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Special Report: IS THERE CAUSE FOR WESTERN OPTIMISM IN THIS ASIAN CENTURY? EU Affairs
EUROPE IN CAN SOCIAL 2017: KEY MEDIA TRANSFORM POLITICS? EVENTS
BEWARE CLASHES OF BIG-POWER NATIONALISMS
Konstantinos C. Trikoukis Chairman
Athanase Papandropoulos Publisher
Christos K. Trikoukis
No apocalypse after Brexit vote
President Trump: America first, certainly not Europe
16 EU AFFAIRS
18 EU AFFAIRS
Europe in 2017: these are the key events to watch out for
EU turning 60 in 2017? Commission rewrites history
26 SPECIAL REPORT
Editor in Chief
N. Peter Kramer Editorial Consultant
Anthi Louka Trikouki Issue Contributors
John Bruton, Hans Izaak Kriek, Adina Portaru, Kalin Anev Janse, David Heilbron Price, Laurent Marchand, Kishore Mahbubani, Ross Chainey, Ceri Parker, Oliver Cann, Gianni Skaragas, Yuhyun Park, Helen Margetts, Paul Evans, Bruno Lanvin, Margarita Chrysaki Correspondents
Brussels, London, New York, Paris, Berlin, Istanbul, Athens, Helsinki, Rome, Prague Public Relations
Margarita Mertiri Financial Consultant
Theodoros Vlassopoulos Published by:
EMG STRATEGIC CONSULTING LTD. 19 Leyden Street, E1 7LE London, United Kingdom www.emgcommunications.co.uk
Is there cause for Western optimism in this Asian Century?
Can social media transform politics?
50 LAST PAGE
The Worldâ€™s Most Talent Competitive Countries, 2017
Min(d)ing the Asteroids
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EDITORIAL EUROPEAN BUSINESS REVIEW
NO APOCALYPSE AFTER BREXIT VOTE By N. Peter Kramer
hose who predicted economic apocalypse if the Brits voted for out on June 23 last year were wrong. The list includes then finance minister George Osborn, the Bank of England, the International Monetary Fund, and who not in the Brussels EU ‘bubble’. The fact is that despite all the predictions of doom and gloom, in 2016 the UK was the fast growing major advanced economy in the world and left other G7 economies in the dust. Thanks to a stronger-than-expected fourth quarter, Britain notched up a 2 percent annual growth in 2016, true below the 2.2 percent in 2015, but still enough to beat the other major economies. The biggest driver was the services sector, and in particular consumer-facing industries such as retail sales and travel. There is no Brexit effect, at least no negative one. Manufacturing didn’t seem to benefit from the fall of the pound in the fourth quarter. This decline has not helped to boost UK’s trade position or boost manufacturing production, which fell a 1 percent at the end of last year. But services which make up nearly 80 percent of the UK economy are powering ahead regardless of the pessimistic predictions. Looking ahead, consumers’ willingness to spend and to borrow will determine the next months. The British Bankers’ Association sounds pessimistic, ‘we have seen high levels of consumer and business borrowing in December, although there are early indications that 2017 could see softer demand for credit from business and households, as they anticipate future interest rate rises and wait for further clarity on Brexit’. It looks like British Prime Minister Theresa May can pull the trigger for Article 50 in the beginning of March. Then the real task begins. The forthcoming negotiations could get ‘nasty and acrimonious’. Don’t underestimate the rancour and thirst of revenge on EU side. The result of the Brexit referendum was for Europhiles and Eurocrats a slap in the face. Better to listen to British MP Jacob Rees-Mogg. He said during the debate in the House of Commons, that the referendum day, 23 June 2016, will ran alongside the battles of Agincourt and Waterloo in the ‘annals of British history’. Hear, hear.
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Beware clashes of big-power nationalisms in 2017 by John Bruton*
The most immediately striking characteristic of the Trump administration is its attitude to China. During the campaign the President-elect threatened to impose very high tariffs on Chinese imports. But his decision to abandon the Trans-Pacific Partnership leaves China in the driving seat as far as trade policy in East Asia is concerned. Since the election, he has sought to use Taiwan as a bargaining chip in negotiations with China. Adding a conflict over the island’s status to this mix could have very unpredictable results. After its experience of the nineteenth and early twentieth centuries China is very sensitive to western ’humiliations’, and to threats to its raw material supply lines. 10
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There will a fanning of nationalist sentiment on both sides. We should not forget that the economic transformation of China is the most important global economic event of the past forty years. It has changed the balance of power on the Eurasian landmass in ways we are only beginning to comprehend. It has led to an increasing number of well-off, high spending consumers. The Boston Consulting Group recently estimated that the number of Chinese people belonging to the ‘upper middle class’ – a group that can afford regular foreign holidays – will rise from 53 million today to 102 million by 2020. But at the other end of the scale, China has not established a well-developed welfare system. The income gap is very wide. Stress is high. There is a two-tier labour market under which long-established city residents qualify for social support, but recent arrivals in the same cities do not. The latter group can remain in a precarious situation for years.
The economic transformation of China is the most important global economic event of the past forty years This gap presents a problem of political management. One can foresee the deliberate fomentation of Chinese nationalism by the Communist leadership in an effort to shore up support and to distract attention from the ill-effects of a very uneven distribution of the fruits of prosperity. Chinese nationalism could, all too easily, collide fatally with the American nationalism that the Trump campaign has rekindled – a nationalism that has risen with great success from quite similar motives. Faced with this collision, Europe should look out for its own interests – especially as it seems likely that the US will move closer to Russia. The new dynamic this possible Russo- American rapprochement creates in global affairs has consequences for Europe. Trump’s statements indicate that a less confrontational approach is in the offing. While benefits may flow from this, it is something that is likely to reinforce the anxiety that some, but not all, central European members of the European Union already feel about Russian intentions. Russia
has traditionally been hostile to the EU, because it has felt excluded from pan-European security structures. It feels hemmed in by NATO members. It has given support to parties in Western Europe that are hostile to EU integration. A disintegrated Europe would offer more opportunities to Russia than a united one, and would mitigate Russia’s sense of being encircled. Europe’s voters tend to think about short-term issues, not about the long-term impact of decisions In the face of this link-up, the EU may find its interests aligned more with those of China – in fields such as climate change and energy, as well as on global issues, given China’s greater economic and strategic weight compared to Russia. On the other hand, Russia is a member, along with the EU countries, of the Council of Europe, and this link could be used to reduce tensions. Europe needs to draw the right lessons from these global movements. Unlike the US, Europe does not have vast energy resources and is much more dependent on an open global trading system. In this it has similar interests to China. But Europe is both a crowded and an ageing continent. Its voters tend to think about short-term issues, not about the long-term impact of decisions the EU may make about relationships with the rest of the world, and notably the rapidly-growing and youthful populations of Africa and the Arab world. So European electorates need to think very carefully about where their protest votes may lead. As we will see with Brexit, protest votes can have consequences far beyond mere protest. These consequences will be felt long after the cause of the original protest is forgotten. A disunited Europe could become a playground for the clash of great power rivalries. Notwithstanding their notional ‘sovereignty’, individual European countries could find themselves being used as pawns in a wider struggle, in the same way as the religious factions in Syria are now being used. Twenty years ago, few people thought Syria would ever have a civil war. There are many ancient and buried antagonisms that could be exploited on this continent if European unity is broken. The UK, which did so much to defend the liberty of Europe in 1914 and 1939, forgot this completely when it voted so recklessly in its recent referendum. The rest of Europe must not make the same mistake. * John Bruton
was Taoiseach (prime minister) of the Republic of Ireland, leading the “Rainbow Coalition” of his own Fine Gael party, Labour and the Democratic Left from 1994-97. He was the EU’s Ambassador to the U.S. (2003-09) and is a former Vice-President of the European People’s Party
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PRESIDENT TRUMP: AMERICA FIRST, CERTAINLY NOT EUROPE by Hans Izaak Kriek* The international reactions were totally different, caution in China, sorrow and danger in Mexico, cork-popping in Moscow - here are some of the global responses to last month’s power handover. Especially the European leaders are not amused about the speech of The Donald. In the first official German reaction to Trump’s inauguration vice chancellor Sigmar Gabriel said: “Germany will need a new economic strategy geared toward Asia should the new US administration start a trade war with China”, warning of a ’rough ride’ hours after the sworn in of Trump. “What the new President said were high nationalistic tones, I think we have to prepare for a rough ride”, when he was interviewed by public broadcaster ZDF. Prime Minister Medvedev of Russia gave a totally different reaction in a positive way on Facebook: “We are ready to do our share of the work to improve the relationship.” The 12
pro-Trump atmosphere that was visible in Moscow was largely of a tongue-in-cheek character, trolling the hated US ‘establishment’ and what Russians hope will be the end of a US that lecture them on human rights. Funny was same reactions, the Army of Russia shops in central Moscow offered all Americans 10% off merchandise on inauguration day, while the occasional restaurant offered a special Trump burger or other gimmicks. Also, Prime Minister Netanyahu of Israel posted a message on social media. “Congrats to my friend President Trump. Look forward to working closely with you to make the alliance between Israel & USA stronger than ever.” Prime Minister May will be next Friday the first international leader who visits Trump in Washington. Boris Johnson, the foreign secretary of the UK tweeted already his congratulations to both Trump and the vice president Pence,
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but the Liberal Democratic leader, Farron, called Trump’s journey to the White House ‘the most divisive, vulgar and illiberal presidential campaign in memory’ before calling on May to stand up to Trump. People wonder how he dare to speak like this way as a politician. If he meets Trump one day, he would probably pee in his pants. The leader of the opposition Corbyn urged him to put the ‘misogyny and the racism’ of his presidential campaign behind him. Corbyn said he hoped that as president he would reach ‘out ‘to all communities across the United States’ and called on him to promote ‘critical engagement’ with Russia. President Hollande of France did not mention Trump by name during a press conference in eastern France, referring instead to ‘my colleague taking the oath’ and criticising the protectionism that Trump advocated. The French President has previously said that Trump’s victory ‘opens up a period of uncertainty, that ‘must be faced with lucidity and clarity’. The leaders of Europe are anxious about the relationship between US and Russia. The really big test will be over the next few months. The question is Euro- politician are going to have so see whether a harder edge comes into his
approach to Russia, and whether he is prepared to validate a sense of commitment to NATO and to Europe. The ‘clown’ of the European Parliament former Belgian Prime minister Guy Verhofstadt wrote on Twitter: “Hostile inauguration speech. We can’t sit around and hope for US support and cooperation. Europe must take its destiny and security in its own hands.” Many European leaders offered perfunctory notes of congratulations. Some appeared to be trying to will Trump to behave like a conventional US President. The next 100 days will show how Trump is acting. Trump said in his inauguration speech: “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength. I will fight for you with every breath in my body - and I will never, ever let you down.” America first. *Hans Izaak Kriek is US correspondent and political commentator for European Business Review and is editor-in-chief for Kriek Media
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CHRISTIANS RECOGNISED AS MOST PERSECUTED RELIGIOUS GROUP WORLDWIDE by Adina Portaru* Around the world, Christians are being persecuted because of their faith. The European Parliament brought much-needed recognition to the victims of persecution and needs to follow up with concrete tools to protect religious groups worldwide. On 14 December, the European Parliament adopted the ‘Annual Report on human rights and democracy in the world’ and the European Union’s policy on the matter in 2015. In keeping with the European Union’s commitment to fundamental human rights, members of the European Parliament stressed the need to protect freedom of religion worldwide. The Annual Report brings a new
dimension to the standard call for respect for human rights. It concludes: “Christians are currently the religious group most harassed and intimidated in countries throughout the world, including in Europe, where Christian refugees routinely suffer religiously motivated persecution, and that some of the oldest Christian communities are in danger of disappearing, especially in North Africa and the Middle East.” The evidence is irrefutable and requires the international community to act. Just recently news broke about an ISIS suicide bombing at a Cairo church, leaving 24 Coptic Christians dead, Christian pastors facing death penalty in Sudan, and ISIS boasting of committing
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genocide in Syria and Iraq. Christian communities that have lived in the Middle East for 2,000 years are now on the verge of extinction. In Syria, the number of Christians has dropped from over 2 million (although secular thinking President Assad protects them) to under a million and in Iraq from 1.4 million to under 260,000 in just a few years. What we are witnessing is the end of Christianity in the Middle East before our very eyes.
