Shimon Peres, Israel’s ninth president and an extraordinarily resilient leader, thinks the only leaders worthy of the title are individuals with “ambition for cause greater than themselves”. That’s reasonable observation. It is, however, in conflict with the motivation of most practising business leaders. The focus now is consistently on self – usually expressed in excessive remuneration, outrageous professional fees and splendid benefits.
The point is the generous treatment with which the world’s commercial and political leaders endow themselves is now the root cause of an escalating and particularly virulent global problem. Leaders fitting the Peres description are few and far between, the consequence of which is an increasingly inequitable, divided and disillusioned world.
Consider the World Economic Forum’s latest Global Risks report. There are, says the Forum, three distinct constellations of risk that present “serious threats” to the world’s future prosperity and security. It calls the first of these risk clusters “dystopia” – the opposite of utopia. It’s place full of hardship and devoid of hope.
The report warns that the links between fiscal, demographic and societal risks are “signalling dystopia future for much of humanity”. Large populations of chronically unemployed youth and millions of aged individuals dependent on survival funding from over-indebted states are two critical factors. Heap onto that the dramatic shift in global wealth to an increasingly small percentage of citizens and things do look increasingly dystopian.
The forum warns that declining economic conditions now threaten existing social contracts between states and citizens, evidence of which plays out daily in every conceivable communication medium.
“In the absence of viable alternatives, this process could precipitate downward spiral of the global economy fuelled by protectionism, nationalism and populism,” it says. Many leaders have already resorted to protectionism of the personal kind which makes it difficult for the hoi polloi to know where to turn for fairness and direction.
Which takes me to the Forum’s second risk grouping. It seems that the world’s increasing complexity and interdependence is accompanied by diminished capacity to manage the systems that underpin our prosperity and safety. Now there’s dichotomy, or rather conundrum, if ever there was one. Does getting ever smarter deliver solutions for the general good or breed contempt by the ambitious and connected few?
The Forum suggests emerging technologies, financial interdependence, resource depletion and climate change have exposed “the weak and brittle nature” of the safeguards that our policies, norms, regulations and institutions once provided. “Our safeguards may no longer be fit to manage vital resources, and ensure orderly markets and public safety,” it adds.
And to cheer you up, here’s risk constellation three. Virtual world crime, terrorism and war are becoming increasingly more threatening than similar activities of the physical kind. Hyperconnectivity is reality and it has its dark side.
With more than five billion mobile phones coupled with internet connectivity and cloud-based applications, daily life is more vulnerable to cyber threats and digital disruptions. And, warns the Forum, “incentives are misaligned with respect to managing this global threat”. On the other hand, online security is now considered “public good” and there seems to be some urgency about reducing vulnerability to key information technologies.
The Forum identified 50 prevalent global risks to make up its three clusters. The five specific risks most likely to happen in the next 10 years are: severe income disparity; chronic fiscal imbalances; rising greenhouse gas emissions; cyber attacks; and water supply crises.
And the five risks likely to have the most profound global impacts in the next 10 years include: major systemic financial failure; water supply crises; food shortage crises; chronic fiscal imbalances; and extreme volatility in energy and agriculture prices.
The Forum points out that the nature of the risks facing the world is changing from environmental to socioeconomic. I believe these kinds of risks are more tricky to tackle. They will need more selfless leadership to solve.
On current global and local evidence, there’s not lot of that kind of leadership about. And given the reward processes that business, in particular, has created, there won’t be any time soon. Indeed, leaders seem to be heading for lifeboats packed to the gunwales with the spoils of their brief terms at the tiller of some sadly mispiloted enterprise. M
Reg Birchfield is writer on leadership, governance & management. [email protected]