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This is the point in the discourse where we could flash the graph showing how there was a dramatic decline in world hunger from that point onwards as a way of convincing you that Erhard’s messaging worked.
In truth, we probably all understand that changing the narrative is only the starting point for transformation. Any number of other factors have to come into play for transformation to really gain traction.
Substantive change (in the absence of war or natural disaster) is also a function of saying the right thing at the right time, making a compelling case as to why this is as much about self-interest and self-preservation as it is about a ‘moral imperative’, and lastly, a point that the World Economic Forum may have only recently fully appreciated, understanding that it’s not about the wealthy extending their hand to the less fortunate.
It’s about recognising that we all have in some measure contributed to the problems the world currently faces. As such, we need to develop solutions together: business, government, institutions, social agents and the citizens of each country that comprise the planet.
When Klaus Schwab first envisaged the kind of community gathering that would eventually become the World Economic Forum, the locus of his focus was on the business community. Schwab’s compelling cry to the most powerful drivers of economic change in the world was that: ‘Corporate success would depend on companies taking account of all stakeholder interests – not merely shareholders, clients and customers, but employees and the communities within which they operate, including government.’1
This was a fairly radical departure from the business convention of the time. Following on from the guidelines set out by the Delaware Companies Act (which most American companies adhered to) management of publicly listed companies accepted it as non-negotiable that the interests of shareholders took precedence over all other stakeholders. Undeniably Schwab’s Davos Manifesto represented an important shift in messaging. It was the first real suggestion that multinationals needed to assume a far more influential role in society than previously considered.
The fact that the annual meeting of the World Economic Forum only opened its doors to those who were deemed influential enough to be invited or wealthy enough to pay for their inclusion into this elite group gave the WEF membership the kind of critical cache that made corporate leadership want to be seen as agreeing with this value system. From a Kuhnian perspective, these were exactly the type of influencers who were capable of initiating a large-scale paradigm shift in terms of how companies saw their obligations to the communities and economies that they were part of.
There is no denying that WEF used this power of persuasion to stimulate any number of societal and political interventions. A review of their 50-year history of influence shows the WEF hosting discussions on the limits to growth and the potential consequences of unbridled growth on the environment as far back as 1973.
In addition to the Davos Manifesto that was also introduced in 1973, the WEF began to open up participation in their debates to emerging economies. They were instrumental in promoting Arab–European business cooperation during the oil embargo of the 1970s and in helping to open the door to China in 1979. With solid roots in the European business community, they would have a decided influence at the end of the Cold War with the way that Europe engaged with Gorbachev and later the German reunification and the emergence of Russia. Later, some credit needs to also come their way for the eventual formation of the G20.
Economic growth and politics weren’t their only focus, though. From early on they provided strong support on such environmental issues as climate change, population growth, urbanisation and the full spectrum of health issues that would shadow development initiatives globally. They would also turn out to be early proponents of gender equality and lifetime learning or skills development – an important counter to global concerns about the coming Fourth Industrial Revolution.
But at the November 2019 annual research meeting in Dubai, which typically provides an opportunity for the various assembled research teams to update the WEF community with the world’s most pressing needs, one could sense that there was a new challenge to their viability that demanded a response if they wanted to stay relevant and influential.
Thanks to some particularly thought-provoking books and articles by the likes of such scholars and writers as Anand Giridharadas, Chiara Cordelli and Dani Rodrik to name just three, there was a growing suggestion about the hypocrisy of it all.
On the one hand, we were seeing an explosion in the number of newly minted billionaires who were appearing on the world stage. These were business moguls whose fortunes had been made on the back of potentially monopolistic, certainly opportunistic business practices.
On the other hand, these same billionaires were just as quickly turning around and doling back this money to causes around the world that they identified as worthy of their support. Just pause for a moment and consider why this was suddenly becoming viewed as a problem.
On the surface it all looked like a win-win for everyone: the rich and famous would come out and lobby for equality and justice for the downtrodden in every way possible … except, as it was carefully pointed out, for any way that might actually threaten how they had come to be so incredibly wealthy.
Similarly by dispensing their largesse where they deemed most fit – and under terms that agreed with their benefactors’ sensibilities – in effect they ended up undercutting the necessity for the countries and civic groups that were beneficiaries to develop their own institutions to fulfil that need.
For Africa, much of this backlash manifested itself through suggestions that aid programmes simply extended the paralysing conditions created earlier through colonialism.
Consider this harsh line of questioning from Chiara Cordelli:
Why are there in the world so many people that need you place in the first place? You should ask yourself: Have your actions contributed to all that? Have caused, through your actions, any harm? And, if yes, the fact that now you are helping some people, however effectively, doesn’t seem enough to compensate.2
From Dani Rodrik’s perspective, the people of the liberal globalist elite may well imagine that they are working for ‘the world’ but in fact they are not part of the political process or citizens of anything, and therein lies a problem.
