Having listed the broad spectrum of discussion topics the following
Attendees to the LatAm WEF summit obviously included many seen as the 'good and the great' of the region, spanning all spheres across: government, industry, services, high finance, academia and journalism.
Just a very few of the institutions represented included: Banco Itau, Nestle, PepsiCo, Mastercard, Cinopolis, El Pais, Oxford University and a myriad more.
To start the basic analysis looked at the core WEF issue of modern and future globalisation, with general inferred recognition of the past failings (of its prime control levers of financial markets and regulation) that have left so many riling against globalisation and retaking to the idea of populist protectionism.
Examples being the heavily affected EMs such as 1990s Mexico, Brazil, Thailand, Indonesia and S.Korea, and of course in AM regions the tsunami-effect of the Great Financial Crisis a decade ago which first massively undermined AM economies (exacerbated by the European Sovereign Debt Crisis) and thereafter affecting the previous rapid growth trajectory of the BRICs, CIVETS etc, creating for a period worldwide contraction and stagnation; new growth now taking effect.
So the first topic related to the need to re-shape the character and attractiveness of globalisation to rekindle peoples' beliefs and energies.
[NB Observations from investment-auto-motives are contained within closed square-parenthesis}.
'A New Deal on Globalisation' -
Ngaire Woods – Chair – Oxford University's Blavatnik School of Government
Brian Gallagher – CEO - 'United Way' NGO-Charity consortium
Roberto Azevedo – WTO Head – (Brazilian Public Administrator)
Micheal Gregoire – CEO – CA Technologies
Georges Faure – Foreign Minister for Argentina
The session started with three questions directed to the audience:
- “How many believe more trade barriers will affect exports from your country's economy?” (Majority agreed)
- “How many believe there is a general popularism in your country against the idea of globalisation?” (About half agreed)
- “How many believe that a 'New Deal' is needed on globalisation?” (Some did some didn't)
[Given the remit of the WEF to drive enthusiasm for world-wide trade and human activity, it is very, very pertinent that this issue be properly examined, beyond the well-worn and now disbelived 'globalist diatribe' – putting finance first - against which so many people are railing. What follows, whilst no where near a panacea seeks to offer new hope via the already very present digital age and digital future, with the necessity for all to become involved if they are to enjoy economic uplift].
“We are the result of industrialisation, organised as such when people moved from rural to urban areas for work/income. Now we are undergoing a new one. The last took 60s years to unfold and 20 years for social systemic adaption that ultimately aided the masses via policy-led redistribution of wealth from the 'Robber Barons' to the people. This economic revolution takes place over 20 years and will have a socially disruptive effect for the next half-century.
[NB The sentiment here is true, but in reality 'the people' lived through 100 years of industrialisation and bad living standards before government via post-WW2 policies fundamentally altred the lives of the masses. Critically, it had been a matter of family and community survival and betterment – the moralistic and unified improving and the amoral criminal disintergrating. With critically the relatively few paternal/maternal industrialists - who with a humanistic ferver - altered the lives of their workforces for the better from the 1880s onwards].
“Today there is talk of the people 'left behind', let me provide 2 contrasting examples:
USA.... those left behind previously honed skills relevant to diminishing industrial sectors, and don't have the modern skill-set [and or geographically distant] from the modern IT and Services led economy.
[NB Herein, as globalisation grew and jobs were 'off-shored' many successive AM governments (and arguably companies) failed in their societal responsibilities to the broad populace. The younger and middle-aged British car-workers and coalminers of the 1970s and 1980s were not retrained for anything substantive because there was no education-based “industrial replacement policy”, instead the fortunate gaining production line assembly jobs on Italian and S.Korean washing machines etc, or reliant upon similar inbound FDI for new Japanese car factories.
Vitally, it took another culture -Japan - of mutuality, shared responsibility, professionalism, efficiency and indeed 'honour' (see latter mention of 'dignity') to modernise the British workforce – the introduction of a whole new belief system by Directors and Senior managers who vitally were not class-conscious and vitally knew what they were doing in running the national division of a global car company. The same story in the USA and Europe, with those lessons learned partly but not overtly successfully adopted by the incumbent (all-Anglo) auto-sector players.
