 The Tipping PointAs global institutions falter in the face of mounting challenges, business has to play an increasingly active role.Author: Klaus Schwab The year 2005 may be remembered as a tipping point of globalization. While the rise of China and India captured the minds of ordinary citizens in the West, we saw for the first time something like a global conscience react to the tsunami in Asia, Hurricane Katrina in New Orleans and the earthquake in Kashmir. However, like any other process, globalization needs rules and institutions that can implement and enforce them. Our existing institutions are on the brink of marginalization. The efforts to reform the United Nations and other international institutions, as well as the summits of the G8 and G20 nations, have produced carefully worded final statements but failed to meet expectations. Meanwhile, the list of global challenges grows longer. We have not made significant progress in the fight against terrorism, in eliminating global economic imbalances, in tackling climate change, in addressing the global health crisis or in creating sufficient jobs even in a growing economy. Our partially dysfunctional global governance systems lack the capacity to develop strategic responses to the challenges of a fast-changing world. The outcome is a generalized sense of insecurity and helplessness, resulting in outbreaks of populism, nationalism and religious fundamentalism acting as an "identity" safety net. To escape from this negativism, it would be wrong to look for the one great solution or the one great leader. We have to continue to strengthen the existing international frameworks. Maybe even more important, we have to create purpose-oriented global networks to address the manifold challenges in a pragmatic way. We have to integrate into those networks as many stakeholders as possible: politicians, academics, NGOs and particularly business. Such networks correspond to the flexible paradigms of the 21st-century knowledge economy, breaking with the rigid, formalized structures of the past. The world of tomorrow is not a world based on a supra-structure of nation-states. It is a world where business is a major shaper not only of economic developments but also of social developments; it is also a world where civil society feels deeply engaged. The only way to foster progress is to knit together the best minds, the most powerful leaders and the truly committed people to jointly define the problems, jointly propose innovative solutions and jointly engage in collaborative actions. In the new form of global governance, multi-stakeholder networks, public-private partnerships and informal alliances of different actors will be the norm rather than the exception. The legitimacy of those platforms will depend less on a traditional "representative" process and much more on ongoing public acceptance and measurable gains. Business has to play a very special role in such networks, as the generator of innovation. Of course, business has the primary motive of generating shareholder value, but it also has a great function as a social agent. Business is duty-bound to serve humankind by engaging with the other stakeholders of global society to address its challenges creatively and in a spirit of corporate global citizenship. Corporate global citizenship is not just a new catchword--no, it entails fundamental changes in the way top management acts. To engage in processes and networks that seek creative solutions for global problems is not only an act of enlightened corporate leadership, it is an essential license to operate in a global economy. Globalization offers great business opportunities, but also entails the duty to help build the fundaments of sustainable global systems. It is in the interest of business to make sure that global systems allow as much as possible of the world's population to benefit further from the effects of globalization. This is not a call to charity. It is a call to solve the manifold problems that threaten not only globalization, but global business itself. If indeed the world is "flat," it is still not yet a uniform surface, not yet a level playing field. It more resembles myriad badly fitting but nevertheless interconnected plates. Our task is to make those connections fit better--with new rules, new institutions and more creative leadership. Schwab is founder of the World Economic Forum. Copyright (c) 2005 Newsweek, Inc. |
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