With the recognition of Christians as the most persecuted religious group worldwide comes the question: what can be done to protect and safeguard the rights of Christians and to secure justice for the victims? Two things should follow: firstly, the prosecution of the perpetrators of genocide at the International Criminal Court, and secondly the strengthening of the mandate of the EU Special Envoy for the Promotion of Freedom of Religion or Belief outside the European Union.
National governments must cooperate with the International Criminal Court to ensure that evidence of crimes committed is preserved, catalogued, and used against the perpetrators. The European Parliament has actually called for the establishment of a group of experts tasked with gathering evidence regarding the genocide against religious and ethnic minorities. If implemented, this group might prove instrumental in bringing the perpetrators to justice. In addition, the mandate of the EU Special Envoy for the Promotion of Freedom of Religion or Belief outside the European Union should be strengthened. This position was created on 6 May 2016, when the President of the European Commission appointed former Commissioner Jan Figel, for a mandate of one year. In the first part of his mandate, Jan Figel has devoted attention to the rising persecution of religious minorities. This has helped in raising international awareness about the plight of Yazidis, Christians, and others in the Middle East. The mandate of the EU Special Envoy should therefore not only be renewed but given increased visibility, political power, budget, and supporting staff. A meagrely staffed office, as it currently stands, will hinder the Envoy in his response to what the EU has rightly concluded is a growing and significant threat. The overall message the Annual Report conveys is clear: member states and the EU as a whole need to do more to seek justice for the victims of religious persecution and prosecute the perpetrators.
With regards to international prosecution, the European Parliament should follow up on its Resolution of 4 February 2016, and call on the UN Security Council to support a referral to the International Criminal Court to investigate ISIS crimes in Syria and Iraq. If this fails because of a lack of political will of UN Security Council permanent members (which is the case presently), the International Criminal Court should nonetheless prosecute European foreign fighters engaged in the atrocities. The Court has jurisdiction over the European perpetrators fighting with ISIS. Most of those are nationals of countries which signed the Rome Statute establishing the International Criminal Court, for example, Germany, France, and the UK. The number of European foreign fighters is estimated to be upwards of 5,000 in the Middle East.
The international community must act with urgency to end the genocide in the Middle East, and to protect Christians and other persecuted religious groups worldwide. * Adina Portaru is a Legal Counsel in Brussels for ADF International, a Vienna-headquartered organisation that advocates for the right of people to freely live out their faith. ** First published at Euractiv.com 15
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EUROPE IN 2017: THESE ARE THE KEY EVENTS TO WATCH OUT FOR by Kalin Anev Janse*
Western societies are shifting. Seismic changes, from the Brexit vote to the US election, challenged the status quo this year. Is this a global move? No, at least not for now. It is mainly confined to Europe and America. 16
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These highly successful societies are searching for a new narrative. Post-US elections, all eyes are turning to Europe. What are the key events to watch in Europe in 2017?
THE THREE (OR FOUR?) BIG ELECTIONS If there is one thing to watch next year, it must be the three big elections in The Netherlands, France and Germany. They represent 56% of the Eurozone economy. They are three of the six founding members of the European Union (EU), who decided to set aside differences after the Second World War in the ambitious belief that joining forces would make them stronger. Together with Belgium, Italy and Luxembourg they signed the Treaty of Rome, which created the European Economic Community (EEC) and a common customs union in 1957. May be also Italy will have its parliamentary elections. SIX DECADES OF SUCCESS Was it successful? Absolutely. The collaboration of the Netherlands, Germany and France made them rich. Very rich indeed. Since 1960, these countries have experienced impressive growth in real GDP per capita. Large parts of these countries were destroyed during the war. They rebuilt themselves, strengthened their economies, and have been flourishing for six decades. Largely due to deeper cooperation, these changes have been remarkable and unprecedented. This deep collaboration was so lucrative, that it made The Netherlands, France and Germany outperform the United Kingdom (UK) and the United States (US) over a 60-year period.
cover for rainy days, and tax schemes that found the right balance between incentives to work harder for ambitious people while ensuring a decent income for the less fortunate. And the results are striking (see chart below). In the US, the poorest 40% of earners bring home just 16% of the national income, while the richest 10% earn a whopping 29%. In The Netherlands, France and Germany, the numbers are much smoother (the bottom 40% brings home 22%, top 10% around 23%). The UK is a bit in the middle, but trend-wise similar to the US. This explains in large part why income inequality and missing out on economic growth were big topics in the US elections and UK referendum. The European countries that will head to elections next year have done much better. The Netherlands, France, and Germany have fairer and more equal income distribution than the US and UK. This is mainly due to the “European welfare model”, though long under fire, it might now appear to be just the right recipe to deal with the problems that globalization brings. EUROPE’S ECONOMY IS BACK The overall economic picture has changed tremendously in Europe over the course of 2016. With the exception of Greece, all European countries have returned to growth. The EU (1.8%) and the Eurozone (1.7%) grew faster than the US (1.6%) in 2016. The unwavering political support of key Eurozone countries, such as The Netherlands, France and Germany, made the economic union and the euro survive the crisis successfully, despite many doomsayers. Europeans are starting to feel the effects of an improving economy anhighd, therefore, concerns are shifting. Although unemployment, especially among young people in Spain, Greece and Italy is incredibly high.
MAKING MORE PEOPLE BENEFIT The Netherlands, France and Germany did more than that. They ensured that large parts of society benefit from this economic growth. The countries implemented policies that distributed wealth more fairly: affordable first-class education, social security to 17
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ADDRESSING THE REAL CONCERNS OF CITIZENS Before spring 2015, the number one concern in Europe was the economy. This has shifted rapidly and the top concerns today are ‘immigration’ (48%) and ‘terrorism’ (39%). This is what Europeans answered in the latest Eurobarometer, when asked what the two most important issues facing the EU and their own country are. The Dutch, French and Germans sound these concerns on both European and national level. This is what keeps them awake at night. These are the topics that are closest to their heart. In democracies, people point their leaders to the key topics they want to be addressed. Rightfully so. This means that politicians and policy makers must address these real concerns. By their very nature, immigration and terrorism are cross-border and need to be solved internationally. This is where European collaboration can show its benefits. Europe was able to curb the first wave of immigration over the course of 2015 and 2016. Immigration numbers went down dramatically. Terrorism is still a large concern, but European collaboration and information exchange can reduce the threat. The topics of immigration and terrorism, narrowly, and safety and security, broadly, bring back the essence of European collaboration. These were the core principles that started European cooperation 60 years ago. This is what people truly wanted. This has an emotional value. Fortunately, most people today have not known wars in Europe. Seventy years ago this was different. If you were a young European, you would have lost millions among your age group on the battlefield. The military graves across Europe show the tangible remains of hundreds of thousands of young French, Germans, American, British and soldiers of other nationalities. The debate will be again around the core values of Europe. Of course, we should stress the GDP per capital growth argument and better income distribution in the Netherlands, France and Germany versus the US and UK. But as people are emotional creatures, safety and security is what really matters to them most. This is what Europe has successfully delivered for many years. And this is being challenged at the moment. The election in the founding members will be about who will be able to offer these basic needs again. And explain this in a crystal clear manner. OTHER TOPICS TO WATCH Obviously, there are many other topics that are rel-
evant to watch in Europe next year: the aftermath of the Brexit vote, the finalisation of the third Greek support package (the last remaining country under ESM or EFSF crisis support), US-Russia-EU relations, EU-Turkey relations, European Central Bank monetary policy and developments in financial markets. Anti-globalism, anti-trade and Euroscepticism are potential headwinds as well. All these issues will come together in the elections of the three founding members of Europe. The outcome will shape the direction of the debate. If something dramatic or unexpected happens, the founding members might gather again, as they did post-Brexit, and set the narrative for the coming years. So what is my take on these key elections? Well, as they say, “Making predictions is very difficult - especially about the future!” Nevertheless, it is certain that 2017 will be a crucial year and these elections will define Europe’s future. I strongly believe in the power of democracy and the wisdom of people. We are the guardians of the European project which has brought peace and prosperity to many. Citizens will ask for changes, which we should implement. But we should safeguard some of our hard-fought core values for the next generations: young Europeans, who have never seen war, and have never been stopped at a European border, need employment!
* Kalin Anev Janse is Secretary General, European Stability Mechanism (ESM)
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EU TURNING 60 IN 2017? COMMISSION REWRITES HISTORY by David Heilbron Price* The beginning this year, European Commission chief spokesman announced that “In 2017, the EU is becoming 60 years old.” And to be sure that everyone understood, he repeated: “The European project is turning 60 this year with birthday celebrations being scheduled for Rome in March.” Wrong! March will not be the 60th anniversary of the European Union. The EU was formulated by the Treaty of Maastricht 1993. Wrong Again! The birthday of the European project, after the Schuman Declaration of 9 May 1950, was the signing of the Treaty of Paris on 18 April 1951. Schuman read out the Great Charter of the Community that they all signed.
