Program by silicon valley entrepreneur to teach innercity students learn how to install solar panels Gilles Mingasson/Getty Images

The Year Ahead 2017

Meeting the Populist Challenge

As the 2016 populist uprising made clear, private-sector executives can no longer celebrate the far-reaching benefits of global capitalism, while ignoring its costs. They, along with politicians and policymakers, have a major part to play in solving such problems as rising inequality, stagnant wages, and structural unemployment.

LONDON – Capitalism is the greatest engine for prosperity that the world has ever seen. But the democratic institutions that create the space for business leaders to operate have not kept up with accelerating economic and technological change; nor have they made the necessary adjustments to ensure that enough people benefit from the system to which they all belong. All leaders should keep these two thoughts firmly in mind as they respond to 2016’s populist backlash – manifested in Brexit, Donald Trump’s election victory in the United States, Italy’s failed constitutional-reform referendum, and so forth.

We capitalists can no longer simply celebrate the fact that open markets and technological innovation have lifted more than one billion people out of extreme poverty since 1990, including hundreds of millions in China alone. We must acknowledge our postwar global order’s failures, such as rising inequality, decades of stagnant wages in many developed markets, and sustained unemployment at or above 20% – and over 40% for young people – in several European countries. Most of all, we cannot simply assume that the system will somehow “self-adjust.” Instead, we need to act.

Of course, meeting the challenge of populism is not a task for business alone. Political leaders have a critical role to play, by shoring up and extending the social safety net to cover those who have been, and will be, “left behind,” and by providing – through smart infrastructure investment and policy reforms – a stronger foundation for inclusive growth. But, beyond creating good jobs and higher-quality products and services at lower prices, private-sector executives must lead in several key areas.

To continue reading, please subscribe to On Point.

To access On Point, log in or register now now and read two On Point articles for free. For unlimited access to the unrivaled analysis of On Point, subscribe now.


Log in;
  1. Financial planning report Getty Images

    The Metric God That Failed

    • Over the past few decades, formal institutions have increasingly been subjected to performance measurements that define success or failure according to narrow and arbitrary metrics. 

    • The outcome should have been predictable: institutions have done what they can to boost their performance metrics, often at the expense of performance itself.
  2.  Laborers fill orders of machine grade steel to be shipped throughout the Pacific Northwest Natalie Behring/Getty Images

    Trump and the All-American Trade Debate

    • Donald Trump’s recently announced tariffs on imported steel and aluminum have raised fears that his administration will roll back the rules-based free-trade system that has facilitated global commerce since World War II. 

    • But a closer examination of the history of US trade policy shows that Trump’s protectionist gambits are neither new, nor likely to have a lasting effect.
  3. Pictures of Chief Executive Carrie Lam and Financial Secretary Paul Chan of Hong Kong ANTHONY WALLACE/AFP/Getty Images

    The Asian Values Debate Returns

    • For the time being, concrete evidence of policy success in countries like China and India may well be the most effective way to buttress the case for applying non-Western perspectives to national development strategies. 

    • But, in the longer term, non-Western thinkers will need to translate their ideas into testable models and theories.
  4. MONEY SHARMA/AFP/Getty Images

    Saving Mothers and Newborns

    • Tens of thousands of mothers and newborns die from preventable causes related to pregnancy and childbirth every year, which is why maternal and perinatal mortality is still one of world’s most daunting public-health challenges. 

    • But recent research finds that a comprehensive systems-based approach provides reason for hope.