Its why Nissan, Toyota, Honda went on to remain successful as even the best nameplates underwent torturous times, all too often blaming lack of finance when so much inefficiency (at every level) and so absorbed costsd were prevelant. Basically, Western companies – let alone governments – did not plan and deliver the industrial transformation required in specific sectors beyond reliance on FDI. As seen by the poor management, heavy legacy costs and so previous collapse of GM and rescue of Chrysler. The irony being that investors, managers and staff recognising that such firms were being run for the profiteering or the Banks and Senior Management – hence the massive decades-long dischord
The City and Wall Street obviously recognised the profit drivers of globalisation, MNCs, lower-cost off-shore production, cheap 'low-value' imports and the massive promise of EM B2B and B2C growth from the 1990s onwards, but vitally failed to take little industrial interests beyond the revolutionising IT sector.
Hence with large profits to be had elsewhere (countries and sectors) the vital theme of industrial innovation that would have saved large sections domestic workforce – ranging from coal carbon capture to new 'lightweight' steels to new material applications such as mass-market high-composite 'lightweight' vehicle bodies (ie Land Rover's experimental visonary 1990s 'plastic Defender' prototype and Ford's 2003 Model U concept). But such projects were not provided the policy-banking-corporate support to succeed, such research and developement efforts coming into fruition on a very ad-hoc basis only within recent years because of directed funding into the latest funded chapter of eco-trends. Such solutions were being investigated decades ago and could have provided new avenues for old industries which in turn would have sustained employment in what should have been very vibrant growing economic eco-systems.
Instead, even with the rise of Retail and Call-Centres for the fortunate, many old-industry communities continued their 1970s 'them and us' labour vs management class-based mindset, which together with greater social seperation and aspiration/greed/individualism across age and gender fragmented families and divided communities
Beyond the enormous damage of the 2007/8 Financial Crisis hitting SME business and the online transformation of Retail and else into 'E-Everything, it has also been the backlash of 35 years of broad industrial sector neglect and its impact that has created the populist anti-globalist wave seen today typically amongst those most affected.
Little wonder that the new entrepreneurial elite (today's Tech Sector 'Robber Barons' given their enormous wealth), under their casual 'campus guise' are seen by the young as the new socio-economic saviours of society, whilst older generations view the obvious potential threat of electronic-based social intrusion and control via untrammelled corporate-government tyranny].
Turning to the other extreme of those 'Left Behind' on the opposite side of the planet Gallagher looks at..
Those people left-behind in the rural regions consisting of the elderly, disabled and children. 61 million children are looked after by grandparents and extended family members; whilst half a million have been left all alone); importantly with no or little assistive infrastructure / social welfare. The Government is now dealing with the issue for fear of social unrest and the social outcomes of such older 'outcasts'. hence the 'Left Behind Initiative' by Gallagher's NGO.
The Chair's question about “global or national solutions?” appeared unanswered by the Panel, so instead the question about recent American steel tarrtifs.
“The WTO was designed to try to avoid the sort of situation we could be headed into, so it is now time again for what is a WTO-led system to prove itself.
A major issue being the transformation of the labour market. One example being the belief (in some quarters) that two-thirds of elementary school children will eventually work in jobs that as of today do not yet exist.
In the meantime what to do about those who've not got either transferable skills or lack modern skills altogether? He believes [without convincing arguement, so requires such] that about 80% of job losses experienced are down to new technologies; so not the imports of goods and services, nor because of immigrants. Simply that in all of commercial evolution new technologies and solutions introduce greater efficiencies and so we see the next innovation driven phase providing higher productivity – in essence (largely IT led task learning and so personnel rationalisation) is an irreversable trend, as has been the case for centuries.
But how to handle that?
The need for more 'horizontal' approaches across education, retraining, social security etc.
He states that a protected job (via protectionism etc) costs a nation about 10x the actual cost of the job (to the employer) being protected through lost competitiveness. So much cheaper for a national economy to adapt, than to become insular so as to protect jobs.
The Chair asked “if its a generational issue? (ie IT literate young vs incapable/unwilling older).
“No the younger generations will suffer even more, because their jobs will be shifting even quicker because of technological change (eg Artificial Intelligence, Machine Learning etc).
“It's not just about the trends for shifting jobs but critically the recognised steady declining share of all generated general income, with the bottom 50% earning less and less, and increasing inequality across most developed parts of the world.