The documents the governments signed declared that on 18 April 1951 they were creating a European Community and specifically a European Economic Community. The basis for its governance was supranational democracy. The first sectors involved in this great European experiment in democracy were coal and steel. The European Community of Coal and Steel began to function in August 1952. Are all today’s European officials and 28 governments so mathematically challenged? How does the Commission explain this preoccupation with 1957? The spokesman said: “First of all we
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like the Treaty of Rome, because it was the treaty establishing the European Community that preceded the European Union. We like the Treaty of Rome because it was signed on the 25 March, which is also the Greek national day which is also difficult to forget for some of us. But also we like the Treaty of Rome because it is a milestone that enabled the six signatory member states to trigger a level of cooperation through common policies that was unprecedented and was not enshrined in law before the Treaty of Rome. So we use the 25 March 1957 as the formal departure, if you like, of this fantastic historical experiment of the European Union. And I thought it was adequate on a day like that to make this point.” He said nothing about supranational democracy and how it works. How should it work? On 18 April 1951, the six governments initiated the European Community’s five democratic institutions. The six also signed what Schuman called the “Charter of the Community.” That title recalls the Magna Carta of British history. It emphasises its importance. Why is it important? Because it describes entry and exit conditions. It emphasises the concept of supranational Community. (‘Supranational’ also appears for the first time in an international treaty in the ECSC article 9 to describe the High
Authority, later called the European Commission.) A supranational Community was also something totally new in history. It was neither confederal (like NATO) nor federal like the Federal Republic of Germany or USA. Only one institution was given federal powers and that was controlled by a European Court of Justice and a Consultative Committee composed of equal membership of entrepreneurs, workers, and consumers. The second reason that the Charter is important is that it defines which states can become members of any Community. The states have to be among those whose people ‘are free to choose’. That ruled out the states – the so-called People’s Democratic Republics – of the Soviet Bloc. They were invited to join. In fact, Schuman said that Russia itself was free to join. The condition meant that the states had to sign up to the European Convention on Human Rights and Fundamental Freedoms of the Council of Europe. In practice, that meant the state could not abuse any citizen against his conscience. The state had to provide freedom of information, religion and of assembly. If any citizen had a complaint against the state, he or she could take it freely to the national courts and if this did not work out, an appeal could
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the productivity of the industry and the rising of the standard of living. … In no case will workers’ standards be lowered. This is an absolute rule that we laid down among our basic principles from the first.” The budget was paid for by a levy on coal and steel products, up to a maximum of one per cent. There was no Court of Auditors. None was needed. The enterprises were very careful about the contributions they had to pay, the workers too watched carefully over their budget for their social requirements. Consumers made sure that money was not wasted. That one percent levy seemed a small price to pay for stable employment and increased, cheaper production. Nevertheless, to the surprise of many, the Treaty of Paris, which unlike the treaties of Rome, had a duration of fifty years, was not renewed in 2002. Lobbying by steel firms may have something to do with it. There was no referendum in member states. The matter was decided in the Council of Ministers, which had kept its doors shut and the public and press out during the Gaullist period. Shortly afterward, the prices of steel rose sharply. Firms were bought by foreign investors. Many workers were thrown out of work.
be made to the Court of Human Rights in Strasbourg. This was a hard pill for governments ruled by a Politburo to swallow. So none of them applied. The first Community also initiated the Single Market. Single markets for coal, scrap iron and steel were opened across the Community in 1953. This broke the national barriers that led to nationalistic competition, which in turn led to wars. With the Single Market came the right of workers to move freely around the Community. The Community budget paid for housing projects in the coal and steel industries – which were lacking after the War. It also paid for retraining of workers when inevitably worn-out mines were closed. This ingenious system helped consumers have access to the cheapest coal and steel products while the workers and firms could redeploy. It fulfilled the promise made by Robert Schuman when he made an explanatory statement about the Community project on 10 August 1950 in the Council of Europe. “Its only preoccupation must be the improving of
In 2016 the EU apparently “forgot” to celebrate the 65th birthday of European democracy. What is their substitute? Europe of 1957, then entering the Gaullist Dark Ages for European democracy, in no way compares with the founding democratic principles of Europe’s true birthday of the first European Community in 1951. The Charter of the Community – which guaranteed the voice of the public and especially the workers and consumers — was buried by Gaullists in the archives of the French Ministry of Foreign Affairs. It was again identified and published in 2012 thanks to M. Bernard Cazeneuve, the present French prime minister, following a request by the Schuman Project. Will the European Commission maintain its ‘Fake News’ and its mathematically challenged “birthday” to March this year? Or will we have politically effective and scientifically correct democracy?
* David Heibron Price is a Brussels-based writer and journalist, and editor of the Schuman Project. ** First published at Euractiv.com
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EIB’S STRONG CONTRIBUTION FOR EUROPEAN GROWTH AND INVESTMENT IN 2016 by N. Peter Kramer
The big question of our time is a simple one: should we feel optimistic or pessimistic for the future of humanity, all 7 billion of us? The world’s response is divided. Many Western societies are drowning in pessimism. By contrast, the rest have never been more optimistic. This represents a reversal of previous centuries’ pattern, where the West was always more optimistic. What happened? And what do the facts tell us? 22
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The European Investment Bank (EIB) Group signed operations worth 83.8 billion euros supporting total investments in the order of 280 billion euros in 2016. More than 33bn went to SME’s, a record. It means that the EIB is well on track under the Investment Plan for Europe (‘Juncker Plan’). EIB President Werner Hoyer said during his presentation of the 2016, that it is no longer more business as usual, but that political and regulatory reform are vital in 2017. He laid out that the EIB contribution to creating jobs and growth in Europe is supporting projects and investment in SMEs, in key infrastructure, innovation and the environment.“At a time of uncertainty the EIB Group has shown that a truly European approach to investment is bearing fruit.” But he warned, “Recovery is still slow. 2017 must see a real stepping-up of reform. We need to ensure that investment is not being held back by unnecessary regulatory bottlenecks.” Increased support for smaller companies. The latest results for the EIB Group, consisting of the EIB and the European Investment Fund (EIF). The more than 33 billion euros for Europe’s small and medium-sized enterprises (SMEs) in 2016 supported some 300,000 companies, which employ more than 4.4 million people.President Hoyer said: “In many parts of Europe SMEs still lack access to finance. SMEs are the true backbone of the European economy. They are the ones that create jobs; their capacity for innovation and flexibility makes them crucial for Europe’s competitiveness and for the well-being of its citizens. 2016 has also seen a significant shift in the kind of financing the EIB Group provides with an increase of smaller loans, which go mostly to innovative smaller businesses. Innovation is key – the EIB Group is looking to make 2017 a year of innovation.” Financing competitiveness and growth. The sectors supported by the EIB Group are critical in terms of their long-term impact on competitiveness and growth. In 2016 close to 20 billion euros went to infrastructure. Some 17 billion euros went to environmental projects. More than 13 billion euros were provided for innovation and for high-speed broadband connections. On climate action, the EIB has for the seventh year running exceeded its target, providing over 19 billion euros to help mitigate climate change and adapt to its impact. This represents 26% of total EIB lending in 2016. Raising money on the capital markets. The EIB is self-financed: lending activities are mainly funded via bond issuance in the international capital markets. Despite periods of market uncertainty last year, the Bank successfully raised 66.4 billion euros from investors around the world. Ten years after pioneering the first Green Bonds, we remain the largest issuer, with over 15 billion euros raised for climate projects since 2007. Investment Plan for Europe on track; but reforms need-
ed. EIB Group operations backed by the European Fund of Strategic Investments (EFSI), which is at the heart of the Investment Plan for Europe, are well on track. In the first one and a half years, the EIB Group has approved more than 420 financing transactions which are expected to support investment of 164 billion euros. The EIB President said: “The Investment Plan for Europe has been a true game-changer for the Bank. We have created new products, we have reached out to new clients – 3 out of 4 are new to the Bank – and we have built new partnerships, in particular with the national promotional banks. Extending the European Fund for Strategic Investments will help Europe meet the challenges of a changing world economy.”The President warned against complacency. According to EIB research, only one in three companies in Europe expect to increase investment in the coming year. “The companies surveyed say that political and regulatory uncertainty are the main barriers to investment. EFSI cannot do the job alone. We need to create the right conditions for investment, at EU level by stepping up work to complete the single market, at Member State level by accelerating regulatory reform.” Jobs for young people. President Hoyer called for continued efforts in the fight against youth unemployment. Since its launch in 2013, the EIB’s “Skills and Jobs – Investing for Youth” programme has provided more than 37 billion euros toward projects for jobs and improved skills for young people. Tackling the migration challenge. The EIB is making a tangible contribution to the EU’s external policy goals. 2016 saw the delivery of the 3 billion euros committed by the EIB as part of a three-year 11 billion euro EU assistance package for Ukraine. This supports competitiveness, resilience, energy security and quality of life for citizens in Ukraine.Regarding the current migration challenge President Hoyer called for a stronger European commitment outside the EU and an adjustment of development policies: “We need to reinforce economic resilience and stability in countries most severely impacted by the current refugee and migration crisis, and tackle root causes of migration.” He also underlined: “Through its Economic Resilience Initiative, the EIB stands ready to complement the EU External Investment Plan by rapidly mobilising additional financing in support of sustainable growth, vital infrastructure and social cohesion. We want to boost employment opportunities in both host and refugee communities.”Under the Economic Resilience Initiative, the EIB will increase its support to the Southern Neighbourhood and the Western Balkans by 6 billion euros, taking total EIB-supported investment in the regions from 20 billion euros to some 35 billion euros by 2020.
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HUBERT VÉDRINE: ‘EUROPEAN ELITES SHOWED DISDAIN FOR THE PEOPLE’ by Laurent Marchand
An interview with Hubert Védrine, a French Socialist Party politician and minister for foreign affairs (1997 to 2002) under Prime Minister Lionel Jospin. He recently published a book entitled ‘Saving Europe’: You wrote, public opinion in Europe is deeply divided. Since when has this been the case? At the time of the Maastricht Treaty, just about all the important leaders backed the ‘yes’ vote. François Mitterrand was heavily involved and had a much greater influence than his successors. Yet in spite of this, the treaty only passed by 51%. This was when the European project began to stall, and the phenomenon continued with the 2005 referendum. Gerhard Schröder (then Germany’s chancellor) told me that Germany would have voted ‘no’ if it had held a referendum. That is when I started thinking about the need to distinguish the European project, which is magnificent, from this kind of bureaucratisation that has taken over the EU.
