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].
Galleghar -
“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..
China :
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.
Azevedo -
“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).
Gregoire -
“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].
Chair -
“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.
Gregoire -
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).
Chair -
(Per Argentine)
“Having been through the populist wave, and so 'ahead' of other
countries facing such matters, is a 'New Deal in Globalisation'
needed?
Faure -
"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.
Chair -
“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..
Another states...
[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].
Chair -
“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].
Chair -
"Give us one
element in the New Deal for Globalisation".
Azevedo -
"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.
Chair -
“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].
She continues...
“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?
Gallagher -
“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!
