>If they don’t, they should demand that their provincial and federal politicians consider a needed constitutional amendment. The failure to act now could be disastrous for the future.</p><img src="https://counter.theconversation.com/content/215106/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeffrey B. Meyers does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The only solution to the ominous threats posed by the increasing use of the notwithstanding clause is to amend Canada’s Charter of Rights and Freedoms.Jeffrey B. Meyers, Instructor, Legal Studies and Criminology, Kwantlen Polytechnic UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1989692023-02-15T19:15:23Z2023-02-15T19:15:23ZThe New International Economic Order stumbled once before. Will it succeed a second time around?<figure><img src="https://images.theconversation.com/files/509290/original/file-20230209-22-w4fp3a.jpg?ixlib=rb-1.1.0&rect=37%2C12%2C8325%2C5554&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People gather in the Davos Congress Center prior to the start of the World Economic Forum in Davos, Switzerland in January 2023.</span> <span class="attribution"><span class="source">(AP Photo/Markus Schreiber)</span></span></figcaption></figure><p>Calls for a new approach to the management of global affairs intensified after the curtain came down on this year’s World Economic Forum (WEF) <a href="https://www.reuters.com/business/davos-2023-world-economic-forum-explained-2023-01-16/">annual meeting</a> held at Davos, Switzerland.</p>
<p>In the wake of the WEF’s <a href="https://www.theguardian.com/business/2023/jan/18/mutiny-erupts-among-wef-staff-over-role-of-mr-davos-klaus-schwab">headline-grabbing controversies about the legitimacy of WEF’s leadership</a> and <a href="https://www.weforum.org/about/book">proposals for a new global economy</a>, a movement seeking to renew the promise of global co-operation quietly re-emerged. Delegates from over 25 countries, organized by a group called Progressive International, assembled in Havana on Jan. 27 to declare their intent to <a href="https://progressive.international/blueprint/d3b4f9e2-3fd7-4d9a-b067-d13b073b1c3f-presenting-the-havana-declaration-on-the-new-international-economic-order/">build a New International Economic Order (NIEO) fit for the 21st century</a>. </p>
<p>The Havana signatories are mobilizing around <a href="https://media.un.org/en/asset/k11/k11drtwp1w">Cuba’s presidency of the Group of 77</a> at the UN. They aim to use Cuba’s platform to revive discussions about a NIEO in the General Assembly. This diverse group of researchers, government officials and activists <a href="https://act.progressive.international/nieo-collection/#collection-00">intend to develop a new political vision</a> for managing the world economy, in the face of several global crises, over the next 16 months.</p>
<p>They hope to enshrine their vision in a UN Declaration next year that would coincide with the 50th anniversary of the <a href="http://www.un-documents.net/s6r3201.htm">General Assembly’s adoption of the Declaration on the Establishment of a New International Economic Order</a>.</p>
<p>The NIEO’s signatories seek to rebuild the collective power of emerging and developing countries within and beyond the UN system. They also support the creation of new governance institutions that would fundamentally transform the international system. In doing so, they are committed to proposing alternative ways to respond to international crises.</p>
<p>While this attempt to revamp global partnerships appears to be promising, at a time of overlapping global emergencies, the pitfalls are numerous. </p>
<h2>The birth of the NIEO</h2>
<p>The NIEO emerged in 1973 as the <a href="https://www.un.org/en/chronicle/article/early-days-group-77">collective project of developing countries</a> to transform the United Nations system. Its adherents were convinced that the international community’s insufficient response to several interlinked crises was undermining their interests. </p>
<p>In 1971, the unilateral U.S. decision <a href="https://history.state.gov/milestones/1969-1976/nixon-shock">to abandon the convertibility of U.S. dollars into gold</a> left many countries with devalued dollars. </p>
<p>To navigate this inflationary context, and respond to U.S. policy during <a href="https://www.britannica.com/event/Yom-Kippur-War">the 1973 Yom Kippur War</a>, members of the Organization of the Petroleum Exporting Countries <a href="https://history.state.gov/milestones/1969-1976/oil-embargo">placed an embargo on oil exports to the U.S</a>. </p>
<figure class="align-center ">
<img alt="Black and white photo of a man with a receding hairline speaking from behind a podium" src="https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/509885/original/file-20230213-30-kbpsd2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In 1971, then U.S. president Richard Nixon suspended the convertibility of U.S. dollars into gold to pressure U.S. trading partners into adjusting their exchange rates to the advantage of the U.S.</span>
<span class="attribution"><span class="source">(AP Photo)</span></span>
</figcaption>
</figure>
<p>The ensuing oil price increase compounded an ongoing <a href="https://doi.org/10.1093/acprof:oso/9780190600686.003.0007">food security crisis</a> and undercut the ambitious goals of the <a href="http://www.un-documents.net/a25r2626.htm">second UN Development Decade</a>. Moreover, the ongoing threat of nuclear conflict, and an emerging awareness of unaddressed environmental challenges, heightened popular malaise about the adequacy of international institutions.</p>
<p>In the wake of these crises, the NIEO was formed. Building on the <a href="https://www.southcentre.int/question/revisiting-the-1955-bandung-asian-african-conference-and-its-legacy/">ambitious development agenda</a> of leaders across the <a href="https://onlineacademiccommunity.uvic.ca/globalsouthpolitics/2018/08/08/global-south-what-does-it-mean-and-why-use-the-term/">Global South</a>, it included a comprehensive package of reform proposals. </p>
<p>Its <a href="http://www.un-documents.net/s6r3202.htm">Programme of Action</a> sought to help countries exercise more control over their own natural resources. The NIEO package recognized that many developing countries had been structured by colonizers to export raw materials and <a href="https://unctad.org/publications/prebisch-lectures">its backers sought to remedy this condition</a>. </p>
<p>Its advocates also pushed for new institutions to govern commodities and transnational corporations, and worked to speed up the transfer of technologies that would facilitate industrialization and end <a href="https://unctad.org/publication/state-commodity-dependence-2021">commodity dependence</a>. </p>
<h2>The NIEO’s stumbling block</h2>
<p>After the General Assembly adopted the NIEO, efforts to implement the full package failed to gain traction. While the U.S. initially recognized <a href="https://history.state.gov/historicaldocuments/frus1969-76v38p1/d32">some of the underlying challenges</a>, it advocated an issue-by-issue approach to engaging with the action program. </p>
<p>Negotiation processes on individual components of the NIEO subsequently multiplied. This fragmentation <a href="https://robarts.info.yorku.ca/files/wto-pdf/wto_globalembedliberal.pdf">taxed the capacity of developing countries and contributed to undermining their unity</a>. </p>
<p>Soon after, opinions on the program’s components polarized, and dialogue reached a contentious impasse. An <a href="https://sharing.org/information-centre/reports/brandt-report-summary">independent commission</a> was then struck to resolve the conflict that had emerged <a href="https://www.wilsoncenter.org/blog-post/the-non-aligned-movement-and-the-north-south-conflict">between the Global North and the Global South</a> over the NIEO. </p>
<p>By the early 1980s, as interest rates rose and a global <a href="https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/WESS_2017_ch3.pdf">debt crisis loomed</a>, some of <a href="https://www.britannica.com/biography/Houari-Boumedienne">the NIEO’s biggest champions had died</a> or <a href="https://www.britannica.com/biography/Michael-Manley">lost political power</a>. </p>
<p>The initiative ebbed after U.S. President Ronald Reagan declared an <a href="https://www.reaganlibrary.gov/archives/speech/statement-first-plenary-session-international-meeting-cooperation-and-development">end to the search for new international institutions</a> in his address to delegates at the International Meeting on Cooperation and Development held in Cancun on Oct. 22, 1981.</p>
<figure class="align-center ">
<img alt="Two rows of people standing and sitting on a white beach with turquoise water in the background" src="https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/509894/original/file-20230213-22-v1marp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Heads of state and government at the Cancun North-South Economic Summit of 1981 at the Cancun Sheraton Hotel Beach in Mexico.</span>
<span class="attribution"><span class="source">(U.S. Federal Government)</span></span>
</figcaption>
</figure>
<p>And now, fifty years later, <a href="https://theconversation.com/on-the-brink-global-crises-ranging-from-climate-to-economic-meltdown-demand-radical-change-190641">we are facing yet another set of intersecting crises</a> with woefully inadequate global responses. </p>
<p>Ongoing global challenges, including the <a href="https://www.who.int/emergencies/situations">public health crisis</a>, <a href="https://www.wfp.org/global-hunger-crisis">global food insecurity</a>, <a href="https://www.cfr.org/global-conflict-tracker">geopolitical conflicts</a> and the <a href="https://www.unep.org/news-and-stories/story/world-headed-climate-catastrophe-without-urgent-action-un-secretary-general">climate emergency</a>, are once again <a href="https://www.un.org/sustainabledevelopment/blog/2022/07/cascading-global-crises-threaten-human-survival-and-the-sdg-roadmap-is-the-way-forward/">outstripping the response capacity of the UN</a>. </p>
<h2>Back to the future?</h2>
<p>The NIEO’s faltering trajectory offers several lessons that must not be forgotten as pressure to renovate global institutions intensifies. </p>
<p>For starters, any proposed renewal of the NIEO must recognize that the original effort went off the rails after the full package was broken up. A case can be made that more substantive results could have been achieved had the program proceeded as <a href="https://www.wto.org/english/tratop_e/dda_e/work_organi_e.htm">an indivisible single undertaking</a>. </p>
<p>The NIEO also served as a rallying cry that enabled numerous <a href="https://www.britannica.com/biography/Muammar-al-Qaddafi">despots</a> and <a href="https://www.britannica.com/biography/Sekou-Toure">authoritarians</a> to sound like change-makers on the global stage, even as they repressed their people and looted state coffers. Today’s reformers must achieve a better balance between talking the talk at global gatherings and walking the walk for their people. </p>
<p>Moreover, the NIEO <a href="https://www.un.org/en/conferences/environment/stockholm1972">never seriously engaged with concerns</a> about the environment. Countries that depend on commodity exports have an interest in taking arguments about the need to <a href="https://unstats.un.org/sdgs/report/2019/goal-12/">downscale humanity’s material footprint</a> seriously. They must think creatively about possible futures that discard <a href="https://www.versobooks.com/books/3989-the-future-is-degrowth">the unsustainable pursuit of infinite growth</a>, and act boldly to end the climate emergency. </p>
<p>As the chorus of voices challenging the global governance status quo swells, a NIEO revival will make a difference if it moves beyond nostalgia. </p>
<p>While the <a href="https://www.jstor.org/stable/2706612">ideological conflicts that plagued the initial drive</a> for a new order could easily undermine the current effort, the fact that idealists and realists are uniting to build genuine paths to a world beyond the WEF is refreshing. Whatever our individual politics, we should watch this space.</p><img src="https://counter.theconversation.com/content/198969/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adam Sneyd does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A renewed attempt to revamp global partnerships appears to be promising, but at a time of overlapping global emergencies, the pitfalls are numerous.Adam Sneyd, Associate Professor, Political Science, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1979382023-01-17T18:34:05Z2023-01-17T18:34:05ZDavos: three ways leaders can use these summits to create a more sustainable world<p>Davos 2023 is the World Economic Forum’s (<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023">WEF</a>) first in-person annual meeting since the start of the COVID pandemic. The yearly gathering sees business, political and civil society leaders convene in the Swiss mountain resort with academics, journalists and celebrities to discuss global economic agendas. Many regard it as essentially <a href="https://theintercept.com/2020/12/08/great-reset-conspiracy/">a forum for the wealthy</a>, but the 2023 Davos summit has returned at “<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023/about/meeting-overview">a critical inflection point for the world</a>”, according to the WEF.</p>
<p>This year’s meeting slogan – Cooperation in a Fragmented World – nods to what the WEF’s recently published <a href="https://www.weforum.org/agenda/2023/01/these-are-the-biggest-risks-facing-the-world-global-risks-2023">Global Risks Report</a> calls the “polycrises” affecting our interconnected world. These intersecting crises range from climate change and energy shortfalls to food insecurity and forced migration. The WEF is calling for “bold collective action” to address them.</p>
<p>In the wake of COVID, many people seemed to be more aware of how vulnerable the world is to the excesses of economic production. UN secretary general, <a href="https://www.theguardian.com/commentisfree/2020/apr/02/un-secretary-general-coronavirus-crisis-world-pandemic-response">António Guterres</a>, declared that we needed to build more “sustainable economies and societies”, and wider hopes abounded for greater global co-operation on human and environmental health.</p>
<p>Then, as much of the world emerged from lockdowns and restrictions, national governments refocused on economic recovery. This appeals of course to the oldest human impulses of progress. But it also led to a missed opportunity to rethink how economies should be organised for a more sustainable world. Global leaders could have used this time to respond to the ecological damage of late modern capitalism by working towards a more regulated, socially and environmentally responsible economic system.</p>
<p>Political leaders across the world may have failed to take this chance immediately after COVID, but the UN explored these issues and published a new vision for global security in 2022 called <a href="https://hdr.undp.org/content/2022-special-report-human-security">New Threats to Human Security in the Anthropocene</a>. I was one of the background authors for the report, which sets out three vital challenges for securing the sustainability of the planet:</p>
<h2>1. Protect both human and environmental security</h2>
<p>The UN report documents the lack of global action in response to <a href="https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_Full_Report.pdf">alarming scientific measures</a> of planetary health – from greenhouse gas emissions to temperature rise, from deforestation to biodiversity loss. It underlines the connections between industrial economic production, climate change and human health.</p>
<p>Among the many reasons why the impact of <a href="https://apps.who.int/iris/bitstream/handle/10665/62989/WHO_EHG_96.7.pdf">capitalism on the environment</a> has yet to be fully recognised, one of the most important is the political ascendancy of neoliberalism. This way of thinking promotes free-market ideas that have long sidelined the environment in advancing economic development. The UK government’s 2021 <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/962785/The_Economics_of_Biodiversity_The_Dasgupta_Review_Full_Report.pdf">Dasgupta Review</a> – which examines the relationship between economics and biodiversity – made the same point.</p>
<p>Neoliberalism consistently prioritises <a href="https://ugapress.org/book/9780820351056/the-long-war">military and economic security</a> over <a href="https://hdr.undp.org/content/human-development-report-1994">human and environmental security</a>. This has meant that global economic production values profit over both planetary and human health. Probably the best examples of this are the rise of <a href="https://monthlyreview.org/2020/05/01/covid-19-and-circuits-of-capital">“Big Farm” agribusiness</a> and the role unregulated <a href="https://www.theguardian.com/world/2020/apr/06/ban-live-animal-markets-pandemics-un-biodiversity-chief-age-of-extinction">wildlife markets</a> may have played in <a href="https://www.unenvironment.org/news-and-stories/story/coronavirus-outbreak-highlights-need-address-threats-ecosystems-and-wildlife">the emergence of COVID</a>.</p>
<h2>2. Measure development differently</h2>
<p>Defining and measuring development is also an important consideration for today’s world leaders. But when linking economic growth to development, it’s important to use measures other than GDP.</p>
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Read more:
<a href="https://theconversation.com/beyond-gdp-changing-how-we-measure-progress-is-key-to-tackling-a-world-in-crisis-three-leading-experts-186488">Beyond GDP: changing how we measure progress is key to tackling a world in crisis – three leading experts</a>
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<p>The UNDP’s 2020 <a href="https://hdr.undp.org/content/human-development-report-2020">Human Development Report</a> introduced what it calls “planetary pressure adjustments” to measure human development. This classifies a country’s development not just in terms of economic prosperity, but also in relation to carbon emissions and resource use per person.</p>
<p>Other alternative models and measures of economic welfare, including <a href="https://www.weforum.org/agenda/2022/06/what-is-degrowth-economics-climate-change/#:%7E:text=What%20is%20degrowth%3F,planet%20by%20becoming%20more%20sustainable">degrowth</a>, are gaining traction with <a href="https://ipbes.net/sites/default/files/inline/files/ipbes_global_assessment_report_summary_for_policymakers.pdf">policymakers</a>. <a href="https://www.penguin.co.uk/books/441772/less-is-more-by-jason-hickel/9781786091215">Supporters of degrowth</a> want to transform how wellbeing is measured and how our economies are regulated to ensure resources are used more sustainably. But this requires both political acceptance and wider <a href="https://www.irishtimes.com/opinion/2022/08/10/is-it-time-for-ireland-to-consider-degrowth">public buy-in</a>.</p>
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Read more:
<a href="https://theconversation.com/degrowth-why-some-economists-think-abandoning-growth-is-the-only-way-to-save-the-planet-podcast-170748">Degrowth: why some economists think abandoning growth is the only way to save the planet – podcast</a>
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<h2>3. Use global governance to create a shared planet</h2>
<p>Building consensus on how to create a more sustainable world will take collective global action on shared interests. It will require solidarity and robust global governance tools to enable <a href="https://unsdg.un.org/sites/default/files/2020-03/SG-Report-Socio-Economic-Impact-of-Covid19.pdf">regulation and accountability</a>. This means legal consequences for countries that don’t adhere to agreed conventions such as the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris Agreement</a> on climate change, or the <a href="https://www.coe.int/en/web/landscape">Council of Europe Convention</a> on landscape. And international organisations such as the World Health Organisation will need more powers to oversee international laws such as the <a href="https://www.tandfonline.com/doi/full/10.1080/13523260.2020.1771955">International Health Regulations</a> in monitoring and combating the global spread of disease.</p>
<p>Governments can also use <a href="https://hdr.undp.org/content/human-development-report-2020">financial incentives</a> to encourage companies to protect biodiversity and advance nature-based solutions to industry problems. Technology can play a part too, although it’s important to be wary of both the limits and rhetoric of the “<a href="https://www.nature.com/articles/s43016-021-00275-z">technological fix</a>”.</p>
<figure class="align-center ">
<img alt="14 January 2020: the congress center in Davos with flags of nations at sunrise during the WEF World Economic Forum" src="https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/504694/original/file-20230116-20-hxv9kx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The Congress Center in Davos, Switzerland during the World Economic Forum’s 2020 annual meeting.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/davos-gr-switzerland-14-january-2020-1617109249">makasana photo/Shutterstock</a></span>
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<p>A more sustainable world means understanding the planet’s <a href="http://www.librelloph.com/journalofhumansecurity/article/view/johs-17.1.15/html">intersecting human and environmental crises</a>, and working out how to address them holistically, cooperatively and responsibly. After that, the challenge lies in using the institutions and mechanisms of global governance that already exist, as well as pushing leaders to make brave decisions that put <a href="https://hdr.undp.org/content/2022-special-report-human-security">human and environmental security for all</a> ahead of endless profit for the few.</p><img src="https://counter.theconversation.com/content/197938/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Morrissey was a background author for the UNDP 2022 Special Report on Human Security, "New Threats to Human Security in the Anthropocene".</span></em></p>Leaders must find new ways to measure development and economic progress and to co-operate on prioritising human and environmental security over profits.John Morrissey, Professor of Geography, University of GalwayLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1537762021-04-27T12:12:01Z2021-04-27T12:12:01ZArbor Day: Why planting trees isn’t enough<figure><img src="https://images.theconversation.com/files/522384/original/file-20230421-20-3y816m.jpg?ixlib=rb-1.1.0&rect=49%2C24%2C5406%2C3034&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Aerial view of native seedlings for forest restoration at the the Instituto Terra, Aimores, Brazil. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/aerial-view-of-the-tree-nursery-of-the-instituto-terra-at-news-photo/1189438752">Christian Ender/Getty Images</a></span></figcaption></figure><p>For 151 years, Americans have marked <a href="https://www.arborday.org/celebrate/history.cfm">Arbor Day</a> on the last Friday in April by planting trees.