Many people have tried to make this distinction… I would describe what we have seen as a kind of headlong rush towards abusive regulation. Jean-Claude Juncker himself has denounced this, saying that Europe has been wrong to regulate so excessively. In fact, this phenomenon does not go back to the original European Community but has its roots in the single market and the Single European Act of 1986. Who can we blame for it? There is an overproduction of standards, a real labyrinth between the 27 EU governments, the Commission, the Parliament and the Court of Justice. The people see these institutions as too far removed from them. You are not afraid to criticise the Europhiles… That is right. There is another group that bears respon-
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sibility and it contains the elites and the media. They saw any opponents or doubters as backward imbeciles, old-fashioned nationalists and sovereigntists. The disdain for the people shown by the elites contributed to the distance we now see. Instead, they should have understood that the people’s hopes and concerns needed a response.
But a Europe that is able to respond to the big challenges is already on the table…
Projects like Airbus…
For the Europhile elites, accepting that the people want to keep a certain identity, sovereignty and security is unthinkable. I think they have been extremely condescending. This is why we saw the rise of protest voting and now see real electoral rebellions.
Exactly. There is strength in unity.
You wrote, “The idea of Europe coming undone is unbearable.” I am not an anti-European. On the contrary. But I do not believe in classic federalism. What I like about Jacques Delors’ formula, when he supports a federation of nation states, is that it intelligently combines the two things. But a strictly federal Europe would not work. No treaty with this aim would ever be ratified. Federalist campaigners are just talking hot air, it will never work. So I aim to find a path down the middle. To strengthen the European idea that is so brilliant and to regain the support of the people that have been left behind. You insist on the formal announcement of a pause… When I talk about Europe taking a pause, it does not mean that everything should grind to a halt. It is a political message to the people, saying, ‘We have stopped, we are going to listening to you.’ It is to break down the idea that we are in a spiral beyond our control. This idea plays a role in the democratic melancholy that has descended on Europe. People have a voting card that they think is useless. A pause followed by a conference… Yes, not a classic European summit but a conference bringing together the governments that are ready to work on redefining how tomorrow’s Europe should work. It is a pathway that should be offered up. Should this decision just be made between governments?
It all depends on the discourse we adopt. If I tell you that there is strength in unity, that we should be more united against the Russians, the Chinese and the Americans, this is obvious. It is something everyone understands.
And another definition? Europe is presented as something to which we will inevitability hand over control because our role is over, because as countries we are supposedly to small, weighed down by our past, unable to manage any more, tired, demoralised, etc… So Europe will continue in our place. This is roughly what the elites have been saying for the last 20 years. But that is not what the people want. When they hear this, they drop everything. But today, people are calling for sovereignty. Because we were wrong to talk about national egotism. You would never accuse the mayor of Rennes of being egotistical for not looking after the interests of Strasbourg. National interests exist, they are not incompatible and we have a negotiation system to reach compromises, but we should not lecture countries every day about national egotism. Do people fear this could set off a downward spiral of nationalism? No, this change is needed to save the core of the European idea. Is the choice of language important here? There is always vital linguistic work to be done. Take sovereignty. Of course, it can take many forms, some of which are completely stupid, but sovereignty is an extraordinary conquest. People taking charge of their own destiny is a great thing.
*First published in www.euractiv.com
If you ask the Commission, the Parliament and the Court of Justice, they will say the system works fine the way it is. So forget them!
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IS THERE CAUSE FOR WESTERN OPTIMISM IN THIS ASIAN CENTURY? An interesting question after ‘Davos’. But no important American or EU leaders were to descry except Britain’s Prime Minister Theresa May who repeated her House of Common’s hard Brexit speech and who is standing already with one leg outside the EU. It was China’s President Xi Jinping who stole the show and who defended globalisation and the Paris climate agreement, without mentioning Donald Trump or the US.
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We didnâ€™t hear in Davos anything serious about the biggest global challenge of global inequality: eight of the planetâ€™s richest people now hold wealth equal to that of the poorest half of the world population. Or about another global problem that automation will soon put millions of people out of work. But, to be honest, who expected that? European Business Review offers you in this special report some topics and the conclusions of the World Economic Forum in Davos. Enjoy it.
N. Peter Kramer, Editor-in-chief European Business Review
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YES, THIS IS THE ASIAN CENTURY. BUT THERE’S STILL CAUSE FOR WESTERN OPTIMISM by Kishore Mahbubani*
The big question of our time is a simple one: should we feel optimistic or pessimistic for the future of humanity, all 7 billion of us? The world’s response is divided. Many Western societies are drowning in pessimism. By contrast, the rest have never been more optimistic. This represents a reversal of previous centuries’ pattern, where the West was always more optimistic. What happened? And what do the facts tell us? 28
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The facts are clear. The human condition has never been better. Global poverty is declining steadily. In 2015, we far exceeded the UN’s Millennium Development Goal of halving global poverty. According to the NIC, extreme poverty could halve again by 2030. The global middle classes are exploding, from 1.8 billion in 2010 to 3.2 billion in 2020 and 4.9 billion in 2030. The world’s infant mortality rate has decreased from an estimated 60 deaths per thousand live births in 1990 to 32 in 2015. This translates to more than 4 million fewer infant deaths per year. If we were rational and objective, we would be celebrating the current human condition. WESTERN NAVAL-GAZING Why are we not? One simple answer is that Western intellectuals who dominate the global intellectual discourse are only aware of their societies’ short-term challenges, not the long-term global promises. Francis Fukuyama illustrates this well. In an essay written after the election of Donald Trump, he says, “Donald Trump’s stunning electoral defeat of Hillary Clinton marks a watershed, not just for American politics, but for the entire world order. We appear to be entering a new age of populist nationalism, in which the dominant liberal order that has been constructed since the 1950s has come under attack from angry and energised democratic majorities. The risk of sliding into a world of competitive and equally angry nationalisms is huge, and if this happens it would mark as momentous a juncture as the fall of the Berlin Wall in 1989.” Please study his words carefully. He is conflating the condition of the West with the condition of the world. It’s true that populism has risen in the West. That explains Trump and Brexit (and possibly Le Pen). But it hasn’t emerged in the more populous regions of Asia and Africa. More importantly, the West only represents 12% of the world’s population. 88% live outside the West. And their living conditions (with the exception of a few Arab countries and North Korea) have never been better. Take three of the most populous countries in Asia: China, India and Indonesia. The lives of the almost 3 billion people in these countries have never been better. And they will get much better in the coming decades, as this figure shows. The decade of 2010 to 2020 is probably the best decade Asia has ever experienced. The Asian middle class population is going to jump from 500 million in 2010 to 1.75 billion in 2020. In short, Asia is going to add 1.5 times the total population of the West to the global middle class population in one decade.
Why is this happening? One simple answer is the triumph of reason. The spread of Western science and technology demonstrates this most clearly. At the most basic level, humans around the world can see the benefits of modern Western medicine. As a result, reason is replacing superstition. In all spheres of human life, from economic policies to environmental management, from education to urban planning, Western best practices are being almost universally adopted by all societies. SO WHAT’S WITH ALL THE PESSIMISM? If the world is getting better, why is the West becoming more pessimistic? The simple answer is that the West has pursued a deeply flawed strategy since the collapse of the Soviet Union in 1991. Like the British defenders of Singapore in World War II, they had their guns pointed out to the sea in the South when the Japanese came by land from the North. To put this point even more starkly, the West thought it had won a colossal and epic struggle with its dramatic victory in the Cold War. As a result, it didn’t notice that an even bigger struggle had begun with the “return” of Asia at the same time. China decided to re-join the world economy in the 1980s. India did so in the 1990s. The return of 3 billion Asians was obviously going to shake up the global economy. The West didn’t notice. It didn’t notice because Western minds were intoxicated with an unhealthy opiate of triumphalism. Francis Fukuyama’s famous essay “The End of History” captured this well. As a result, the West developed a flawed interventionist strategy towards the rest. Many of the interventions led to disaster. Michael Mandelbaum notes that “the Clinton administration’s track record was not encouraging: it has promised order in Somalia and left chaos. It had gone to Haiti to restore democracy and had left anarchy. It had bombed in Bosnia for the sake of national unity but presided over a de facto partition.” And 9/11 made things worse. It seduced the Neo-Con advisers of George W Bush to invade Iraq, after invading Afghanistan. A decade later, Europeans saw two-thirds of their refugees coming from three countries: Iraq, Afghanistan and Syria. But that was not where the real disaster was. As Western strategic thinkers were distracted, they didn’t see that the most important event in 2001 was not 9/11. It was China’s entry into the World Trade Organisation. The entry of almost a billion workers into the global trading system would obviously result in massive “creative destruction” and the loss of many jobs. Trump and Brexit are therefore the natural and logical results of a flawed Western strategy of not dealing
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with the real economic challenges to the West. While the West was distracted, China emerged. According to IMF statistics, in 1980, in PPP terms, America’s share of global GDP was 25% while that of China was 2.2%. In 2016, America’s share has shrunk to 15.5% while that of China has risen to 17.9%. THE RELATIVE DECLINE OF THE WEST There are therefore sound strategic reasons for Western pessimism: From 1820 to roughly 1980, Western economic power either grew steadily or maintained a huge globally dominant position. In the past three decades, the combined GDP of North America and Western Europe has shrunk from 51.5% in 1990 to 33.45% in 2014. An even more destructive strategic change happened at the same time. While the workers in the West suffered job losses and deteriorating incomes, the Western elite became super rich from accelerated globalisation and the return of Asia. R.W. Johnson describes well how American workers suffered: “Between 1948 and 1973, productivity rose by 96.7% and real wages by 91.3%, almost exactly in step. Those were the days of plentiful hard-hat jobs in steel and the auto industry when workers could afford to send their children to college and see them rise into the middle class. But from 1973 to 2015 – the era of globalisation, when many of those jobs vanished abroad – productivity rose 73.4% while wages rose by only 11.1%. Since 2000 the wages paid to college graduates have fallen.”
A REASON TO BE OPTIMISTIC The existential questions that the West faces today are quite simple. Is everything lost? Will Western power and influence steadily decline? Or is there hope for the West? Can the West also benefit from the resurgence of the rest? The simple answer is that the West can benefit from the surge of the rest. 12% of the world’s population can be pulled along by the remaining 88%. To achieve this, Western leaders and pundits need to make many significant psychological adjustments. Instead of constantly trying to retain control of the world, the West should learn to share power. Asians should be allowed to run the IMF and World Bank. Equally importantly, Western pundits must drop their traditional condescension when speaking about the rest. Emerging Asian entities, like China, India and ASEAN, should be treated with more respect. India should be immediately given a seat on the UN Security Council, with the UK and France stepping aside. All this sounds inconceivable to many Western minds. But until recently, it was also inconceivable that the rest could be more optimistic than the West. The West must now do the inconceivable to prepare for the inevitable inconceivable world. * Kishore Mahbubani
is Dean of Lee Kuan Yew School of Public Policy, National University of Singapore. He is the author of The Great Convergence: Asia, the West and the Logic of One World. His forthcoming book, The ASEAN Miracle: A Catalyst for Peace will be published by NUS Press in early 2017.
