A sign and logo of the World Economic Forum is seen at of the forum's annual meeting in Davos, Switzerland. Picture: AFP PHOTO/FABRICE COFFRINI
A sign and logo of the World Economic Forum is seen at of the forum's annual meeting in Davos, Switzerland. Picture: AFP PHOTO/FABRICE COFFRINI

The World Economic Forum (WEF) has launched the Great Reset — an initiative to accelerate change and fundamentally rethink capitalism in the new context brought about by the Covid-19 pandemic.

There is general agreement that the world needs drastic change — already battered by the effects of climate change and social inequality, the most recent forecast by the IMF is that the global economy will shrink 3% in 2020.

The WEF has positioned itself as the International Organisation for Public-Private Co-operation. The endorsements provided during the launch event were significant: joining Prof Klaus Schwab on the virtual stage were UN secretary-general António Guterres and IMF MD Kristalina Georgieva, as well as the Prince of Wales.

In a nutshell, the Great Reset provides a framework with three main components:

  • Fair regulation to support a stakeholder economy;
  • Economic stimulus packages guided by environmental, social and governance (ESG) metrics; and
  • Harnessing the innovations of the fourth industrial revolution to support the public good.

One of the fascinating aspects of the Covid-19 pandemic has been the immediate impact it has had on human behaviour around the globe. Whether prompted by regulation or by fear, activities such as social distancing and the wearing of masks became the new normal almost overnight. This is very different from the slow progress made over many years to convince people to change their behaviour to deal with environmental risks or social injustice.

But the risk is also there that people will return to “business as usual” as soon as a vaccine for Covid-19 becomes available, or simply as governments rebalance the need for economic activity with public health concerns. And while it will be great to be able to have a pint at the local pub again, we don’t want people to hop on a plane whenever there is a meeting to attend. People very quickly embraced technology to stay in touch professionally and personally, and we know there will be huge environmental benefits if some of this behaviour can become the new default option.

We should be mindful of the “recovery” that was pursued after the global financial crisis only 12 years ago. The metrics used to measure recovery were quarterly results of companies, arguably the very metrics that contributed to the crisis in the first place. The task of the Great Reset is more daunting: it requires us not only to stick to new behaviour, but also to embrace new metrics to measure success and apply technology to accelerate the progress.

The operational aspects of the Great Reset are complex, but the principles behind it are not. It is clear that there will be a very broad range of regulatory interventions, stimulus packages and technological interventions. There is no one-size-fits-all — context will determine strategy. But the principles underpinning these measures are universal: fairness, transparency and accountability.

As Schwab pointed out during the launch event, to achieve the Great Reset will take a change in mindset. We have seen that it is possible to make short-term changes to achieve short-term objectives with long-term effect, for example to flatten the curve. We now have the choice to maintain the new normal to achieve long-term objectives, not only in terms of public health but also in terms of broader equality and sustainability issues. In essence, we have the opportunity to recalibrate the measure of success. New metrics will help us understand the value of a healthier society and a healthier planet.

A few years ago Wharton professor Tom Donaldson and University of Michigan professor Jim Walsh teased us with the following riddle: “Law is to justice, as medicine is to health, as business is to ... ... ...?” Their tentative (academic) answer was “optimised collective value”. In more practical terms, they offered “prosperity with an emphasis on dignity”, as opposed to profit.

To implement their solution they have to face the same obstacle as the Great Reset: a change in mindset. That will not be easy, and as the WEF engages with different stakeholders over the next six months, leading up to its annual meeting in Davos early in 2021, the following words of philosopher John Rawls, written almost 50 years ago, will serve as an uncomfortable but necessary reality check:

“Society … is typically marked by a conflict as well as by an identity of interest. There is an identity of interest since social co-operation makes possible a better life for all than any would have if each were to live solely by his [or her] own efforts. There is a conflict of interests since persons are not indifferent as to how the greater benefits produced by their collaboration are distributed, for in order to pursue their ends they each prefer a larger to a lesser share”.

• Malan, an assistant professor in business ethics at Trinity Business School, Trinity College Dublin, is co-chair of the B20 task force on integrity and compliance, and a member of the WEF’s Global Future Council on Transparency and Anti-Corruption. 

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