Now <a href="https://www.1t.org/">business leaders</a>, <a href="https://www.wri.org/blog/2020/02/how-where-plant-trees-us">politicians</a>, <a href="https://www.youtube.com/watch?v=HPJKxAhLw5I">YouTubers</a> and <a href="https://www.vogue.co.uk/news/article/gisele-bundchen-40-birthday-trees">celebrities</a> are calling for the planting of millions, billions or even <a href="https://www.1t.org/">trillions of trees</a> to slow climate change.</p>
<p>As ecologists who study <a href="https://scholar.google.es/citations?user=LqwnWIoAAAAJ&hl=en">forest</a> <a href="https://scholar.google.co.jp/citations?user=0f_YV1wAAAAJ&hl=en">restoration</a>, we know that trees store carbon, provide habitat for animals and plants, prevent erosion and create shade in cities. But as we have explained elsewhere in detail, planting trees <a href="https://doi.org/10.1126/science.aba8232">is not a silver bullet</a> for solving complex environmental and social problems. And for trees to produce benefits, they need to be planted correctly – which often is not the case.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Cartoon showing benefits and harms from tree-planting." src="https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=390&fit=crop&dpr=1 600w, https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=390&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=390&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=490&fit=crop&dpr=1 754w, https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=490&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/396141/original/file-20210420-23-1cy5iup.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=490&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Planting trees can have both positive and negative effects, depending on how projects are planned and managed and where they are done.</span>
<span class="attribution"><span class="source">Vanessa Sontag, modified from Holl and Brancalion 2020.</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<h2>Tree-planting is not a panacea</h2>
<p>It is impossible for humanity to <a href="https://www.theguardian.com/environment/2019/jul/04/planting-billions-trees-best-tackle-climate-crisis-scientists-canopy-emissions">plant its way out of climate change</a>, as some advocates have suggested, although trees are one part of the solution. Scientific assessments show that avoiding the worst consequences of climate change will require governments, businesses and individuals around the globe to make <a href="https://www.ipcc.ch/2020/07/31/energy-climatechallenge/">rapid and drastic efforts to reduce greenhouse gas emissions</a>. </p>
<p>Moreover, planting trees in the wrong place can have unintended consequences. For example, <a href="https://www.youtube.com/watch?v=GAoVZoZpqro">planting trees into native grasslands</a>, such as North American prairies or African savannas, <a href="https://theconversation.com/when-tree-planting-actually-damages-ecosystems-120786">can damage these valuable ecosystems</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/396108/original/file-20210420-17-llbbwr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A monoculture of exotic eucalyptus trees (background) was planted into a native grassland within the Brazilian Cerrado, a global hot spot for conservation priorities. Transforming an open ecosystem into a shaded monoculture plantation can harm native plant and animal species and reduce the water supply for local people and aquatic creatures.</span>
<span class="attribution"><span class="source">Robin Chazdon</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Planting fast-growing, nonnative trees in arid areas may also <a href="https://theconversation.com/planting-trees-must-be-done-with-care-it-can-create-more-problems-than-it-addresses-128259">reduce water supplies</a>. And some top-down tree-planting programs implemented by international organizations or national governments displace farmers and <a href="https://doi.org/10.1073/pnas.1014773107">lead them to clear forests elsewhere</a>.</p>
<p>Large-scale tree-planting initiatives have failed in locations from <a href="https://doi.org/10.1111/rec.12492">Sri Lanka</a> to <a href="https://www.theguardian.com/world/2020/jan/30/most-of-11m-trees-planted-in-turkish-project-may-be-dead">Turkey</a> to <a href="https://www.nationalgeographic.com/environment/article/how-to-regrow-forest-right-way-minimize-fire-water-use">Canada</a>. In some places, the tree species were not well suited to local soil and climate conditions. Elsewhere, the trees were not watered or fertilized. In some cases local people <a href="https://www.theweek.in/news/world/2020/08/10/pakistan-locals-at-khyber-uproot-trees-planted-by-government.html">removed trees</a> that were planted on their land without permission. And when trees die or are cut down, any carbon they have taken up returns to the atmosphere, negating benefits from planting them.</p>
<h2>Focus on growing trees</h2>
<p>We think it’s time to change the narrative from <a href="https://www.worldagroforestry.org/publication/tree-planting-tree-growing-rethinking-ecosystem-restoration-through-trees">tree-planting to tree-growing</a>. Most tree-planting efforts focus on <a href="https://www.youtube.com/watch?v=HPJKxAhLw5I">digging a hole and putting a seedling in the ground</a>, but the work doesn’t stop there. And tree-planting diverts attention from <a href="https://www.iis-rio.org/wp-content/uploads/2019/10/IIS_CI_CIFOR._Progress_report_natural_regeneration_.pdf">promoting natural forest regrowth</a>. </p>
<p>To achieve benefits from tree-planting, the trees need to grow for a decade or more. Unfortunately, evidence suggests that reforested areas are often <a href="https://theconversation.com/restoring-tropical-forests-isnt-meaningful-if-those-forests-only-stand-for-10-or-20-years-107880">recleared within a decade or two</a>. We recommend that tree-growing efforts set targets for the area of forest restored after 10, 20 or 50 years, rather than focusing on numbers of seedlings planted. </p>
<p>And it may not even be necessary to actively plant trees. For example, much of the eastern U.S. was <a href="https://doi.org/10.2307/2260864">logged in the 18th and 19th centuries</a>. But for the past century, where nature has been left to take its course, large areas of forests have regrown without people’s planting trees. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A stream runs through a wooded area past remains of an old stone wall." src="https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=408&fit=crop&dpr=1 600w, https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=408&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=408&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=513&fit=crop&dpr=1 754w, https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=513&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/522385/original/file-20230421-5447-7awbnd.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=513&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Hardwood forests like this one in central New England have regrown after logging in the 18th and 19th centuries.</span>
<span class="attribution"><a class="source" href="https://harvardforest.fas.harvard.edu/sites/default/files/dioramas/hi_res/1-8-modernforestlandscape1.jpg">David Foster/Harvard Forest</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<h2>Helping tree-growing campaigns succeed</h2>
<p>Tree-growing is expected to receive unprecedented financial, political and societal support in the coming years as part of the <a href="https://www.decadeonrestoration.org/">U.N. Decade on Ecosystem Restoration</a> and ambitious initiatives such as the <a href="https://www.bonnchallenge.org/content/challenge">Bonn Challenge</a> and World Economic Forum 1t.org campaign to <a href="https://appliedecologistsblog.com/2020/09/02/how-can-we-improve-tree-planting-outcomes/1t.org">conserve, restore and grow 1 trillion trees</a>. It would be an enormous waste to squander this unique opportunity.</p>
<p>Here are <a href="https://doi.org/10.1111/1365-2664.13725">key guidelines that we</a> and <a href="https://doi.org/10.1111/gcb.15498">others</a> have proposed to <a href="https://www.youtube.com/watch?v=SqWp65AtgZc">improve the outcomes of tree-planting campaigns</a>.</p>
<p><a href="https://www.worldwildlife.org/blogs/sustainability-works/posts/planting-trees-is-good-saving-existing-forests-is-better-protecting-people-and-nature-is-best"><strong>Keep existing forests standing</strong></a>. <a href="https://www.globalforestwatch.org/about/">Global Forest Watch</a>, an online platform that monitors forests around the world, estimates that the Earth lost an area of rainforest <a href="https://blog.globalforestwatch.org/data-and-research/global-tree-cover-loss-data-2020/">the size of New Mexico in 2020</a>. It is much more effective to <a href="https://theconversation.com/want-to-beat-climate-change-protect-our-natural-forests-121491">prevent clearing of existing forests</a> than to try to put them back together again. And existing forests provide benefits now, rather than decades into the future after trees mature. </p>
<p>Protecting existing forests often requires <a href="https://www.rncalliance.org/WebRoot/rncalliance/Shops/rncalliance/509E/0633/706F/6EAF/F598/C0A8/D2F8/45D2/DTP2_239_English_Brancalion_0020_et_0020_al_4-10-12.pdf">providing alternative income</a> for people who maintain trees on their land rather than logging them or growing crops. It also is important to strengthen enforcement of protected areas, and to promote supply chains for timber and agricultural products that <a href="https://doi.org/10.1038/s41559-021-01417-z">do not involve forest-clearing</a>.</p>
<p><strong>Include nearby communities in tree-growing projects</strong>. International organizations and national governments fund many tree-growing projects, but their goals may be quite different from those of local residents who are actually growing the trees on their land. Study after study has shown that <a href="https://doi.org/10.1007/s00267-013-0213-7">involving local farmers and communities</a> in the process, from planning through monitoring, is <a href="http://dx.doi.org/10.1088/1748-9326/ab96d1">key to tree-growing success</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Tree-planting projects that involve local communities are more likely to succeed." src="https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/396112/original/file-20210420-19-jirviz.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A farmer and representatives from an international NGO and a restoration company discuss where to plant native trees on a cattle ranch in the Brazilian Amazon.</span>
<span class="attribution"><span class="source">Pedro Brancalion</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p><strong>Start with <a href="https://doi.org/10.1111/1365-2664.13725">careful planning</a>.</strong> Which species are most likely to grow well given local site conditions? Which species will best achieve the project’s goals? And who will take care of the trees after they are planted?</p>
<p>It is important to plant in areas where trees have grown historically, and to consider whether future climatic conditions are likely to support trees. Planting in areas that are <a href="http://dx.doi.org/10.1890/140052">less productive for agriculture</a> reduces the risk that the land will be recleared or existing forests will be cut down to <a href="https://doi.org/10.1073/pnas.1014773107">compensate for lost productive areas</a>.</p>
<p><strong>Plan for the long term</strong>. Most tree seedlings need care to survive and grow. This may include multiyear commitments to water, fertilize, weed and protect them from grazing or fire and monitor whether the venture achieves its goals. </p>
<p>We recently <a href="https://doi.org/10.1016/j.oneear.2022.04.001">published</a> a <a href="https://www.climateandcapitalmedia.com/the-pitfalls-of-the-global-tree-planting-frenzy/">list of questions</a> that all tree-growing organizations should answer and that funders should ask before pulling out their wallets. They include questions about whether the initial drivers of deforestation have been addressed, how the project will be maintained and monitored over time, and how local stakeholders will be involved and benefit from the project. It’s also important to look at the outcomes of prior tree-growing projects overseen by the organization.</p>
<p>Organizations that follow best practices are much more likely to grow trees successfully over the long term. Planting seedlings is just the first step.</p>
<p><em>This is an update of an <a href="https://theconversation.com/arbor-day-should-be-about-growing-trees-not-just-planting-them-153776">article</a> originally published on April 27, 2021.</em></p><img src="https://counter.theconversation.com/content/153776/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Karen Holl receives funding from the U.S. National Science Foundation.</span></em></p><p class="fine-print"><em><span>Pedro Brancalion receives funding from The São Paulo Research Foundation (FAPESP) and Fundação de Estudos Agrários "Luiz de Queiroz". </span></em></p>Large-scale tree-planting projects are politically popular and media-friendly, but without effective planning and long-term management, they can do more harm than good.Karen D. Holl, Professor of Restoration Ecology, University of California, Santa CruzPedro Brancalion, Professor of Forest Restoration, Universidade de São Paulo (USP)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1526222021-02-04T03:30:02Z2021-02-04T03:30:02ZNo more business as usual: in ‘The Great Reset’ business schools must lead the way<figure><img src="https://images.theconversation.com/files/381887/original/file-20210202-21-1vnl1up.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3391%2C2244&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">gallofoto/Shutterstock</span></span></figcaption></figure><p>Business schools have a major role to play in what the World Economic Forum calls “<a href="https://www.weforum.org/great-reset/">The Great Reset</a>” as the world adjusts to the COVID-19 pandemic. To contribute to their full potential, business schools must change. So too must universities and the businesses that support and engage with them. </p>
<p>Much of the focus on universities during the pandemic has understandably been on the crucial work of developing vaccines and medical equipment, and on fields such as epidemiology. Business schools can valuably contribute to these efforts too. For example, with their expertise in managing supply chains, operations and logistics they can advise on the massive challenge of manufacturing and distributing billions of vaccines, and scrutinising the integrity and ethics of vaccine testing and rollout.</p>
<p>Beyond these immediate challenges, business schools can help businesses redefine their purpose in the post-pandemic world. That starts with re-examining dated models, many of which have been driven since the 1970s by the <a href="https://www.forbes.com/sites/stevedenning/2019/08/19/why-maximizing-shareholder-value-is-finally-dying/">mantra of maximising shareholder value</a>. </p>
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Read more:
<a href="https://theconversation.com/its-a-myth-that-companies-must-put-shareholders-first-coronavirus-is-a-chance-to-make-it-stop-129104">It's a myth that companies must put shareholders first – coronavirus is a chance to make it stop</a>
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<p>Business schools possess expertise in fields as diverse as assessing and managing risk in highly uncertain circumstances, and in rebuilding trust with stakeholders that might have been adversely affected by the health crisis. Business schools can draw on their expertise in change management, organisational development, human resources and information systems to help sustain different patterns of organisation and work, including more decentralised decision-making and working from home.</p>
<h2>Business schools must change</h2>
<p>The mission of business schools has evolved. Today their horizons have expanded towards improving well-being in society. Their stakeholders extend beyond students and businesses to include governments and not-for-profits. </p>
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Read more:
<a href="https://theconversation.com/what-are-we-teaching-in-business-schools-the-royal-commissions-challenge-to-amoral-theory-110901">What are we teaching in business schools? The royal commission's challenge to amoral theory</a>
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<p>Business schools were already under pressure to respond to the pace of change in technology, competition and social expectations. COVID-19 has provided impetus to rise to the <a href="https://hbr.org/2020/01/making-stakeholder-capitalism-a-reality">call for business to lead social change</a>.</p>
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<figcaption><span class="caption">The World Economic Forum is calling for a new form of capitalism, one that puts people and planet first, to rebuild the world after COVID-19.</span></figcaption>
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<p>The key to meeting lofty stakeholder expectations is significant change management. Business schools need to become fully and authentically committed to resolving problems affecting not just business, but humanity as a whole. Central to their agendas should be applying all their knowledge and skills to dealing with wicked problems such as climate change, ethics and fairness, and disruption by digital technologies and artificial intelligence.</p>
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Read more:
<a href="https://theconversation.com/vital-signs-a-3-point-plan-to-reach-net-zero-emissions-by-2050-132436">Vital Signs: a 3-point plan to reach net-zero emissions by 2050</a>
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<p>Business schools are now moving to focus on societal impact through closer research engagement with industry and society. Increasing philanthropic, government and student demand is driving this shift. </p>
<p>The University of Queensland Business School, for example, has established research hubs in trust, ethics and governance, and in business sustainability. Imperial College Business School has a program on the economics and finance of climate change.</p>
<p>Such changes are not assisted when the metrics of success in business schools continue to focus on ranking systems largely driven by graduate salaries, with a <a href="https://www.ft.com/content/8bb6737c-35ed-11ea-a6d3-9a26f8c3cba4">40% weighting</a> in the <a href="http://rankings.ft.com/businessschoolrankings/global-mba-ranking-2020">FT Global MBA rankings</a>, for example. Corporate social responsibility and ethics have a <a href="https://www.ft.com/content/8bb6737c-35ed-11ea-a6d3-9a26f8c3cba4">3% weighting</a>.</p>
<p>Vitally important will be the ways business schools <a href="https://www.weforum.org/agenda/2020/07/university-entrepreneurship-post-covid-19-world/">encourage the innovation and entrepreneurship</a> that will create the new businesses and jobs to replace those lost during the pandemic. As well as stimulating and guiding start-ups, business schools can advise existing businesses on how to adjust to the new realities. Their expertise in governance, leadership and strategy can help businesses build the diverse capabilities they need to thrive in turbulent and ambiguous environments.</p>
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Read more:
<a href="https://theconversation.com/brands-backing-black-lives-matter-it-might-be-a-marketing-ploy-but-it-also-shows-leadership-139874">Brands backing Black Lives Matter: it might be a marketing ploy, but it also shows leadership</a>
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<h2>Stakeholders also need to change</h2>
<p>Business schools attract <a href="https://www.dese.gov.au/higher-education-statistics/resources/2019-student-summary-time-series">large numbers of students</a>. They have continued to do so in many universities throughout the epidemic. This means they commonly account for a large share of university fee income. </p>
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<p>For business schools to contribute to The Great Reset, they need more than <em>juste retour</em>, or simply getting back from university budgets the income they attract. They need full recognition and support for the role they can play in creating the new and emerging world. Universities have to move beyond seeing business schools as cash cows to being jewels in their crown.</p>
<p>Research funders should consider how business school perspectives add value to research projects in the sciences, social sciences and humanities. From the economics and operations of drug development and new energy sources, to business approaches to diversity and equality, to the marketing of the arts, business schools have much to offer.</p>
<p>COVID-19 represents a tipping point for business schools to use their expertise to reset, reinvent and relaunch their role in promoting ethical and sustainable business practices. As well as being valuable sources of short-term advice, business leaders should use their links with business schools to discuss, reflect upon and adjust their long-term vision and strategy. There is much benefit for business, for example, in learning along with business schools about how responses to the COVID-19 crisis can be applied to achieving the United Nations <a href="https://sdgs.un.org/goals">Sustainable Development Goals</a>. </p>
<p>Business schools are testing sites for the creation of more ethical, dynamic and trustworthy leaders who in turn can influence broader societal issues.</p><img src="https://counter.theconversation.com/content/152622/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Business schools have vast and diverse expertise to contribute to rebuilding better in a post-pandemic world, but the problems it has laid bare require business schools to change too.Sarah Jane Kelly, Associate Professor, UQ Business School, The University of QueenslandMark Dodgson, Visiting Professor, Imperial College Business School, and Emeritus Professor, School of Business, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1535082021-01-22T16:18:37Z2021-01-22T16:18:37ZDavos 2021: to achieve a ‘great reset’, we can’t count on the same old globalists to lead the way<p>The <a href="https://www.weforum.org">51st World Economic Forum</a> starts on January 25, but with a major difference. Whereas this is famously the annual gathering at the Davos ski resort in Switzerland of global leaders from business, government and civil society, this year’s event will take place virtually because of the pandemic. </p>
<p>Inevitably, the event for the 1,200-plus delegates from 60 countries aims to respond to the apocalyptic events of the past 12 months. “A crucial year to rebuild trust” is the theme, built around the “great reset” that World Economic Forum (WEF) founder Klaus Schwab and Prince Charles <a href="https://www.weforum.org/agenda/2020/06/the-great-reset-this-weeks-world-vs-virus-podcast/">launched last year</a>. </p>
<p>The event will be accompanied by virtual events in 430 cities across the world, to emphasise the fact that we face global challenges that require global solutions and action. </p>
<p>This recognises that the effects of the pandemic are likely to be increasingly compounded by other major global threats, including the climate crisis, financial crises, and social and economic inequality. To give just one example, the COVID-19 mortality rate in England in December <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/monthlymortalityanalysisenglandandwales/december2020">was over twice as high</a> in the most deprived areas than the least deprived. </p>
<p>So how successful is the WEF’s mission likely to be?</p>
<h2>Lessons from history</h2>
<p>This is not the first time that global crises have required global action, but there have been mixed results in the past. After the first world war, the UK played a pivotal role in forming the <a href="https://www.history.com/topics/world-war-i/league-of-nations">League of Nations</a> on the international stage. But this ultimately failed to deliver, with the UK’s insistence on post-war reparations undermining Germany’s economic recovery and political stability. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="First meeting of Assembly of the League of Nations in November 1920." src="https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=457&fit=crop&dpr=1 600w, https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=457&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=457&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=574&fit=crop&dpr=1 754w, https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=574&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/380179/original/file-20210122-17-7otv61.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=574&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">First meeting of Assembly of the League of Nations in November 1920.</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/League_of_Nations#/media/File:No-nb_bldsa_5c006.jpg">Wikimedia</a></span>
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</figure>
<p>When the world next sought to prevent future conflicts towards the end of the second world war, the lessons were to some extent learned from last time around. The allies met at <a href="https://www.worldbank.org/en/about/archives/history/exhibits/bretton-woods-monetary-conference">Bretton Woods</a>, New Hampshire, in the US in 1944 to develop policies for economic stability. </p>
<p>This led to a new system of interlinked exchange rates organised around a gold-backed US dollar, as well as new institutions to help manage it, including the International Monetary Fund and what later became the World Bank. This was followed in the next couple of years by the United Nations and the forerunner to the World Trade Organization. The Bretton Woods system endured until the early 1970s when the US came off the gold standard, but much of the system created in the 1940s survives in one form or another today. </p>
<p>The 2007-09 financial crisis, which involved the <a href="https://www.iea.org/data-and-statistics/charts/global-annual-change-in-real-gross-domestic-product-gdp-1900-2020">first global recession</a> since the 1930s, led to many <a href="https://podcasts.ox.ac.uk/global-recession-how-did-it-happen-0">calls for action</a> to prevent similar crises in future. There was some tightening of regulation, but <a href="https://www.law.ox.ac.uk/business-law-blog/blog/2018/11/ten-years-after-financial-crisis-we-are-safer-not-safe-we-should-and">the threat of instability remains</a> due to excessive debts and too much speculation.</p>
<p>With only the 1940s seeing a really adequate response to global crises, what will make the difference this time?</p>
<h2>The great reset</h2>