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HOW CAN WE AVOID A CLIMATE CHANGE CATASTROPHE? AL GORE AND DAVOS LEADERS RESPOND by Ross Chainey* Every month, it seems, we are confronted with fresh data that shines a light on the perilous state of our natural environment. Ninety-two percent of people worldwide live in places where air pollution levels exceed suggested safety limits, at least 1.8 billion people still lack reliable access to safe drinking water, and 2016 was the warmest year on record – around 1.2°C warmer than pre-industrial levels. Meanwhile, our oceans and forests aren’t faring much better. As highlighted by the latest edition of the Global Risks Report, the mismanagement of our environment is the one global threat that just refuses to go away. And while there are clear signs that the world is fighting back, there is still a great deal of work to do to avert climate catastrophe. We asked global leaders gathering
in Davos — what should our priorities be? Here’s what they had to say: AL GORE, VICE-PRESIDENT OF THE UNITED STATES (1993-2001), CHAIRMAN AND CO-FOUNDER, GENERATION INVESTMENT MANAGEMENT Our efforts to solve the climate crisis are in a race against time, because we are still using the Earth’s atmosphere as an open sewer, adding 110 million tons of man-made global warming pollution each day, and we are moving closer to several potential thresholds of unrecoverable damage. However, businesses and investors – alongside governments – are making
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significant progress on solutions. Markets are recognizing that fossil fuels are a bad bet; governments are acting to reduce their national emissions; and people are demanding action. The implications of these changes for business and society justify renewed hope that we will act in time to avoid the most catastrophic damage and build a sustainable future. We’re seeing continued, stunning declines in the cost of renewable energy, energy efficiency, batteries and energy storage — giving nations and communities around the world dramatic new opportunities to embrace a sustainable future based on a low carbon economy. In many parts of the world, renewable energy is already cheaper than that of fossil fuels, and some developing countries are leapfrogging carbon-based energy altogether. Similar developments are likely to occur elsewhere throughout the world, with new advancements in electric vehicles, smart grids and micro grids, advanced manufacturing, and as other areas continue to accelerate climate action. We are going to prevail in our effort to solve the climate crisis, but we must continue to invest in these technologies and ramp up our transition to a clean energy economy at a pace previously unimaginable.
emissions at home and abroad, and make Canada and the world more resilient to the impacts of climate change. Our goal is to position Canada as a global leader in the clean-energy economy. ERIK SOLHEIM, HEAD OF UN ENVIRONMENT We do not lack the technology or the finances to resolve environmental issues. If we need more of one thing to tackle the problem, it is political will. A government can create the conditions for solutions like nothing else. Yet political will flows from the will of the people. When people care, politicians act. So by bringing environmental concerns close to people and speaking a language they understand, we get them to care and politicians to act. For example, few can relate to carbon dioxide emissions. But everyone can relate to air pollution - we can see it, smell it, taste it. Fixing air pollution is an easy cause to get behind. The triumph is that in doing so, we also help heal the climate. Political will can make sustainability the norm. But if protecting the environment is not a dinner table conversation from Kansas to Kazakhstan, we are failing to drive that change.
CATHERINE MCKENNA, MINISTER OF ENVIRONMENT AND CLIMATE CHANGE, CANADA Today, the stresses of climate change—the decrease in biodiversity, rising sea levels—present a significant global challenge. This challenge requires Canada’s resolve to do one thing to address climate change. We must show leadership at all levels. We are working with the provinces, territories, and municipalities whose leadership is the foundation on which we build our future actions. And we value the work and traditional knowledge of Canada’s indigenous peoples. Their leadership on climate change is well established. Canada is leading by example and there is still more work to be done:
NAOKO ISHII, CHIEF EXECUTIVE OFFICER AND CHAIRPERSON, GLOBAL ENVIRONMENT FACILITY
• Putting a price on carbon pollution and expanding carbon markets globally. Ramping up momentum for the implementation of the Paris Agreement and building momentum for the ratification of the Kigali Amendment to the Montreal Protocol (phasing down hydrofluorocarbons or HFCs). Working with our partners to unleash private sector investment and business entrepreneurship for the innovation needed to transition to a low-carbon economy. Supporting vulnerable communities and workers to maintain and even enhance their participation in a low-carbon economy. Combined, these measures will help reduce
It is increasingly evident that the stability and resilience of Earth is being pushed to the limit. Several planetary boundaries that are fundamental for human society to thrive have already been transgressed, as the global commons that we have so long taken for granted has come under irresistible pressure. Fortunately, the world has taken the first steps to begin to turn this growing tragedy of the commons into an opportunity. The Sustainable Development Goals and the Paris Climate Agreement clearly recognise that the health of the global commons is fundamental to development and growth.
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But, important as these agreements are, they are only a start: action is needed, and it must happen fast. Business as usual will take us nowhere. And incremental change will not suffice — the challenge is just too great for that. The only solution is to fundamentally transform our key economic systems — our energy system, food production system, our cities, and our goods manufacturing system. We simply have no other option. JIM LEAPE, CONSULTING PROFESSOR, WOODS INSTITUTE FOR THE ENVIRONMENT, STANFORD UNIVERSITY As environmental pressures mount, and some governments falter, we need to find ways to harness the disruptive power of the Fourth Industrial Revolution in the cause of sustainability. An explosion in transparency is a crucial antidote to “post-truth” politics. The proliferation of data sources and new tools for finding signal in the noise can create inescapable public accountability for controlling GHG emissions or protecting forests or even conserving groundwater. They can also provide visibility across global value chains — “made in the world” need not mean “made in the shadows.” The Fourth Industrial Revolution can also enable the transition to sustainability. It promises new tools to manage public resources, even as ecosystems and resources are increasingly in flux. New tools for tracing products from origin to use to disposal can help small producers access global markets, enable buyers and consumers to support better management, and lubricate a circular economy. Big markets are well-served by the Fourth Industrial Revolution. Our challenge is to spark, nurture, and disseminate innovations, like the ones above and many others, that can help us meet the challenge of living within the limits of the Earth’s resources. JOHAN ROCKSTRÖM, EXECUTIVE DIRECTOR, STOCKHOLM RESILIENCE CENTRE 2016 was an alarming year for those monitoring the stability and resilience of Earth. Temperature records were smashed month by month from January through to August making it the warmest year since records began. The Arctic was hit by an unprecedented heatshock in November, halting the refreeze of sea ice. We need emergency measures. The Third Industrial Revolution was driven by Moore’s Law. The Fourth Industrial Revolution must take place within
planetary boundaries and be driven by a “Carbon Law” – greenhouse gas emissions in all sectors and all countries must halve every decade until zero by 2050. This is not only economically feasible, the good news is we have already started to follow the Carbon Law. The Global Carbon Project reports that annual emissions have not grown for three years running, even with strong economic growth globally, and renewable capacity is expanding exponentially. What does this mean in practice? Current emissions are about 40 Gigatonnes of carbon dioxide (GtC). Following the Carbon Law, we need to reach 20GtC by 2030, 10GtC by 2040, and 5GtC by 2050, when the world economy is net-zero for carbon with food production pulling out more than 5GtC from the atmosphere every year. Follow the curve and coal collapses to zero globally in the early 2030s and oil early in the 2040s. This is not a pipe dream: about 25% of all countries have already committed to become free of fossil fuels by 2050. Encapsulating the Fourth Industrial Revolution within a global Carbon Law will not only enable the world to develop on a stable planet, it is also bound to unleash even more disruptive innovation and sustainable transformations. JEAN-LOUIS CHAUSSADE, CHIEF EXECUTIVE OFFICER, SUEZ Considering the magnitude of the challenge we are facing, it is no less than a transformation of our economic model that is needed. The way we produce and consume raw materials, fossil fuel or gas, water, should change. By going from a linear to a circular economy, we will be able to decouple economic growth from resources consumption and from greenhouse gases emissions. The question, “how do we do it?” is a hard one. In my opinion, carbon pricing is the only way to trigger a technological momentum towards a low-carbon economy, by fostering the necessary investments. The price of carbon can give back imagination to finance and it can restore the growth of the world economy: green business is a true source of opportunities and it could be a key success factor for economic rebound. Again, it can generate jobs and wealth, both in the North and in the South.
*Ross Chainey is Digital Media Specialist, World Economic Forum
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CHINA’S PRESIDENT XI JINPING DEFENDED ECONOMIC GLOBALISATION IN HIS FIRST SPEECH TO THE WORLD ECONOMIC FORUM AT DAVOS by Ceri Parker*
“It is true that economic globalisation has created new problems. But this is no justification to write off economic globalisation altogether. Rather we should adapt to and guide globalisation, cushion its negative impact, and deliver its benefits to all countries and all nations,” China’s President Xi Jinping said. At a time when protectionist and nationalist forces are on the rise in the West, President Xi warned against making globalisation a scapegoat. “Some people blame economic globalisation for the chaos in our world. Economic globalisation was once viewed as the treasure cave found by Ali Baba in the Arabian nights, but now it has become the Pandora’s Box.” However, the world’s problems could not simply be laid at globalisation’s door, from the “heart-breaking” refugee crisis to the financial crisis. “The international financial crisis is another example, it is not an inevitable outcome of economic globalisation, rather it is the consequence of the excessive chase of profit by financial capital and a great failure of financial regulation,” Xi Jinping said, “the global economy is the big ocean you cannot escape from” and that China had “learned how to swim.” After 38 years of reform and opening, China has become the world’s second-largest economy. “China’s development is an opportunity for the world. China has not only benefited from economic globalisation but also contributed to it,” he said. Looking ahead, President Xi warned against protectionism. “We should
commit ourselves to growing an open global economy,” he said. “No one will emerge as the winner in a trade war.” He added: “China has no intention to boost its trade development by devaluing the Renminbi still less by launching a currency war” The speech ended with a plea for cooperation in turbulent times: “World history shows that the road of human civilisation has never been a smooth one and that mankind has made progress by surmounting difficulty. No difficulty, however daunting, will stop mankind from advancing. When encountering difficulty, we should not complain, blame others, or run away from responsibilities ... Instead we should join hands and rise to the challenge. History is made by the brave.”
*Ceri Parker is Commissioning Editor, Agenda, World Economic Forum
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10 ACHIEVEMENTS FROM DAVOS 2017 by Oliver Cann*
When Davos ends, the work continues on 50 year-round Forum projects aimed at supporting the United Nations Sustainable Development Goals. The Annual Meeting is often described as a talking shop, but it is also a working meeting for dozens of different communities from all regions of the world, all ages and all sections of society. Here are a few of the things that happened at the Annual Meeting in Davos this year:
creating vaccines that could be released quickly once an outbreak occurs.
