2021 Forecast – Building The New Growth Economy
2020 showed cracks in our economic system.
On the one hand, the pandemic forced a breakdown of economic norms—forced closures, livelihoods cut off instantly, and an inability to even network to find a job. Then the year brought to the surface and forced us to witness the fact that the economy simply isn’t working for everyone and that there is built-in, systemic economic injustice.
Yet, to have a truly flourishing economy in the 21st Century, it needs to be reliable, work for us all, and give people the opportunity to sustain economic health for themselves.
People don’t want handouts; they want to care for themselves. For example, at a 2020 Monocle event, the President of the International Committee of the Red Cross shared with regard to economic relief: “What strikes me when I listen to victims, to beneficiaries of our operations, to governments, to non-state armed groups in the world—everybody comes with the same message: ‘We don’t want handouts. We want support for sustaining autonomous lives.’” People can sustain themselves and take personal responsibility when they have a trustworthy system they can rely upon that will work for them. So the goal, as Al Gore wrote in a New York Times Op-Ed, “What lies before us is the opportunity to build a more just and equitable way of life for all humankind.”
To create such a system, we need to do the hard work.
We wrote about this idea last year, “A One-Sided Economy vs. An Ecosystem Economy,” as our 2020 Economy forecast, and it’s still relevant. We referenced the late Paul Volcker and this quote: “[He wondered how many lectures and presentations he had sat through with economists] telling us open markets are wonderful, everybody benefits from open markets. Eventually, Mr. Volcker said, someone in those lectures would always ask, “What about that poor manufacturer in my town?” But that concern was dismissed too easily, with talk of worker retraining or some other solution far easier said than done.” It’s time to do the hard work and get it done if the new growth economy is going to work for all rather than continue to push the complexities aside with academic answers. Workers in these forgotten towns need to feel seen and heard with actions that back it up.
Experts suggest that an economic solution won’t be found in binary models. The solution lies in integrating the best different systems.
Again, in our Economy forecast from last year, we reference an article and work by Ruchir Sharma about Switzerland, the second richest nation in the world. Ruchir writes:
“[Switzerland] delivers welfare benefits as comprehensive as Scandinavia’s but with lighter taxes, smaller government, and a more open and stable economy….”
“The real lesson of Swiss success is that the stark choice offered by many politicians—between private enterprise and social welfare—is a false one. A pragmatic country can have a business-friendly environment alongside social equality, if it gets the balance right.”
In this Op-ed, David Brooks suggests that the U.S. is already leaning towards “a robust capitalist economy combined with generous social support.” For a policy view of what this might look like, Brooks features the work by Brink Lindsey and Samuel Hammond of the Niskanen Center, a playbook for “faster growth and fairer growth.”
When building this new economy, we can’t underscore the importance of rebuilding faith in truth and trust.
Trust needs to exist as the foundation for a thriving economy. Moreover, citizens need to be able to trust that the systems they operate within are sustainable and will allow them to sustain themselves.
The Economy Forecast:
It is time to create an economic system that is built with competence and compassion, that delivers long-term, sustainable growth for all.
Why It Matters:
The playing field in which business will play will continue to evolve, as it always does. To participate, be prepared for policy changes, to participate in doing the hard work to create a thriving economy for all, and for changes in what citizens, workers, and consumers will demand from their leaders and leading institutions.
What You Should Do:
Take a long-term, multi-period view
Embrace the complexity and multi-dimensionality of the problems we face
Bring a systems thinking mindset
Bring diverse thinkers into solution building
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