<p>The WEF’s vision of a “<a href="https://www.weforum.org/great-reset/">great reset</a>” recognises that what is needed to tackle these crises goes far beyond economic reforms, or climate measures, or tackling a pandemic – it is all of these combined, and more. It is the idea that global action needs to be underpinned by a mission to change society, to make it more inclusive and cohesive; to match environmental sustainability with social sustainability. It follows their call to “<a href="https://www.weforum.org/agenda/2020/07/to-build-back-better-we-must-reinvent-capitalism-heres-how/">build back better</a>” – one <a href="https://www.unenvironment.org/news-and-stories/video/building-back-better-leadership-fornature">echoed by many</a> around the world.</p>
<p>The WEF seeks action across seven key themes: environmental sustainability; fairer economies; “tech for good”; the future of work and the need for reskilling; better business; healthy futures with fair access for all; and “beyond geopolitics” - national governments collaborating globally.</p>
<p>The WEF <a href="https://www.weforum.org/agenda/2021/01/davos-agenda-trust-global-cooperation/">says the key</a> is reestablishing public trust, which is “being eroded, in part due to the perceived mishandling of the coronavirus pandemic”. But this may prove difficult, given there is little change in corporate or government leadership. The big hope is 78-year-old Joe Biden, who was US vice president for eight years during which many of these problems were mounting, not being solved.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Joe Biden outlines his COVID-19 response at the White House" src="https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/380180/original/file-20210122-19-1087ml7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Can Joe save us?</span>
<span class="attribution"><span class="source">EPA</span></span>
</figcaption>
</figure>
<p>Sadly, the main cause for optimism is the fact that today’s crises are so great that they may provoke action. Future financial crises look likely. The climate crisis is increasingly accepted to be an existential threat. And now the pandemic is a huge economic and human disaster, with further such pandemics <a href="https://www.gavi.org/vaccineswork/5-reasons-why-pandemics-like-covid-19-are-becoming-more-likely#:%7E:text=Climate%20change&text=An%20increasing%20risk%20of%20flooding,are%20also%20much%20more%20likely.">recognised as likely</a> because of everything from the explosion in global travel to the effects of climate change.</p>
<h2>The neoliberal drift</h2>
<p>A key question for this year’s conference, which is due to be followed by a second phase in <a href="https://www.weforum.org/press/2020/12/special-annual-meeting-2021-to-take-place-in-singapore-in-may/">Singapore in May</a>, is whether a new form of globalisation will be developed. </p>
<p>There was a free-market form of globalisation leading up to the first world war, then a retreat during the inter-war period. Bretton Woods led to an era of regulated globalisation from 1945 until the 1980s. But since then, the “global elite” has pushed back regulatory restrictions on everything from speculative financial flows across borders to mergers and acquisitions. </p>
<p>A new era is required, building on the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris Agreement</a> to limit climate change now that the Americans are <a href="https://www.theguardian.com/us-news/2021/jan/19/biden-environment-paris-climate-agreement-keystone-xl-pipeline">joining again</a> - with more support of a <a href="https://greennewdealgroup.org">Green New Deal</a> geared towards achieving net zero emissions and making the global economy truly sustainable. </p>
<p>We need bold initiatives to tackle the threat of future pandemics; financial speculation, tax evasion and avoidance, and the threat of financial crises; and to reduce the unsustainable inequalities of wealth, income and power across the globe. </p>
<p>Will corporate and political decision-makers rise to the challenge? There needs to be sufficient popular pressure - from citizens, voters, consumers, workers, educators and activists - to push governments and business to change course fundamentally. These past few years have witnessed the <a href="https://blogs.lse.ac.uk/politicsandpolicy/impact-of-occupy-movement/">Occupy movement</a>, the <a href="https://metoomvmt.org">Me Too Movement</a>, <a href="https://blacklivesmatter.com">Black Lives Matter</a> and countless climate crisis groups.</p>
<p>Calls for action have been coming from business leaders at Davos and elsewhere <a href="https://theconversation.com/its-official-inequality-climate-change-and-social-polarisation-are-bad-for-you-71105">for years</a>. The hope is that this time, the scale of the emergency will finally make radical change unavoidable.</p><img src="https://counter.theconversation.com/content/153508/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jonathan Michie has in the past received funding from the ESRC, Leverhulme, the Higher Education Innovation Fund, the European Commission, the Department for Trade and Industry, the Royal Economic Society and other academic funding bodies.</span></em></p>When Joe Biden is the great hope for global change, it’s hard to feel overly optimistic.Jonathan Michie, Professor of Innovation & Knowledge Exchange, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1531422021-01-19T12:45:18Z2021-01-19T12:45:18ZWe need hard science, not software, to power our post-pandemic recovery<figure><img src="https://images.theconversation.com/files/379020/original/file-20210115-23-zaumhg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/team-medical-research-scientists-collectively-working-691541065">Gorodenkoff/Shutterstock</a></span></figcaption></figure><p>Ten years ago, PayPal founder Peter Thiel condensed the growing sense of disappointment in new technologies down to just nine words. “We wanted flying cars,” he wrote, “instead we got 140 characters”. </p>
<p>That these words still ring true a decade later shows just how far short of expectations new technologies have fallen. To drive growth in a post-pandemic world, we should remember that real economic progress has in the past been driven by hard science – not flashy consumer gadgetry.</p>
<p>For years, <a href="https://www.weforum.org/agenda/2018/01/fourth-industrial-revolution-massive-productivity-boom-good/">hopes for productivity growth</a> have been pinned on “<a href="https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/">Fourth Industrial Revolution</a>” (4IR) technologies such as artificial intelligence (AI), the Internet of Things (IoT), and 3D-printing. </p>
<p>But, in contrast to previous industrial revolutions, recent advances in digital technology have not resulted in the expected boost in productivity. <a href="https://www.vox.com/a/new-economy-future/robert-gordon-interview">Labour productivity growth</a> has been stagnating since the 1970s. In the UK, it’s actually at its <a href="https://www.bankofengland.co.uk/-/media/boe/files/speech/2018/the-fall-in-productivity-growth-causes-and-implications">slowest rate in 200 years</a>. </p>
<p>Stagnating productivity has not gone unnoticed. Having banged the drum of the <a href="https://www.weforum.org/about/the-fourth-industrial-revolution-by-klaus-schwab/">Fourth Industrial Revolution</a> since 2016, the World Economic Forum has now changed its narrative to the “<a href="https://www.weforum.org/great-reset/">Great Reset</a>”. No doubt this change reflects new economic realities wrought by the pandemic, but it’s also a silent admission that <a href="https://www.iza.org/publications/dp/13829/industrialization-under-medieval-conditions-global-development-after-covid-19">the 4IR has dramatically under-delivered</a> on its promises of productivity and prosperity.</p>
<p>Why? First, <a href="https://www.nber.org/papers/w25756">dominant firms</a> that possess 4IR technologies are hindering their diffusion by leveraging their technological advantage to further <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3682745">entrench their dominance</a> and reduce competition. </p>
<p>This happens because software technology, which is subject to large fixed costs but low marginal costs, enables larger firms to develop better-quality products and services than their smaller rivals. That leaves <a href="https://www.aeaweb.org/articles?id=10.1257/pandp.20191001">smaller firms</a> facing high obstacles and low benefits when considering the adoption of 4IR technologies. Many elect simply to continue without them.</p>
<p>This means that 4IR technologies are not diffusing fast enough. The gap
between the “<a href="https://www.nytimes.com/2020/02/03/technology/google-earnings-big-tech.html">technology haves and have nots</a>” in the corporate world is widening. A recent <a href="https://pubs.aeaweb.org/doi/pdfplus/10.1257/mac.20150175">study</a> also found that this gap is widening between rich countries and poor countries. When few companies have access to 3D printers, <a href="https://voxeu.org/article/robot-adoption-german-plants">robots</a>, or cutting-edge AI, there are fewer actors to leverage such technologies to the point at which productivity will increase across the board.</p>
<figure class="align-center ">
<img alt="A palm above which the logos of Big Tech companies are arranged on a screen" src="https://images.theconversation.com/files/379023/original/file-20210115-15-18q5mma.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/379023/original/file-20210115-15-18q5mma.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=336&fit=crop&dpr=1 600w, https://images.theconversation.com/files/379023/original/file-20210115-15-18q5mma.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=336&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/379023/original/file-20210115-15-18q5mma.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=336&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/379023/original/file-20210115-15-18q5mma.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=423&fit=crop&dpr=1 754w, https://images.theconversation.com/files/379023/original/file-20210115-15-18q5mma.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=423&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/379023/original/file-20210115-15-18q5mma.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=423&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Some argue that ‘Big Tech’ hold a monopoly over 4IR technologies.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/big-five-companies-tech-company-logos-1643544484">Ascannio/Shutterstock</a></span>
</figcaption>
</figure>
<p>It was general-purpose technologies – such as steam engines and the electric dynamo – that powered change in <a href="https://www.aeaweb.org/articles?id=10.1257/jel.54.1.224">previous</a> industrial revolutions. At present, <a href="https://www.nber.org/papers/w24001">it remains unclear</a> whether 4IR technologies can do the same. </p>
<p>For example, AI has been of little value <a href="https://link.springer.com/article/10.1007/s00146-020-00978-0">against the pandemic</a>, failing to contribute constructively to solving the biggest problem of a generation. 4IR technology is stuck in what research firm Gartner call the “<a href="https://www.gartner.com/en/research/methodologies/gartner-hype-cycle">trough of disillusionment</a>” – a state of disappointment we feel when technologies fail to live up to the hype.</p>
<h2>Shifting investments</h2>
<p>This “<a href="https://press.princeton.edu/books/paperback/9780691175805/the-rise-and-fall-of-american-growth">technology problem</a>” has been well documented. New digital technologies are often found to deliver <a href="https://www.aeaweb.org/articles?id=10.1257/aer.20180338">diminishing returns</a> over time, especially once “<a href="https://www.amazon.com/Great-Stagnation-America-Low-Hanging-Eventually/dp/0525952713">low-hanging fruit</a>” have been plucked, leaving only more ambitious, costly, and risky projects up for grabs.</p>
<p>To avoid a technology problem, we need to invest in science that delivers general-purpose technologies, and technologies that deliver real scientific progress. To get there, we’ll need new strategies in research and investment once the pandemic subsides. </p>
<p>For instance, the vast majority of investment in digital technologies is currently driven by venture capitalists out to <a href="https://www.technologyreview.com/2020/06/17/1003318/why-venture-capital-doesnt-build-the-things-we-really-need/">score quick returns</a> on start-ups that can be scaled fast. As a result, technologies that require more development time – but that are most likely to lead to new breakthroughs – tend to be starved of funds.</p>
<figure class="align-center ">
<img alt="A painting featuring a loom in the industrial era." src="https://images.theconversation.com/files/379019/original/file-20210115-13-sk2j6g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/379019/original/file-20210115-13-sk2j6g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/379019/original/file-20210115-13-sk2j6g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/379019/original/file-20210115-13-sk2j6g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/379019/original/file-20210115-13-sk2j6g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/379019/original/file-20210115-13-sk2j6g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/379019/original/file-20210115-13-sk2j6g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The technologies that powered previous industrial revolutions were more widespread.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/machines-making-cotton-thread-by-performing-237232108">Everett Collection/Shutterstock</a></span>
</figcaption>
</figure>
<p>This investment trend can leave crucial industries and technologies without the necessary funds to advance and innovate. For instance, venture capital (VC) funding into medical instrument technologies – vital for the continuing fight against pandemics – <a href="https://issues.org/behind-technological-hype/">declined by over 50% between 2003 and 2017</a>. Elsewhere, the VC market for technologies to combat climate change <a href="https://www.brookings.edu/research/cleantech-venture-capital-continued-declines-and-narrow-geography-limit-prospects/">is in a crisis</a>. </p>
<p>With markets allocating insufficient funding to technologies that might help tackle our grand global challenges, <a href="https://financialpost.com/opinion/book-review-matt-ridley-innovation-is-a-bottom-up-phenomenon">controversial</a> arguments are now being made for <a href="https://academic.oup.com/icc/article/27/5/803/5127692">mission-oriented</a> innovation policies, which would entail an “entrepreneurial state” leading the charge towards key technologies.</p>
<h2>Back to the lab</h2>
<p>Many <a href="https://financialpost.com/opinion/book-review-matt-ridley-innovation-is-a-bottom-up-phenomenon">doubt</a> this “creationist” view of innovation whereby the state can lead innovation, and argue instead that innovation is a bottom-up process. Whether innovation is creationist or bottom-up, we need to rethink our institutional frameworks for doing science, and start with the role of universities. </p>
<p>According to <a href="https://nautil.us/blog/the-present-phase-of-stagnation-in-the-foundations-of-physics-is-not-normal">a growing chorus of commentators</a>, fundamental physics, which delivered virtually all of the technologies underpinning earlier industrial revolutions, has been <a href="https://www.edge.org/response-detail/11441">stagnating</a> for years. This stagnation is now accompanied by a rise in <a href="https://journals.plos.org/plosbiology/article?id=10.1371/journal.pbio.3000683">anti-science movements</a> that reject scientific knowledge on <a href="https://www.theguardian.com/commentisfree/2020/jul/30/climate-denier-shill-global-debate">climate change</a>, <a href="https://www.sciencedaily.com/releases/2020/02/200217163004.htm">vaccine safety</a>, and even <a href="https://theconversation.com/flat-earthers-vs-climate-change-sceptics-why-conspiracy-theorists-keep-contradicting-each-other-96060">the shape of the earth</a>. At the same time, <a href="https://theconversation.com/academic-freedom-is-under-threat-around-the-world-heres-how-to-defend-it-118220">academic freedom</a> is under threat.</p>
<p>University science has also become encumbered by unhelpful administrative <a href="https://www.nber.org/papers/w26752">incentives</a>, box-ticking, and “a focus on <a href="https://www.nber.org/papers/w26752">incremental studies</a> rather than more ambitious projects which are likely to fail, but might lead to more exciting breakthroughs”. Overcoming these obstacles should be a leading priority as we develop post-pandemic research and innovation policies.</p>
<h2>How we reset</h2>
<p>The Fourth Industrial Revolution never really got off the ground — largely due to human flaws in distribution, investment and research which restricted the diffusion of its technologies and skewed investment into technologies with less meaningful economic impact. </p>
<p>The Great Reset, like the Fourth Industrial Revolution, reads like a Hollywood script. To move beyond headline-grabbing science fiction and glitzy gadgetry, we need a real “back-to-basics” revolution — in the kind of science-plus-risk-taking that delivered economic prosperity in the past. For a start, this will demand more entrepreneurial university research projects that may well fail, but which might break new ground, too.</p><img src="https://counter.theconversation.com/content/153142/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Wim Naudé does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Fourth Industrial Revolution failed to deliver; it’s time that we put our faith once again in hard science.Wim Naudé, Professor of Economics, University College CorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1283822020-01-27T12:18:39Z2020-01-27T12:18:39ZHow CEOs, experts and philosophers see the world’s biggest risks differently<figure><img src="https://images.theconversation.com/files/311947/original/file-20200126-81416-i4u3lb.jpg?ixlib=rb-1.1.0&rect=32%2C278%2C5431%2C3325&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Activist Greta Thunberg was among attendees who want the world's leaders to prioritize fighting climate change. </span> <span class="attribution"><span class="source">AP Photo/Michael Probst</span></span></figcaption></figure><p>We live in a world threatened by numerous existential risks that no country or organization can resolve alone, such as <a href="https://theconversation.com/us/topics/climate-change-27">climate change</a>, <a href="https://theconversation.com/us/topics/extreme-weather-3799">extreme weather</a> and the <a href="https://theconversation.com/us/topics/coronavirus-5830">coronavirus</a>.</p>
<p>But in order to adequately address them, we need agreement on which are priorities – and which aren’t.</p>
<p>As it happens, the policymakers and business leaders who largely determine which risks become global priorities <a href="https://www.npr.org/sections/goatsandsoda/2020/01/24/797182641/is-davos-as-bad-as-critics-say-global-leaders-weigh-in">spent a week in January mingling</a> in the mountainous resort of Davos for an annual meeting of the world’s elite. </p>
<p>I participated in a global risk assessment survey that informed those at the Davos summit on what they should be paying the most attention to. The results, drawn from experts in a broad range of disciplines including business, happen to be very different from what company CEOs specifically see as the biggest threats they face.</p>
<p>As a <a href="https://scholar.google.com/citations?user=-9wM__kAAAAJ&hl=en&oi=ao">philosopher</a>, I found the differences curious. They highlight two contrasting ways of seeing the world – with significant consequences for our ability to address societal risks.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/312046/original/file-20200127-81336-1tftebr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/312046/original/file-20200127-81336-1tftebr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/312046/original/file-20200127-81336-1tftebr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/312046/original/file-20200127-81336-1tftebr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/312046/original/file-20200127-81336-1tftebr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/312046/original/file-20200127-81336-1tftebr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/312046/original/file-20200127-81336-1tftebr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Wildfires in Australia have destroyed more than 3,000 homes and razed more than 10.6 million hectares since September.</span>
<span class="attribution"><span class="source">AP Photo/Noah Berger</span></span>
</figcaption>
</figure>
<h2>Two perspectives on the biggest risks</h2>
<p>The World Economic Forum’s <a href="https://www.weforum.org/reports/the-global-risks-report-2020">Global Risk Report</a> consolidates the perceptions of about 800 experts in business, government and civil society to rank “the world’s most pressing challenges” for the coming year by likelihood and impact.</p>
<p>In 2020, extreme weather, a failure to act on climate change and natural disasters topped the list of risks in terms of likelihood of occurrence. In terms of impact, the top three were climate action failure, weapons of mass destruction and a loss of biodiversity. </p>
<p>The specific perspective of corporate leaders, however, is captured in another survey that highlights what they perceive as the biggest risks to their own businesses’ growth prospects. <a href="https://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2020.html">Conducted by consultancy PwC</a> since 1998, it also holds sway in Davos. I’ve been involved in that report as well when I used to work for the organization. </p>
<p>In sharp contrast to the World Economic Forum’s risk report, the CEO survey found that the top three risks to business this year are overregulation, trade conflicts and uncertain economic growth.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/312049/original/file-20200127-81336-1f86j37.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/312049/original/file-20200127-81336-1f86j37.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/312049/original/file-20200127-81336-1f86j37.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/312049/original/file-20200127-81336-1f86j37.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/312049/original/file-20200127-81336-1f86j37.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/312049/original/file-20200127-81336-1f86j37.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/312049/original/file-20200127-81336-1f86j37.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">President Trump’s trade war and other economic concerns tend to be the focus of corporate CEOs.</span>
<span class="attribution"><span class="source">AP Photo/Evan Vucci</span></span>
</figcaption>
</figure>
<h2>Economic or ethical</h2>
<p>What explains such a big difference in how these groups see the greatest threats?</p>
<p>I wanted to look at this question more deeply, beyond one year’s assessment, so I did a simple analysis of 14 years of data generated by the two reports. My findings are only inferences from publicly available data, and it should be noted that the two surveys have different methodologies and ask different questions that may shape respondents’ answers.</p>
<p>A key difference I observed is that business leaders tend to think in economic terms first and ethical terms second. That is, businesses, as you’d expect, tend to focus on their short-term economic situation, while civil society and other experts in the Global Risk Report focus on longer-term social and environmental consequences.</p>
<p>For example, year after year, CEOs have named a comparatively stable set of narrow concerns. Overregulation is among the main three threats in all but one of the years – and is frequently at the top of the list. Availability of talent, government fiscal concerns and the economy were also frequently mentioned over the past 14 years. </p>
<p>In contrast, the Global Risk Report tends to reflect a greater evolution in the types of risks the world faces, with concerns about the environment and existential threats growing increasingly prominent over the past five years, while economic and geopolitical risks have faded after dominating in the late 2000s. </p>
<h2>A philosophical perspective</h2>
<p>Risk surveys are useful tools for understanding what matters to CEOs and civil society. Philosophy is useful for considering why their priorities differ, and whose are likelier to be right. </p>
<p>Fundamentally, risks are about interests. Businesses want a minimum of regulations so they can make more money today. Experts representing constituencies beyond just business place a greater emphasis on the common good, now and in the future.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=795&fit=crop&dpr=1 600w, https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=795&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=795&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=999&fit=crop&dpr=1 754w, https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=999&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/312048/original/file-20200127-81341-fdta72.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=999&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Bertrand Russell.</span>
<span class="attribution"><span class="source">Naci Yavuz/Shurterstock.com</span></span>
</figcaption>
</figure>
<p>When interests are in tension, philosophy can help us sort between them. And while I’m sympathetic to CEOs’ desire to run their businesses without regulatory interference, I’m concerned that these short-term economic considerations often impede long-term ethical goals, such as looking after the well-being of the environment. </p>
<h2>An uncertain world</h2>
<p>Experts agree on at least one thing: The world faces dire risks.</p>
<p>This year’s <a href="https://www.weforum.org/reports/the-global-risks-report-2020">Global Risk Report</a>, titled, “An Unsettled World,” depicts on its cover a vulnerable earth in the shadow of a gigantic whirlpool. </p>
<p>The cover photograph of the <a href="https://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2020.html">Global CEO Survey</a>, which reported the lowest CEO confidence in economic growth since the Great Recession, shows an incoming tide beneath looming dark clouds, with the words: “Navigating the Rising Tide of Uncertainty.” </p>
<p>Between the covers, however, the reports demonstrate a wide gap between two influential groups that need to be on the same page if we hope to resolve the world’s biggest threats.</p>
<p>Last century, in the same year that World War II drew to a close, Bertrand Russell proclaimed that the <a href="https://archive.org/details/TheHistoryOfWesternPhilosophy/page/n9/mode/2up">purpose of philosophy</a> was to teach us “how to live without certainty, and yet without being paralyzed by hesitation.”</p>
<p>In the 21st century, philosophy can remind us of our unfortunate tendency to let economic priorities paralyze action on more pressing concerns.</p>
