World Economic Forum: The Great Reset

The World Economic Forum (WEF) adopted The Great Reset as the theme of its 50th annual meeting held in Davos, Switzerland in June 2020. This theme was also adopted for the 2021 WEF annual meeting. These WEF meetings provided opportunities for some of the world’s most prominent political and business leaders to discuss how to rebuild global society and the economy in a sustainable way following the COVID-19 pandemic. Conceptually, The Great Reset is intended to reshape the world in a way that is more aligned with the United Nations 2030 Sustainable Development Goals, with a particular focus on issues related to climate change, inequality, and poverty. Charles, Prince of Wales, at the opening session of The Great Reset 2020 event, cited some guiding principles and issues of paramount importance to humanity with a particular focus on technology, climate change, environmental degradation, increased income inequality, and adequate food and water resources. He appealed for the adoption of a Sustainable Markets Initiative through global action to address how to achieve an economy that operates in favor of people and the planet while contributing to growth and prosperity. This new economic structure would require a dramatic shift in corporate business models, an aligned incentivized and mobilized financial system, and an enabling environment that attracts investment and incentivizes action. It would include reinvigoration of science; innovation in technology; introduction of carbon pricing; achieving net zero emissions globally; implementing new incentive structures; rebalancing investments to include more green investments; and encouraging green public infrastructure projects. According to keynote speaker Kristalina Georgieva, Managing Director of the International Monetary Fund, the three key economic aspects of the sustainable response for The Great Reset are green growth, smarter growth, and fairer growth. Governments can put in place public investments and incentives for private investments that support low-carbon and climate-resilient growth. These investments will lead to a job-rich recovery through infrastructure development, land restoration and reforestation. Although the digital economy has grown significantly due to the pandemic crisis, it is important to offset the widening digital divide that leaves some countries and communities further behind; it is essential to make sure that the jump in growth in profitability in the digital sector leads to benefits that are shared across all societies. The risk that the pandemic will deepen inequality can be avoided if the resetting process is focused on investing in people, the social fabric of society, providing access to opportunities in education for all, and by expanding programs of social security and healthcare while giving particular attention to the most vulnerable people around the world.  Other important aspects of The Great Reset include: (i) a focus on labor markets and the future of work as more people work remotely and the process of up-skilling and re-skilling takes place; (ii) concern for food production and security, mitigating risk of disruptions to food supply chains, and the need for global policy coordination to prevent food protectionism taking effect. 

Klaus Schwab, Founder of the WEF, has described the three core components of The Great Reset as: (i) the creation of conditions for a stakeholder economy, improving policies and agreements on taxes, regulations, fiscal policies and trade to result in fairer outcomes; (ii) addressing how the large-scale pandemic governmental spending programs and private sector institutional investment could improve the global economic system by moving forward to a better system that is more resilient, equitable and sustainable over the long-term by building green urban infrastructure and creating incentives for industries to improve their track record on environmental, social and governance (ESG) issues; and (iii) to harness the innovations of a so-called Fourth Industrial Revolution for the public good. Previous industrial revolutions liberated mankind from animal power, made mass production possible and brought digital capabilities to billions of people. The Fourth Industrial Revolution is, however, fundamentally different inasmuch as it is characterized by a fusion of technologies, including artificial intelligence, robotics, the internet of things, autonomous vehicles, 3-D printing, nanotechnology, materials science, energy storage, and quantum computing, all of which impact the global economy and the whole range of industrial activity. The resulting shifts and disruptions provide a time of great promise to dramatically improve the efficiency of organizations and to manage assets in ways that can help regenerate the natural environment, and thus mitigate the evident damage from previous industrial revolutions. The level of cooperation and ambition that this new economy implies is unprecedented. However, the pandemic crisis has clearly demonstrated how quickly radical change to lifestyles can be made as businesses and individuals abandoned practices long claimed to be essential such as working in an office and utilizing frequent air travel facilities. The commitment and ability to build a better future society and global economy require stronger and more effective governments and private sector engagement to realize the full potential of this brave new world.

 Ken Buffin, Editor