He recounts the Victorian/Edwardian 'Red Flag Law' (where a warning 'saftey man' had to warn pedestrians and horse operators of approaching motor car). This designed to slow down the production of cars and innovation, (but the tidal wave still arrived).
[NB Whilst some truth to this, to protect the commercial interests of the wagon-carriage trades (constructiors and operators), actually not wholly so. The Red Flag Act was also a matter of how parliament dealt with the social attitudes toward innovation, since it recognised the advantages of motorised vehicles on many levels, from cleaner more orderly modes of transportation, to the expansion of the oil, chemicals and metals sectors. The Red Flag as such was a regulatory 'transition tool' for the period].
“The earnings difference between an IT job and blue-collar job is the crux of capitalism. If you have a skill that is unique and required, the market will reward you, more so than compared to a 'commidity skill'. Any 'New Deal' ought to ensure that Tech companies are made responsible for human welfare without slowing down innovation.
He proposes a 'gift and get'...specifically regards data capture and use.With the need for standardised cross-border regulation to provide a basis of stable research and use. In return society gains from the IT sector by providing society with the required skill-sets necessary in an IT-led climate into the future.
“AI, no-code systems, serverless computers, etc... we've moved from 'data analystics' to true 'machine learning' to true AI and cognitive systems. Why not have a private-public partnership on a global basis where (the Techocrats) have to bring IT training to the forefront for those who wish to participate. This should be a start-point regards curriculums and skill-sets.
“EMs don't need to play catch-up but could in fact leap-frog the AMs, since the educational curriculums of the G8 nations is 30/40/50 years old. Ultimately it needs a new approach to public education.
“LatAm is an IT matured region, young and old smart-phone literate and the region is the 3rd largest cyber-economy. so have a "bolder" curriculum.
[NB This suggests that Alphabet-Google et al wish to directly design the school curriculums of 5-18 year olds, with the expected promise (as with its urban planning efforts) of financial spend and increasing responsibility, so reducing the financial obligations of municiplaities around the world, in both budget-deficit/constrained localities in AM countries and under-developed localities in EM countries.
Making such a transition – for the obvious gain of 'Big Tech' – would require substantive cost-benefits and SWOT/TOWS planning by central governments. This is not to believe that such initiatives are inherently bad, simply that the foundations of proper Enlightenment based eduction is retained].
“That deals with next generation skills, but what about 'Capitalism' (per se)? (Newer) thinking by some seek to fundamentally change the economic basis. JP Morgan Chase's CEO says we need new approaches, over tax-credits or taxing robotic production etc. Blackrock, McKinsey and TATA say "capitalism is at a dis-equilibrium", so need to think about longterm capitalism and one that all can buy into.
We all got Larry's (Fink of BlackRock) e-mail, but we've been doing that for the last 15 years, taking care of employees and community is good business. If you don't you won't survive.
We raise $5bn per year and 95% of that is from the private sector., so I'm a Capitalist... ['capitalist-NGOer need not be a paradox]... long before CSR / triple-line etc. The best leaders recognised their best customers come from their communities... [a perspective created by the forefathers of industrial philanthropism eg Hershey's, Cadburys, Sunlite, Ford, etc].
“Forming socio-economics, business leads, society comes second and government way behind. The inertia that exists in developed countries in welfare, training programmes, etc are so entrenched. [NB often because of (as in the UK) the commercial interests of select private training companies and their entrenched interests (that have in the past provided exactly the same extremely basic notional 'training' for a massively diverse spectrum of the unemployed, whether a PhD graduate or remedial school drop-out. By and large teaching people things that they already know, but are still forced to attend to retain very scant unemplyment benefit. So adding to the profits of those companies but wasting the time of many of already capable but insufficiently financially supported to make their own lives better. Indeed the travelling costs to such centres fundamentally impacts on their poverty level standard of living. Such schemes should be directed for the truly poorly educated and the training monies better directed if given to the individual based upon their capabilities and qualifications so they can help themselves...if indeed there is job market at the time which often there is not in the midst of even a mild recession let alone elongated as experienced since 2008.].
“(We've) got to 'bust loose' [ie deconstruct]some the educational institutions we have right now because they will not be preparing the workforce of the future.
Chair – provides an audience question :
“Who thinks retraining will boost the fortunes of those who face declining wages (in 23 of the 25 OECD countries about 50% of workers have experienced declining or stagnating income?