<p>[ <em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=youresmart">You can read us daily by subscribing to our newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/128382/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>As a former employee, Christopher Michaelson was paid by PwC for activities that included working on the Global CEO Survey and representing PwC to the World Economic Forum. He is currently affiliated with the World Economic Forum as an unpaid member of its Expert Network. </span></em></p>The World Economic Forum’s annual meeting in Davos put environmental risks at the top of its agenda, while the world’s CEOs see overregulation as their biggest threat.Christopher Michaelson, Professor of Ethics and Business Law, University of St. ThomasLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1113032019-02-19T22:10:32Z2019-02-19T22:10:32ZClimate action helps companies build reputations and attract investors<figure><img src="https://images.theconversation.com/files/259359/original/file-20190216-56208-w0vexd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Investors are starting to demand businesses take action on climate change. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/new-york-city-usa-october-30-1065011192">(Shutterstock)</a></span></figcaption></figure><p>This year, climate change topped off the agenda at the annual meeting of the World Economic Forum in Davos, Switzerland — where every January, global leaders and the heads of the world’s largest companies gather to find ways to improve the state of the world. When surveyed, <a href="https://www.reuters.com/article/us-davos-meeting-climatechange/failure-to-curb-climate-change-a-top-risk-davos-survey-idUSKCN1PA13J">experts from government, business, academia and non-governmental organizations said the failure to respond to climate change is a key risk</a>. </p>
<p>Companies committed to tackle climate change are addressing their greenhouse gas emissions (GHGs) via <a href="https://sciencebasedtargets.org/what-is-a-science-based-target/">science-based targets</a>. These voluntary goals are compatible with the global push towards a low-carbon economy that aims to keep the global temperature increase to less than 2°C.</p>
<p>One program that is gaining traction globally is the <a href="https://sciencebasedtargets.org/">Science Based Targets initiative</a> (SBTi), a collaboration between <a href="https://www.cdp.net/en">CDP, a not-for-profit charity</a>, the <a href="https://www.unglobalcompact.org/">UN Global Compact</a>, the <a href="https://www.wri.org/">World Resources Institute</a> and the <a href="https://climatesavers.org/">World Wildlife Fund</a>. This program creates a global community where companies can set targets that align with the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris Agreement</a>. </p>
<p>Joining a global community like SBTi not only provides a formal framework for measurement and tracking goals, it also signals <a href="https://www.forbes.com/sites/mikescott/2018/07/10/the-worlds-biggest-companies-are-set-to-decarbonize-their-products/#75b8577038f1">a company’s commitment to climate change action</a>. As of early 2019, <a href="https://sciencebasedtargets.org/companies-taking-action/">525 companies</a> have signed on, including 169 with approved targets.</p>
<h2>Big companies at the forefront</h2>
<p>IKEA, Unilever, Tesco, General Mills, L’Oreal, Walmart and McDonald’s are among the large multinational corporations that have signed on to the SBTi. </p>
<p><a href="https://www.ikea.com/us/en/about_ikea/newsitem/061318-IKEA-Group-climate-positive-2030">IKEA Group</a>, for example, has committed to an 80 per cent reduction in GHG emissions in stores and other operations and a 50 per cent reduction in emissions from travel and customer deliveries by 2030, compared to 2016 levels. It will also cut emissions in its value chain by at least 15 per cent, resulting in a 70 per cent reduction in the climate footprint of an <a href="https://www.prnewswire.com/news-releases/ikea-group-commits-to-zero-emissions-targets-for-home-delivery-in-five-major-cities-by-2020-300712424.html">average IKEA product</a>.</p>
<p>Large companies can make change within their own operations and along the supply chain. <a href="https://www.newswire.ca/news-releases/mcdonalds-becomes-the-first-restaurant-company-to-set-approved-science-based-target-to-reduce-greenhouse-gas-emissions-677353923.html">McDonald’s</a> plans to reduce its emissions intensity across its supply chain by 31 per cent by 2030 (baseline 2015) by targeting energy use and packaging waste in restaurants, and streamlining its beef production, which make up more <a href="https://sciencebasedtargets.org/2018/03/20/mcdonalds-has-pledged-to-slash-greenhouse-gas-emissions-its-charting-a-course-for-sustainable-growth/">60 per cent of emissions</a>.</p>
<p>Similarly, General Mills, the packaged food company (Cheerios, Yoplait and Green Giant) set a science-based target to cut its GHG emissions by 28 per cent by 2025 (from a 2010 baseline) across its entire value chain, from <a href="http://www.csrwire.com/press_releases/38222-General-Mills-Announces-New-Commitment-on-Climate-Change">farm to table to landfill</a>. It plans to do this by <a href="https://www.generalmills.com/en/News/Issues/climate-policy">getting its farmers to adopt sustainable practices that reduce emissions and protect at risk water sources</a>, for example. </p>
<p>Companies participate in global sustainability initiatives and set external goals because of their sustainability mindset, <a href="https://www.theguardian.com/sustainable-business/three-reasons-investors-consider-sustainability">strategic gains, external competitive or reputational risk pressures</a> and <a href="https://www.wri.org/our-work/project/mind-science-mind-gap-aligning-corporate-ghg-emissions-reduction-targets-climate-0">recognition of an inexorable shift to a low-carbon economy</a>. </p>
<p>While participation in the SBTi is voluntary, the results are reported publicly. Even though there are few tangible sanctions for non-performance, the absence of achievement or reporting can harm a company’s reputation.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Former U.S. Vice-President Al Gore speaks during the ‘Safeguarding the planet’ session at the annual meeting of the World Economic Forum in Davos, Switzerland, in January 2019.</span>
<span class="attribution"><span class="source">(AP Photo/Markus Schreiber)</span></span>
</figcaption>
</figure>
<p>In Canada, only nine companies have joined the SBTi, and all but one remain at the commitment-setting stage. <a href="https://www.cn.ca/-/media/Files/Delivering-Responsibly/Environment/CDP-2017-en.pdf">Canadian National Railway</a> has promised to reduce its emissions intensity by 29 per cent by 2030, based on a 2015 baseline. </p>
<p>There are several reasons for the low participation in SBTi among Canadian companies. <a href="https://www.cpacanada.ca/en/news/world/2018-12-07-climate-change-and-business">The Chartered Professional Accountants of Canada</a> argues that more than 99 per cent of businesses in Canada are small businesses, with fewer resources, employees and pressures.</p>
<h2>Key benefits</h2>
<p>SBTi and the participating companies, however, see a number of benefits from setting targets. They also provide companies with long-term goals that will be resistant to changes in management and shifts in business priorities.</p>
<p>A major European electric company, EDP, found <a href="https://www.huffingtonpost.com/entry/utility-edp-key-benefits-from-setting-a-science-based_us_595e0944e4b0cf3c8e8d5671">strategic benefits</a> in laying plans to decarbonize — it builds reputation, improves visibility and helps it benefit from innovation, and had a favourable response from investors, employees and customers. </p>
<p><a href="https://www.walmartsustainabilityhub.com/project-gigaton/emissions-targets">Walmart</a> says it is part of their sustainability journey to encourage others to look at emissions as a form of waste with financial value or inefficiency in the value chain. <a href="https://news.walmart.com/2017/04/19/walmart-launches-project-gigaton-to-reduce-emissions-in-companys-supply-chain">In 2017, it launched Project Gigaton</a> to encourage suppliers to eliminate one billion tonnes of GHG emissions from their operations and supply chains by 2030 by targeting one of six pillars: energy, waste, packaging, agriculture, forests or product use. Suppliers achieving goals and communicating performance publicly are recognized as “<a href="https://www.walmartsustainabilityhub.com/supplier-recognition">Giga-Gurus</a>.”</p>
<p><a href="https://www.unilever.com/news/news-and-features/Feature-article/2018/what-are-science-based-targets-and-why-do-we-use-them.html">Unilever</a> looks at science-based targets to boost its competitive advantage in the shift towards a low-carbon economy and to hedge against regulator pressures and the costs related to carbon pricing. In 2017, <a href="https://www.unilever.com/sustainable-living/reducing-environmental-impact/greenhouse-gases/">Unilever</a> reduced energy-related emissions by 47 per cent per tonne of production from 2008 levels, and shifted towards renewable energy in manufacturing. The company also identified a nine per cent increase in GHG emissions from its consumer products since 2010, largely due to the consumers’ <a href="https://www.unilever.com/sustainable-living/reducing-environmental-impact/greenhouse-gases/">hot showers</a> when using their products. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-divesting-of-fossil-fuels-could-help-save-the-planet-88147">How divesting of fossil fuels could help save the planet</a>
</strong>
</em>
</p>
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<p>The food and beverage sector — considered a <a href="https://www.globalpolicyjournal.com/blog/05/02/2019/will-science-based-targets-save-us-insights-global-food-industry">significant driver of global climate change</a> and the one with the <a href="https://oxfamilibrary.openrepository.com/bitstream/handle/10546/610563/tb-science-based-targets-carbon-emmissions-250516-en.pdf">most at risk from climate change</a> — has been an early adopter of science-based targets. Fifty-nine businesses, including Ben & Jerry’s and PepsiCo, have either set targets or are at the commitment stage. </p>
<p>Other global initiatives to encourage businesses to develop responsible practices and meet climate goals are also on the rise. For example, <a href="https://www.unpri.org/pri/about-the-pri">Principles for Responsible Investment</a> has attracted 2,232 investors who believe in an “economically efficient, sustainable global financial system” and who agree to incorporate environmental, sustainability and governance issues into their investment practice. </p>
<p><a href="https://www.newswire.ca/news-releases/majority-of-canadians-support-more-action-on-climate-change-615563183.html">Eighty-seven per cent of Canadians</a> believe businesses must make a stronger commitment to climate change action. Youth, in particular, are demanding more commitment, and future consumers such as Greta Thunberg are <a href="https://www.theguardian.com/environment/2019/feb/15/the-beginning-of-great-change-greta-thunberg-hails-school-climate-strikes">taking to the world stage and inspiring other students</a> to raise their voices.</p>
<p>It is unlikely that one company or one nation will make a significant impact on reducing emission levels, however, climate change can have significant impact on business.</p><img src="https://counter.theconversation.com/content/111303/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rumina Dhalla does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Business leaders are beginning to take the global climate issue seriously by setting science-based targets to reduce greenhouse gas emissions.Rumina Dhalla, Associate Professor, Organizational Studies and Sustainable Commerce, CSR/Sustainability Coordinator and MBA Graduate Coordinator, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1103802019-02-03T09:17:32Z2019-02-03T09:17:32ZThe fourth industrial revolution and sport: why we need to be vigilant<figure><img src="https://images.theconversation.com/files/256322/original/file-20190130-108334-1x63med.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ordinary citizens are mere consumers of sport now - mainly through watching it on television.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Sport has always been influenced by industrial revolutions through the millenia, starting way back in the late 18th century with the first industrial revolution. Each one since has dramatically affected sporting activities.</p>
<p>This is also true of the <a href="https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/">“Fourth industrial revolution”</a>, which has become one of the most prominent buzz phrases in international policymaking since it was first coined in 2016 by the World Economic Forum founder and executive chairperson, Klaus Schwab. The concept, which explains how a combination of technologies are changing the way we live, work and interact, was the <a href="https://www.cnbc.com/2019/01/16/fourth-industrial-revolution-explained-davos-2019.html">theme</a> of the forum’s annual meeting in Davos this year.</p>
<p>Schwab argued that this technological revolution is already underway and that it’s,</p>
<blockquote>
<p>blurring the lines between the physical, digital, and biological spheres.</p>
</blockquote>
<p>It refers to how technologies like artificial intelligence, robotics, virtual reality and the internet are merging with humans’ physical lives. It ultimately leads to a societal transformation similar to previous industrial revolutions. </p>
<p>All these changes have had a dramatic effect on sport, particularly through Artificial Intelligence which is directing sports coaching within areas ranging from gene sequencing to nanotechnology, renewables and quantum computing.</p>
<p>Another major change ushered in by the fourth industrial revolution has been the hyper-commercialisation of sport. Franchised sport conglomerates and corporate sponsors are in control in uncontrolled capitalist systems. Ordinary citizens are mere consumers of products, especially through television watching and consumption, rather than producers of values.</p>
<h2>First revolution</h2>
<p>The first industrial revolution spanned the period from about 1760 to around 1840. It was triggered by the ushering in of predominantly mechanical production. </p>
<p>Modern day sport emerged then, in part, as a consequence of the western European industrial revolution and colonisation, with Britain at the epicentre, during the second half of 18th century.</p>
<p>When public schools took off in Britain at the turn of the 19th century, character training became a <em>raison d'être</em>, for the elite. Sport was used to promote national solidarity and patriotism. As French philosopher <a href="http://www.bbc.co.uk/history/historic_figures/rousseau_jean_jacques.shtml">Jean Jacques Rousseau</a>, <a href="https://cdn.auckland.ac.nz/assets/press/all-books/pdfs/2012/palenski-the-making-of-nzers_sample.pdf">suggested</a>:</p>
<blockquote>
<p>sport had a special role to play in the production of patriots. </p>
</blockquote>
<p>The second industrial revolution started in the late 19th century when mass production became possible. This period witnessed the advent of electricity and assembly line production. </p>
<p>At the same time, international sport federations along mainly amateur lines were formed. Amateurism was the means that the landed aristocracy used to protect their social privileges. This they did through the establishment of clubs, associations and federations.</p>
<p>The third industrial revolution began in the 1960s and was catalysed by the development of semiconductors, mainframe computing (1960s), personal computing (1970s and 80s) and then the World Wide Web. Sports specialisation took off. Fields like Adapted Physical Activity, Sport Sociology, Sport History, Philosophy of Sport, Motor Behaviour, Sport Psychology and Biomechanics emerged. </p>
<p>This period also saw the advent of increased commercialisation and the professionalisation of sport. Large business, including the tobacco industry, were attracted to this development and started investing in sport science institutes. </p>
<h2>Sport and the fourth industrial revolution</h2>
<p>The fourth industrial revolution has been evolving in a deeply unequal world. In fact, in parts of the global south, the second or third industrial revolutions are still incomplete. Nearly 1.3 billion people still lack access to electricity. Four billion people, mostly in third world countries, lack internet access. </p>
<p>According to Schwab’s analysis, the winning nations will be those who are able to participate fully in innovation-driven ecosystems by providing new ideas, business models, products and services, rather than those who can offer only low-skilled labour capital. </p>
<p>Yet, most countries are experiencing an increase in joblessness, impoverishment and criminal elements among other social outcasts that constitute what Karl Marx termed the <a href="https://www.marxists.org/glossary/terms/l/u.htm"><em>lumpenproletariat</em></a>. They have little or no access to 21st century artificial intelligence. </p>
<p>What are the consequences for sport? </p>
<p>Unequal participation trends have emerged. The working class and the lumpen proletariat don’t benefit. They don’t have access to the growing number of artificial intelligence products that directs sport coaching. These range from gene sequencing to nanotechnology, renewables and quantum computing.</p>
<h2>Resistance</h2>
<p>A big challenge for progressive sport administrators and activists will be how to master (and challenge) this new world. Professional sport opened new markets of wealth creation, beyond the narrow nationalisms of the first, second and third industrial revolutions. But it’s only by embracing the nourishing aspects of traditional sport – honesty, enjoyment, health and fun – that societies can develop positive, common and comprehensive narratives. </p>
<p>This challenge can be met if communities take control of their sport organisations and administer them along the lines of traditional sport values. </p>
<p>Increased sport participation, in materially poor communities, can be achieved. This means asking hard questions. What is the continued and changing nature of sport? Also, who controls the means of sport production? What inequalities arise and what forms of resistance can be mobilised against these inequalities?</p>
<p>These will help assist community based sport activists as they organise communities in a very unequal material world of the 21st century.</p><img src="https://counter.theconversation.com/content/110380/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Francois Cleophas does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Making sport accessible to ordinary people can be achieved if communities take control of their organisations.Francois Cleophas, Senior Lecturer in Sport History, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1105302019-01-25T13:24:31Z2019-01-25T13:24:31ZImagining a Davos for the many that was actually serious about climate change<p>From the moment world leaders claiming to want to fight climate change arrived in private jets, the 2019 World Economic Forum in Davos attracted controversy. With global inequality growing and the threat of environmental destruction looming ever larger, the jets are getting <a href="https://www.fastcompany.com/90295752/what-climate-change-davos-bigwigs-slammed-for-taking-private-jets">larger and more expensive</a>. The <a href="https://www.aircharterserviceusa.com/about-us/news-features/news/1500-private-jets-predicted-to-descend-on-davos-this-week">director of one private charter company</a> says surging demand for his planes is partly down to “business rivals not wanting to be seen to be outdone by one another”.</p>
<p>This contradiction between rhetoric and action goes far beyond the use of private aircraft. It reveals the broader problems of allowing billionaires to not only control a disproportionate amount of the world’s wealth but also shape its political and economic agenda. While recognising the need for change, their solutions will almost always lead to a defence of the status quo from which they profit so handsomely.</p>
<p>Davos is just the tip of the iceberg of the more pervasive problem of “<a href="https://www.theguardian.com/news/2018/may/24/the-trouble-with-charitable-billionaires-philanthrocapitalism">charitable billionaires</a>”. On the surface, it would appear that having “the 1%” direct their wealth toward worthy causes is both laudatory and necessary. But such philanthrocapitalism promotes market-friendly policies and devalues the ability of democratic governments to provide social welfare or meet the needs of their citizens. As one critic <a href="https://www.jacobinmag.com/2018/02/charity-philanthropy-howard-buffett-congo">noted</a>: </p>
<blockquote>
<p>the problems capitalist philanthropists claim to be solving are rooted in the same economic system that allows them to generate such enormous wealth in the first place.</p>
</blockquote>
<p>An obvious answer may then be to simply dismiss the World Economic Forum and Davos altogether. Stopgap solutions such as seeking to address economic insecurity through employee “mindfulness and <a href="https://www.washingtonpost.com/posteverything/wp/2015/01/26/the-dark-underbelly-of-the-davos-well-being-agenda/?utm_term=.489eafc91d3e">well-being</a>” could be mocked, at best. </p>
<h2>An alternative and sustainable Davos?</h2>
<p>However, the ethos of Davos still has much to offer. It represents an effort to bring together global leaders and influencers to address problems that go beyond national borders. If anything, it would appear that we need more of these trans-national spaces for discussing technological innovation and social transformation.</p>
<p>For Davos to truly be effective though, it must stop serving as a space for elites to defend their status and power. It must no longer be a forum, for instance, for CEOs like Tim Cook of Apple to <a href="https://www.ft.com/content/46be5d76-1efa-11e9-b126-46fc3ad87c65">defend</a> his company and his executive allies from the legitimate “big tech backlash”. Rather, it should be an opportunity to force billionaires to invest in ambitious progressive solutions for solving the very problems they are primarily responsible for causing.</p>
<p>Climate change is a crucial place to start. At the moment, the most that pro-environmental voices such as New Zealand PM Jacinda Ardern can do is <a href="https://www.theguardian.com/business/live/2019/jan/22/davos-2019-financial-risks-climate-dangers-bolsonaro-attenborough-prince-william-arden-live?page=with:block-5c474839e4b00173154a9368#block-5c474839e4b00173154a9368">plead with elites</a> to “get on the right side of history and embrace ‘guardianship’ of the earth”. Alternatively, Davos could be used to promote a more ambitious green agenda and directly challenge the power of the billionaire class and the politicians who continue to prop them up.</p>
<p>Leading up to Davos, US congresswoman Alexandria Ocasio-Cortez made headlines by calling for a “Green New Deal”. It <a href="https://www.vox.com/energy-and-environment/2018/12/21/18144138/green-new-deal-alexandria-ocasio-cortez">proposes</a> to have the US become a global leader in “decarbonising” its economy within ten years. Further, it will achieve these aims through massive public investment, a federal jobs guarantee, and a dramatic increase in the taxing of high income. The growing public support for this plan has also been a platform for progressive lawmakers to question the huge US <a href="https://www.vox.com/policy-and-politics/2019/1/7/18171927/alexandria-ocasio-cortez-60-minutes-trump-racist">military budget and tax cuts</a>. Why, they ask, are war and wealth being prioritised over the housing, healthcare or the environment?</p>
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<p>This is a good beginning. Yet it would benefit from having the support of global movements and the capital of global elites. In an alternative world, Davos could be just such a venue for an international commitment to innovation and progressive change. Rather than just having countries fight to tax their richest citizens and corporations, they could also mandate that they have to invest a percentage of their profits in the ideas and agenda proposed by leading experts and activists around the world every year. In this case, it would be for helping to fund countries and communities to put in place a “green new deal”.</p>
<p>The roots of such an alternative are already growing in events like the “<a href="https://wsf2018.org/en/english-world-social-forum-2018/">World Social Forum</a>” which is an attempt to bring together community and political leaders with leading thinkers to imagine a different “world” to the corporate-friendly one supported by the World Economic Forum. Critically, it advocates “glocal” solutions, customised to local conditions. Davos, in this regard, could be a yearly corrective where those most affected by elite policies could put forward the specific solutions for them to rectify it.</p>
<p>For this to happen it would mean transforming the very ethos of Davos from one of “idea sharing” to that of democratic accountability and justice. It entails delinking social value and influence from economic wealth and the political influence it buys. Instead, Davos could be an annual opportunity for experts and “the people” to propose the best and most cutting edge ideas for redistributing this wealth to where it is truly needed and can do the most good. Scientists <a href="https://www.theguardian.com/environment/2018/oct/08/global-warming-must-not-exceed-15c-warns-landmark-un-report">warn</a> that we have only 12 years potentially left to avert a “climate change catastrophe”. It is why we need to create an alternative Davos “for the many, not the few” as soon as possible.</p><img src="https://counter.theconversation.com/content/110530/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Bloom does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The World Economic Forum in Davos must change its ethos from ‘idea sharing’ to one of democratic accountability and justice.Peter Bloom, Senior Lecturer in Organisation Studies, Department of People and Organisation, The Open UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1104112019-01-25T11:53:06Z2019-01-25T11:53:06ZWhy the Davos elites are still relevant<figure><img src="https://images.theconversation.com/files/255501/original/file-20190124-196244-1n8y7qo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A police officer stands guard over the global elites who decided to make the trek to Davos this year.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Switzerland-Davos-Forum/8413fe4b50ce4c9bac5aa27b1abc7335/19/0">AP Photo/Markus Schreiber</a></span></figcaption></figure><p>Has Davos lost its mojo?</p>