1) A new fund backed by the Norwegian government has been launched that will raise $400 million and protect 5 million hectares in countries working to reduce deforestation and forest and peat degradation. The fund could lead to $1.6 billion in deforestation-free agriculture investments, also leading to job creation and economic growth.
3) Signatories to the Forum’s New Vision for Arab Employment project said they have now helped re-skill 250,000 people since 2013, and are now targeting 1 million current and future workers.
2) The Coalition for Epidemic Preparedness Innovations (CEPI) was officially launched at the Annual Meeting with the aim of quickly reacting to epidemics by 36
4) The Forum teamed with the University of California Santa Barbara’s Marine Science Institute to build a coalition to protect the world’s oceans and marine resources; a global commons estimated by the World Wildlife Fund to be worth $2.5 trillion.
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5) The Forum mobilised a public-private coalition to build a responsible, inclusive and sustainable battery supply chain. The lithium-ion battery market is expected to be worth $70 billion by 2024, yet production is linked to issues such as child labour, health and safety hazards for workers, environmental impacts and life-cycle sustainability.
9) Some of the world’s largest financial service providers, global IT and telecom companies and the international humanitarian community agreed on six principles to better enable digital cash payments in crisis-affected populations. Digital cash has a proven track record of fostering entrepreneurialism and boosting local economies.
6) 40 governments and businesses, including some of world’s largest consumer goods, retailers and recycling firms, endorsed a plan to increase global reuse and recycling rates for plastic packaging from its current 14% to 70%.
10) Last but not least, 100 leading businesses signed the Compact for Responsive and Responsible Leadership. The Compact was developed with the Forum’s International Business Council which will now develop a framework which will allow the measurement of a long-term approach.
7) Social Entrepreneur Gary White of water.org, cofounded with Matt Damon, announced a major new $1.2 million partnership with Stella Artois to help provide clean water to 3.5 million people. 8) GoodWeave International, another social enterprise, announced a new international programme, Sourcing Freedom, to stop modern slavery in supply chains. There are estimated to be 21 million people in forced and bonded labour around the globe. The programme is backed by a number of global businesses from across a range of industries.
*Oliver Cann is Head of Media Content, World Economic Forum Geneva
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INDIA’S FOREIGN POLICY INCREASE THANKS TO PRIME MINISTER MODI by Hans Izaak Kriek*
How is India dealing these days, politically , and with international trade and terrorism? Since 26th May 2014 Narendra Modi is in charge of more than a 1,5 billion Indians. In 2019 there will be elections again in India. Who is Narendra Modi? He took oath as the Prime Minister of India, becoming the first ever PM to be born after India attained Independence. He looks dynamic and determined. PM Modi arrives as a ray of hope in the lives of his people. Ever since he assumed office in May 2014, he has embarked on a journey of all-round and inclusive development where every Indian can realise their hopes and inspirations. He remains deeply inspired by the principle of ‘Antyodaya’, of serving the last person in the queue. Through innovate ideas and initiatives, the Government has ensured that the wheels of progress move at rapid pace and the fruits of development reach 38
every citizen. Governance has become open, easier and transparent. Narendra Modi looks a ‘People’s Leader’, dedicated in solving India’s problems and improving their well-being. Nothing is more satisfying for him than being amongst the people, sharing their joys and alleviating their sorrows. His powerful ‘personal connect’ with the people on the ground is complemented by a strong online presence. He is known as India’s most techno-savvy leader, using the web to reach people and bring about change in their lives. He is very active on social media platforms as Facebook, Twitter, and Instagram. FOREIGN POLICY Modi is active in international way, so he joined the
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Nuclear Security Summit in April 2016 where he put forward a strong message on the importance of Nuclear Security at the world stage. Also he joined the COP21 Summit in Paris , where he, along with several other world leaders deliberated on climate change. Many of them, Prime Minister of Australia Tony Abbott, President Xi Jinping of People’s Republic of China, President Vladimir Putin of Russia and Chancellor Angela Merkel of Germany have visited India and these visits have achieved breakthroughs in improving cooperation between India and these countries. President Obama visited India at Modi’s invitation in 2015 to attend Indian Republic Day, a first in the history of India-USA relations and in June last year, Modi delivered a brilliant speech to the US congress, in which he has detailed his doctrine (https:// www.youtube.com/ watch?v=Y47AiJDFcQY) Modi: “We trade with the US more than we trade with any other nation”. This was during the US presidential election campaign and, by then, Modi was anticipating Clinton’s victory, against his own wishes and his country’s interests. However, with time, disappointed with Obama’s legacy as far as India is concerned, Modi felt extremely pleased with Trump’s victory. The stake is big. Pakistan is traditional an enemy and Trump wants to move to a new alliance US-Russia-India versus China. “Pakistan must walk away from terrorism for talks with India”, said PM Modi recently. The so-called ‘Modi Doctrine’, in other words India’s foreign policy under PM Modi’s leadership, is the translation of several policy initiatives in foreign matters, in which Modi has engaged India’s government towards foreign powers since he took office in 2014. Narendra Modi has his own style but more importantly, he is ambitious and determined, dreaming of raising up the nuclear India to a position of superpower among the world’s greatest superpowers. Nuclear India with 1,5 billion citizens, fear China’s aggressive power and ambition. On track, Modi is also confident that during Trump’s mandate, India will be able to balance the strength of US-China’s relationship. In this matter, he is aligned with Trump. INDIA AND EUROPE, TRADE India maintains an ongoing dialogue with the European Union which is separates from the bilateral relations with soe EU member States. In Asia the positive public perception of Europe is highest in India. This country, the world’s most populous democracy , has strategic partnerships with France, UK and Germany. PM Modi intends to diversify India’s purchase of high tech fighting
military equipment like warplanes and warships and with respect, considers Europe (France, UK, Germany, Sweden and Italy) as much as he consider Russia and the US. The foremost areas of programmed India-EU28 cooperation are in the domains of education, cultural exchanges, joint-research in science and technologies, and law enforcement. The European Union (EU28) is India’s second largest trading partner, accounting for around 20% of Indian trade (Gulf Cooperation Council), with almost $160 billion in total trade. The European Union - still reeling from the combined effects of the global economic slowdown, European sovereign debt crisis, a re-assertive Russia, European immigration crisis and several high-profile corporate scandals - appears rudderless in trying to find solutions to reverse the surge of Euro scepticism, antiestablishment and anti-globalisation movements. Uncertainties in Brussels over the future state of the European Union are directly reflected in EU-India relations. Prime Minister Modi met the leaders of Europe, President Tusk and Juncker at the EU-India Summit in Brussels, 2016. Europe is popular with Indians tourists. Efforts by Indian multinational companies, operating in industrial engineering and ICT domains, to cover European markets via quality-price competition and by providing innovative goods and services substitutes has seen mixed results due to structural shortcomings and regulatory difficulties.
* Hans Izaak Kriek is US correspondent and political commentator for European Business Review and editor-in-chief of Kriek Media
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THE REALM OF THE IMAGINABLE by Gianni Skaragas
Maggie Minoglou is never without her notebook. Her lively manner and boundless energy, her ardent temperament and cosmopolitan vision recall the old Greek bourgeoisie of Smyrna (Izmir, Asia Minor) where her mother’s family had lived. She has navigated difficult territory as one of a few women publishers in Greece. The new year marks the 30th anniversary of the establishment of her independent publishing house. Over the past three decades, Kritiki has published academic textbooks across a range of subject areas, as well as fiction and nonfiction books. But Maggie Minoglou doesn’t want to give herself the opportunity to celebrate her past because she has always looked forward, not back. “I like gazing at the sky,” she told me when we conducted our last interview. She lives by her lifelong credo, “The sky is the realm of the imaginable, never the unimaginable.”
paste. The pursuit and conquest of women drove him— he never stopped flirting with them—but I knew that my place in his heart was unique. I was his private audience, and his stories turned me into an introspector.
Both your father and grandfather were merchants. Do you think that predisposed you toward your life choices? Yes, absolutely. The lesson I took with me into adulthood, taught by these two men, is that principles will get you through times of no money. When I plunged into publishing and founded Kritiki, I guess I had their example in the back of my mind. Was it hard to develop autonomy when you were growing up? I was raised in a family where the women were aware that they privileged men. My grandmother taught me to look after men, to treat them like royalty. I know male privilege when I encounter it. I’ve witnessed it my entire life, but it didn’t affect my way of viewing the world. It didn’t prevent me from becoming a woman of the world. You had a special bond with your grandfather. He was the dominating influence in my upbringing because my father worked all day and slept late on Sunday. In my eyes, my grandfather was something of a mystic. He had the charismatic gleam of a brilliant storyteller. I remember the afternoons I spent sitting with him in his private office, where we shared dried apricot
You have taught Economics at the National and Kapodistrian University of Athens from 1981 to 2007. After completing my PhD in Economics at Clark Uni
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contain the crisis, but I really was determined to save the company. In 1992, I acquired all remaining shares, and became the sole owner of Kritiki. What did you learn from that experience in running your own publishing house? I learned that it is important to honor agreements and pay people quickly. How is the publishing scene in Greece under the weight of austerity? I am afraid that we are worn down by the crisis and its aftermath. Publishing has always been a rough game, but I think austerity has brought further upheaval to a market already grappling with the protracted economic decline. We are increasingly forced to cut corners, commissioning less than before, while profit margins are squeezed. But I like to think that my job is to widen the cultural vistas of Greek readers, to invest in academic and literary exceptional titles. The old certainties have disappeared, but I believe I must get going and stay focused.
versity, in Massachussetts, US, I taught Central Planning in Socialist Countries, Comparative Economic Systems and Political Economy, among other things. I decided to quit when at some point I felt estranged. I handed in my resignation, and someone said, “These things don’t happen here. Nobody resigns from Greek universities.” At that moment I knew that I was doing the right thing. How did you decide to become a publisher? I envisioned a publishing house to chronicle the rapidly growing academic scene. That was my mindset when, in 1987, together with three other shareholders we founded Kritiki, with equal shares. At that time the book market was healthy with an interest in non-fiction, mainly philosophy and politics. The vision I had and my inner feeling about books was what mattered the most. I wanted to see if any magic was starting with it. And how exactly do you feel about books? How can one describe the state of feeling secure, or well cared for, or inspired to get out and see the beauty in the world? Your list exceeds 800 titles. Has it been a rough ride? Within almost five years of its founding, Kritiki faced certain financial challenges in reaching its goals. We reckoned we would have to take drastic measures to
Tell us a little about the process from the point of reading a manuscript to acquisition. It would be too black-and-white to say that the book comes first, but it’s totally true. If it is good, that should be all that matters. A publisher’s worth depends on his books. I am thrilled when a submission seizes me immediately. I like to find a voice that is immediately arresting. It’s not about strong log lines and a good paragraph description. Each and every manuscript is unique, and is treated as such. Do you have time to read everything? Sometimes it may seem that there isn’t enough time, but I believe in my skill for spotting a good story. Discovering a good book in the slush pile is a transcendent moment. What is a good story in fiction? Subtlety, point of view, bright voice, plotting that grows from a vision. My allegiance is to good writing that blurs the lines of traditional storytelling and reveal the extraordinary moments found in everyday life. Maggie Minoglou has contributed to raising the profile of women in publishing. I asked her what advice she would give her younger self. She believes that she wasted a lot of time. “It’s too easy for precious moments to slip through our fingers,” she said. “My sense of responsibility sometimes pushed me in odd directions, but later I realized that you can’t have responsibility for something that’s happening and evolving.” She feels that she owes her work more time than she actually gives it. “Time always makes us see something new about life. I don’t want to waste it. I want to dream ahead of it.”
