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The View
OpinionComment
Klaus Schwab
Klaus Schwab

The View | The fourth industrial revolution will worsen inequality – but only if the world lets it

  • Klaus Schwab says the right response to globalisation is not retreating within national borders but crafting new models that create opportunities for all
  • The upcoming World Economic Forum will be about meeting this challenge as the disruptions of the fourth industrial revolution accelerate

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The next annual meeting of the World Economic Forum in Davos, Switzerland, looks set to be dominated by discussions of the fourth industrial revolution and its effects on communities around the world. Photo: Bloomberg
Klaus Schwab
After the second world war, the international community came together to build a shared future. Now, it must do so again. 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 globalisation and the entire economic system it underpins. In an era of widespread insecurity and frustration, populism has become increasingly attractive as an alternative to the status quo. 
But populist discourse elides – and often confounds – the substantive distinctions between two concepts: globalisation and globalism. Globalisation is a phenomenon driven by technology and the movement of ideas, people and goods. Globalism is an ideology that prioritises the neoliberal global order over national interests. Nobody can deny that we are living in a globalised world. But whether all of our policies should be “globalist” is highly debatable.

After all, this moment of crisis has raised important questions about our global-governance architecture. With more voters demanding to “take back control” from “global forces”, the challenge is to restore sovereignty in a world that requires cooperation. Rather than closing off economies through protectionism and nationalist politics, we must forge a new social compact between citizens and their leaders, so that everyone feels secure enough at home to remain open to the world at large. Failing that, the ongoing disintegration of our social fabric could ultimately lead to the collapse of democracy.

Moreover, the challenges associated with the “fourth industrial revolution” are coinciding with the rapid emergence of ecological constraints, the advent of an increasingly multipolar international order, and rising inequality. These integrated developments are ushering in a new era of globalisation. Whether it will improve the human condition will depend on whether corporate, local, national and international governance can adapt in time.

Watch: World Economic Forum panellists on sustainable development

Meanwhile, a new framework for global public-private cooperation has been taking shape. Public-private cooperation is about harnessing the private sector and open markets to drive economic growth for the public good, with environmental sustainability and social inclusiveness always in mind. But to determine the public good, we first must identify the causes of inequality.

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