<p>After U.S. President Donald Trump, U.K. Prime Minister Theresa May and other world leaders <a href="https://www.ft.com/content/27926bca-1d99-11e9-b2f7-97e4dbd3580d">nixed plans to attend</a> the World Economic Forum annual meeting in Switzerland, some began to claim “<a href="https://www.washingtonpost.com/news/powerpost/paloma/daily-202/2019/01/22/daily-202-davos-is-in-decline-as-elites-fail-to-tackle-the-globe-s-biggest-problems/5c469bf11b326b29c3778c5c/?utm_term=.64987c0e12b4">Davos is in decline</a>.”</p>
<p>I take the opposite view. <a href="https://www.huffingtonpost.com/christopher-michaelson-phd/davos-2012_b_1245312.html">Having been there</a> in the past as part of a participant’s supporting staff – condescendingly referred to by <a href="https://www.weforum.org/agenda/2019/01/fewer-private-jets-in-davos-2019/">status-conscious attendees</a> <a href="https://www.weforum.org/agenda/2016/09/what-you-need-to-know-about-the-g20/">as a “sherpa”</a> – I have seen up close how much can be accomplished by a handful of people sitting in a room and talking. </p>
<p>As a <a href="https://www.stthomas.edu/hollorancenter/about/leadership/christopher-michaelson.html">philosopher and business ethicist</a>, I believe it’s worth remembering some of the history that’s been made in that rarefied Alpine air and why Davos still matters today. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=472&fit=crop&dpr=1 600w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=472&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=472&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=593&fit=crop&dpr=1 754w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=593&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/255505/original/file-20190125-196215-1rruip5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=593&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Yasser Arafat and Shimon Peres shake hands at Davos in 2001, their second meeting at the forum.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Associated-Press-International-News-Switzerland-/350fc46403e5da11af9f0014c2589dfb/19/0">AP Photo/Michel Euler</a></span>
</figcaption>
</figure>
<p>The stated aim of the World Economic Forum – which we commonly refer to by the name of the ski resort in the Swiss Alps where it is held – is “<a href="https://www.weforum.org/our-impact">improving the state of the world</a>.”</p>
<p>It does this by promoting <a href="http://www3.weforum.org/docs/WEF_AM19_Meeting_Overview.pdf">global collaboration</a>, <a href="https://www.foreignaffairs.com/articles/2008-01-01/global-corporate-citizenship">capitalism that includes many stakeholders</a> and <a href="https://www.weforum.org/about/world-economic-forum">public-private cooperation</a>.</p>
<p>Numerous international agreements and breakthroughs have emerged from Davos. Examples include <a href="http://www.bbc.com/news/business-35285852">preventing war</a> between Turkey and Greece in the 1980s and <a href="http://www.nytimes.com/2012/01/29/business/global/in-davos-europe-is-pressed-for-debt-crisis-solution.html">helping resolve the eurozone’s debt crisis</a> in 2012 – the year I was last there. It brought together world leaders as oppositional as South Africa’s <a href="https://www.flickr.com/photos/15237218@N00/963931930/">Nelson Mandela and F.W. de Klerk</a> in 1992 and <a href="http://www.dailyherald.com/storyimage/DA/20160927/news/160928811/EP/1/6/EP-160928811.jpg&updated=201609272331&MaxW=800&maxH=800&noborder">Yasser Arafat and Shimon Peres</a> in 1994 and 2001. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=367&fit=crop&dpr=1 600w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=367&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=367&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=461&fit=crop&dpr=1 754w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=461&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/255503/original/file-20190124-196250-1c2yh07.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=461&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Prince William and Sir David Attenborough watch the latter’s new documentary ‘Our Planet.’</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/APTOPIX-Switzerland-Davos-Forum/640d31808598444ca0d598551cf2e9aa/128/0">AP Photo/Markus Schreiber</a></span>
</figcaption>
</figure>
<p>But Davos doesn’t need to make a breakthrough in an ancient conflict to be effective. Its theme this year, “<a href="https://www.iafrica.com/wef-in-davos-globalisation-4-0-what-does-that-mean/">Globalization 4.0</a>,” served as an important rebuke to the <a href="https://theconversation.com/why-the-rise-of-populist-nationalist-leaders-rewrites-global-climate-talks-107870">nationalists emerging</a> in the world today who have shown a <a href="https://www.msnbc.com/stephanie-ruhle/watch/business-leaders-concerned-about-rise-of-u-s-nationalism-populism-1430526531560">disdain for multilateralism</a> and a preference for <a href="https://www.usnews.com/opinion/thomas-jefferson-street/articles/2017-09-14/donald-trump-and-the-rise-of-zero-sum-politics">confrontation over cooperation</a>. </p>
<p>And in fact, <a href="https://www.cnn.com/2019/01/22/economy/central-banks-global-economic-slowdown/index.html">most</a> of the <a href="https://www.nytimes.com/2019/01/23/technology/world-economic-forum-data-controls.html">sessions</a> <a href="https://www.ft.com/content/47c36e02-1fb6-11e9-b126-46fc3ad87c65">focused</a>, as I believe they should, on <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting/programme">finding cooperative ways</a> to solve the world’s pressing problems. </p>
<p>And the world <a href="https://www.reuters.com/article/us-davos-meeting-climatechange/failure-to-curb-climate-change-a-top-risk-davos-survey-idUSKCN1PA13J">has many to deal with</a>, from worsening economic inequality and climate change to the growing scarcity of water. <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting/programme">All were discussed</a> at Davos this year.</p>
<p>Were any breakthroughs made? Maybe not. </p>
<p>Davos cannot realistically be expected to solve the world’s problems in less than a week each year. But despite its elite reputation, I believe it helps direct attention toward actually making the world better for everyone – and not just the elites in the audience.</p><img src="https://counter.theconversation.com/content/110411/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Michaelson is affiliated with the World Economic Forum as a member of its Expert Network. </span></em></p>The high-profile absence of several world leaders including Trump from the World Economic Forum has led some to suggest its influence is in decline. A philosopher who has seen Davos up close disagrees.Christopher Michaelson, Professor of Ethics and Business Law, University of St. ThomasLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/908742018-02-06T13:08:57Z2018-02-06T13:08:57ZDigital dark age fears stoked by Davos elite do little to address cybersecurity<figure><img src="https://images.theconversation.com/files/205067/original/file-20180206-14096-dcg9y3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/hexagon-network-covering-world-map-glowing-660792934?src=vv5AqSpZwD2gOpWaL6sEvQ-1-72">Shutterstock</a></span></figcaption></figure><p>Business leaders who recently convened in Davos for the annual <a href="https://www.weforum.org/">World Economic Forum</a> fretted over the various catastrophes that could hit the globe hard and – given the recent spate of cyberattacks – cybersecurity was high up on the agenda.</p>
<p>The end result was the launch of a <a href="https://www.weforum.org/press/2018/01/to-prevent-a-digital-dark-age-world-economic-forum-launches-global-centre-for-cybersecurity">Global Centre for Cybersecurity</a> (GCC) with a clear mission to “prevent a digital dark age”. It claims to be the first platform for cybersecurity coordination on a global scale, bringing together governments, business and law enforcement agencies. The importance of cybersecurity is growing not only for traditional computer networks but also for “artificial intelligence, robotics, drones, self-driving cars and the Internet of Things”.</p>
<p>Cyberattacks are like any other crime, except that the origins and reach can be global. Put simply, a cyber criminal in one country can reach out to target victims at the other end of the world. Likewise, a gang of cyber criminals could organise themselves across several countries to target their victims. </p>
<p>It’s the unfortunate reality of the connected world we live in, where the internet doesn’t only provide connectivity but also anonymity and transient access, all of which serve to enable such attacks. </p>
<p>On top of that, parallel structures over the internet – known as the <a href="https://theconversation.com/what-is-the-dark-web-and-how-does-it-work-63613">dark web</a> – have emerged to facilitate cyber attacks of all kinds, allowing a black economy to thrive and be marketised. </p>
<p>This year’s <a href="http://reports.weforum.org/global-risks-2018/">Global Risk Report</a> places cyberattacks in the top five global risks, behind only extreme weather events and natural disasters. The World Economic Forum <a href="http://reports.weforum.org/global-risks-2018/global-risks-2018-fractures-fears-and-failures/">said</a>:</p>
<blockquote>Most attacks on critical and strategic systems have not succeeded – but the combination of isolated successes with a growing list of attempted attacks suggests that risks are increasing. And the world’s increasing interconnectedness and pace heightens our vulnerability to attacks that cause not only isolated and temporary disruptions, but radical and irreversible systemic shocks.</blockquote>
<p>It’s clear that a globally coordinated approach to cybersecurity is essential.</p>
<p>While this is laudable, there have been similar efforts over the past decade or so – with mixed results. The <a href="https://www.coe.int/en/web/conventions/full-list/-/conventions/treaty/185">Budapest Convention on Cybercrime</a>, launched in 2001 by the <a href="https://www.coe.int/en/web/portal">Council of Europe</a>, was one such attempt to align laws and to enable a key provision of securing digital evidence across jurisdictions to effectively resolve investigations. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2615789">Harmonisation</a>, however, has been a challenge with <a href="https://www.theregister.co.uk/2017/07/27/asia_can_take_world_beyond_budapest_convention_on_cybercrime/">competing regional efforts emerging</a> in various parts of the world.</p>
<p><a href="https://ccdcoe.org/">NATO’s Cooperative Cyber Defence Centre of Excellence</a> based in Tallinn, Estonia, is another such effort. It has played a major role in help producing the <a href="https://ccdcoe.org/tallinn-manual.html">Tallinn Manual</a>, which is the most comprehensive of international treaties for cyberspace law. Its impact is severely limited, however, because it is strictly an academic study and legally non-binding. </p>
<h2>Geopolitics and cybersecurity collide</h2>
<p>The quality of a state’s capacity to respond to such a <a href="https://theconversation.com/its-the-year-2020-hows-your-cybersecurity-57868">complex</a> problem is rapidly being recognised as an important element of global competitiveness. What, then, could global coordination achieve for effective cybersecurity?</p>
<p>A key aim of the proposed GCC is to work towards an appropriate and agile regulatory framework on cybersecurity. Regulatory alignment needs significant teamwork on global policy at all levels, sometimes from officials with little relevant expertise. They are required – often in time-critical scenarios – to assess evidence from a mix of sources including official threat intelligence, academic sources and industry threat reports. </p>
<p>All of which present policy challenges. How effective is the threat assessment? How good is the risk perception associated with a potential cyber attack? How are consequences judged, particularly in terms of critical and national assets? How does one account for a proportionate response, especially when it is <a href="https://theconversation.com/cyber-espionage-is-more-difficult-to-pin-to-a-state-than-spying-in-the-physical-world-32977">nearly impossible to pin down perpetrators</a>? And, most importantly, how do we shape future policy to address these questions? </p>
<p>The <a href="http://www.gcsp.ch/">Geneva Centre for Security Policy (GCSP)</a>, a leading security thinktank, plays host to an <a href="http://www.atlanticcouncil.org/programs/brent-scowcroft-center/cyber-statecraft/cyber-9-12">annual student competition</a> to address these questions. Competing teams from all over the world enter the competition and attempt to present a set of viable policy options for each round of the game. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=406&fit=crop&dpr=1 600w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=406&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=406&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=510&fit=crop&dpr=1 754w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=510&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/205068/original/file-20180206-14107-1gize12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=510&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Business folk hitch a ride at the World Economic Forum in Davos, where cyber risks were a hot topic.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/davos-switzerland-jan-25-2018-working-1011856720?src=Rr_Ux6WAl-n9y-Bacy-5uQ-1-17">Shutterstock</a></span>
</figcaption>
</figure>
<p>A panel of judges choose winners for each round based on the most appropriate response to a set of cybersecurity threats identified. As rounds proceed, the scenarios escalate becoming more complex. The winning team is the one that demonstrates excellence in deep technical knowledge and international relations skill. It’s an example of a truly global competitive effort. Could such games pave the way for a globally-coordinated <a href="https://www.oecd.org/cfe/leed/44681969.pdf">capacity building</a> initiative which seeks to allow all members – including the poorest and most disadvantaged – to develop skills and competencies?</p>
<p>Perhaps, but capacity building is only one challenge. How would a global effort serve to resolve national concerns over an <a href="https://gspp.berkeley.edu/research/featured/the-cyber-security-challenge">overt declarative policy</a>, effective deterrence, guarantee of civil liberty, democratic oversight and use of public-private cooperation for cyberspace? How would age-old political fault lines be resolved in the Middle East and East Asia, which <a href="https://www.weforum.org/agenda/2016/05/who-are-the-cyberwar-superpowers/">persist</a> across cyberspace? And how would new <a href="https://www.reuters.com/article/us-africanunion-summit-china/china-denies-report-it-hacked-african-union-headquarters-idUSKBN1FI2I5">global cyber conflicts</a> be prevented?</p>
<p>The GCC undoubtedly offers a reasonable proposition to nation states, by urging them to collaborate on overcoming cyber threats in a coordinated way. But for such a noble goal to work, it requires deeper resolve to deliver and a level of national commitment unprecedented over previous efforts. Given the increased global uncertainty, we are yet to have faith.</p><img src="https://counter.theconversation.com/content/90874/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Siraj Ahmed Shaikh receives funding from EPSRC. </span></em></p>Cyberattacks are in the top five global risks, behind extreme weather events and natural disasters. But global cooperation remains deeply problematic.Siraj Ahmed Shaikh, Professor of Systems Security, Coventry UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/908032018-01-29T11:30:21Z2018-01-29T11:30:21ZWhy it’s too soon for Davos billionaires to toast Trump’s ‘pro-business’ policies<figure><img src="https://images.theconversation.com/files/203670/original/file-20180128-100929-1dvdiu9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">SAP CEO Bill McDermott and Siemens chief Joe Kaeser flank Trump as they praise him for his tax cut.</span> <span class="attribution"><span class="source">AP Photo/Evan Vucci</span></span></figcaption></figure><p>The moguls of global business, who met recently in Davos for the World Economic Forum, may not like Donald Trump’s style. But, if a <a href="https://www.nytimes.com/2018/01/26/business/trump-davos-speech-response.html">series</a> of <a href="https://www.nytimes.com/2018/01/22/business/davos-world-economic-forum-populism.html">reports</a> by <a href="https://www.nytimes.com/2018/01/23/us/politics/trump-davos-elites.html">The New York Times</a> and <a href="https://www.washingtonpost.com/business/economy/trump-wins-over-global-elites-at-davos-all-it-took-was-a-15-trillion-tax-cut/2018/01/25/3c688624-0201-11e8-8acf-ad2991367d9d_story.html7">other</a> <a href="http://money.cnn.com/2018/01/23/news/economy/ceos-love-us-trump-tax-cut-davos/index.html">outlets</a> are to be believed, Trump’s pro-business policies are making it easier for them to forgive his foibles. </p>
<p>Klaus Schwab, the head of the forum, put it <a href="https://www.nytimes.com/2018/01/26/business/trump-davos-speech-response.html?ribbon-ad-idx=7&rref=homepage&module=Ribbon&version=origin&region=Header&action=click&contentCollection=Home%20Page&pgtype=article">this way</a> as he introduced President Trump before his Jan. 26 speech: “On behalf of the business leaders here in this room, let me particularly congratulate you for the historic tax reform [that is] fostering job creation while providing a tremendous boost to the world economy.”</p>
<p>Many attendees <a href="https://www.nytimes.com/2018/01/26/business/trump-davos-speech-response.html">praised</a> <a href="https://theconversation.com/what-trumps-every-country-for-itself-rhetoric-gets-wrong-about-davos-90792">Trump’s speech itself</a> – bolstered by the impression members of his administration gave at the forum – for pragmatism and a “very constructive mind-set.”</p>
<p>Such wonky gushing is shortsighted, however, and ignores the long-term risks of Trumpism for the economic prosperity of the U.S. and the world. Research into the politics of economic growth – one of my areas of expertise – explains why. </p>
<h2>Don’t pop the champagne corks yet</h2>
<p>Since becoming president, Trump has overseen significant <a href="https://www.csmonitor.com/Business/2018/0105/Trump-s-deregulation-drive-is-epic-in-scale-and-scope.-And-yet">deregulation</a> in several industries, and his signature economic initiative is a <a href="https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-tax-cuts-delivering-hardworking-americans-manufacturers/">major tax cut</a> focused on businesses. The <a href="https://www.cnn.com/2018/01/05/politics/trump-dow-jones-interactive/index.html">strong performance</a> of the U.S. stock market suggests investors, at least, are quite smitten with his policies.</p>
<p>It is true that tax cuts and deregulation can provide a fiscal stimulus and, when done correctly, can even <a href="http://www.france24.com/en/20180123-imf-global-growth-boost-trump-tax-cuts">spur growth</a> by encouraging investment. It is also true that many in the business community are <a href="https://www.nytimes.com/2018/01/24/business/trump-davos-follow-the-money.html">relieved</a> that Trump seems <a href="https://theconversation.com/trumps-brand-of-economic-populism-gets-a-makeover-in-first-100-days-76077">uninterested</a> in following through on his populist rhetoric.</p>
<p>But it is important to remember that the long-term business costs of Trump’s destabilizing influence are likely to be much greater than any short-term policy benefits. This is because businesses must operate within a social and political context, one that influences their success at every step.</p>
<p>Trump’s behavior since taking office – his <a href="https://twitter.com/realDonaldTrump?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor">willingness to ignore</a> the norms of civil discourse, his <a href="http://billmoyers.com/story/trump-russia-timeline/">possible links</a> to the authoritarian regime in Russia, his <a href="http://www.bbc.com/news/world-us-canada-38069298">problematic business interests</a> and, especially, his contempt for the <a href="https://www.brennancenter.org/analysis/his-own-words-presidents-attacks-courts">judiciary</a> and the <a href="https://www.washingtonpost.com/outlook/how-to-work-for-a-president-who-hates-the-civil-service/2018/01/26/34dbe95c-0204-11e8-bb03-722769454f82_story.html">professional civil service</a> – has eroded global <a href="https://www.npr.org/2018/01/17/578422668/heres-just-how-little-confidence-americans-have-in-political-institutions">confidence</a> in American institutions. </p>
<p>This is a serious problem for business. Research has confirmed <a href="http://whynationsfail.com/summary/">over</a> and <a href="http://www.cambridge.org/us/academic/subjects/politics-international-relations/political-economy/institutions-institutional-change-and-economic-performance">over</a> the link between open and stable political institutions and economic growth. We now know that <a href="https://www.sciencedirect.com/science/article/pii/S2340943615000195">entrepreneurship</a>, <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2342668">natural resource wealth</a> and even <a href="https://press.princeton.edu/titles/8494.html">the right economic policies</a> are not enough to bring prosperity, when people are unable to trust the integrity of a country’s political and legal system. Instability <a href="https://dash.harvard.edu/bitstream/handle/1/4553024/alesina_instabilitygrowth.pdf?s">deters investment</a>, both foreign and domestic, and raises fears that the benefits of hard work will not be rewarded.</p>
<h2>The China exception?</h2>
<p>At first glance, the phenomenal growth experienced by autocracies such as China and Singapore may seem to be exceptions to this rule. But a comparative view shows that stability is critical for growth even among authoritarian regimes. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2478.2012.00753.x/abstract">My own research</a> (co-authored with political scientist Daniel Kuthy) suggests that more institutionalized and stable dictatorships are more inclined to choose economic policies that promote growth. And <a href="https://www.amazon.com/Political-Institutions-Dictatorship-Jennifer-Gandhi/dp/0521155711/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=">research by Emory University’s Jennifer Gandhi</a> has made the link between authoritarian stability and growth even more directly.</p>
<p>Even so, <a href="https://www.amazon.com/Globalizing-Innovation-Institutions-Investment-Economies-ebook/dp/B078X54VRC/ref=sr_1_1?s=books&ie=UTF8&qid=1517192617&sr=1-1&keywords=politics+fdi">stable</a> <a href="https://www.amazon.com/Nation-States-Multinational-Corporation-Political-Investment-ebook/dp/B003NUSAP6/ref=sr_1_4?s=digital-text&ie=UTF8&qid=1517192929&sr=1-4">democracy</a>, with its transparency and its rule of law, is the best sort of government for business. Such countries as <a href="http://natoassociation.ca/exploring-the-effects-of-economic-instability-in-venezuela/">Venezuela</a> and <a href="https://www.chathamhouse.org/expert/comment/turkish-economy-struggling-political-volatility">Turkey</a> have experienced negative economic consequences after backsliding from democracy.</p>
<h2>Business and society</h2>
<p>Economic growth is also <a href="http://www.seh.ox.ac.uk/sites/default/files/DP15.pdf">tightly linked</a> to <a href="https://press.princeton.edu/titles/5105.html">social</a> cooperation and peace. </p>
<p>When there is a high level of antagonism in society, whether by class, race, ethnicity, gender, geography or something else, businesses must operate in a much more complicated environment. There is a greater threat of strikes, reduced public support for liberal markets, and more challenges in the workplace and in product marketing.</p>
<p>It is here that Trump’s statements and behavior, from his <a href="https://newrepublic.com/article/146683/trump-fox-news-mainstreaming-white-nationalism">failure to condemn</a> white nationalists to his well established <a href="http://www.telegraph.co.uk/women/politics/donald-trump-sexism-tracker-every-offensive-comment-in-one-place/">sexism</a>, can be so harmful. The highly <a href="https://mitpress.mit.edu/books/polarized-america">polarized</a> climate of today, quite apart from the <a href="https://www.nytimes.com/2018/01/27/opinion/sunday/democracy-polarization.html">inherent problems</a> it creates, is <a href="http://onlinelibrary.wiley.com/doi/10.1111/ecin.12070/abstract">bad</a> for business.</p>
<p>Moreover, social peace is <a href="http://www.cambridge.org/us/academic/subjects/economics/industrial-economics/inequality-and-industrial-change-global-view?format=PB&isbn=9780521009935#S3Y3gDuBLrcfG1hz.97">connected</a> to levels of economic inequality. This is where even the policies that many businesses support can have seriously <a href="https://www.economist.com/blogs/economist-explains/2014/05/economist-explains">negative repercussions</a> in the long term. Analysts agree that Trump’s tax cuts will have the effect of <a href="http://fortune.com/2017/11/03/trump-gop-tax-plan-cuts-2017/">concentrating wealth</a> even more fully in the hands of the few. For businesses, the short-term benefits of a tax concession should not outweigh the risks posed by increased inequality and polarization.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/203709/original/file-20180129-100908-ntfxyu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/203709/original/file-20180129-100908-ntfxyu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=352&fit=crop&dpr=1 600w, https://images.theconversation.com/files/203709/original/file-20180129-100908-ntfxyu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=352&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/203709/original/file-20180129-100908-ntfxyu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=352&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/203709/original/file-20180129-100908-ntfxyu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=443&fit=crop&dpr=1 754w, https://images.theconversation.com/files/203709/original/file-20180129-100908-ntfxyu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=443&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/203709/original/file-20180129-100908-ntfxyu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=443&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Most of those who attend the meeting in Davos, including CEOs, have a more internationalist bent than Trump. From left to right, Christine Lagarde, managing director of the International Monetary Fund, Erna Solberg, prime minister of Norway, Virginia Rometty, CEO of IBM, Chetna Sinha, president of the Mann Deshi Foundation, Fabiola Gianotti, director of the European Organization for Nuclear Research, Sharan Burrow, general secretary of the International Trade Union Confederation, and Isabelle Kocher, CEO of ENGIE.</span>
<span class="attribution"><span class="source">AP Photo/Markus Schreiber</span></span>
</figcaption>
</figure>
<h2>Trumpism abroad</h2>
