The reshaping of the world

Professor Klaus Schwab is the Founder and Executive Chairman of the World Economic Forum.

Seattle, Prague, Genoa, Melbourne. Over a decade ago, these cities were hosts to violent protests against a nebulous enemy: “globalization”.

The protests were aimed at high-level meetings of the international organizations the World Trade Organization, the International Monetary Fund and the World Bank, not to mention our own Meetings at the World Economic Forum.

Inside the meetings, while condemnation of the violence was unanimous, opinions of the protesters’ grievances, and what to do about them, were not.

Many inside the meetings understood that as the world was becoming more tightly interconnected as it accelerated into the 21st century, it was also becoming more inequitable and volatile. Few were united about what to do. And so the kind of coordination and agreement that would be necessary to manage the complexity of the new world was elusive.

The world is paying the price for that indecision and disunity today.

Over the past few years, our meetings in Davos have often been dominated by a single major issue facing the global community. From the global financial crisis, the Arab transition and the threatened collapse of the euro, leaders have often arrived with a dominant agenda and in response mode.

Today the situation is different.

From conflict in the Middle East, the US Federal Reserve’s tapering programme, and tension in the South China Sea, to the 75 million unemployed young people around the world, we face a situation where the number of potential flashpoints are many and are likely to grow.

I believe this situation is the result of a collective failure to manage and mitigate the consequences of globalization at the international level that stems back over the course of decades. In essence, the turn of the century anti-globalization protesters had a clear message that was right: global governance was not fit to manage the implications of the reshaping of the world that was already proceeding apace.

It remains unfit for purpose, and the challenges the world faces today are compounded in complexity.

Since the turn of the century, globalization has helped to bring hundreds of millions of people out of poverty. At the same time, many of these people have become customers of the global economy, clustering in new urban areas requiring infrastructure and resources, increasing the importance of supply chain resilience and crisis management capabilities.

Greenhouse gas emissions have continued on an unremittingly upward trajectory, while the global community’s efforts to coordinate a response around this complex tragedy of the commons have collapsed.

Global financial markets have demonstrated all too starkly how unidentified risks and uncoordinated responses can have a catastrophic impact across the globe.

Meanwhile, the accelerating march of technology has changed everything that touches our daily lives, from our ability to create community to the source and make-up of our energy. And the use of technology by governments and business has fundamentally brought into focus the nature of privacy and what it means to be an individual in modern society.

Each of these examples shows the dual nature of our modern interconnected world – the shining upside and the complex and unpredictable downside – calling for more and better coordination of mitigation and response capabilities at the global level.

As world leaders gather in Davos, the absence of an immediate crisis should provide critical space for leaders to focus on long term thinking. The theme of the meeting The Reshaping of the World: The Consequences for Society, Politics and Business speaks to the need for leaders to fundamentally reassess how the tectonic plates of the world are shifting against each other, so they can predict and respond more effectively to the earthquakes that we know are coming.

If our ingenuity and interconnectedness are to improve lives rather than reinforce the worst fears of the anti-globalization protests, leaders will need to rise above the endless maelstrom of short-term crises. The turn of the century demonstrations remind us that the discussions leaders have this week will influence the state of the world not only in 2014, or in 10 years’ time, but also beyond that to our long-term collective future.

We cannot afford to allow the next era of globalization to create as many risks and inequities as it does opportunities. The reshaping of the world demands collective insights and collaborative action.

Professor Klaus Schwab is the Founder and Executive Chairman of the World Economic Forum. The 44th Annual Meeting of the World Economic Forum will take place in Davos-Klosters from 22 – 25 January.