Globalization and the technological revolution go hand-in-hand, in a way that is now inseparable.
But they both need to revolve around human beings, thereby becoming more inclusive. In essence, what needs to happen is to reconnect the rhythm of the economy with the rhythm of society.
This is something that governments have started to realize lately (perhaps too late?). In the run-up to its annual meeting in the Swiss Alps, to be held in Davos in January 2019, even the World Economic Forum (WEF) acknowledges that:
Owing to the slow and uneven recovery in the decade since the global financial crisis, a substantial part of society has become disaffected and embittered, not only with politics and politicians, but also with globalization and the entire economic system it underpins.
Did the G20 focus on it?
But how to bridge this divide? The recent G20 summit in Buenos Aires ventured into this territory in its final declaration, with a commitment to defend a more inclusive, more people-centered form of globalization.
It became apparent in the Argentine capital that, despite the presumable trade détente between Trump and Xi Jinping, globalization is in jeopardy if it cannot be tamed.
This is not only due to the protectionist and restrictive winds blowing in Washington. It also reflects the decoupling between economies and societies, at least in a considerable number of countries.
The G20 declaration – a document few read, but always one which requires huge diplomatic efforts to negotiate – went further and deeper into the subject of inclusivity than the previous annual G20 summit in Hamburg, which had endorsed an action plan in this area.
What’s the role of national level action?
As important as it is to get to a more people-centered form of globalization, most measures are to be taken at a national level, albeit in a coordinated fashion.
At least the G20 has recognized the dangers that come with the technological revolution. It accepts that we are in transition as far as the future of work is concerned and it is necessary to help the people caught up in it.
It also encourages small and medium-sized enterprises to complete their digital transformation, an area where they are widely falling behind.
Japan’s concept of a “Society 5.0”
The core idea – that economic growth cannot be allowed to take place in a vacuum, but must be accompanied by security for people and that its distribution must be fairer – is something that Japan, which has recently taken on the presidency of the G20 for the year ahead, is now proposing.
In this regard, Japan leads the way with its concept of Society 5.0. It puts people and society — and not industry per se (unlike the German Industry 4.0 strategy) — as the focus of necessary and unstoppable technological change.
Some of this may be an attempt at clever wordsmithing on the part of the Japanese, however. After all, it is the fear of Japan being left behind in the Fourth Industrial Revolution that underlies the initiative by Shinzo Abe’s government.
The role of the private sector is critical
None of this is something that falls exclusively to governments or to states. The private sector has a critical role to play too.
A lot is at stake. Properly managed, the technological revolution can reduce inequality. Mismanaged, or left to its own devices, it will increase it.
Of course, all of the above is easier said than done. But unless it is talked about and discussed and debated, there is no prospect of taking the path required, not just to make progress but to avoid slipping backwards.
Globalization and the technological revolution go hand-in-hand. But they both need to revolve around human beings.
After the Yellow Vests challenged Macron in France, is there a way out of the conundrum for the G20 nations?
Japan’s concept of Society 5.0 puts people and society -- and not industry -- as the focus of necessary and unstoppable technological change.
Properly managed, the technological revolution can reduce inequality. Mismanaged, it will increase it.