Business | DAVOS SPECIAL 2017

Global cooperation needed in uncertain times

by Sayuri Daimon

Staff Writer

The world in 2016 saw many events signaling the rise of protectionism and populism, ranging from Brexit to Donald Trump’s victory in the U.S. presidential election and people’s fear of job loss due to immigrants and artificial intelligence (AI) development.

An executive of the Geneva-based World Economic Forum, which hosts the annual Davos meeting of corporate, government, academic and civil leaders in Davos, Switzerland, believes that in such uncertain times, global leaders need to come together to tackle newly emerging issues and Japan can take initiative in showing how to solve these problems.

“We’re not trying to solve yesterday’s problems. We should acknowledge that there are new problems on the horizon,” WEF managing board member Lee Howell said in a recent interview in Tokyo. “It requires engagement of the public sector, private sector and civil society.”

With that in mind, the theme of this year’s WEF annual meeting, which kicks off on Jan. 17, is “Responsive and Responsible Leadership.”

Howell said that certain political events around the world last year like Brexit have raised a notion of responsiveness and responsibility in people’s consciousness.

While British people search for their identity, some are wondering whether the referendum that took place last June was beneficial.

“It (the referendum) actually led to more uncertainty to some degree, and this is why we need responsive and responsible leadership,” he said.

Howell said that populist reactions seen in some parts of the world are premised on the fact that incumbent leaders have not been responsive enough to solve problems. At the same time, those people who are calling for a radical change, are often not responsible, making policy proposals that are shortsighted and regressive.

“Our leaders have to listen to all stakeholders and act on their shared mutual interests in a responsible way,” he said. “Responsible means whatever actions are taken, the unintended consequences for future generations need to be thought through.”

Howell, who compiled the WEF’s global risk report in 2011 as an editor, said the report at that time already highlighted income disparity as a major global risk.

The 2012 annual report’s executive summary described income disparity along with economic, environmental and geopolitical risks. The interplay among these risks could result in high unemployment as the largest population of retirees in history becomes dependent upon already heavily indebted governments, it said.

“Young and old could face an income gap, as well as a skills gap so wide it threatens social and political stability,” the report noted.

Howell said this issue of income disparity could erode the middle class, which is the foundation of most economies.

“If the narrative around the middle class is that it is shrinking and opportunities are lessening, we’re going to enter a very different political space,” he said.

“It’s hard to develop a global or regional identity if you feel your national identity is threatened,” he said. “People in the U.K. are Europeans, but the sense of identity, the affinity to Brussels has diminished from what it was from a decade or two ago.”

Meanwhile, the U.S. may also be steps away from global major issues with Trump in charge.

“We already know President-elect Trump’s views on NATO, the TPP, climate change and the Middle East. The U.S. is going to take a step back and assess its own situation before it commits more to these issues,” Howell said.

Regarding the fourth industrial revolution, where AI will possibly replace an increasing number of jobs, Howell said it could also be a threat to the middle class.

“AI doesn’t know national boundaries … . We can anticipate most future job displacement will be technology-related, not trade-related,” he said.

Thus, Howell said that this year’s Davos is focused on five issues. These are preparing for the fourth industrial revolution; strengthening systems for global collaboration; revitalizing the global economy; reforming market capitalism; and addressing identity through positive narratives.

“I think the more we have people coming together considering them, the more chances for solutions. That’s what the Davos platform is about,” he said.

In October, the WEF established the World Economic Forum Center for the Fourth Industrial Revolution. The center aims to advance global cooperation on the fourth industrial revolution by defining policies for agile technology governance.

It will unite entrepreneurs, start-ups, investors, businesses, regulators, policy makers, NGOs and academia from around the world.

“How do you govern new technologies to serve society in humanity’s best interest? These experts will research developing principles and guidelines to deploy these technologies,” he said.

Howell said Japan could take a leadership role in tackling world issues, as its government is among the most stable in the G-7.

“It’s aging rapidly. The world will become much more like Japan to some degree. It’s very much aware of climate. We need to become sustainable in terms of energy policies. There are many areas where Japan could be a leader,” he said.

“Japan is using technology to help as society ages. It’s one of a few places where robots are seen as friends, not threats,” he said.

Unlike other nations where migration is becoming a serious concern, Japan has the opposite dilemma. Japan may have to rethink immigration, as well as invite more women into the workforce because technological solutions are limited, he said.

The question is how can Japan better deploy the people it has, he said.

“It’s more about an opportunity that can be taken than a challenge to overcome,” he said, adding that Japan can offer more positive narratives than many other countries.

Download the PDF of this Davos Special

Coronavirus banner