By Arab News
By Andrew Hammond*
The World Economic Forum (WEF) has long been perceived, by critics, as an exclusive club for the world’s globalized elite. It is, therefore, ironic to some that rebuilding societal trust in the post-pandemic era has been the theme of this week’s annual event. However, skepticism aside, the topic of trust is essential for the world to address given recent populist political surges, rising economic inequalities, and the “post-truth” phenomenon. And the end of Donald Trump’s presidency in the US may be the right moment for the world to turbocharge this conversation.
The fact that the flagship annual WEF summit has been held virtually for the first time this week provided an opportunity to extend the Davos dialogue to a much broader audience than the leading politicians and corporate leaders who normally attend. For instance, Sunday’s opening event and other key sessions are openly accessible on YouTube. Keynote speakers this week have included Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, French President Emmanuel Macron, German Chancellor Angela Merkel, South Korean President Moon Jae-in, and European Commission President Ursula von der Leyen.
These politicians have been joined by other leaders, including UN Secretary-General Antonio Guterres, World Health Organization Director-General Tedros Adhanom Ghebreyesus, International Monetary Fund Managing Director Kristalina Georgieva, and European Central Bank President Christine Lagarde.
The goal of rebuilding trust is not just an important end in itself. It is also vital, indirectly, in enabling the rebuilding of the world’s social and economic systems in the wake of the coronavirus crisis with forward-looking, fair and sustainable solutions.
Opinion surveys have, for decades, shown that trust in many elites and institutions has eroded. Moreover, the standing of a number of governments, especially in the West, has been further set back by a perceived mishandling of the pandemic. But, while trust in many politicians continues to weaken, some surveys simultaneously point to a rebound in the perceptions of business on measures including competence and ethics. This trend is interesting, as the opposite phenomenon — declining confidence in business, especially among the young — was one of the key legacies of the international financial crisis that started about a decade and a half ago.
Previously, growing distrust in business was shown not just in numerous opinion polls, but also by significant protests, including the Occupy movement, which came to international prominence with its Wall Street protest in 2011 as part of its campaign against social and economic inequality. The Occupy demonstrations, often driven by young people, spread to about 1,000 cities and more than 80 countries, from Canada to Norway to New Zealand.
One manifestation of this rising tide of distrust was that stakeholder belief in what many corporates said and did had been undermined. This posed challenges for firms looking for new, innovative ways to reconnect with publics and communities, especially in a world where there had already been a longstanding and growing backlash against the private sector on issues such as executive pay, international trade and globalization.
Many businesses have sought to rebuild trust through tried and tested techniques like creating good new jobs and investing in the economy, while paying workers fair wages and benefits. However, a growing number of firms have used new ideas to restore credibility and some of this may now be paying off in terms of public opinion. One example is the apparent paradox that, while there had been growing distrust of business, many people nonetheless expected the private sector to play a greater role in society. This includes helping tackle the range of problems facing the world, from climate change to growing economic inequality.
Of course, firms have long had sustainability, social responsibility and/or philanthropic programs to address such issues. However, the challenge — and potential opportunity — is now giving rise to a new way for firms to secure competitive advantage by creating “shared value” for society as well as shareholders. Perhaps the key idea behind this shared value concept is that corporate competitiveness and the health of society at large are mutually dependent and reinforcing. Thus, capitalizing on the connections between societal and economic progress, including tackling challenges ranging from climate change to the obesity crisis in many countries, can help drive growth for years to come.
Taken together, the innovation that many businesses have shown in the last decade and a half in reconnecting with society may contain insights for wider institutions and elites too. This is not just an academic exercise, for the challenges facing the world in the post-pandemic era will be best addressed with greater cohesion and trust right across the private, public and third sectors in a massive integrated recovery effort.
- Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.