The headlines before, during, and after the annual meeting of the World Economic Forum in Davos scream with indignation: globalization is bad, the world is divided, and trust in leaders is plummeting.
None of this should surprise us. The elections in the U.K. and the U.S. reflect a rising discontent with the state of the developed world and its leaders. That’s not just politicians; business leaders aren’t doing too well in the trust category, either. Those who aren’t enjoying the benefits of globalization are angry, and we all have a lot of soul-searching to do.
It’s been a bit more than a week since the annual meeting in Davos, which I have attended for more than a dozen years, and I’ve been reflecting on what was discussed this year. Perhaps the most sobering line came from Richard Edelman, whose public relations firm has published the Edelman Trust Barometer for 17 years. “We are in Davos with an empty bag. They don’t need us anymore,” Richard said.
A society without trust is at serious risk of weakening the bonds that unite us. So what should we do?
First, we must accept reality. Globalization is (mostly) good and certainly unstoppable; the world is in many ways more united, thanks to technology; and trust will only return when leaders concretely address the very real and substantial economic dislocations caused by the interconnected forces of globalization and technology. Those are the facts.
Consider this: About 11 percent of the world now lives in extreme poverty, according to a recent study by the World Bank. That’s down from 85 percent just 200 years ago. Why? Globalization. The free movement of goods, capital, and information globally is the single greatest force for eradicating poverty.
Not only has globalization lifted more than a billion people out of extreme poverty since 1990, it has contributed to a “substantial narrowing in inequality,” according to that same World Bank study. This is the first such narrowing since the Industrial Revolution more than 200 years ago.
But it sure doesn’t feel that way, does it? Thanks again to globalization. The free flow of goods, capital, and information means we will always have temporary periods in which large numbers of people are disadvantaged as investment dollars flow elsewhere. This is unfortunate – and inevitable. What’s more, the ubiquitous availability of information means everybody knows pretty much in real time who is gaining and who is not. This adds a particular psychological burden to the economic costs the disadvantaged endure.
This is the harsh downside of globalization, and it would be easy to turn inward as a result. That would be a very bad idea.
Accept and Harness
Rather than criticizing globalization, we need to accept it as a force of nature and then figure out a better way to harness this for the good of all. Driven by life-changing advances in technology, the world is more connected than ever. Do we really think we can contain this progress?
We can’t, and we shouldn’t want to. What’s so striking about the times we live in is that people everywhere, thanks to a global Internet, are sharing their frustrations. We have been brought together by digital technology in a very real way to address the economic dislocations caused by globalization. There’s a certain irony here: The technology that caused the dislocation is the very same technology that can help bridge the economic divide.
All this leads to my second point. What we need today is a new globalization that puts broad-based economic opportunity front and center. If the elections have taught us anything, it’s that our political and business leaders failed to consider those left behind as we raced ahead to conquer new frontiers and open new markets. While we celebrated the technological advances of Silicon Valley – and we were right to do so – we failed to celebrate and support the people whose skill and determination powered the previous generation of progress. Their lives were torn apart, and they feel robbed of what they thought would always be theirs. That leads to a lot of angry voters.
In practical terms, we need to increase investment in those places hit hardest by globalization. Why not, for example, build the next-generation alternative energy plants in coal-mining country? Why not reward those who first powered our greatness with the opportunity to power our continued success? On this, I humbly submit, we can all agree.
The only real way for leaders to rebuild trust is to show that we honestly, sincerely care. That means tangible investment – in schools, in infrastructure, in energy, in technology, in business, in health care, in families, and in our collective future. If we do this, perhaps the bags we carry to Davos next year will bulge with more than good intentions.
Stanley M. Bergman is Chairman of the Board and CEO of Henry Schein, Inc., a Fortune 500 company and the world’s largest provider of health care products and services to office-based dental, animal health and medical practitioners, with nearly 19,000 Team Schein Members and operations or affiliates in 33 countries. www.henryschein.com