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HOW CAN WE HELP KIDS PROTECT THEMSELVES ONLINE? by Yuhyun Park* We are living in a renaissance period of new digital media and technologies that are reshaping the world around us. A wide and growing cross-section of the world’s population has become immersed in this hyperconnected digital world, in turn transforming the ways we communicate and interact. At the same time, as digital media and technology become an indispensable part of our daily lives, there is growing concern that we are losing control as our dependence on technology grows. One key issue concerns the unprecedented scale and scope of online personal data that is being generated, collected, analysed and monetised, often beyond user awareness or control. In a recent survey of over 6,000 digital media users worldwide, the World Economic 42
Forum found that 52-71% of respondents believe ICT companies and digital media platforms are not doing enough to provide adequate end-user control over what personal information is shared online. Numerous privacy scandals and data breaches have occurred and further hurt public perception of the Industry. Governments are also struggling to regulate the appropriate usage of users’ personal data and develop robust standards for data protection. As a result, the public’s trust in government and digital-media-related industries is volatile and wavering. Tackling this problem is a high priority to ensure sustainable growth of this industry sector and to continue developing the digital economy over the long term. How can we close this trust gap?
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DIGITAL INTELLIGENCE FOSTERS PUBLIC CONFIDENCE Trust comes from understanding and knowledge. Digital intelligence, or DQ as it’s also known, is a set of collective abilities to meet the demands and challenges of digital lives, including digital citizenship and literacy skills. The starting point is for individuals to be aware of how their online personal data is being collected and used, and to understand its impact on their lives. Unfortunately, such DQ is not currently very high among the public. According to the survey, 32-47% of respondents did not understand the meaning of “online presence” and “derived data”, even after they read their definitions. It is clearly important to address this gap in understanding and equip people with the skills to use digital media and technology responsibly. DIGITAL EDUCATION SHOULD START YOUNG Unfortunately, children are the most vulnerable and critical group in society regarding digital issues. Many children do not own their privacy even before their digital lives start, which can be the day they are born, and they are not properly equipped to manage their privacy afterwards. Their personal information, such as photos or medical and educational information, is shared online by their own parents, who often do not realize the full implications of their actions. In other cases, child information is included in the cloud by societal systems with blind understanding of the consequences. Already more than 90% of young people between the ages of six and 17 access the internet across Europe, according to the OECD data. More than 50% of children use social media by the age of 10. And nearly all children who participate in digital media and share information do so without understanding what it means for their privacy.
As well as this, early digital media use increases the likelihood of being exposed to a variety of online risks, such as screen addiction, cyber-bullying, online sexual
behaviour and cybercrime. Just as young people need to learn the highway code before driving a car, children need digital education before they can safely navigate the online world on their own. A 2016 study by Nanyang Technological University showed that higher levels of digital literacy are significantly correlated with a lower risk of becoming involved in potentially harmful behaviours, as well as with necessary skills such as global citizenship, empathy and critical thinking. THE LACK OF DIGITAL EDUCATION IS A GLOBAL EMERGENCY Given the pressing nature of the issues, national governments and industries need to work together with other involved parties, including academia and civil society, with speed, scale and influence. Governments need to prioritise digital education as a key agenda item, with the support of civil society and academia. Industries need to increase the transparency and accountability of users’ privacy and safety, and partner with governments to implement digital educational programmes, as well as incorporate digital learning tools in their products and services. An informed and responsible digital population, together with transparent governments and industry, will promote a culture of trust. This trust will play a pivotal role in the long-term development of an enduring and innovative digital economy.
* Yuhyun Park is Chair, infollutionZERO Foundation
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CAN SOCIAL MEDIA TRANSFORM POLITICS? by Helen Margetts* Can social media transform politics? Of course, social media are transforming politics. But it’s not to blame for Brexit and Trump. After Brexit and the election of Donald Trump, 2016 will be remembered as the year of cataclysmic democratic events on both sides of the Atlantic. Social media has been implicated in the wave of populism that led to both these developments. Attention has focused on echo chambers, with many arguing that social media users exist in ideological filter bubbles, narrowly focused on their own preferences, prey to fake news and political bots, reinforcing polarisation and leading voters to turn away from the mainstream. Mark Zuckerberg has responded with the strange claim that his company (built on $5 billion of advertising revenue) does not influence people’s decisions.
WHAT ROLE DID SOCIAL MEDIA PLAY IN THE POLITICAL EVENTS OF 2016? There is no doubt that social media has brought change to politics. From the waves of protest and unrest in response to the 2008 financial crisis, to the Arab spring of 2011, there has been a generalized feeling that political mobilisation is on the rise, and that social media had something to do with it. Our book investigating the relationship between social media and collective action, Political Turbulence, focuses on how social media allows new, “tiny acts” of political participation (liking, tweeting, viewing, following, signing petitions and so on), which turn social movement theory around. Rather than identifying with issues, forming collective identity and then acting to support the interests of that identity
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– or voting for a political party that supports it – in a social media world, people act first, and think about it, or identify with others later, if at all. These tiny acts of participation can scale up to large-scale mobilizations, such as demonstrations, protests or campaigns for policy change. But they almost always don’t. The overwhelming majority (99.99%) of petitions to the UK or US governments fail to get the 100,000 signatures required for a parliamentary debate (UK) or an official response (US). The very few that succeed do so very quickly on a massive scale (petitions challenging the Brexit and Trump votes immediately shot above 4 million signatures, to become the largest petitions in history), but without the normal organisational or institutional trappings of a social or political movement, such as leaders or political parties – the reason why so many of the Arab Spring revolutions proved disappointing. This explosive rise, non-normal distribution and lack of organisation that characterises contemporary politics can explain why many political developments of our time seem to come from nowhere. It can help to understand the shock waves of support that brought us the Italian Five Star Movement, Podemos in Spain, Jeremy Corbyn, Bernie Sanders, and most recently Brexit and Trump – all of which have campaigned against the “establishment” and challenged traditional political institutions to breaking point. Each successive mobilisation has made people believe that challengers from outside the mainstream are viable – and that is in part what has brought us unlikely results on both sides of the Atlantic. But it doesn’t explain everything. We’ve had waves of populism before – long before social media (indeed many have made parallels between the politics of 2016 and that of the 1930s). While claims that social media feeds are the biggest threat to democracy, leading to the “disintegration of the general will” and “polarisation that drives populism” abound, hard evidence is more difficult to find. THE MYTH OF THE ECHO CHAMBER The mechanism that is most often offered for this state of events is the existence of echo chambers or filter bubbles. The argument goes that first social media platforms feed people the news that is closest to their own ideological standpoint (estimated from their previous patterns of consumption) and second, that people create their own personalised information environments through their online behaviour, selecting friends and news sources that back up their world view. Once in these ideological bubbles, people are prey to fake news and political bots that further reinforce their views. So, some argue, social media reinforces people’s current views and acts
as a polarising force on politics, meaning that “random exposure to content is gone from our diets of news and
information”. Really? Is exposure less random than before? Surely the most perfect echo chamber would be the one occupied by someone who only read the Daily Mail in the 1930s – with little possibility of other news – or someone who just watches Fox News? Can our new habitat on social media really be as closed off as these environments, when our digital networks are so very much larger and more heterogeneous than anything we’ve had before? Research suggests not. A recent large-scale survey (of 50,000 news consumers in 26 countries) shows how those who do not use social media on average come across news from significantly fewer different online sources than those who do. Social media users, it found, receive an additional “boost” in the number of news sources they use each week, even if they are not actually trying to consume more news. These findings are reinforced by an analysis of Facebook data, where 8.8 billion posts, likes and comments were posted through the US election. Recent research published in Science shows that algorithms play less of a role in exposure to attitudechallenging content than individuals’ own choices and that “on average more than 20% of an individual’s Facebook friends who report an ideological affiliation are from the opposing party”, meaning that social media exposes individuals to at least some ideologically crosscutting viewpoints: “24% of the hard content shared by liberals’ friends is cross-cutting, compared to 35% for conservatives” (the equivalent figures would be 40% and 45% if random). In fact, companies have no incentive to create hermetically sealed (as I have heard one commentator claim) echo chambers. Most of social media content is not about politics (sorry guys) – most of that L5 billion advertising revenue does not come from political organisations. 45
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So any incentives that companies have to create echo chambers – for the purposes of targeted advertising, for example – are most likely to relate to lifestyle choices or entertainment preferences, rather than political attitudes. And where filter bubbles do exist they are constantly shifting and sliding – easily punctured by a trending cross-issue item (anybody looking at #Election2016 shortly before polling day would have seen a rich mix of views, while having little doubt about Trump’s impending victory). And of course, even if political echo chambers were as efficient as some seem to think, there is little evidence that this is what actually shapes election results. After all, by definition echo chambers preach to the converted. It is the undecided people who (for example) the Leave and Trump campaigns needed to reach. From the research, it looks like they managed to do just that. A barrage of evidence suggests that such advertising was effective in the 2015 UK general election (where the Conservatives spent 10 times as much as Labour on Facebook advertising), in the EU referendum (where the Leave campaign also focused on paid Facebook ads) and in the presidential election, where Facebook advertising has been credited for Trump’s victory, while the Clinton campaign focused on TV ads. And of course, advanced advertising techniques might actually focus on those undecided voters from their conversations. This is not the bottom-up political mobilisation that fired off support for Podemos or Bernie Sanders. It is massive top-down advertising dollars. Ironically however, these huge top-down political advertising campaigns have some of the same characteristics as the bottom-up movements discussed above, particularly sustainability. Former New York Governor Mario Cuomo’s dictum that candidates “campaign in poetry and govern in prose” may need an update. Barack Obama’s innovative campaigns of online social networks, micro-donations and matching support were miraculous, but the extent to which he developed digital government or data-driven policy-making in office was disappointing. Campaign digitally, govern in analogue might be the new mantra. CHAOTIC PLURALISM Politics is a lot messier in the social media era than it used to be – whether something takes off and succeeds in gaining critical mass is far more random than it appears to be from a casual glance, where we see only those that succeed. In Political Turbulence, we wanted to identify the model of democracy that best encapsulates politics intertwined with social media. The dynamics we observed seem to be leading us to a model of “chaotic 46
pluralism”, characterized by diversity and heterogeneity – similar to early pluralist models – but also by nonlinearity and high interconnectivity, making liberal democracies far more disorganised, unstable and unpredictable than the architects of pluralist political thought ever envisaged. Perhaps rather than blaming social media for undermining democracy, we should be thinking about how we can improve the (inevitably major) part that it plays. Within chaotic pluralism, there is an urgent need for redesigning democratic institutions that can accommodate new forms of political engagement, and respond to the discontent, inequalities and feelings of exclusion – even anger and alienation – that are at the root of the new populism. We should be using social media to listen to (rather than merely talk at) the expression of these public sentiments, and not just at election time. Many political institutions – for example, the British Labour Party, the US Republican Party, and the first-past-the-post electoral system shared by both countries – are in crisis, precisely because they have become so far removed from the concerns and needs of citizens. Redesign will need to include social media platforms themselves, which have rapidly become established as institutions of democracy and will be at the heart of any democratic revival. As these platforms finally start to admit to being media companies (rather than tech companies), we will need to demand human intervention and transparency over algorithms that determine trending news; fact checking (where Google took the lead); algorithms that detect fake news; and possibly even “public interest” bots to counteract the rise of computational propaganda. Meanwhile, the only thing we can really predict with certainty is that unpredictable things will happen and that social media will be part of our political future. Discussing the echoes of the 1930s in today’s politics, the Wall Street Journal points out how Roosevelt managed to steer between the extremes of left and right because he knew that “public sentiments of anger and alienation aren’t to be belittled or dismissed, for their causes can be legitimate and their consequences powerful”. The path through populism and polarization may involve using the opportunity that social media presents to listen, understand and respond to these sentiments. *Helen Margetts is Professor of Society and the Internet and Director of the Oxford Internet Institute, University of Oxford **This piece draws on research from Political Turbulence: How Social Media Shape Collective Action (Princeton University Press, 2016), by Helen Margetts, Peter John, Scott Hale and Taha Yasseri.
