Need for Reviving Economic Growth

  It has become increasingly difficult to identify routes that will take our global economic well-being back to historical growth rates. However, other factors need to also be added to the list of cautions. Income and wealth distribution have developed into political disruptions and a lack of emphasis surrounds the financial security of individuals because of vast technological change. This combination of economic inequality and political polarization threatens to amplify global risks. Technologically, we are in a highly disruptive phase of technological development intertwined with insufficient social cohesion and questionable policy-makers’ legitimacy. More agile forms of local, national and global governance and risk management need to be established through policy-maker and stakeholder collaboration to address this phase.

Current State of Democracy

  There are three identifiable trends undermining democratic legitimacy and effectiveness. The first one is rapid economic and technological change. This change, addressed earlier, has negatively impacted the average person’s sense of economic security. Outsourcing and foreign direct investment, along with technological advances, contribute to this impact. The job losses that have occurred have broken down whole communities through limited sources of income for post-industrial areas.

  The next trend is deepening social and cultural polarization. Immigration is the core policy issue within this trend, many countries are yearning for immigration policy change to bolster national sovereignty in a globalized world. The last identified trend undermining democratic legitimacy is a post-truth political debate. President Trump has essentially trademarked the “Fake News” phrase when referring to the suspicious and unpredictable way news and information is produced, distributed and shared. The “post-truth” phrase exacerbates this new phenomenon. The article discusses three strategies to improve democracy and address these alarming trends. They are: generating more inclusive growth, maintaining continuity in government while accelerating change, and reconciling identity nationalism and multiculturalism.

The Disruptive Impact of Emerging Technologies

  The article points to the labor market as a glaring indicator of the disruptive impact of emerging technologies on the global risk landscape. Incomes are pushed down and unemployment is pushed up in affected regions because of fewer available jobs resulting from technology development. Moreover, a recent study found that the most important interconnection of global risks is the pairing of unemployment and social instability. The following six technologies are highlighted as “emerging”:

  • 3D Printing – advances in additive manufacturing, such as 3D bio-printing of organic human tissues
  • Biotechnologies  – innovations in genetic engineering and therapeutics, such as synthetic biology and facial recognition scans
  • Robotics  – development of machines that can substitute for humans, such as claims representatives and bank tellers
  • Block chain/Distributed Ledger  – distributed ledger technology based on cryptographic systems that manage, verify and publicly record transaction data
  • Geoengineering  – technological intervention in planetary systems, such as complete climate change control
  • Neurotechnologies  – innovations that allow for reading, communicating and influencing human brain activity, such as smart drugs and neuroimaging

  Technology has arisen as the main source of solutions for the social, cultural, economic and political risks introduced. However, the pace at which the emerging and emerged technologies are changing is unsettling. This is because of their disruption in labor markets and exacerbation of political divisions due to rigid communities of like-minded citizens. Better management of technological change needs to quickly occur to hasten the benefits associated with emerging technologies.

Link: World Economic Forum: The Global Risks Report 2017

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ERM Enterprise Risk Management Initiative 2017-12-12