Schwab looks at various structural socio-economic issues we must urgently address, and which were present already before the current COVID public health crisis. They include:
- The challenge posed by rising income inequality around the world, including in societies where productivity and wage growth has slowed.
- Increasing market concentration in various industries, and the related issues of slowing growth, innovation and productivity gains, as well as a higher indebtedness.
- The short-sighted exploitation of natural resources, that is corroding the environment and affecting the lives of many for the worse.
Next, Schwab investigates the possible causes of these systemic issues – globalization, the Fourth Industrial Revolution, the use of natural resources - and looks for solutions in places as diverse as China, Denmark, Ethiopia, Germany, Indonesia, New Zealand, and Singapore. He finds that in many instances, the same causes for the challenges we face today, are the reasons for the advances in prosperity we have seen in other domains.
And, he finds new ways of doing things that can help build the future and put us on a more resilient, inclusive and sustainable path. What these solutions share, is their adherence to the “stakeholder model”. In it, various stakeholders of an economy don’t only look after their own interests, but that of society as whole, leading to a system of “stakeholder capitalism”. It contrasts to present systems where the interests of a single stakeholder prevail, such as shareholder capitalism, or state capitalism.
Ultimately, the stakeholder model Schwab suggests, is one where government, business, and individuals collaborate; where longer-term planning for future generations replaces short-sighted presentism, and where better measures of success allow us to move beyond a myopic focus on GDP and short-term profits.
Schwab concludes by discussing initiatives such as the “Stakeholder Capitalism Metrics”, adopted in 2020 by many of the largest companies in the world, or the Living Standard Framework of the New Zealand government. It is when we apply this model consistently, Schwab writes, that we can build a global economy that works for progress, people and planet.