<p>Most of the corporate CEOs who gathered in Davos <a href="https://theconversation.com/trump-at-davos-can-america-first-lead-to-shared-prosperity-across-the-world-90792">have a distinctly international orientation</a>. President Trump’s “<a href="https://theconversation.com/us/topics/america-first-34020">America First</a>” policies are likely to harm their interests much more than those of domestic business leaders. </p>
<p>For international businesses to function, a network of global agreements and understandings is necessary. The countries of the world have built this network over decades, largely under the leadership of the United States. </p>
<p>If the primary architect of this system no longer supports it, there is a risk that new impediments to trade and capital flows will make economic interdependence <a href="https://theconversation.com/trumps-america-first-trade-policy-ignores-key-lesson-from-great-depression-87477">harder to sustain</a>. While supporters of globalization are <a href="https://www.nytimes.com/2018/01/24/us/politics/trump-trade-america-first-davos.html">moving forward</a> without the Trump administration, the world should not be sanguine about the future of the liberal economic order without active American support.</p>
<p>Just as seriously, an international conflict could have a severely <a href="http://onlinelibrary.wiley.com/doi/10.1111/1468-2478.00042/full">detrimental</a> impact on <a href="https://www.huffingtonpost.com/michael-shank/economic-consequences-of-_b_1294430.html">economic activity</a>. Loose talk from the Trump administration, to the extent that it <a href="http://thehill.com/homenews/administration/347783-poll-68-percent-think-trump-could-accidentally-get-us-in">increases the risk of war</a>, is a serious threat to business success.</p>
<p>For all of these reasons, the optimism that many seemed to be feeling at Davos is misplaced. Businesses operate within a social and political context, and when that context is destabilized, they cannot escape the consequences.</p><img src="https://counter.theconversation.com/content/90803/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Hankla does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The billionaires, business leaders and other elites who gathered in Davos praised the president’s policies, yet research on the politics of economic growth suggests it’s too soon to celebrate.Charles Hankla, Associate Professor of Political Science, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/907322018-01-28T16:54:49Z2018-01-28T16:54:49ZViolent past, digital future: Angela Merkel’s remarks at Davos<figure><img src="https://images.theconversation.com/files/203616/original/file-20180127-100915-iv720x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Merkel after her address in Davos</span> <span class="attribution"><span class="source">AP Photo/Markus Schreiber</span></span></figcaption></figure><p>Two world wars and a genocide have a way of focusing the mind. </p>
<p>Maybe that’s why references to “lessons of the past” are almost ritualistic in addresses such as German Chancellor Angela Merkel’s to the World Economic Forum. Here’s how Merkel checked that box in Davos:</p>
<blockquote>
<p>“100 years after the end of the First World War, and with eyewitnesses to the Second World War dying off, we must ask: have we really learned from this history, or haven’t we?”</p>
</blockquote>
<p>In the era of Brexit, though, such statements are not just ritual. They are also a reminder that the European Union was created not to tweak trade measures or to massage monetary policies, but to make Europeans stop killing each other. As Merkel noted, the generations born after World War II will determine whether those lessons stick. Her implicit message was that the jury is still out. </p>
<p>Yet in Merkel’s remarks, the generational divide appeared most consequential not in attitudes toward the European Union or immigration, but rather in another context: digitalization.</p>
<h2>The postwar generations</h2>
<p>Merkel was born in 1954: a true representative of the postwar generation. Yet she appeared at Davos, as she does in so many international settings, as the staid senior counterpoint to France’s flashier President Emmanuel Macron, who was born in 1970. To express concern about “postwar generations” is not necessarily to hand elders the moral upper hand: Today’s seniors as well as young people are products of postwar Europe. </p>
<p>The economic challenges of an aging society are familiar in Europe. Fewer working people paying into the system, more retirees drawing from it. Yet Merkel also lamented another pitfall of an aging population – a lack of appetite for innovation, particularly in regard to digital technologies. Germany, Merkel bluntly said, is far behind the digital curve. Yet delaying digitization because seniors are comfortable without it is a disservice to younger generations. </p>
<p>Nevertheless, Merkel held, Europe has a critical role to play in shaping the digital future by navigating the issue of ownership of data. As she put it: In the United States, private firms have nearly uninhibited ownership of data; in China, the bodies collecting data and the state function almost as a single unit. Europe’s social market economy offers a middle way: a more just digital order built on a balance between private ownership and state control of data.</p>
<p>The “social market economy” does not just evoke Europe’s more generous welfare and labor policies. It is also a historical reference: a nod to the architects of postwar West Germany, who sought a middle way between free market capitalism and a state-planned economy. In the 1950s, memories of capitalism’s failure in the Great Depression, and its catastrophic political consequences, were close at hand. The equally frightening counterpart was the repressive, state-command economy of the USSR and its satellites. Now, Merkel seemed to say, the social market economy not only remains necessary: It should be a model for solving a distinctly 21st-century problem.</p>
<p>Germany’s concern for privacy is also a legacy of the past. During the Great Depression, social workers’ collection of information to assist with clients’ medical and mental health needs seemed like a good idea – until the Nazis got their hands on all those records. For decades after the war, West Germany took painstaking measures to protect citizens’ privacy. The state-run telephone company, for example, did not keep records of numbers dialed by customers lest someone, someday be tempted to use those records to track a private citizen’s telephoning habits. </p>
<p>That was all well and good as long as the state had a monopoly on telephone lines. </p>
<p>If older Germans show little appetite for full-bore digitalization, younger Germans are as quick to post selfies in an age of facial recognition technology as their U.S. counterparts. Germany maintains stricter privacy laws than many other states, but German industry complains that such laws hinder innovation. As Merkel put it, “The Europeans haven’t decided how we want to handle data, and there’s a great danger that we may be too slow, that the world may steamroll us as we conduct philosophical debates about the sovereignty of data.” </p>
<p>Merkel’s metaphoric eye-roll at “philosophical debate” evoked a popular stereotype of Europeans - but one with queasy associations. The Weimar-era Nazis and Communists mocked parliamentary democracy as an impotent debating society. They, by contrast, were parties of action.</p>
<p>Merkel is not criticizing parliamentary democracy. She’s trying to save it from a <a href="https://theconversation.com/merkels-challenge-governing-germany-in-an-age-of-rising-nationalism-84577">re-emergent radical right</a>. But in an era when firms like Google are more powerful than most states on the planet, liberal democracy faces a threat that is at least as potent as xenophobic political parties: preservation of the rights of the individual if individuals’ data is the property of private corporations or the state. </p>
<p>Merkel’s – and Europe’s – quandary is this: how to move forward in the digital age when Europe’s contribution is to seek balance between state power, individual rights and the dynamism of capitalism. Achieving that balance – achieving any balance – means slowing things down. It means philosophizing.</p>
<p>And so the question at hand may not be: Will postwar generations remember the lessons of the 20th century? Rather, the real question may be: Is this history an adequate guide to our present-day circumstances? And if it isn’t, can Germany, Europe or some other actor find an alternative in time to save us from the privacy-wrecking options already in play?</p><img src="https://counter.theconversation.com/content/90732/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elizabeth Heineman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Will young Germans remember their history – and will older German embrace the digital future?Elizabeth Heineman, Professor of History and Gender, Women's, and Sexuality Studies, University of IowaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/907442018-01-27T02:38:40Z2018-01-27T02:38:40ZMacron calls for a ‘global contract’ at Davos<figure><img src="https://images.theconversation.com/files/203564/original/file-20180126-100926-h3klf3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Macron in Davos on Jan. 24, 2018, where he argued that economic growth wasn't an end in itself.</span> <span class="attribution"><span class="source">AP Photo/Markus Schreiber</span></span></figcaption></figure><p>French President Emmanuel Macron’s speech at the World Economic Forum in Davos on Jan. 24 called for nation-states and businesses to join in a “true global contract” to invest in human capital, and meet the challenges of terrorism and climate change.</p>
<p>“Globalization is undergoing a major crisis,” Macron said, “and this enormous challenge requires a collective effort.”</p>
<hr>
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<h2>A ‘cultural shift’</h2>
<p>In terms of domestic policy, Macron proclaimed France’s commitment to creating a business-friendly environment. Speaking in English for the first 20 minutes of his speech, he declared “France is back!” This was an implicit challenge to the United States, which under President Donald Trump has threatened to ignite a trade war by <a href="http://www.cnn.com/2017/08/28/politics/trump-china-tariffs/index.html">implementing costly protective tariffs</a>.</p>
<p>Macron’s domestic program is also a repudiation of France’s long-standing commitment to social protection and a regulated form of capitalism. France’s postwar policies, he said, produced a nation in which companies were both “forbidden to fail” and “forbidden to succeed.”</p>
<p>Macron’s economic reforms aim to improve French productivity and competitiveness by encouraging a more flexible labor market, essentially by making it easier for firms to fire their employees. In the past, French governments have hesitated to push such reforms, because of the <a href="https://www.economist.com/blogs/economist-explains/2014/03/economist-explains-15">long-standing power of French unions</a>. Macron appears to believe that his <a href="https://www.nytimes.com/2017/05/07/world/europe/emmanuel-macron-france-election-marine-le-pen.html">decisive defeat</a> of both the candidates of the left and the right in last year’s presidential election gives him more leverage in this fight than his predecessors François Hollande and Nicolas Sarkozy.</p>
<p>Macron also boasted of a “cultural shift” taking place in France. No longer would the French government assume that adjusting social inequalities with tax policy and job protections was enough. He promised instead that his government would address the fundamental causes of inequality, rather than simply try to “correct” it with taxpayer money. Significantly, his speech gave no specifics on how he would accomplish this, beyond his general enthusiasm for economic growth.</p>
<h2>En Français</h2>
<p>Switching to French, Macron made a very different argument about the global economy. Economic growth, he stated, can never be an end in itself. A world where all nations compete against one another has led to an unsustainable Darwinian struggle, a race to the bottom. Short-term profits accrue to the few. The distribution of wealth in the world is increasingly unjust.</p>
<p>Macron pointed out that a commitment to growth at all costs creates serious divisions within nations. New technologies and the disproportionate growth and power of the financial sector have created winners and losers in every country. The “nomadic” and talented few who are able to adapt to the new economy move easily from New York to London to Tokyo and back, Macron suggested. Many more cannot adapt and are left behind.</p>
<p>In this way, Macron argued, democracies are corroded from within, providing fertile ground for nationalists whose only solution is to turn inward and close the borders against the world. Populist parties in Europe and North America blame globalization for all their problems. Their leaders pull out of international agreements at precisely the moment when cooperative efforts are most needed. Macron did not name names in his speech, but the audience at Davos certainly understood the reference: Trump’s <a href="https://www.forbes.com/sites/phillevy/2018/01/22/the-nafta-withdrawal-threat-is-real/#b30b82b6458c">attacks on NAFTA</a> and the Trans-Pacific Partnership; British <a href="https://theconversation.com/brexit-is-on-britain-votes-to-leave-the-eu-experts-respond-61576">voters opting for Brexit</a>; and France’s <a href="https://www.nytimes.com/2017/01/23/us/politics/tpp-trump-trade-nafta.html">own National Front calling</a> for the French to leave the EU.</p>
<p>For Macron this is the danger of the present moment: a relapse into a sterile nationalism that is incapable of addressing the real challenges posed by the present. </p>
<h2>Three obligations</h2>
<p>Macron called for a “true global contract” that rests on three obligations that fall equally on nation-states, their populations and private businesses. </p>
<p>The first is the “duty to invest,” particularly in the education of young women in developing countries. </p>
<p>The second obligation is the “duty to share” both the profits and costs that accompany the new economy. </p>
<p>Finally, Macron insisted that the global contract implies a collective “duty to protect.” The challenges of terrorism, large-scale migrations and climate change can only be met with a collective, multilateral effort. </p>
<p>Macron’s global contract sounds eerily like the promises of the postwar European welfare states: Invest in human capital through subsidies of education, redistribute the value generated by capitalism to all participants in the global economy, and protect the vulnerable through multilateral and cooperative policies that involve both states and the private sector. </p>
<p>The difference, of course, is that France’s older social model depended on a strong state to mediate the clash of interests between employers and labor. His “global contract” is a form of multilateralism that includes both states and nonstate actors. It lacks a mediating force to insist that everybody play by the rules.</p>
<p>Macron’s hope is that a united Europe might play this mediating role. A democratic Europe might thread the needle between the unregulated capitalism often endorsed by the United States and the statist and anti-democratic model provided by China. It’s a compelling vision, but even the optimists will admit that it is easier to see the paths that lead to failure than to success. Macron understands the stakes — but seems to see no other option.</p><img src="https://counter.theconversation.com/content/90744/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joshua Cole does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>French companies will no longer be ‘forbidden to fail’ and ‘forbidden to succeed,’ the French president tells the World Economic Forum.Joshua Cole, Professor of History, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/904472018-01-25T19:13:54Z2018-01-25T19:13:54ZVital Signs: what the Davos meeting is good for<figure><img src="https://images.theconversation.com/files/203172/original/file-20180124-72597-c7ie6x.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> </figcaption></figure><p><em>Vital Signs is a weekly economic wrap from UNSW economics professor and Harvard PhD Richard Holden (<a href="https://twitter.com/profholden">@profholden</a>). Vital Signs aims to contextualise weekly economic events and cut through the noise of the data affecting global economies.</em></p>
<p><em>This week: There is more to the World Economic Forum meeting in Davos than celebrities and ski resorts.</em></p>
<hr>
<p>The World Economic Forum’s annual meeting in the Swiss resort town of Davos has become a bit like the Academy Awards. There are lots of celebrities and lots of publicity, but there are legitimate questions about the substance of the whole enterprise.</p>
<p>Is the whole thing a palaver? Actually, no.</p>
<p>The theme this year is Creating a Shared Future in a Fractured World - and it reflects legitimate concerns about the breakdown of international institutions.</p>
<p>The institutions that have guided the post-World War II era are under threat from both the left and the right. US President Donald Trump has decried institutions like the United Nations and threatened to withhold funding. </p>
<p>In his campaign he railed against NATO - a vital alliance that has underpinned European security for decades. His nativist agenda, with its America First slogan, is seen by many as a major threat the entire apparatus of international cooperation.</p>
<p>Yet a newly energised and combative left also decry many of these institutions as pushing a “neoliberal” agenda. The hero of the American left, Bernie Sanders, went as far as to <a href="http://www.huffingtonpost.com.au/entry/bernie-sanders-greece_n_7709322">blame the International Monetary Fund for the Greek debt crisis</a>. And Britain’s putative Prime Minister Jeremy Corbyn has widespread contempt for the international financial order, even agreeing with the accusation that he is <a href="https://www.businessinsider.com.au/jeremy-corbyn-morgan-stanley-banks-we-are-a-threat-2017-11?r=UK&IR=T">“a bigger threat than Brexit”</a>.</p>
<p>It is unlikely that this clash of ideologies is going to be solved this week. But against this backdrop, there is a more traditional international game being played: lobbying for national interests and positioning for national advantage.</p>
<p>US Treasury Secretary Steve Mnuchin declared that the US <a href="https://www.irishtimes.com/business/economy/trump-s-davos-advance-party-delivers-mixed-messages-to-global-elite-1.3366703">“is open for business”</a>, and according to administration officials, Trump will purportedly say similar things when he attends on Friday. </p>
<p>Enter the large Australian delegation at Davos this year. It includes Finance Minister Matthias Cormann and Trade Minister Steven Ciobo, who will be representing Australia’s trade and investment interests. As Cormann <a href="https://www.theaustralian.com.au/national-affairs/sarah-hansonyoung-pays-own-fare-to-mingle-with-world-leaders-at-davos/news-story/1b6d8a7d80fc27b72f3f9f55c08aa4da">put it</a>:</p>
<blockquote>
<p>The World Economic Forum is one of the best, most efficient opportunities to engage over a very short period, in one single location, with a very large number of senior political, business and community leaders from right around the world.</p>
</blockquote>
<p>It’s a critical time to defend free international trade. The US has pulled out of the Trans Pacific Partnership, but the other 11 countries (including Australia) are set to sign the so-called <a href="https://theconversation.com/farmers-and-services-industry-the-winners-under-the-revised-trans-pacific-partnership-trade-deal-90619">Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) deal</a>. Yet there are sceptics and critics of such deals at home and around the world.</p>
<p>At Davos yesterday, German Chancellor Angela Merkel rightly warned that despite the challenges faced by the world economy, “protectionism is not the proper answer”. In Australia, it’s unclear yet what Labor leader Bill Shorten’s reaction to the CPTPP will be. He declared the original TPP “dead” when the US pulled out, but the CPTPP still holds significant benefits for Australia.</p>
<p><a href="https://piie.com/system/files/documents/wp16-2_0.pdf">New modelling</a> by the highly respected Petersen Institute for International Economics suggests that although the overall benefits of the CPTPP may be lower, Australia will do nearly as well as under the larger agreement with the US involved.</p>
<p>The reason is that without the US, Australia will get a bigger share of markets like Japan and Mexico, for products like beef, that it would otherwise have had to share with the US.</p>
<p>Shorten’s response to this good but inconvenient fact (for him) will be telling.</p>
<p>An array of Australian business leaders will also be in attendance, and it’s an important time for Australian business to try to sell Australia as an attractive destination for foreign investment. Australia’s corporate tax rate, at 30%, is now among the highest in the OECD, whereas 15 years ago it was among the lowest. And unless you run a chain of moderately successful smoothie bars and hence have revenues under A$50 million, little tax relief is on the horizon.</p>
<p>The real fireworks from Davos might come from President Trump’s public remarks. But it will be the private remarks between senior Australian business leaders and foreign investors that will likely be the most consequential for the Australian economy in the coming few years.</p><img src="https://counter.theconversation.com/content/90447/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It will be the private remarks between senior Australian business leaders and foreign investors at Davos that will likely be the most consequential for the Australian economy in the coming few years.Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/905872018-01-25T13:17:00Z2018-01-25T13:17:00ZHow anti-globalisation switched from a left to a right-wing issue – and where it will go next<figure><img src="https://images.theconversation.com/files/203224/original/file-20180124-107956-1k1jegu.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C1952%2C1374&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Trump has promised to put 'America first' to make it great again. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/susanmelkisethian/37128863541/sizes/l">Susan Melkisethian/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>The world is currently witnessing a new <a href="https://academic.oup.com/cjres/advance-article/doi/10.1093/cjres/rsx026/4819300">backlash against economic globalisation</a>. Supporters of the UK’s exit from the European Union seek to “take back control” from Brussels, while Donald Trump’s economic ethno-nationalism has promised to put “America first”. </p>
<p>Trump arrives at the 2018 World Economic Forum in Davos after his administration claimed that US support for China joining the World Trade Organisation (WTO) in 2001 <a href="https://www.reuters.com/article/us-usa-trade-china/trump-administration-says-u-s-mistakenly-backed-china-wto-accession-in-2001-idUSKBN1F82U1">was a mistake</a> and having just announced large tariffs on imported solar panels. It is remarkable that the backlash that he represents emerged from the right of the political spectrum, in countries long recognised as the chief architects and beneficiaries of economic globalisation. </p>
<p>At the turn of the millennium, the primary opposition to globalisation was concerned with its impacts in the Global South. Joseph Stiglitz, former chief economist at the World Bank, wrote in his 2006 book <a href="https://books.google.co.uk/books/about/Making_Globalization_Work.html?id=AdHM3_LCNtMC&source=kp_cover&redir_esc=y">Making Globalization Work</a> that “the rules of the game have been largely set by the advanced industrial countries”, who unsurprisingly “shaped globalisation to further their own interests.” Their political influence was represented through dominant roles in organisations such as the World Bank, International Monetary Fund and WTO, and the <a href="https://www.theatlantic.com/magazine/archive/1992/03/jihad-vs-mcworld/303882/">corporate dominance</a> of their multinationals. </p>
<p>In the 1990s the anti-globalisation movement opposed neoliberal economic integration from a range of perspectives, with a particular emphasis on the Global South. The movement was populated by activists, non-governmental organisations and groups with a variety of concerns: peace, climate change, conservation, indigenous rights, fair trade, debt relief, organised labour, sweatshops, and the AIDS pandemic.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/203220/original/file-20180124-107937-1jp5gt7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/203220/original/file-20180124-107937-1jp5gt7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=364&fit=crop&dpr=1 600w, https://images.theconversation.com/files/203220/original/file-20180124-107937-1jp5gt7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=364&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/203220/original/file-20180124-107937-1jp5gt7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=364&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/203220/original/file-20180124-107937-1jp5gt7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=458&fit=crop&dpr=1 754w, https://images.theconversation.com/files/203220/original/file-20180124-107937-1jp5gt7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=458&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/203220/original/file-20180124-107937-1jp5gt7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=458&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Protests in Seattle against the WTO in 1999.</span>
<span class="attribution"><a class="source" href="https://upload.wikimedia.org/wikipedia/commons/6/63/WTO_protests_in_Seattle_November_30_1999.jpg">By Steve Kaiser from Seattle via Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<h2>The big switch</h2>
<p>Economic globalisation in the 21st century has evolved in ways that neither its extreme proponents nor its most vocal critics predicted. A big switch has occurred, and today’s backlash against globalisation emerged from concerns about its impacts in the Global North.</p>
<p>In the aftermath of the Brexit vote, UK prime minister Theresa May offered a <a href="https://www.weforum.org/agenda/2017/01/theresa-may-at-davos-2017-her-speech-in-full/">sceptical assessment</a> at the 2017 World Economic Forum at Davos, arguing that “talk of greater globalisation can make people fearful. For many, it means their jobs being outsourced and wages undercut. It means having to sit back as they watch their communities change around them.” The US, under Trump, subsequently began <a href="https://www.nytimes.com/2017/09/28/business/how-the-trump-administration-is-doing-renegotiating-nafta.html">renegotiating NAFTA</a> and <a href="https://www.theguardian.com/us-news/2017/jan/23/donald-trump-first-orders-trans-pacific-partnership-tpp">withdrew</a> from the Trans-Pacific Partnership.</p>
