DELOITTE GLOBAL CHAIRMAN: We need to redefine globalization

For many, calling someone a “globalist” these days is not a compliment. In our societies, there is a mounting animosity around some aspects of globalization, perpetuated by a laser sharp focus on what economic indicators tell us. With the release of US GDP numbers this week and recent UK GDP numbers showcasing sluggish growth in comparison to the rest of the Eurozone, it is an opportune time to reflect on the true value of numbers at such a critical juncture in our history.

So what happens when we look beyond the standard numbers globally?

To make an impact that matters, business, government and civil society should first assess the weaknesses that communities and countries face and then address those shortcomings. The latest Social Progress Index, launched 21 June, is the perfect tool for the job because it looks beyond what mainstream economic factors are telling us — not dismissing them, but broadening our access to data to inform our decision making. With the index, we can educate our society to not grow weary of globalisation or hold steadfast to economic numbers, but to better understand the other major factors at play.

The Index comes courtesy of Social Progress Imperative (SPI), a nonprofit that empowers communities with new ways to think about and measure success. Deloitte has been working closely with SPI for the past four years because we understand that rising gross domestic product (GDP) figures mask the lack of opportunity that exists for many people. Globalization is responsible for some of that, but so are corruption, nepotism, lacklustre educational outcomes, weak private sectors, economic inequality, stagnating standards of living and a variety of other factors that GDP doesn’t measure.

SPI’s Social Progress Index does. By placing social progress alongside economic prosperity as measures of development, the global index and its supplemental regional- and community-level indices offer more-meaningful gauges of national and local performance. That not only makes it possible for governments, businesses and non-profit and civil society organisations to systematically identify and prioritise the most pressing needs of their communities, but it also suggests where problems might arise and serves as a road map to guide investments, resources and collaborations.

The 2017 Social Progress Index, and four years of results, tell us the world is generally improving, with 113 countries showing progress. This is principally being driven by improvements in access to information, communications and advanced education driving social progress globally, with some convergence in progress towards nutrition and basic medical care, access to basic knowledge through enrollment and literacy, and water and sanitation.

Yet, these advances remain slow and uneven, and the world is underperforming compared to what the average GDP per capita suggests is possible. This signals that we have the resources to be better, and that surely contributes to the animosity towards globalism.

It is in these progress gaps where responsible and inclusive business, government and civil society leaders can leverage the Social Progress Index results to their advantage. It’s where we can do the most to shape and redefine globalization, and help ensure globalization is able to bend and flex without breaking. If we are asking employees and citizens to adapt to globalization, then we must do the same.

When competition is global, and not just local, individuals require more skills, flexibility and openness to risk than ever before. Some will flourish in this environment, but many will require help in adapting to new economic and social realities. The bottom line is that globalisation does have a positive impact on jobs and has resulted in the creation of new sectors and industries that have spurred job creation. However, we have to mitigate the impact on job changes and losses that may arise from a result of this same creation of new sectors and industries and effects of globalisation. This includes life-long learning and reskilling to help people adapt more seamlessly to economies that are constantly evolving because of technological advances.

We also need to help citizens understand that these innovations typically do not replace jobs, but instead, will augment them and help people be more productive. How we live and work will likely change at awe-inspiring speeds with the emerging “Fourth Industrial Revolution” and increase in artificial intelligence, digital commerce, instantaneous communication and other technologies. That will cause short-term pain for some. Ultimately though, all leaders will need to be ready to drive efforts to improve citizens’ skills to help them prosper in a global economy.

Global issues like these demand a unified global response. We know that getting richer simply won’t move the needle far enough; the most stubborn challenges need innovation and other creative interventions to make social progress achievable by even the lowest resourced countries. To be successful this will require all sectors to work together with governments to find the right solutions to our biggest global challenges. Step one is understanding what those challenges are, and that’s where SPI and its Social Progress Index are invaluable. Globalisation may be an unstoppable force, but it is one that we, leaders of all stripes, have the power to shape for the better.

David Cruickshank is the Global Chairman of Deloitte and a board member of the Social Progress Imperative.