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THE WORLDâ€™S MOST TALENT COMPETITIVE COUNTRIES, 2017 by Paul Evans and Bruno Lanvin*
While technology is eliminating jobs, it is also creating them. But filling these new roles is the next talent challenge. Much has been made of the potential of recent leaps in technology to automate many jobs out of existence. From taxi drivers to accountants, some studies suggest that as many as half of existing jobs could be automated. Routine work is clearly disappearing, but the fears of mass unemployment at the hands of machines could be overblown. 47
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For example, research by the McKinsey Global Institute suggests that around 20 percent of occupations could see around 70 percent of their activities automated, meaning a slightly less worrying future, where automation is more likely to take the form of augmentation. But this doesn’t mean technology and talent development should be approached with any less urgency. While technology is creating jobs as well as destroying them, there is often a disconnect between the skills needed and the skills that employees and graduates currently have. It’s a massive challenge for our educational systems currently based on the factory model, turning out young adults who are equipped for routine jobs that are fast disappearing. And the workplace is taking on different forms, evidenced in new models of employment, such as contingent and project-based work. In Europe and the United States, as much as 30 percent of the population earns all or part of their income as free agents in the gig economy, offering their skills to multiple employers through collaborative computer-based platforms. As we observe in this year’s Global Talent Competitiveness Index Report, countries that lead the way in talent competitiveness have taken a multipronged approach to dealing with recent advances in technology and fostering the talent necessary to leverage it. THE WINNERS The index, which measures the extent to which countries attract, grow and retain talent and how they translate their efforts into output, puts Switzerland on top, followed by Singapore and the United Kingdom. While Switzerland excels at offering an ideal economic environment and retaining domestically-developed talent, Singapore leads the way in attracting and enabling its global talent pool. Singapore is a particularly relevant case study in this year’s report because it takes an ecosystem approach to talent development in the face of technological change. Its regular “learning journeys”, organised by the Ministry of Manpower, along with relevant agencies such as the Workforce Development Agency and the Infocomm Development Agency, aim to enlighten small businesses to new possibilities in automation to enhance productivity and reduce dependence on foreign labour. One of its most recent journeys introduced smart technologies in the cleaning and services sector such as robotic floor cleaners and droids that can fold napkins to speed up the work of hotel staff. The learning journeys are only the beginning. They are accompanied by various government grants and incentive schemes, such as the Lean Enterprise Development Scheme, a cross-agency taskforce that makes resources and funding available to lo-
cal small companies looking to augment their workers with technology. Another box Singapore ticks in the GTCI is in education. Its recent PISA scores – which put Singaporean children three years ahead of their American peers in mathematics – reflect Singapore’s forward-looking education system. Singaporean children don’t start primary school until age 6, spending their early years in play-based kindergartens. At school, the curriculum encourages students to ask questions about things they see around them and to maintain that curiosity, which aids lifelong learning. The school system also offers coding classes at a very early age, adopts many digital delivery channels and gives teachers 100 hours a year for training. The importance of ecosystems, which runs consistently throughout our report, cannot be underestimated. The standouts of the GTCI use public-private partnerships to surmount and exploit the challenges of building the new economy. URBAN ADVANTAGE For the first time, this year’s report also includes an index on cities (Global City Talent Competitiveness Index), because talented individuals tend to focus less on which country to go to and more on which city to live in. Cities are therefore, increasingly engaging in their own means to attract, retain and develop talent, making them a crucial part of talent competitiveness. Following a similar methodology to the GTCI ranking, the GCTCI ranking tells us that the leaders, Copenhagen, Zurich and Helsinki, in addition to being consistently high performers in quality-of-life indicators, have strong physical and information infrastructure and strong international links. Another interesting finding is that despite the presence of the big metropolises, such as Paris and Los Angeles in the leading group, the average population of the top 10 cities is around 400,000, demonstrating that the trend of highly educated individuals gravitating to large cities is changing. As talented individuals can increasingly operate from anywhere, physical and technical connectivity and quality of life are competitive advantages for smaller cities. The importance of clusters cannot be underestimated. Ireland’s ICT clusters are a distinct advantage; so is Eindhoven, which is home to Philips. MOVING UP THE VALUE CURVE One consistent finding we see across every annual edition of the report is that the top positions of the GTCI continue to be filled by high-income countries. Those able to deploy capital in innovation, entrepreneurship and collaboration lead the index. Countries that con
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tinue to rely on labour-intensive industries at the expense of high-value industries and talent will struggle to move up the index. The BRICS countries are not getting stronger with scores declining all round this year, shown first in Brazil (81st). China (54th) puts in a good showing in formal education, but lets itself down in attraction. India (92nd out of 118) too is not able to retain, let alone attract, talent. The rise of technology brings new challenges to emerging markets as rich countries become more self-sufficient with robots and automation. Adidas is about to do something unheard of in the clothing and shoes business for some time: bring shoe production back to Germany. With advances in robotics, it can make a pair of trainers in five hours, much less than the seven weeks it currently takes in its Asian supply chain. As advanced economies struggle to cope with immigration, the ability to â€œreshoreâ€? jobs is a blessing for policymakers, as shown by some announcements made by President-Elect Donald Trump in the U.S. With resources and financing channelled to innovation in developed economies, emerging countries may lose their main source of competitive advantage, namely cheap
labour for outsourcing. Even China is waking up to robotics and is set to lose more jobs to automation than to competition from cheaper countries. But not all manufacturing jobs will head back home to developed economies. Policymakers here, as in the developed world, also need to think beyond automation as labour advantage gives way to digital advantage. Digital tools enable people anywhere to participate in global trade, which is carried less by ship and more by the internet. Both for cities and nations, connectivity will be crucial, along with a workforce educated to suit the new economy, facilitated by government, business and educational institutions. *Paul Evans is the Academic Director of the INSEAD Global Talent Competitiveness Index, Emeritus Professor of Organisational Behaviour and the Shell Chair of Human Resources and Organisational Development Emeritus at INSEAD. *Bruno Lanvin is the Executive Director for Global Indices at INSEAD.
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MIN(D)ING THE ASTEROIDS by Margarita Chrysaki*
As it is part of the human nature to explore, space exploration is undoubtedly a human internal need that is constantly keeping active the human beings in a vast range of sectors. One of these sectors is reflected in industry and competitiveness. As a result, the nature of the challenges is not only technological but also social and ethical. One of the most evident examples is asteroid mining. So far only two space companies, Planetary Resources and Deep Space Industries (DSI), are involved with activities on the extraction of useful materials from asteroids, for example, gold, platinum, minerals, water and nickel. Though both companies are still at the stage of developing spacecraft technologies that are needed for the implementation of their mining activities, it’s interesting to assess the related supportive legal framework. On 25 November 2015, President Obama signed “the single greatest recognition of property rights in history”. This ground-breaking law signifies a whole new change for space law as it will allow anyone to own the materials they mine and therefore not to be part of the “common heritage of mankind” as the Outer Space Treaty indicates in its regulation. More recently, the government of Luxembourg has signed a Memorandum of Understanding with Planetary Resources and with the second space mining company, DSI, “to create the needed framework for private citizens and companies to operate in Space”. Luxembourg is the first European country to step into co-funding the development of asteroid mining technology and Europe now more than ever needs to inspire a responsible and ethical corporate behaviour in space. Already the European Commission had defined CSR as “the responsibility of enterprises for their impacts on society integrating social, environmental, ethical, consumer, and human rights concerns into their business strategy and operations”. 50
Considering the growing commercialisation of space exploration, EU leaders now have the chance to inspire and support a new form of CSR that will lead to responsible behaviour in space. This will not only require an updated set of ‘celestial’ CSR standards and policies, for example, the need of specific guidelines to minimise the problem of space debris or to protect the physical integrity of celestial bodies, but also a new form of CSR as a self regulatory system within space industries. This kind of “internal audit” within space companies should examine whether the CSR proposals are implemented in practice or not. European governments have to support and strengthen their policies regarding this substantial CSR on space industry activities such as asteroid mining. This new regulatory framework will prevent and act drastically for all kind of social and ethical challenges on earth and space.
*Margarita Chrysaki is a Brussels-based Political Scientist. She has a BSc and a Master in Political Sciences with special focus on Corporate Social Responsibility in Greek banks. Currently, she is making a profound research in the field of space activities and EU strategy on Space.