<p>The polling company YouGov, in a <a href="https://yougov.co.uk/news/2016/11/17/international-survey/">2016 survey</a> of people across 19 countries, found that France, the US and the UK were the places where the fewest people believe that “globalisation has been a force for good”. In contrast, the survey found the most enthusiasm for globalisation in East and Southeast Asia, where over 70% in all countries believed it has been a force for good. The highest approval, 91%, was in Vietnam.</p>
<p>Most notably, China took a very different stance on globalisation than the US and the UK at the 2017 Davos gathering. China’s president, Xi Jinping, said that his country will <a href="https://www.theguardian.com/business/2017/jan/17/china-xi-jinping-china-free-trade-trump-globalisation-wef-davos">assume the leadership</a> of 21st century globalisation. Defending the current economic order, Xi said that China was committed to make globalisation work for everyone, which was its responsibility as “leaders of our times”.</p>
<p>At Davos in 2018, Narendra Modi, prime minister of India, has already <a href="https://www.weforum.org/agenda/2018/01/7-things-that-happened-on-day-one-of-davos-2018?utm_content=bufferbb7df&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer">warned against de-globalisation</a>: </p>
<blockquote>
<p>It feels like the opposite of globalisation is happening. The negative impact of this kind of mindset and wrong priorities cannot be considered less dangerous than climate change or terrorism.</p>
</blockquote>
<h2>What drove the switch?</h2>
<p>Significant proportions of the US and other countries in the Global North have experienced limited, if any, income gains in the most recent era of globalisation. Leading global inequality expert <a href="http://glineq.blogspot.co.uk/">Branko Milanovic</a> has explored changes in real incomes between 1988 and 2008 to show who particularly lost out on relative gains in income. He found two groups lost most: the global upper middle class – those between the 75th and 90th percentiles on the global income distribution, of whom 86% were from advanced economies – and the poorest 5% of the world population.</p>
<p>A different picture emerges in the Global South. People living in <a href="https://academic.oup.com/wber/article/30/2/203/2224294">Asia accounted</a> for the vast majority of those who experienced relative income gains from 1988 to 2008. In comparison with the 1990s, the Global South now earns a <a href="http://onlinelibrary.wiley.com/doi/10.1111/dech.12379/epdf">much larger share</a> of world GDP, has more middle-income countries, more middle-class people, less dependency on foreign aid, considerably greater life expectancy, and lower child and maternal mortality.</p>
<p><iframe id="Je2FW" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Je2FW/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Emerging evidence indicates that increased global trade has played a role in economic stagnation or decline for people in the north, especially in the US. MIT economist David Autor and his colleagues suggest that the “<a href="http://ddorn.net/papers/Autor-Dorn-Hanson-ChinaShock.pdf">China shock</a>” has had major redistributive effects in the US, leading to declines in manufacturing employment. </p>
<p>Economists had previously argued that the <a href="https://muse.jhu.edu/article/250696/pdf">“losers” from trade</a> could be compensated by transfers of wealth. Autor and his colleagues found that while there have been increases in welfare payments to regions of the US hardest hit by the trade shock, they fall far short of compensating for the income loss.</p>
<h2>Not just globalisation</h2>
<p>Not all of the stagnation and decline experienced in the Global North can be attributed to economic globalisation. Technological change is a big factor and national policy choices around taxation and social welfare have also played key roles in shaping inequality patterns within countries. In such a context, “globalisation” has been deployed as a scapegoat by some governments, invoking external blame for economic problems made at home.</p>
<p>The current backlash is not just about economic globalisation. It has involved ethno-nationalist and anti-immigrant components, for example among supporters of <a href="https://www.nytimes.com/2016/10/16/upshot/whats-behind-a-rise-in-ethnic-nationalism-maybe-the-economy.html">Trump</a> and <a href="http://journals.sagepub.com/doi/abs/10.1177/1369148117710799">Brexit</a>.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-g20-summit-shows-a-world-divided-in-its-attitudes-toward-globalisation-80517">The G20 summit shows a world divided in its attitudes toward globalisation</a>
</strong>
</em>
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<p>Neither does less of a backlash in the Global South necessarily mean support for neoliberal globalisation – and the optimism in countries such as Vietnam may paradoxically be a result of an earlier rejection of it. China, in particular, has not followed the same approach to economic globalisation as that which was <a href="https://www.britannica.com/topic/Washington-consensus">encouraged by the US</a> and organisations such as the IMF and World Bank in the late 20th century. </p>
<p>Meanwhile, many of the world’s poorest in the Global South have seen very little improvement in quality of life in recent years, yet are much more marginal and less well positioned to express their frustrations than the “losers” in countries such as the US and UK. They must not be forgotten. </p>
<p>A key lesson from the late 20th century is to be wary of wholesale attacks on, and sweeping defences of, 21st century economic globalisation. In light of the difficulties of establishing solidarity between “losers” in different parts of the world, the challenge of our times is for an alter-globalisation movement which addresses all of them.</p><img src="https://counter.theconversation.com/content/90587/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rory Horner receives funding from the Economic and Social Research Council (ESRC), and is a Research Associate at the Department of Geography, Environmental Management and Energy Studies at the University of Johannesburg. </span></em></p><p class="fine-print"><em><span>Dan Haberly receives funding from the National Science Foundation, and is an Honorary Research Associate at the Oxford School of Geography and the Environment.</span></em></p><p class="fine-print"><em><span>Yuko Aoyama receives funding from the National Science Foundation. </span></em></p><p class="fine-print"><em><span>Seth Schindler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The movement against globalisation has shifted from developing to developed countries.Rory Horner, Lecturer, Global Development Institute, University of ManchesterDaniel Haberly, Lecturer In Human Geography, University of SussexSeth Schindler, Lecturer, Department of Geography, University of SheffieldYuko Aoyama, Professor of Economic Geography, Clark UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/905062018-01-23T22:44:30Z2018-01-23T22:44:30ZDavos oblivious to one of free trade’s gravest threats<figure><img src="https://images.theconversation.com/files/203070/original/file-20180123-182945-1pokrfw.jpg?ixlib=rb-1.1.0&rect=12%2C769%2C4214%2C1989&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. Navy ships operate in formation in the South China Sea.</span> <span class="attribution"><span class="source">(U.S. Navy)</span></span></figcaption></figure><p>Every day, tens of millions of people and trillions of dollars of goods and services flow across routes known as <a href="http://staging.unep.org/delc/GlobalCommons/tabid/54404/Default.aspx">global commons</a> — aboard ships, underwater, by air and in space. </p>
<p>No country exercises sovereignty over most of these global commons routes, and yet everyone abides by the rules. </p>
<p>That means there’s little need for self-protection or armed escorts against pirates or <a href="https://www.merriam-webster.com/dictionary/privateer">privateers</a> and no one has to pay protection money to warlords en route. </p>
<p>It was not always this way. As recently as the mid-19th century, high-value cargo on the High Seas was transported by heavily armed merchant ships like <a href="https://www.britannica.com/technology/East-Indiaman">East Indiaman</a>. On land, many routes required travellers to be armed and protected from bandits or <a href="https://dictionary.cambridge.org/dictionary/english/highwayman">highwaymen</a>. Taxes were routinely paid to warlords or local chiefs for safe passage.</p>
<p>The communist regime of China, however, has staked a sovereign claim to most of the South China Sea, where there was $3.4 trillion in trade transit in <a href="https://chinapower.csis.org/much-trade-transits-south-china-sea/">2016</a>. If allowed to stand, this will enable China to ban or embargo shipping, or to levy fees for passage like 19th-century potentates. </p>
<p>Yet power brokers meeting in Davos this week are barely acknowledging this grave threat to free trade.</p>
<h2>Ottoman Empire amassed wealth</h2>
<p>Prior to <a href="https://www.britannica.com/topic/Pax-Britannica">Pax Britannica</a>, a period of relative peace in Europe from 1815 to 1914, the cost of tariffs and other protectionist measures paled in comparison to the cost of privately protecting and <a href="https://www.irmi.com/articles/expert-commentary/lloyds-of-london-the-early-days">insuring</a> commerce or paying tariffs levied by kingdoms en route. </p>
<p>For example, the Ottoman Empire <a href="https://en.unesco.org/silkroad/knowledge-bank/history/ottoman-empire-and-spice-routes-16th-century">became wealthy</a> by monopolizing and controlling the overland trade route between Europe and India and levying taxes on the spice trade. </p>
<p><a href="http://factsanddetails.com/india/History/sub7_1c/entry-4120.html">The Portuguese monopolized</a> the sea route to Cathay before their hold was broken by the Dutch and English. </p>
<p>Indeed, centuries of European innovation centred around either gaining control of, or bypassing, existing trade routes to avoid these levies. </p>
<p>Those acting on behalf of potentates routinely preyed upon insufficiently-armed merchants and seized their cargo and crew for ransom unless they were under the protection of another empire. </p>
<h2>Piracy eventually curbed</h2>
<p>The U.S. Navy, in fact, was expressly <a href="http://www.mountvernon.org/education/primary-sources-2/article/the-naval-act-of-1794/">created</a> in 1794 because <a href="https://www.thoughtco.com/young-u-s-navy-battled-north-african-pirates-1773650">North African Barbary pirates</a> seized and ransomed American ships and crews after the British Royal Navy stopped protecting the U.S. following the War of Independence.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/203075/original/file-20180123-182959-1ivjuuu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/203075/original/file-20180123-182959-1ivjuuu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=273&fit=crop&dpr=1 600w, https://images.theconversation.com/files/203075/original/file-20180123-182959-1ivjuuu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=273&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/203075/original/file-20180123-182959-1ivjuuu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=273&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/203075/original/file-20180123-182959-1ivjuuu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=343&fit=crop&dpr=1 754w, https://images.theconversation.com/files/203075/original/file-20180123-182959-1ivjuuu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=343&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/203075/original/file-20180123-182959-1ivjuuu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=343&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In this oil painting from the 1600s by Dutch marine painter Aert Anthoniszoon, a French ship is seen being bombarded by Barbary Pirates.</span>
<span class="attribution"><span class="source">(Creative Commons)</span></span>
</figcaption>
</figure>
<p>Aggressive enforcement of “freedom of navigation” eventually curbed piracy, first on British routes and then on all western shipping routes via reciprocal agreements with other imperial powers. </p>
<p>After Lord Nelson’s victory at Trafalgar and during the <a href="https://www.britannica.com/event/Napoleonic-Wars">Napoleonic Wars,</a> the Royal Navy provided protection of commerce and merchant shipping, making free trade possible with security provided as a public good.</p>
<p>As transportation costs fell, trade, especially within the British Empire, flourished. </p>
<p>By the 20th century, a global system emerged where imperial powers guarded trade routes and offered assistance to each other on a reciprocal basis. Tariffs, or “protection fees” levied en route by potentates, were largely abolished — by force when necessary — except for the use of purpose-built infrastructure like the Suez and Panama canals. </p>
<h2>Freedom of navigation expands</h2>
<p>The golden age of free trade ushered in after the First World War owes its success to <a href="https://www.nytimes.com/2016/12/16/opinion/trumps-chinese-foreign-policy.html">Pax Americana,</a> a period of relative peace in the Western Hemisphere around the middle of the 20th century. It took over from the British model and expanded freedom of navigation worldwide. Allied naval power underwrote free trade by providing protection.</p>
<p>Freedom of navigation is about limiting and regulating states’ ability to assert sovereignty at sea and use it to tax, regulate, embargo or blockade commerce in peacetime. In exchange for ceding those rights, states gained access to global commons from other states on a reciprocal basis.</p>
<p>States also assumed the responsibility to protect and respect shipping and provide security for trade routes without charge, though this remained, to this day, the responsibility of wealthier and more capable states. </p>
<p>These rules and practices were modernized and codified in the United Nations Law of the Sea (<a href="http://www.un.org/depts/los/convention_agreements/convention_overview_convention.htm">UNCLOS</a>) convention in 1982 that defined rules on what are territorial waters, exclusive economic zones and rights of vessels in peacetime for innocent passage and transit. </p>
<p>States that <a href="https://treaties.un.org/pages/ViewDetailsIII.aspx?src=TREATY&mtdsg_no=XXI-6&chapter=21&Temp=mtdsg3&clang=_en">signed and ratified</a> UNCLOS agreed to a set of rules that facilitated navigation and trade. Historical or prior claims that states may have had to territorial waters beyond UNCLOS were extinguished after it came into force in 1994.</p>
<p>Most countries, including China, signed and ratified UNCLOS. The United States signed but <a href="https://digital.library.unt.edu/ark:/67531/metadc86634/m1/1/high_res_d/R42541_2012May22.pdf">did not ratify</a>, though it voluntarily abides by most of its provisions. </p>
<h2>Free trade thrives</h2>
<p>More than anything else, freedom of navigation has allowed globalization and free trade to flourish. </p>
<p>And yet it’s now being threatened by China which, in violation of UNCLOS treaty obligations, has staked claims to an area of the South China Sea (the so-called <a href="http://www.bbc.com/news/world-asia-pacific-13748349">nine-dash line</a>) that’s <a href="https://www.aspistrategist.org.au/countering-beijings-manoeuvres-south-china-sea/">larger than Western Europe from Poland’s eastern border to the English Channel</a>. </p>
<p>What are the implications?</p>
<p>Potentially, Chinese claims on the South China Sea can <a href="https://fas.org/sgp/crs/row/R42784.pdf">expand</a> to the East China Sea and the Yellow Sea. A modest fee or tax on trade that is currently free could yield a fortune in revenues for China.</p>
<p>Ships from countries that include the U.S., Canada, Japan, South Korea and Taiwan could be forced to pay up or reroute around Chinese claims.</p>
<p>If the precedent set by China spreads, it could lead to other regimes seeking control of choke points like the Persian Gulf’s Strait of Hormuz, the Bab al-Mandab Strait between Yemen and the Horn of Africa, and other waterways through which the vast majority of global commerce flows.</p>
<p>Globalization and free trade, in effect, will revert back to the pre-19th century, when pirates and shakedown artists ruled the High Seas.</p>
<h2>Davos focused on wrong issues</h2>
<p>This year’s <a href="http://www3.weforum.org/docs/WEF_AM18_Overview.pdf">theme</a> at the World Economic Forum gathering in Davos, Switzerland is “Creating a Shared Future in a Fractured World.”</p>
<p>Yet scant attention is being paid to the importance and value of freedom of navigation to free trade and global commerce. Little concern has been shown by global elites about the erosion of the UNCLOS regime caused by China’s sea grab. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/203074/original/file-20180123-182973-82xcyy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/203074/original/file-20180123-182973-82xcyy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/203074/original/file-20180123-182973-82xcyy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/203074/original/file-20180123-182973-82xcyy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/203074/original/file-20180123-182973-82xcyy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/203074/original/file-20180123-182973-82xcyy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/203074/original/file-20180123-182973-82xcyy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Armed Swiss police officers stand guard on the roof of a hotel near the congress center where the annual meeting of the World Economic Forum takes place in Davos, Switzerland on Jan. 23, 2018.</span>
<span class="attribution"><span class="source">(AP Photo/Markus Schreiber)</span></span>
</figcaption>
</figure>
<p>Instead, <a href="https://www.usatoday.com/story/news/world/2018/01/23/indian-leader-modi-warns-trumps-trade-protectionism-worrisome/1056860001/">rising U.S. protectionism</a> under President Donald Trump, and China’s <a href="https://www.city-journal.org/html/countering-chinese-mercantilism-15391.html">mercantilism</a>, are in the spotlight for now, even as core institutions for free trade —like freedom of navigation and security in the global commons — are in serious peril.</p>
<p>If the world returns to a pre-19th century system of enforced territorial claims on global commons routes, then tariffs and subsidies will be nothing compared to these profound hindrances to trade.</p>
<p>Imagine a world in which commerce is heavily taxed by authorities en route, or in which shippers must directly bear the cost of protecting their cargo. That’s the world China is <a href="https://www.theglobeandmail.com/news/world/xi-positions-china-as-a-champion-of-free-trade-in-the-trump-era/article33685286/">leading</a> us to.</p>
<p>Davos participants have yet to demonstrate the courage to defend core free-trade institutions. </p>
<p>Next year, perhaps?</p><img src="https://counter.theconversation.com/content/90506/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Danny Lam does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>China’s actions in the South China Sea are getting scant attention at Davos. But if the Chinese set a precedent for other rogue nations, there will be a profound impact on global free trade.Danny Lam, Research Associate Environment, Trade & Security, University of WaterlooLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/905482018-01-23T14:54:47Z2018-01-23T14:54:47ZWhy shaking up South Africa’s power utility matters for the economy<figure><img src="https://images.theconversation.com/files/203050/original/file-20180123-182973-1b61qkn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Cyril Ramaphosa, South Africa's deputy president who was recently elected as the leader of ruling party, is seen to be fighting corruption.</span> <span class="attribution"><span class="source">EPA</span></span></figcaption></figure><p><em>South Africa’s power utility Eskom has seen a remarkable leadership shake up in the past few days. Almost the entire board has been replaced with seasoned businessmen. And a well respected acting CEO has been put in place, too. The developments appear to reflect resolve by the country’s deputy president Cyril Ramaphosa, who was elected as president of the African National Congress in December. Sibonelo Radebe asked Jannie Rossouw to discuss what the changes at Eskom mean.</em></p>
<p><strong>What do you make of the shake up at Eskom?</strong></p>
<p>The announcement of a <a href="https://www.enca.com/south-africa/eskom-appoints-new-board">new board at Eskom</a> is welcome for a number of reasons. </p>
<p>Firstly, the previous board and top executive layer proved to be incompetent if not downright destructive. Secondly, the power utility had sunk into dire <a href="https://www.fin24.com/Economy/Eskom/eskom-could-collapse-sa-economy-warns-gigaba-20180118">financial difficulties</a> on their watch. Recent reports suggested that the power utility has <a href="https://www.fin24.com/Economy/Eskom/exclusive-eskoms-cash-dries-up-20171113-2">run out of funds</a> and wouldn’t be able to meet its obligations unless government stepped in with another huge bailout. This, after the government <a href="https://www.ujuh.co.za/brian-molefe-the-ceo-of-south-africas-power-utility-is-overrated/">injected</a> R23 billion in equity and and wrote off about R60 billion over the past five years.</p>
<p>Over the past five years or so, Eskom has been hit by a series of corporate governance breaches of the worst kind. These included the former CEO Brian Molefe trying to secure a <a href="http://www.702.co.za/articles/265740/public-protector-to-probe-brian-molefe-s-r30-million-pension-pay-out">R30 million payout</a> for only 18 months at the helm.</p>
<p>And it’s become clear from the <a href="http://amabhungane.co.za/article/2017-06-09-guptaleaks-how-eskom-was-captured">Gupta leaks</a> that the power utility had come to play a central role in a raft of activities related to state capture. It appears to have served as <a href="https://www.ujuh.co.za/state-of-capture-public-protectors-report/">a conduit to transfer government resources</a> to well-connected and corrupt individuals and families in South Africa.</p>
<p>Given the damage that’s been done, the previous board at Eskom simply could not continue. It had <a href="http://ewn.co.za/2018/01/18/gigaba-treasury-can-t-afford-more-eskom-bailouts">no plan</a> to turn the company around or stop corruption. Its only strategy was to lean on the South African government for more financial assistance.</p>
<p>The Eskom shake up is also significant because it’s a signal that the new president of the ANC Cyril Ramaphosa is committed to fighting <a href="http://ewn.co.za/2018/01/19/ramaphosa-we-re-dead-serious-about-addressing-corruption">corruption</a> in both the public and private sectors.</p>
<p><strong>Why does Eskom matter?</strong> </p>
<p>Eskom is arguably South Africa’s most important state owned enterprise. The South African economy depends on continuous and uninterrupted power supply. This puts Eskom in a different league to other embattled state owned enterprises like the national airline, South African Airways (SAA).</p>
<p>SAA is also dependent on government <a href="https://www.fin24.com/Economy/live-out-of-cash-saa-faces-parliament-20170804">bailouts</a>, but the South African economy will continue to function without it. Eskom, on the other hand, is a monopoly power supplier. All South Africans depend on it for power. </p>
<p><strong>There seems to have been an urgency to make changes. Why?</strong></p>
<p>It seems that Ramaphosa moved quickly to wrap up the Eskom shake up before he left for the World Economic Forum in Davos. It’s not difficult to understand why. South Africa has had some very bad headlines over the past few years, including downgrades by international rating agencies, and its economy is in the doldrums. </p>
<p>A significant portion of South Africa’s economic pressure originates from declining confidence of local and international investors in the country’s economy. This is evident from the South African <a href="https://tradingeconomics.com/south-africa/business-confidence">business confidence index</a>, which has plummeted. Since 2013 business confidence has been on a declining trend from above 50 to a current level below 35.</p>
<p>Replacing the Eskom board before the Davos meeting was a smart and necessary move. Davos is a rare occasion to showcase South Africa as an investment destination of choice for international investors. One condition for attracting international investment is a clear commitment to addressing corruption and instilling sound management in government enterprises.</p>
<p><strong>What in your view is the long term solution around Eskom?</strong></p>
<p>The long term solution to the problems at Eskom and other troubled state owned enterprises is a rethink of their role in the South African economy. </p>
<p>Some, such as South African Airways, are really unimportant and their disposal or even their closure would have little impact on the domestic economy. Disposal or closure are necessary options as these entities add an unnecessary burden on the national fiscus.</p>
<p>But others, like Eskom, are more strategic and matter enormously and the government should retain them. </p>
<p>It has also become necessary for South Africa to rethink the <a href="https://businesstech.co.za/news/wealth/194164/ceo-vs-employee-salaries-at-eskom-saa-and-other-state-companies/">remuneration policies</a> for executives of state owned enterprises. They earn salaries that aren’t commensurate with the risks they face. The consequences of failure are much more severe for executives in the private sector. Executives of state owned enterprises simply apply for bailouts when they’re in trouble. </p>
<p>So there’s no justification for exorbitant remuneration at state owned enterprises. And no executive at any state owned enterprise should get a bonus: how can a bonus be justified when the South African government provides the bailout in the event of financial difficulty?</p>
<p>The new Eskom board should urgently revise the company’s remuneration policy to restore some sanity in the level of remuneration. The board should also review business practices to ensure that Eskom remains financially viable without any financial assistance from the government.</p>
