5 minute read 23 Jan 2019
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When trust falters: how to spur inclusive growth

By

Alison Kay

EY Global Accounts Committee Chair

Working across EY's largest accounts. Advocate for a diverse workforce. Accomplished pianist. Loves to sail.

5 minute read 23 Jan 2019

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Three ways to make growth more inclusive and create a business environment that allows people to thrive.

History tells us that if you leave people behind, there are consequences. So as the World Economic Forum Annual Meeting opens this week with a focus on “Globalization 4.0,” – I am keen to come up with ways to make growth more inclusive.

We are living in a new type of innovation-driven economy and new global norms, standards, policies and conventions are needed to safeguard the public trust.
Professor Klaus Schwab
Founder and Executive Chairman of the World Economic Forum

Globally, there is a growing digital divide between rich and poor, urban and rural, developed and developing that threatens to undermine the incredible potential of technology advances. The UN Broadband Commission for Sustainable Development estimates that, by the end of 2019, only 50% of the world is expected to be online. What happens to those who aren't?

There are also regional divides emerging within countries. Despite the “always on, everywhere” aspect of technology, job creation in the last 10 years has been very concentrated in hot spots. In the US, it's been on the coasts; in the UK, it's been in London and the south-east. What happens to those growing up outside these areas? Do they miss out on job prospects? With technology and all the possibilities for remote working, is that the best we can do?

Fortunately, the news is not all bad. At a high level, in terms of education, income and mortality, the world is a better place than it was 20 years ago1 :

Education

60%

In low-income countries around the world, 60% of girls finish primary school education.

Income

20

In the last 20 years, the number of people living in extreme poverty (under US$2) has halved.

Mortality

72

The average life expectancy around the world is 72.

Have there been ways in which globalization to date has failed? Absolutely. But it's worth acknowledging the progress we have made. Huge progress. Having said that, it's time to work on making sure that more people's lives improve as a result of globalization.

Why trust matters

So how can we spread economic growth more evenly? I believe this is a key issue of our time.
This will define the success of Globalization 4.0. And while government has responsibility and obligations in terms of policy, business and business leaders have an active role to play.

Trust is at the heart of people's relationships with businesses and governments. But there has been an erosion of public trust in these institutions in recent years. According to the 2018 Edelman Trust Barometer, the number of countries dubbed “distrusters” – where less than 50% of the general population trust “the institutions of government, business, the media and non-governmental organizations (NGOs)” – is now 20 of 28.

Almost two-thirds of participants said they wanted businesses and CEOs to speak out on policy and step up to be agents of change, instead of expecting government to instigate it. I believe this is in response to leading companies taking action. These include consumer product companies that are focusing on sustainability and tackling quality and environmental issues in their supply chains, tech companies getting involved in education and actively seeking a more diverse talent pool, and energy companies working with housing developments to implement microgrids.

However, I also believe that responsibility for inclusive growth is not down to government or up to business. It is the responsibility of us all: citizens, businesses, academics, regulators and governments.

Three ways to improve inclusiveness

So where do we start? How can we create a business environment that allows people to thrive? I think there are three priorities:

1. Focus on the big questions at a global level

When is it acceptable to clone animals or humans? Should driverless cars be programed to value the lives of many over the life of the driver? Should robots have rights? How do we decide which biases to strip out of AI algorithms?

Questions like these have moral and ethical ramifications beyond national borders. Ultimately, AI will be used globally, it will require global norms and standards for people, governments and businesses to follow. And as AI continuously evolves, it will need an ongoing and rigorous system of checks, processes and controls. Developing these will take the best scientific, technological, academic, legal, political and business minds working together. We've seen a few starts but this is an urgent priority before the genie is out of the bottle.

2. Educate and train people, so they can navigate through the impact of automation

Much has been published about the impact of automation on jobs and the need for more digital skills in both current and future generations. But altering national approaches to education requires public trust in the government's vision of the future, not to mention an enormous amount of political will, negotiation and money. So will people spend money on edtech to give their children what the schools aren't? Something needs to change.

Businesses and governments need to create new strategies and opportunities for people whose jobs are affected by automation. Reskilling and training is essential to give people the tools they need to flourish, and to adopt a mindset of lifelong learning. I believe the best future will be humans and machines working alongside each other but that won't happen by default. We need to invest and plan for it.

3. Focus on the long-term and sustainability

Profit is quick to recognize short-term changes in revenues and costs but what about investments made for the long-term? My last blog explored how we could update financial reporting to reflect long-term value. Right now, a company's investments in innovation, environmental and social impact or strong governance are real competitive assets that don't show on the balance sheet. It's time to correct this.

What’s possible in the Transformative Age? Join EY to discuss this and all the pressing economic and social issues as we look to the World Economic Forum Annual Meeting 2019 ― from 22-25 January. Join the debate via ey.com/wef and using #WEF19 and #BetterWorkingWorld.

Summary

Building a better future will take bold thinking and wider collaboration. But most importantly, it will take trust. Without a shared vision of how technology can benefit all of society, and not just a select few, people will be less likely to embrace change, to share data, to collaborate on the creation of global norms and standards. To create a better future, a more inclusive future, we have to start with rebuilding trust.

About this article

By

Alison Kay

EY Global Accounts Committee Chair

Working across EY's largest accounts. Advocate for a diverse workforce. Accomplished pianist. Loves to sail.