Growth in a Fragmented World
Last week, from May 2–3, I attended the @World Economic Forum's #GrowthSummit2023, accompanied by Dr. Wilert Puwirat, who represented Chulalongkorn Business School as an Institute Partner.
This event is WEF’s third-largest event (following Davos and the Summer Davos in China) and features dozens of ministers and is packed with top global organizations from the Forbes 500.
Some highlights of the event include the unveiling of the Future of Jobs and the Chief Economists Outlook reports, which focus on how the global economy will evolve and what types of jobs will drive it. I would like to summarize the key takeaways that are beneficial for Thailand as follows:
Fragmentation of global society has made old understandings, patterns, and expertise no longer applicable.
CEOs are less interested in GDP growth and are more focused on the equitable wealth distribution and economic sustainability.
Dedollarization started with the significant volume of trade and commerce occurring in the East, but it remains unclear whether the dollar will be replaced by other currencies.
AI will play a significant role in the job market, especially in the service sector. However, the impact could be both positive and negative, such as AI replacing humans in some jobs or helping them perform certain tasks more efficiently.
High inflation and interest rates are expected to last a while. Thus, businesses need to adjust their business models, especially financial models, but no one knows what the ultimate formula will look like.
The impact of inflation has already manifested in three waves: the impact on durable goods, energy prices, and finally spreading to other goods, resulting in abnormal margins for each business.
New industries, innovation, clean energy technologies, and the service sector, including digital, are all important drivers of future growth and the design of sustainability policies for each industry's supply chain.
Industrial policies that foster a safe and flexible environment for industrial sector investors will create competitive advantages and competitiveness for the country.
We cannot achieve our climate combating goals without global-level innovations, international cooperationacross all sectors, and blended financing to support our missions.
Effective management of climate issues requires alignment of strategies from the corporate, national, to global levels as this is a global issue that cannot be solved by any single individual.
Long-term growth of the global economy depends on productivity, which is currently a problem the world is facing. In this regard, AI and automation will play important roles in solving the issue.
Shifting the global economy structure from efficiency to resilience can only be achieved through global cooperation beyond self-focus or nationalism.
The future of jobs is determined by three main factors: positive factors from the green economy, negative factors from the global economy, and ambiguous factors (whether positive or negative) from technology.
Creativity and analytical skills have become the most important skills in every job position, making reskilling in these areas a key factor to remain competitive in the future.
Migration of people and labor has become increasingly intense, leading to a War for Talent in the global economy. Governments should therefore implement measures to attract and retain these talents.
Economic statistics are starting to tell us less. Therefore, governments should prioritize people’s experiences and perceptions and work with the private sector to respond more effectively.
Equality is not just about income but also about access to the necessities in our daily lives. This is a horizontal solution that has led to the emergence of a new term called "Inequity of Inclusion."
The relationships between large companies and SMEs are essential. Clear inspiration or incentive is needed to cultivate this collaboration and there must be a platform to support their matching.
While the birth rates are low, so are the death rates. The government, private sector, as well as the public need to work together to reevaluate the labor market and retirement landscape. Otherwise, we will all end up retiring in poverty and face a workforce shortage.
Growth and resilience are like two sides of a coin. The ability to grow combined with the ability to maintain what already exists under new risks is, by default, resilience.
All of these are what I have learned, along with my personal perspectives on various other issues. They may not be new, but they emphasize that we are not alone in this world. Whatever the global problems are, we must solve them together. Whatever the domestic problems are, we must take responsibility for them. Finally, I would like to end with this quote:
"Poverty anywhere is a threat to prosperity everywhere." - Gilbert Houngbo
Whatever your perspectives are on this, please share them with us.
I hope this will be helpful.
BRANDi and Companies
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