<p>It is also important that the South African government and the board of Eskom should make it clear to the general public and to investors that the proposed <a href="https://awethu.amandla.mobi/petitions/campaign-for-a-just-energy-future?gclid=EAIaIQobChMI58iX0pnu2AIVzr_tCh3WcwUoEAAYASAAEgLYwfD_BwE">nuclear procurement project</a> plan will not go ahead: neither the South African fiscus nor Eskom can afford such a project.</p><img src="https://counter.theconversation.com/content/90548/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jannie Rossouw is a NRF C3-rated researcher and receives funding from the NRF. </span></em></p>The shake up at South Africa’s power utility, Eskom, sends a good signal about where Cyril Ramaphosa is taking the country.Jannie Rossouw, Head of School of Economic & Business Sciences, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/846602017-10-03T09:57:42Z2017-10-03T09:57:42ZWorld trade data shows globalisation is alive and kicking<figure><img src="https://images.theconversation.com/files/188174/original/file-20170929-19343-15wsd9d.jpg?ixlib=rb-1.1.0&rect=362%2C298%2C3471%2C2144&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cargo-port-container-terminal-714172105?src=aDb7H7483HWopCDHS1i4Qw-1-30">apiguide/Shutterstock</a></span></figcaption></figure><p>It is commonplace to emphasise that we are now in a new era of globalisation, marked by the rise in the importance of emerging economies. But what does this really mean? </p>
<p>Richard Baldwin, <a href="https://piie.com/events/great-convergence-information-technology-and-new-globalization">author of The Great Convergence</a>, argues that what is new is the combination of northern technology and southern labour. But he adds that for the present, global value chains are still mainly regional. Intermediate goods like car parts are primarily moved around within a regional “factory” (North America, Europe, East Asia), and then final goods are shipped to the user. China is the exception to this rule with its use as a factory economy by the EU and US. </p>
<p>It is worth testing this idea by looking at the patterns in the data since 2002. We have organised world trade into country groups: North America, Europe, East Asia, South-East Asia, South America, Less Developed Countries, and the Rest of the World. </p>
<p>So then, who trades the most?</p>
<p>Well, the chart below provides a snapshot of the share each region had in world trade in 2016 and the changes since 2002. What we see is that the greatest shares of both imports and exports are accounted for by Europe, followed by East Asia, the Rest of the World (RoW) and then North America. Trade flows are calculated using <a href="https://comtrade.un.org/">UN COMTRADE</a> import data.</p>
<p>The next chart gives the percentage point changes in these shares between 2002 and 2016. It shows that East Asia has increased its share by five points. The other big gainer is the Rest of the World, whose constituent countries have seen their share of world imports increase by three points and their share of exports increase by seven. </p>
<p>Growth here, and for South-East Asia and South America, reflects the growing importance of emerging markets. And this is backed up by declines in the share of imports and exports for both Europe and North America.</p>
<h2>Who trades with whom?</h2>
<p>It is commonly argued that distance matters in international trade; that countries tend to trade most with countries which are closer. The fact that the cost of moving people hasn’t fallen along with the cost of moving goods and information may accentuate this. The heat map graphic below explores this. </p>
<p>Each matrix gives the share of trade between the partners. The darker the shade, the more important a trading partner is to that country. The top two tables show the state of play in 2002; the bottom two show 2016. Imports are on the left; exports on the right.</p>
<p>One thing that is immediately clear is how Europe operates on a different level in terms of the intra-regional share of trade. In 2016, 54% of imports into European countries came from other countries on the continent. It’s at 56% for exports. The corresponding figures for North America, the next biggest, were 33% and 48%. East Asia comes in at 31% and 29%. It helps explain the hand-wringing over Brexit from businesses worried about even small barriers to this market. Just-in-time production methods are very vulnerable to border holdups.</p>
<p>That said, while intra-regional trade is important, and there remains much truth in the idea that global value chains are primarily regional, it appears this may be in decline. We have pulled this out into the graph below which gives the change in the intra-regional trade share for each of the regions. The only grouping which sees a rise in trade with itself is the RoW, and it’s fair to note that this is not a regional grouping geographically. </p>
<p>More generally, the heat map table above shows a rise in the importance of the RoW countries as destinations for the exports of other groupings. Their share in the exports of East Asia has gone up from 8% to 18% between 2002 and 2016. For Europe it rose from 19% to 22%; for North America from 8% to 13%.</p>
<h2>The role of intermediates</h2>
<p>To truly understand the story we need to get a handle on trade in services and on intermediates. This market for things like the switches on a food mixer, or the consultancy work on a company merger have become more and more important in world trade. </p>
<p>The following chart gives the share of intermediates in total trade. From this we see an increase in the share of intermediates from 48% to 52%, and in total trade from 35% to 39%. In other words, more parts are being sourced away from where final products are manufactured.</p>
<p>We do see a slight fall in the share of services in total trade. Services figures are notoriously unreliable but these estimates are consistent <a href="https://www.imf.org/%7E/media/Files/Publications/WP/2017/wp1777.ashx">with IMF</a> and <a href="https://www.wto.org/english/res_e/statis_e/wts2016_e/wts2016_e.pdf">WTO estimates</a>. In fact, much of recorded trade in goods reflects services embodied in goods, for example where software is used in design or manufacture.</p>
<p>Even for the growing trade in intermediates, the data show the same trend away from intra-regional activity. You might wonder if that’s just down to how we built the groups, but it’s not. The table below shows that even within categories of intermediates there remains a trend towards a slightly declining importance of intra-regional trade. It seems to be happening within almost all categories. </p>
<p>What does all this tell us? Well, trade is still heavily regional. But China’s growing global role in the last 15 years has not prompted East Asia as a region to switch its focus to internal markets. And even Europe may be weaning itself off the dominance of trade between its constituent countries. Recent news about the US’ relationship with Canadian firm Bombardier might make you think North America’s <a href="http://www.cbc.ca/news/politics/boeing-bombardier-us-canada-hall-1.4310027">regional favouritism is fragile too</a>. Genuine protectionism from Washington in the future may have a deep and lasting effect on this data, but right now we are still moving towards – and not away from – true globalisation.</p>
<p><em>This article has been published as part of the World Economic Forum series, <a href="https://www.weforum.org/focus/the-state-of-trade">The State of Trade</a>.</em></p><img src="https://counter.theconversation.com/content/84660/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Holmes is a member of Labour Party. </span></em></p><p class="fine-print"><em><span>Michael Gasiorek does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Crunching the numbers on 14 years of trading shows one of the assumptions about global markets is looking fragile.Peter Holmes, Reader in Economics, University of Sussex Business School, University of SussexMichael Gasiorek, Senior Lecturer in Economics, University of Sussex Business School, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/836082017-10-02T12:41:07Z2017-10-02T12:41:07ZHow China’s first ‘silk road’ slowly came to life – on the water<figure><img src="https://images.theconversation.com/files/188067/original/file-20170928-24379-r69ne5.jpg?ixlib=rb-1.1.0&rect=99%2C177%2C3898%2C2617&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/multicolors-scarfs-on-market-585631718?src=IuSm6dzXb9EyciS--jKqeA-2-60">Curioso/Shutterstock</a></span></figcaption></figure><p>Few images are more enduring in the historical imagination than the train of two-humped Bactrian camels plodding across desert sands from west to east, or vice-versa, across the vast open spaces of Eurasia. Now that China is edging <a href="https://qz.com/983460/obor-an-extremely-simple-guide-to-understanding-chinas-one-belt-one-road-forum-for-its-new-silk-road/">towards a modern incarnation of the “silk road”</a> it is worth remembering how this emblem of the ancient world actually came into being. </p>
<p>There is no doubt that these overland trading routes existed in the early and late Middle Ages. There is also no doubt that these treks across deserts brought massively important cultural influences from the west to the east while carrying goods in the other direction.</p>
<p>But there is another side to this tale, and it is one which <a href="http://www.mepc.org/speeches/maritime-dimension-one-belt-one-road-strategic-perspective">the Chinese government acknowledges</a> with its huge One Belt One Road (OBOR) transcontinental infrastructure project to link East Asia to the Middle East and Europe. Simply put, the story of the silk road, ancient or modern, is as much the story of the sea as the dunes.</p>
<h2>Trade in ideas</h2>
<p>The overland routes carried spices and gems and other non-bulky items as well as bolts of silk and packages of unwoven silk thread. They also helped to bring the ideas and art of both Islam and Buddhism to East Asia.</p>
<p>That is why Indian art, already impregnated by Greek influences since Alexander the Great, had <a href="https://steemit.com/history/@norbu/ancient-indian-influence-on-japanese-culture-and-religion-hindu-deities-worshipped-in-japan">so great an impact</a> on the art of China and even Japan. It is curious indeed to see motifs in medieval sculptures of the Buddha that survive in Japan that can, ultimately, be traced back to the ancient Mediterranean. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/188063/original/file-20170928-1438-ck6pj2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Sands of time.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/bandytam/33357157230/in/photolist-SPE9Gw-nS2buD-Rc1QbA-nMtc6h-8KzUNk-pUBB4e-7nQddX-RSvJD1-4iUAy1-mPqCMc-tRgo6-Jtfba-m3DcTP-b3rKqH-de89qZ-4TAXiA-7wP4c8-tjBqA-j1vwf-4r5Fv9-S46BEH-hi7Vv-J6J2BD-88iwrk-NpzJrC-cXt79S-fgJfQs-Pt2stN-cNzcWW-o8Staf-o6gsz-b1swGz-5t8n5J-L9m9Vm-KKWerQ-epduQn-6euHvX-B9RHb1-TcsKjS-58H28n-J6J2Rr-KfGmJa-8oC2Nt-L9hzvG-8bsKZc-mZegP2-dMNfM9-djJzmJ-dnFvKL-4qauc">Andrea Moroni/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>In the eighth century there were merchants – many of whom were Jewish and known by the <a href="http://www.academia.edu/4810020/The_Radhanite_Merchants">still unexplained title “Radhanites”</a> – who set out from France and in some cases managed to reach China overland. But they were not the true pioneers, as they attached themselves to existing camel caravans. At this point, the route cannot seriously be seen as an example of proto-globalisation. The effects on the economy of Western Europe from very small amounts of high-cost luxury goods were minimal. </p>
<p>Routes right across Asia could only flourish when political conditions were right, and the 11th and 12th centuries were a relatively quiet period. However, with the rise of the Mongols, a new political order imposed peace from Russia to China and made long-distance travel easier. This was particularly the case when the Genoese and Venetians installed themselves in trading centres along the Black Sea, notably at Caffa (<a href="https://discover-ukraine.info/index/crimea/feodosiya">modern Feodosiya</a>) in the Crimea, and <a href="https://www.britannica.com/place/Azov">Tana on the Sea of Azov</a>. </p>
<p>The most famous European visitor to medieval China – Marco Polo – was not, if his account <a href="http://www.telegraph.co.uk/news/worldnews/europe/8691111/Explorer-Marco-Polo-never-actually-went-to-China.html">is to be believed</a>, typical: he spent many years in the Mongol administration during the 13th century before returning to Venice by sea. But there were Genoese and Venetians who travelled out to Quanzhou on the coast of China and lived and died there. And there were certainly bolts of Chinese silk that found their way to Western Europe; at least one item in the ceremonial regalia of the Holy Roman Emperor was made from Chinese silk.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/187978/original/file-20170928-1466-d3ohog.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Modern artwork at the site of Xanadu, Inner Mongolia.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/site-xanadu-inner-mongolia-china-july-692752585?src=ZjC0Gbzs-v1i8zyoc7N2XA-1-28">Yavuz Sariyildiz/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Primacy of the sea routes</h2>
<p>As the Mongol Empire broke up in the 14th century, the primacy of the maritime route linking China to lands further west became more obvious, though in fact it had continued without a break for many centuries. </p>
<p>Indeed, there were already elements in place in the days of the Roman Empire, when Greek merchants from Egypt reached the Bay of Bengal and massive quantities of pepper reached the port of Rome at Ostia. </p>
<p>But in the days of the Roman Empire, maritime links to China were tenuous in the extreme, and Roman embassies to the rival great empire tended to be dismissed without much interest. Moreover, Chinese governments tended to look away from the sea, concentrating on the exploitation (and taxation) of the rich resources of their own country. </p>
<p>The great transformation occurred from the seventh century as the area now known as Malaysia and Indonesia was opened up to maritime trade. <a href="https://www.britannica.com/topic/Song-dynasty">Under the Song dynasty</a>, based in southern China around 1100, Chinese merchants were encouraged to head across the water. Trade in camphor out of the East Indies pointed in two directions: upwards to the coast of China, but also westwards into the Indian Ocean. </p>
<p>A trading network developed in the East Indies, under the auspices of the rulers of Sri Vijaya in Sumatra, which linked the world of the Chinese traders to that of the Malay and Indian traders.</p>
<p>A trade route was emerging that was worthy of the name. This was a “silk route of the sea”.</p>
<h2>Gingerbread</h2>
<p>Along the sea routes, increasing quantities of spices filtered westwards, passing India and flowing up the Red Sea, where they were moved on to Alexandria in Egypt, and collected by merchants from Genoa, Venice, Barcelona and other western ports. Sometimes they made their way across Europe by land, or eventually around Iberia by sea, and ended up in the gingerbread of Hanseatic burghers in Lübeck, Riga or Tallinn. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/187977/original/file-20170928-1483-1cshdc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Spiced up.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/one-most-traditional-sweet-treats-which-520314445?src=xlfdxq-LkjMFZBtr8yDUWg-2-0">Ugis Riba/Shutterstock</a></span>
</figcaption>
</figure>
<p>Ships also carried enormous amounts of Chinese porcelain, much in demand in the Islamic world, which keeps turning up in shipwrecks in and around the South China Sea. The <a href="http://en.unesco.org/silkroad/silk-road-themes/underwater-heritage/cirebon-shipwreck">Cirebon shipwreck</a> found off Java carried half a million pieces of porcelain, part of a cargo weighing 300 tons.</p>
<p>Eventually, with the foundation of <a href="https://www.lonelyplanet.com/malaysia/peninsular-malaysia-west-coast/melaka">Melaka</a> at the start of the 15th century the Chinese established a base on the edges of the Indian Ocean. This was the result of the short-lived period of vigorous maritime activity around 1420, when the Ming emperors sent large fleets out into the Indian Ocean <a href="http://ngm.nationalgeographic.com/ngm/0507/feature2/">under the command of Admiral Zheng He</a> to show the Chinese flag and to collect information about the world beyond the Middle Kingdom.</p>
<p>These routes linking east and west long preceded the coming of the Portuguese, Spaniards and Dutch, who transformed the trade of the world after 1500. And it was the maritime (rather than the overland) silk route that can be seen as a very early case of what might be called proto-globalisation. It is interesting to note that much the same applies today: the quantities of goods carried by train across Asia under the OBOR project cannot hope to match the enormous amount of containerised goods a revived Chinese merchant marine will be able to carry by sea.</p>
<p><em>This article has been published as part of the World Economic Forum series, <a href="https://www.weforum.org/focus/the-state-of-trade">The State of Trade</a>.</em></p><img src="https://counter.theconversation.com/content/83608/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Abulafia does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>China’s bid for an infrastructure blitz to drive overland trade through to Europe will end up being overshadowed.David Abulafia, Professor of Mediterranean History, University of CambridgeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/846592017-10-02T10:30:45Z2017-10-02T10:30:45ZLessons from smaller nations for Britain’s post-Brexit trade deals<figure><img src="https://images.theconversation.com/files/188163/original/file-20170929-19343-1haakm0.jpg?ixlib=rb-1.1.0&rect=171%2C207%2C2557%2C1724&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/chess-game-glass-brown-wooden-pieces-716124748?src=wx63D-Ssjp0EY5XLQ2Q17Q-3-20">PaaOne/Shutterstock</a></span></figcaption></figure><p>It should have been the year of the Trans-Pacific Partnership <a href="http://dfat.gov.au/trade/agreements/tpp/Pages/trans-pacific-partnership-agreement-tpp.aspx">(TPP)</a>. This was to be the first of three mega-regional trade deals, designed to join the US and NAFTA partners with key Asian economies, Australasia, and emerging nations in South America. US president, Donald Trump, <a href="https://www.brookings.edu/blog/unpacked/2017/03/24/trump-withdrawing-from-the-trans-pacific-partnership/">put paid to that</a> by withdrawing at the beginning of 2017.</p>
<p>Trump’s decision leaves in the lurch those trading partners who don’t have current bilateral preferential trade agreements (PTAs) with the US. That includes larger countries including Japan, but is more worrying for smaller countries such as New Zealand and Brunei. They will now be unable to gain preferential access to the US market, even if the other TPP members can establish a <a href="http://www.euronews.com/2017/05/21/tpp-free-trade-pact-to-go-ahead-with-or-without-us">TPP minus the US</a>. </p>
<p>For smaller states, access to the world’s top markets is crucial. They face difficulties getting in the goods and services they need for economic development and innovation. And because they’re small, producers and providers seekign scale need to look beyond their borders for new customers.</p>
<p><a href="http://wits.worldbank.org/openness-to-trade-visualization.html">World Bank data from 2016</a> shows that on average, trade as a percentage of GDP is particularly high in small states: 103% compared to 84% for the eurozone. For these countries, domestic demand can’t act as a backstop as it does for the US, EU or China.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/188164/original/file-20170929-22066-h3g0ba.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">All in this together?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/flying-flag-nations-world-698756464?src=J-q6tPijQRua2OhLgISf_w-1-9">ArtisticPhoto/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Staying open</h2>
<p>That has prompted a group of smaller states in the Asia-Pacific to take trade openness to heart. Since the 1980s and 1990s, they have developed active policies of unilateral reduction of trade barriers and pursuit of PTA networks. Chile, Singapore and New Zealand, stand out.</p>
<p>Singapore has benefited from its location at the heart of the South-East Asian growth economies and manufacturing hubs. It has established itself as an access point for the region with its port, service industries, membership of the <a href="http://www.asean.org">Association of South East Asian Nations (ASEAN)</a>, and <a href="https://www.iesingapore.gov.sg/Trade-From-Singapore/International-Agreements/free-trade-agreements/Singapore-FTA">PTAs</a> covering 31 partners. </p>
<p>Chile positioned itself as a “gateway to Latin America” for European, North American and – later – Asian business, by developing an extensive network of PTAs. <a href="http://www.sice.oas.org/ctyindex/CHL/CHLagreements_e.asp">Chile’s PTAs</a> cover 61 countries. Both Chile and Singapore have negotiated PTAs with the US, EU and China. New Zealand, meanwhile, has <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/">PTAs</a> with 16 partners, including China, and will soon embark on negotiations <a href="https://eeas.europa.eu/headquarters/headquarters-homepage/32183/launching-trade-negotiations-new-zealand_en">with the EU</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=336&fit=crop&dpr=1 600w, https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=336&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=336&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=422&fit=crop&dpr=1 754w, https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=422&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/188165/original/file-20170929-22066-1d5y5xr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=422&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Calm waters for New Zealand?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/volvob12b/14848990805/in/photolist-oC9XCR-GBYq3t-SdRuDC-di5Q1w-HUzhok-FYF69f-fhYEap-ppE9ij-fuardb-HWM1hY-8kbQUt-Rmuj1L-rsgpUd-o7wPBg-HBcZgU-GWUrwM-SJzwQV-qrXo8f-FTXYpZ-kBi2LU-fT349q-SYxJbP-Ywgvyr-pJ2Xbk-Gkx4pQ-6cCgnk-pwQJJk-mLt2ei-fnnKhk-VRLiMj-fnCkkJ-8aAW2C-fJge2v-r9MV3k-RuARf8-di5W2t-pB2UEq-fo5XWA-TAjGbA-RzyZ6J-6wxNhz-fhBntu-jEg2t2-bpLWm5-SLELS1-qeY18a-fLZUPb-ega5y1-qqCWPc-VUYfPH">Bernard Spragg. NZ/Flickr</a></span>
</figcaption>
</figure>
<p>Their success in creating PTA networks lies in a flexible approach and adaptation to their partners’ needs. For instance, Chile initially negotiated a trade in goods agreement with China – and only negotiated an agreement on services once China had decided that trade in services deals could be beneficial. Their PTAs are, therefore, diverse in terms of coverage and scope. This contrasts with the use of templates by the US and the EU’s insistence on a number of areas that must be included in PTAs.</p>
<p>Their small size has aided them in pioneering PTAs with new partners. They are not seen as a threat. This makes larger and more protected markets willing to negotiate with them. <a href="http://www.commonwealthofnations.org/sectors-singapore/business/agriculture/">Less than 1% of Singapore land</a> is given over to farming, and it contributes the same to its GDP. That means sensitive agricultural issues are eliminated from negotiations with the US, EU and China. Even New Zealand, a highly successful exporter of dairy and agricultural goods, is viewed in a relatively benign light. It was able to sign an <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/nz-china-free-trade-agreement">FTA with China</a>in 2008 – seven years before Australia – as, even with somewhat improved agricultural market access, it would be unable to severely damage Chinese agriculture.</p>
<p>This enables these states to offer something of unique value to negotiation partners: a safe environment in which to learn about PTAs, and practice and test new approaches. New Zealand actively courted this by becoming the first developed state to negotiate a PTA and grant China market economy status and, now, the first to engage in <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/nz-china-free-trade-agreement">upgrading negotiations with China</a>.</p>
<h2>Brexit blueprint?</h2>
<p>TPP itself emerged from small states’ vision to overcome their market limitations and enhance their attractiveness as PTA partners. Limited progress on trade liberalisation <a href="http://www.apec.org">within APEC</a> (the Asia Pacific Economic Cooperation organisation) led Singapore, Chile and New Zealand (and later Brunei) to negotiate the Transpacific Strategic Economic Partnership Agreement <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/p4/">(also known as P4)</a> of 2005. The intention here was that others may join. When, in 2008, the US announced it would do just that, TPP negotiations began. With the initial agreement was <a href="https://www.tpp.mfat.govt.nz/about">signed in 2016</a>, it looked like their gambit had succeeded.</p>
<p>Although the US will not participate in TPP for now, the project has reinvigorated interest in trade negotiations in the region. It has also enhanced the attractiveness of smaller trade partners – look to the <a href="http://ec.europa.eu/trade/policy/countries-and-regions/negotiations-and-agreements/#_being-negotiated">EU negotiations</a> with Asian and Australasian states as proof of that. </p>
<p>Moreover, decades of East and South East Asian initiatives for regional agreements coalesced in 2012 against the TPP backdrop in the negotiations for the Regional Comprehensive Economic Partnership (<a href="http://asean.org/?static_post=rcep-regional-comprehensive-economic-partnership">RCEP</a>) between ASEAN and its PTA partners: China, Japan, Korea, India, Australia and New Zealand. </p>
<p>It remains unclear whether RCEP will conclude this year, but it has become the last remaining of the major mega-regional initiatives after the stalemates in TPP and <a href="http://ec.europa.eu/trade/policy/in-focus/ttip/index_en.htm">TTIP</a>. Asia-Pacific states whose governments have committed to trade openness are <a href="https://www.cnbc.com/2017/03/14/china-south-korea-join-tpp-members-in-trade-talks.html">keen to join</a> this initiative in the absence of TPP. </p>
<p>Shifts in policies in the major economies will continue to affect smaller economies. However, smaller Asia-Pacific economies have shown they can exercise agency in their trade strategies, and retain and expand their attractiveness as trade partners. </p>
<p>The UK will shortly find itself thrust into a new world of FTAs and PTAs as it imagines life outside the EU. It might just be able to copy the blueprint of a flexible approach and a unique proposition to potential partners. But crucially, whether it can present itself as a non-threatening economic force is another matter entirely.</p>
<p><em>This article has been published as part of the World Economic Forum series, <a href="https://www.weforum.org/focus/the-state-of-trade">The State of Trade</a>.</em></p><img src="https://counter.theconversation.com/content/84659/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Maria Garcia has received ESRC and EU research funding. She is Secretary of UACES. </span></em></p>The countries doing innovative deals with trading partners have one key difference with a post-Brexit UK.Maria Garcia, Senior Lecturer in International Relations, University of BathLicensed as Creative Commons – attribution, no derivatives.