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Five priorities for leaders at Davos 2017

For Davos attendees, it can be lonely at the top.
By Bank of America
Published Last updated This article is more than 2 years old.

In a year that promises huge changes, our leaders and executives must manage the immediate priorities: trade, foreign relations, and government spending. But they must also consider the less obvious changes, many of them driven by technological innovation. From automation and artificial intelligence to commerce, connectivity, and distribution, rapid advances are beginning to challenge the way we live, work, and communicate.

The response to this wave of change will dictate our collective future. With that in mind, here’s what we expect policymakers and leaders attending Davos to discuss this week:

What will work look like?

Work isn’t what it used to be. Young jobseekers have grown up in a corporate landscape marked by uncertainty and disruption. Even as green shoots appear in economies like the US, settling on a long-term career path has become more challenging. New graduates must not only pick the right job, they must also pick an industry or path protected from the threat of tech-enabled obsolescence.

This uncertainty helps explain why millennials in both developed and emerging markets are the least loyal employees in generations. Two in three expect to quit their current company by 2020—and those who do intend to stick around generally want to work in open and inclusive organizations that promote from within.

As the job-for-life paradigm fades, focusing on building worker skills becomes even more critical to employees and employers alike. With future corporate investments in the US likely focusing on cost-savings efficiencies from automation and AI-driven production, blue-collar workers may find that their career longevity depends on figuring out how to work in emerging disciplines like 3D printing or material sciences.

In high-tech industries, nurturing and retaining top talent will be a top priority in building a workforce for tomorrow. Are current education offerings up to the challenge? Emerging learning platforms (from online Ivy Leagues and coding boot camps to the Kahn Academy) might help bridge the skills gap and boost entrepreneurship. Employer recognition of non-traditional online education could also help cap the rising burden of US student debt for younger workers.

Can good governance go global?

After decades of uneven results, globalization is no longer sacred. Davos gatherers understand that a wave of economic populism—in part a backlash against offshoring, free trade, and wage stagnation—helped drive the electoral results that redefined the West’s path forward in 2017. At the same time, existing international bodies like the UN are struggling to deal with persistent conflicts across humanitarian, environmental, and economic lines. Can we reshape these institutions to deliver better collective solutions?

Combatting cross-border crime is crucial to good governance, too, whether the issue is human smuggling or sophisticated tax evasion. Can technology and policy work more closely to confront challenges to international rule of law? A shift to a cashless society in Scandinavia (in part to defund organized crime and reduce money laundering) is one example of how governments can use new tech to address age-old problems. These kinds of bold ideas could reinvigorate the social contract.

How do we end the inequality gap?

Economic health today is often measured in incremental GDP percentage points or by volume of trade. While these remain important benchmarks, we must also find ways to promote the kind of growth that brings everyone along for the ride.

Achieving this in a complex, interconnected global economy is not easy. On one hand, the abrupt end of the TPP trade pact represents a victory for an embattled Western “working class.”Cheap imports and outsourcing may be held at bay for now. But on the other hand, the decision is a setback for workers in emerging markets—and their hopes for global growth that would lift them into a comfortable middle class.

Can we strike a more balanced approach that grows all economies without spooking richer markets? And in a world of tax havens and tax cuts for the 0.1%, how can we distribute capital more equitably? New research shows income inequality is reaching record levels in the US; for earners in the bottom half, wages haven’t advanced in more than three decades.

Regardless of where you might fall on the wealth scale, the stakes of inaction are too high. Davos attendees must have an honest discussion of how to address and reverse institutionalized unfairness. It’s evident that the status quo is not working for many, and it’s clear the electorate is not afraid to demand change.

Can we recalibrate capitalism for tomorrow?

Capitalism has become today’s dominant economic and political force. Our legal systems largely revolve around the rules of finance, property and trade. And more recent government experiments, like the last decade of near-zero interest rates, haven’t helped workers.

How can capitalism be tweaked? Making labor-friendly policy isn’t always easy or straightforward. In Japan, rules designed to protect worker rights have accidentally created a generational divide between the haves and have-nots: older salarymen enjoy incredible job security and perpetually rising wages, while younger workers get temp contracts, longer hours and low pay. In the US, a hunger for insular trade policy helped swing the election; a rise in protectionism, though, could prove destructive for jobs and companies alike.

There is no one-size-fits-all reform, but whatever course we embark on must tilt toward responsible, sustainable growth. We must also escape the short-term thinking that stems from a focus on quarterly numbers and share buybacks. Davos attendees can look to nonpartisan movements like the American Prosperity Project when thinking about how the benefits of growth can be spread around.

How do we rebuild trust in institutions?

The trend is clear—public faith in our governance systems is eroding. Young Americans’ trust in institutions has now fallen below 50%, and Europe hardly fares better: While some in the UK may regret Brexit, Brussels’ opaque legislative process didn’t help.

When so few trust politicians, corporations, or the justice system, what does it say about our society? And where are our arbiters of reality? Distrust for news used to simply be a matter of political slant; now personalized distribution systems send out targeted content that can be outright false. Regardless of how you see the world, an open season on truth makes governing and doing business all the harder.

Perhaps an answer lies in the parallel rise we’ve seen in trust in our peers and individuals. Vibrant online communities have emerged, connecting a diverse swathe of people around the world. This encouraging trend shows that cynicism is not the only footpath we can take.

There is an added urgency at this Davos summit—the problems the world faces today are neither simple nor straightforward. Imminent technological change holds the potential to both help and harm, at a scale and speed once unimaginable. For the Davos class of 2017, this primer is a starting point for discussion; the real goal should be action, and for our leaders to take up the mantle of responsible and responsive leadership.

This article was produced on behalf of Bank of America by Quartz Creative and not by the Quartz editorial staff.


Sources:
Deloitte, 2016 Millennial Survey
Forbes, 3 Online Education Trends That Will Shape How You Hire in 2016 
Bloomberg, China’s Empty Oceans
New York Times, A Trade War Against China Might Be a Fight Trump Couldn’t Win
Bloomberg, Scandinavia’s Disappearing Cash Act
New York Magazine, A New Study Shows How Severe US Inequality Is—and How Little We’re Doing About It
NPR, Who Benefits From Donald Trump’s Tax Plan
Washington Center for Equitable Growth, Distributional National Accounts: Methods and Estimates for the United States
Bloomberg, Low Rates Don’t Increase Inequality Bundesbank Study Shows
Financial Times, Shinzo Abe fears wrath of the salaryman on labour reform
The Economist, An early salvo in trade war between America and China? 
Aspen Institute, The American Prosperity Project: Policy Framework 
Harvard IOP, Trust in Institutions and the Political Process 
The Economist, After Brexit, Bregret
Politico, Where European democracy goes to die
Gallup, Confidence in Institutions 

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