Majority think it could, but large minority think not.
[NB The reality is that people in such positions - let alone longterm unemployed and now incapable - no longer believe in the entirety of 'the system' as is, or indeed promises that it will miraculously get better for them. Such is the broad and massive dissatisfaction at the manner in which many OECD countries failed their populations because of short-termist, inept and unempathetic leadership from their policy-setters, politicians and professionally emplyed remaining middle and upper classes.
In essence though obviously unstated (because of civility and political correctness) there appears an "FU" mentality seen by those 'long lost', that bitterness spanning from the youth to seniors. The endemic problem is far bigger than generally appreciated).
(Per Argentine) “Having been through the populist wave, and so 'ahead' of other countries facing such matters, is a 'New Deal in Globalisation' needed?
"Globalisation as an expression is already in the past, and there is no 'New Deal' (idiology). Simply that we have to deal with the technological reality as is. But as is, all governments are far behind given that their structures originated out of the previous reality (the 19th/20th industrial and associated services economic base). So not just unresponsive people [populations] but also unresponsive national structures.
“New tech offers fundamental re-organisation of standard practices. Especially in industry where trends like 3D printing will create ['micro-factories] for say shirt-making
[NB this something experiemented with by new (typically Californian) start-ups in the Micro-Factory Retailing space of the auto-sector over the last 20 years [eg the early origins of (non-Chines) BYD 'Build Your Own' and 'Local Motors', now the technology selectively used by major automakers to illustrate the idea of much from complete new models of the future through to specifically commissioned non-structural outer skin panels].
Faure (continues) -
“or seen in bricklaying by robots [for speed and accuracy, though still evolving on a site by site specific basis].
“Education is moulded by the tools and environment around a person. The old models [as provided to] the 30s to 60 year olds, are already falling apart, so they are likewise disorientate by today'#s speed of change.
[NB this is perhaps an overtly simplified and innacurate description, depending upon the socio-economic status, livelihood and social relations of a person].
“We have to stop this. The remit of society's leadership is how to adapt to this reality.
“Not everyone under 50 is a 'digital native'.
In (the wealthy) town of Oxford "20% of children do not have access to the internet more than once every 2 weeks..
[NB this a questionable survey result, possibly because the survey itself was designed deliberately promote the idea of IT exclusion. Nevertheless, it is a concern. It highlights the reality of very disruptive lives in poor areas (infact not so different the Brazilian favella – but without the community cohesion, so possibly even worse).
Indeed it also highlights the issue of financial literacy and responsibility of such parents whose themselves even with decent benefits do not manage themselves properly to ensure children's stability whether because of own rationality or facing everyday language problems for immigrants].
Chair – with another audience question -
“The need for a New Deal is to deal with the social disruption, the restructuring of labour markets, new skills and training, and new international agreements that permit digital commerce, all under the Tech Revolution...How to help groups for this?
[NB This has been discussed in AM countries for 3 decades now, with little real-world progress, as seen by the Oxford Town example].
“Anything missing, what else in any New Deal in Globalisation?
An Audience member from the ICC - International Chamber of Commerce – stands...
“We at ICC have started the 'ITTI' (International Tech and Trade Initiative), to see how Augmented Intelligence could better plot international trade. Since present conditions are akin to 'flying an aeroplane without instruments'. New tech could be the instruments.
[NB it seems that much can be learned from other disciplines, such as the technical transfer of Meteoroloical Modelling, which must compile credible forecasts from a myriad of climate data inputs from the macro perspective of for the entire globe through to local conditions].
Another audience member...
Important issues are: the “Global Deal on Climate Change for Climate Security....Migration / Human Mobility, and a new G20 'set of rules of the game'. Also on fiscal policies such as OECD BEPS initiative. The need to understand that globalisation was previously about trans-national forms or production, but now need to recognise its about trans-national forms of 'de-materialisation' [ie digital-environments] which requires new levels of insight. The digital world brings totally new paradigm..
[We need to] "start to discuss 'de-carbonisation' - landscape management and gong 'carbon negative', The plan to reforest 350m hectares, regenerating jobs in rural areas alongside tech solutions, and the potential to redfine resource flow from linear to circular (ie improved recycling), bio-economies and have millions of people in gardening landscapes.
