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Already, in barely six months, the COVID-19 pandemic has plunged our world in its entirety — and each of us individually — into the most challenging times we’ve faced in generations.
It is a defining moment — we will be dealing with its fallout for years, and many things will change forever. It has wrought (and will continue to do so) economic disruption of monumental proportions, creating risk and volatility on multiple fronts — political, social, geopolitical — while exacerbating deep concerns about the environment and also extending the reach of technology into our lives.
No industry or business will avoid the impact of these changes. Millions of companies risk falling behind, and many industries face an uncertain future; a few will thrive.
On an individual basis, for many, life as they’ve always known it is unraveling at alarming speed. This said, acute crises favor introspection and foster the potential for transformation.
“On an individual basis, for many, life as they’ve always known it is unraveling at alarming speed. This said, acute crises favor introspection and foster the potential for transformation.”
A new world could emerge, the contours of which it is incumbent on us to reimagine and redraw.
The sudden and violent nature of the shock the pandemic is inflicting can make the scale of this challenge seem overwhelming.
This impression is due in no small measure to the fact that in today’s interdependent and hyper-connected world risks amplify each other: Individual risks or issues harbor the potential to create ricochet effects by provoking others (like unemployment potentially fuelling social unrest and impoverishment triggering involuntary mass migration).
The defining feature of today’s world is systemic connectivity: In such a world, silo-doing and silo-thinking have no place because risks converge. All the macro issues that exert direct and daily impacts on our societies, the global economy, geopolitics, the environment and technology do not evolve in a linear fashion.
They play out as complex adaptive systems, and as such, share a fundamental attribute: susceptibility to matters cascading out of control and in so doing producing extreme consequences that often come as a surprise. COVID-19 has already given us a foretaste of this phenomenon.
“The defining feature of today’s world is systemic connectivity: In such a world, silo-doing and silo-thinking have no place because risks converge.”
To a considerable extent, occurrences as different as the sharp and dramatic rise in unemployment (an economic risk), the global wave of social unrest unleashed by the Black Lives Matter protests (a societal issue) and the growing fracture between China and the U.S. (a geopolitical risk) wouldn’t have taken place without the pandemic. At the very least, coronavirus exacerbated those trends.
The concurrence and severity of these fault lines mean that we are now at a critical juncture: The potential for change is unlimited and bound only by our imagination — for better or for worse.
Societies could be poised to become either more equitable or the opposite; geared toward more solidarity or greater individualism; favoring the interests of the few or looking to the needs of the many; economies, when they recover, could be characterized by greater inclusivity and more attuned to our global connection, or they could simply return to business as usual — now revealed to be (in so many ways) an untenable status quo.
This is the fundamental question upon which the success of the Great Reset depends. The scope of change required is immense, ranging from elaborating a new social contract to forging improved international collaboration. Immense but far from insurmountable, as the case for smart investment in the environment shows.
“The concurrence and severity of these fault lines mean that we are now at a critical juncture: The potential for change is unlimited and bound only by our imagination — for better or for worse.”
The immediate post-crisis period offers a small window to build back better by not wasting the $10 trillion that governments around the world are investing to alleviate the effects of the COVID-19 pandemic.
One way to invest smartly is to embed climate and environmental resilience into stimulus packages and recovery programs.
A recent policy paper to which the World Economic Forum contributed estimates that building a nature-positive economy could represent more than $10 trillion per year by 2030 — in terms of new economic opportunities, as well as avoided economic costs.
In the short term, deploying around $250 billion of stimulus funding could generate up to 37 million nature-positive jobs in a highly cost-effective manner. We should not view resetting the environment as a cost but rather an investment that will generate economic activity and employment opportunities.
We must get the Great Reset right. The challenges before us could be more consequential than ever imagined, but our capacity to reset could also be greater than we had previously hoped.
This article accompanies the launch of COVID-19: The Great Reset, the new book by Klaus Schwab and Thierry Malleret on the COVID crisis and its impacts.
Republished with permission, this article first appeared on World Economic Forum.
Longitudes explores and navigates the trends reshaping the global economy and the way we’ll live in the world of tomorrow: logistics, technology, e-commerce, trade and sustainability. Which path will you take?