Many of the problems the world economy faces – whether it’s trade restrictions or financial instability or lack of adequate development and global poverty and all those things – many of these problems would in fact become less severe if our local politics were working right.
And the idea that you could just develop these solutions from the outside or parachute them in, or that you could bypass local politics through these transnational kinds of efforts, it’s definitely worth it as complementary efforts. But when it becomes a substitute, when it starts to replace the hard work that we should get engaged in in terms of our domestic political process, then I think it becomes potentially quite perverse.3
The political system that Rodrik is referring to is more than just government. It is civic society, the process of solving problems where the population being impacted should logically have their say.
This is exactly the kind of criticism or commentary that the World Economic Forum is now becoming acutely sensitive to. To its credit, it is trying to understand how it can better address what are probably valid observations. This includes ensuring that it has more diverse and representative attendance at every level of their forums: working committees, research committees, and regional committees addressing regional priorities as opposed to global priorities.
But more importantly the WEF has also seen that better traction will be gained by aligning themselves with more broad-based initiatives, where any number of other stakeholders appear to have participated in the debates. To that end, this year, 2020, the World Economic Forum will align itself to addressing the 17 sustainable development goals that were agreed upon in Addis Ababa in 2015 by the 193 member states of the United Nations.4
By now, most corporate leaders are fairly familiar with the basic tenets of the 17 sustainable development goals.
But what perhaps has not been fully appreciated is how radically different the modus operandi has been for setting out those goals, agreeing to their terms and identifying how best to meet them. And therein lies our third lesson about how to effect change. Consider how the principles set out in this pact have set a new benchmark for transformation. For the first time in the history of the planet the development model for transformation would make a radical leap forward and this has particular implications for development in Africa.
Perhaps the more critical factor was that each participating country recognised that it was up to them to determine how best to meet these goals, over what timeframe and as assessed by what criteria. In that regard, these endeavours speak right to what Rodrik was advocating for: that ‘the whole idea of having a polity, having a demo, is that there is accountability within that demos’. That is what a political system ensures that a non-governmental organisation (NGO) or corporate social investment (CSI) programme can’t.
This doesn’t mean that there isn’t a critical role for corporates and multinationals to play. But to understand how to play that role to greatest effect needs to be prefaced by the kind of discussion that we have just had here. We need to be sensitive to the fact that if this is actually going to work (this time) we indeed will need a paradigm shift.
As the discussion document setting out the 17 SDG initiative concludes:
Harnessing the know-how, expertise, technology and financial resources from businesses, academia, civil society and individuals is necessary to reach the ambitious targets in every context. The multi-stakeholder approach defines the core of the 2030 Agenda and SDGs: we are all in this together.5
MINDSHIFT THREE: Facilitating constructive change demands a new perspective – where multistakeholder parties understand that to get this right, we need to understand that we’re all part of the problem – and as such, need to be part of the solution. With that as the starting point, how do we ensure that each party remains accountable for delivering their part to the answer – while at the same time ensuring that they leave behind the public institutions or public–private partnerships that will safeguard the sustainability of these commitments into the future?
So given our expanded understanding about change, where can corporations and multinationals make a meaningful contribution to economic growth and economic productivity in Africa?
While the WEF’s Global Future Councils typically deal with issues that pertain across the globe, the November 2019 meeting of the Councils in Dubai made it patently clear that the weakest link in the global challenge to meet the 17 sustainable development goals by 2030 was Africa. Africa was significantly behind every other continent in meeting those targets.
As the continent with the greatest population growth, Africa could provide the business world with, at one level, a whole new consumer market or access to attractive alternative to Asia as a source of cost-effective labour and resources. But, equally, a failure to unlock that youth dividend could have ramifications these days that go far beyond the borders of its 45 member nations.
Possibly the most important insight that we can offer to corporations and multinationals operating in Africa is that research currently suggests that the payback for enhancing human capital development in Africa is nearly double that for other labour markets around the globe.
Now that we all have a clearer understanding of the debates around developmental change and economic growth, we will use the next issue, Issue 5, of the Benefits Barometer Africa newsletter to expand on exactly what areas of human capital development will serve both your productivity and global competitiveness issues as well as the developmental imperatives of the region to meet their SDG targets. This is as close to a true win-win as it will get.
Spoiler alert: If we look at the constituents of the Human Capital Development Index they are:
Combine this with a more thorough assessment of what possibilities the African Continental Free Trade Agreement holds for Africa’s future and you will appreciate our focus for our next issue of Benefits Barometer Africa.
1 Parker, C. The World Economic Forum at 50: A timeline of highlights from Davos and beyond, 20 December 2019, World Economic Forum (online).
2 Giridharadas, A. 2019. Winners Take All: The Elite Charade of Changing the World, London, Allen Lane, p. 256.
3 Giridharadas, A. 2019. Winners Take All: The Elite Charade of Changing the World, London, Allen Lane, p. 224.
4-5 United Nations Development Programme. 2018. Sustainable development goals, 14 July 2018 (online).
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