[NB this highlights the tangible realities of an expanding eco-economy, from new realms of market gardening to trash seperation, collection and recycling, assisted by the likes of 21st century bottle-deposit initiatives – so echoing the period from the 1880s to 1960s when all re-usable packaging was recognised as valuable – and helped fundamentaslly boost the profits of drinks retailers (eg Coca Cola to R. Whites Lemonade) negating the costs of all-new new bottle production].
Another audience member from WIPRO (the Indian IT co)...
"Re-skilling and training...what scale is required?
We have plenty of opportunities but (face the challenge as to) how to properly fulfil the human resource aspect? Growth is about who's got the right people and talent for the kind of demand we face already, not a decade ahead but nowadays.
[NB it is assumed this is a RoW problem for WIPRO, since India itself appears to have the human resources required domestically. Thus an issue related to WIPRO's global expansion, not doubt specifically in LatAm].
“CEOs said "we do need to start paying tax". Over last decade in the OECD we saw personal tax rates rise by 6% but corporate tax rates decline by 10%. Many governments feel they are in a race to the bottom to attract business with good tax rates. Does this require global coordination?
[NB this interesting given the apparently syncronised world we now live in for those in the old (AM) and new (EM) middle classes, who's lives are increasingly compatible, from the purchase of global products spanning white and brown goods to cars, and the expansion of brands pertinent to leisure-time consumption, from Disney entertainment to Westfield mall shopping to Nandos restaurants. Hence there looks to be an arguement for PPP based international taxation for those employed (at different earnings rates) and a similar approach for businesses depending upon sector and maturity].
"Give us one element in the New Deal for Globalisation".
"Get ready for digital revolution. There is a parallel with yesteryear's need for language skills and without adequate formal schooling, the importance of alternative home tutoring. Today some countries (eg China) have a mandatory discipline of computer coding, this replacing the past need for (European and Japanese) languages.
“Are we not too complacent about the political revolt on our doorsteps?
[NB Precisely...except it is no longer political since the disenchanted masses have no belief in the apparently orchestrated 'media-politics' of today. The poor yet conservative right brought up on old patriotic and family values effectively dispises the worthless soundbite chatter and the media industry that demand and creates it. Whlst the older and younger liberal left are caught in a concern about the rise of the right and the awakening 'sleeping giant' that is pissed-off people. (This especially so in the USA given gun ownership levels). Moreover, the left appears to be experiencing more ingroup infighting between the many different (sex, race, SIG) factions which once united under the same cause seem to be diverging (eg 2nd wave feminists such as the iconic Germain Greer per the rise transgender (wo)men). The friction and factions then is/are not simply political but deeply sociological, especially worrying when modern politics is viewed with such distain and so as an increasingly meaningless societal construct].
[NB Hence this remark by the chair (Ngaire Woods) perhaps the most prescient of the whole discussion].
“Many people across many countries sayong we don't like the status quo, and we need a political and public solution that answers that? Even though digital education is fine, what would calm the masses?
“The biggest problem in my view – besides military conflict - is the concentration (ie disparity) of wealth around the world. China has figured it out given their economic uplift, and Alex de Tocqville once wrote 'it is not the people living in abject poverty you should worry about, but the ones who get out of abject poverty and see what they don't have”. If the concentration of wealth doesn't start to diminish and general personal oncome in developed countries doesn't start to rise, these digital technologies allows these demonstrations to turn violent when they are ready.
[NB without sounding overly alarmist, investment-auto-motives has long suspected that the real intention behind the evolution of the so called flash-mob, predicated upon spur of the moment entertainment activities and created by influencers within the media and performance arts industries, has indeed been done with the intention of creating on the spot demonstration and riots that the authorities have little reaction time and manpower to quell. Not so small scale examples seen already across many US cities after the election of Trump.
Smart-phones are already the socialised communications device in what has become a passive-aggressive social war campaign, the mobilising 'walkie-talkies' of today for many tribes across the social spectrum from the street gangs of inner city areas to even some criminalised white-collar groups who pretend to be 'pillars of society' whilst harrassing others for their assets].
This is a properly insightful observation by a Brian Gallagher, who perhaps who unlike some others recognises the world's reality where supposed developed societies have taken on the aggressive social dynamics of 3rd world countries.
Bravo Mr Gallagher!