As we close out 2019, the world is getting ready to gather once again in Davos-Klosters, Switzerland for the World Economic Forum Annual Meeting. The 2020 event is held from January 21st through the 24th. Stakeholder Capitalism is a major theme for this years event. Klaus Schwab, Founder and Executive Chairman of the World Economic Forum describes the need for a better kind of capitalism. In this recent article describing why we need the Davos Manifesto, he describes the three models of capitalism. The current dominant model is shareholder capitalism – a model that enabled hundreds of millions of people around the world to prosper, as profit-seeking companies unlocked new markets and created new jobs. This model is embraced by most Western corporations and holds that a corporation’s primary goal should be to maximize its profits.
In a recent Article via the World Economic Forum, author Alexandre Lemille – Co-founder and general secretary, African Circular Economy Network – describes the Circular Economy – a future scenario on my anchor Visual. In doing so, he shows how our current model extracts resources, transforms them into products, and consumes or uses them, prior to disposal. He describes how recycling actually distracts from the realization of a true circular economy – as recycling only starts at the throwing-away stage: this is a process that is not made to preserve or increase value nor to enhance materials.
I had the pleasure of delivering a dinner keynote at this weeks SAP Ariba Live event. I was very impressed with the event theme: 3 Trillion Reasons. That theme is a play on the nearly $3 trillion in commerce flowing through SAP Ariba annually. Although that number speaks to commerce, the theme spoke to purpose. As positioned on this Blog frequently, I expect a continued Shift to Purpose and Well-Being.
Within the context of the Fourth Industrial Revolution, the World Economic Forum is focused on Globalization 4.0. We are actually approaching Globalization’s Third Act. In a book titled The Great Convergence, Author Richard Baldwin describes the three constraints that have limited globalization: the cost of moving goods, the cost of moving ideas, and the cost of moving people. The first two acts of globalization occurred when the cost of moving goods and ideas dropped. While globalization raised the standard of living in several developing economies, the third constraint limited the breadth of impact.
In his closing chapter, Mr. Baldwin explores the possibility of a third act. This act is driven by dramatic advancements in areas that address the third constraint. If the cost of moving people were to drop, developing nations like South America, Africa, and others could be the beneficiaries of this third act. That aside, the World Economic Forum is looking at global risks and the need for global solutions. They identified Six Questions that must be addressed to make the next wave of Globalization work for all. They correctly state that facing future challenges requires dialog and input from all. Kudos to them for driving the dialog. The six questions are:
- How do we save the planet without killing economic growth?
- Can you be a patriot and a global citizen?
- What should work look like in the future?
- How do we make sure technology makes life better not worse?
- How do we create a fairer economy?
- How do we get countries working together better?
A very good set of questions. You can see how people responded to them by going Here.
As I reflected on my Thoughts for 2019, three themes stood out. I’ve already written about Convergence and Acceleration, so this post will focus on possibilities. As described recently, I believe the world will experience a Burst of Possibilities enabled by the forces of convergence and acceleration. We should expect these possibilities to multiply in 2019, but realization depends upon multiple factors. One of these factors is a true focus on purpose, posing this question for humanity: how do we harness these possibilities to bring about a better world?
In arguing the case for purpose-orientation and possibilities, I created this visual that maps future advancements to our areas of well-being (click on visuals to enlarge them). I could create a different one that shows how these same advancements can be used to diminish our well-being. That’s why convergence is the most critical theme among the three. An effective way to think about purpose and possibilities is via the United Nations Sustainable Development Goals. These are among the best-known and most frequently cited societal challenges. I believe we are entering a period of astounding innovation – advancements that have the potential to address these goals.
The brain is clearly one of the next great frontiers. In this World Economic Forum Article on reading minds, we get a glimpse into the exponential progression of brain science. The author cites research published by AI experts in China, the US and Japan showing that computers can replicate what people are thinking by using functional magnetic resonance imaging (fMRI) machines that measure brain activity – linked to deep neural networks that replicate human brain functions.
In a new book titled Shaping the Fourth Industrial Revolution, Klaus Schwab explores a future shaped by scientific and technological advances. The book builds on his earlier work where he describes the emerging Fourth Industrial Revolution. In this latest work, the author describes how rapid advancement in science and technology promise to disrupt the digital systems of our day, creating entirely new sources of value. He touches on a key point that I have articulated in my anchor visual; that the digital technologies that organizations are struggling to make sense of today, turn into the core infrastructure that business models will take for granted tomorrow. Said another way; digital is the foundation for the innovation that is emerging.