Klaus Schwab: It's time for a world renaissance

In order to improve the state of the world, we need rapid and joint action to radically reform every aspect of our socioeconomics, including education, the social contract, and working conditions. Every country, including China and the United States, must participate, and every industry from oil and gas to technology must transform. In short, we need a "The Great Reset" driven by all stakeholders.

There are many reasons for a world renaissance, the most urgent of which is the Covid-19 pandemic. The outbreak has killed hundreds of thousands of people and has become one of the worst public health crises in the modern history of the world. This pandemic is far from over, and more and more people around the world are losing their lives as a result. ?

The crisis will have long-term and severe consequences for economic growth, public debt, employment and well-being. According to the Financial Times, global government debt has reached its highest level in peacetime. Meanwhile, unemployment in many countries has been soaring due to the pandemic. Take the United States as an example. Since mid-March, one in four American workers has applied for unemployment benefits, and the number of new weekly recipients far exceeds the record high. The International Monetary Fund expects the world economy to shrink by 3% this year - a drop of 6.3 percentage points in just four months.

All of this will exacerbate the climate and social crisis already underway. Some countries have used the new crown epidemic as an excuse to relax environmental protection and reduce the intensity of related actions. The social ills that have increased the wealth of America's billionaires during this crisis have continued to widen the gap between the rich and the poor, adding to the frustration.

If left unchecked, these crises will, together with the COVID-19 pandemic, intensify various social conflicts, damage the sustainable development of the world, exacerbate world inequality, and make the world more fragile. To prevent such a scenario from happening, we cannot just respond step-by-step or resort to ad hoc interventions, but the foundations of the socio-economic system must be re-established.

To this end, we must set unprecedented ambitious goals and carry out unprecedented multi-party cooperation. This is not a distant dream. In fact, the epidemic has brought us a positive side: it has shown that we can change our way of life quickly and completely. Almost in an instant, the pandemic has forced businesses and individuals to abandon some long-entrenched practices, including frequent aerial flights and working in the workplace.

During the epidemic, the vast majority of citizens showed the spirit of sacrificing themselves and others, actively caring for staff in key positions such as medical staff, and caring for vulnerable groups such as the elderly. Many companies have also stepped up their support for employees, customers and society, and actively implemented the stakeholder concept they had previously committed to.

There is no doubt that all sectors of society have the good will to build a better society. We must capitalize on such good intentions to ensure a much-needed "world renaissance". Of course, we don't have to expand the size of government out of ideological reasons, but we need to build stronger, better-governed governments. In this process, the participation of the private sector is also essential.

How can we achieve "the renaissance of the world"? I think three points are crucial. The first is to guide the creation of a more equitable market environment. To achieve this, the government must strengthen policy coordination (such as tax, regulatory and fiscal policies, etc.), upgrade trade arrangements, and create conditions for the development of a "stakeholder economy". At a time when the tax base is weakened and public debt soars, the government has a strong incentive to do so.

In addition, the government should pursue long overdue reforms to promote social equity. These vary by country and could include reforming wealth taxes, eliminating fossil fuel subsidies, and introducing new regulations around intellectual property, trade and market competition.

With these funds, along with investments from private entities and pension funds, we can't just plug the holes in the old system, but take a long-term view and create a new system that is more resilient, fairer and more sustainable. For example, we can build urban “green” infrastructure or incentivize industries to improve their ESG (environmental, social and governance) performance.

The third is to use the technologies of the Fourth Industrial Revolution to benefit the public good, especially to solve health and other social problems. During this outbreak, companies, universities, and stakeholders have joined forces to develop diagnostics, treatments, and even vaccines; create testing centers; establish infection tracking mechanisms; and conduct telemedicine. If all industries can take similar concerted action, the benefits will be limitless.

The new crown epidemic has affected every corner of the world and every aspect of people's lives. But the pandemic is not all tragic. It also provides us with a rare and fleeting opportunity to reflect, reconstruct and promote the revival of the world for a healthier, equitable and prosperous future for mankind.