Deep Insights From Davos 2022
The World Economic Forum’s virtual Davos meeting concluded on January 21. While climate and the pandemic were at the center of most conversations, BCG CEO Christoph Schweizer also shared four themes that he called: The Unexpected Insights From Virtual Davos 2022.
When I reflect on these themes, I see a huge role that governments around the world can play in addressing these challenges at a global or national level.
In my view, there are four factors underpinning policy/government solutions to these challenges
Trust in government: Trust is both a cause and an effect of the government fulfilling its “value proposition”—its commitment to doing right by its residents. Surprising as this might sound, according to the findings of the most recent Edelman Trust Barometer, 48% of adults perceive governments as a divisive force in society (of course, the scores vary by country). The high degree of ambiguity and uncertainty caused by the current pandemic has further exacerbated people’s lack of trust in government.?
To build trust, governments need to bridge the gap between delivery and expectation by demonstrating tangible progress against key challenges in their countries. Government should prioritize:?
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Government leaders will need to break barriers and work more closely than ever before with businesses as well as citizens. As pointed out in this BCG publication, no matter how effective, a leader who works in secret, detached from a city’s residents, will never be a great leader, because transparency and openness are important preconditions of trust.
Digitization and AI: At BCG, we have believed for a very long time that wellbeing and social equity are always closely intertwined. By harnessing both the human and technological elements of their organizations, governments can provide positive outcomes for citizens. This is one of the most effective short- and long-term ?solutions for building resilience, fostering digital inclusion, and addressing inequality (both within and among nations).
A key enabler of digitization and AI in government services is digital inclusion. At the foundational level, countries need to ensure universal, reliable, and stable connection to the internet. The digital divide between those who do and do not have access to high-speed internet has become starkly visible during the ongoing pandemic. The problem is not limited to developing countries, and factors such as infrastructure availability, pricing, and digital literacy contribute to it. In my view, the need of the hour is to map out unserved and underserved audiences, involve public and private stakeholders (ISPs, health, finance, education, etc.), and jointly deploy a plan for network building, training, and appropriate pricing models.
Digitization and AI are also tied very closely to legitimacy and trust, as my colleagues have described in detail in this BCG report.
Social and economic equality: Beyond digital inequalities, the world also needs to do more to assess the widening economic and social inequalities. However, far too many solutions are focused on redistribution and safety nets when the better and more sustainable answer is regeneration and trampolines. These call for an immediate start to better and more expansive trade and industry development and education policies.
Resilience will continue to be the world’s primary buffer against various kinds of inevitable shocks: Supply chain and workforce disruptions are no exception. The economy during two years of pandemic-induced lockdowns and safe distancing has become even more digital. Many organizations (private, public, and social) now work virtually. In turn, this means their workforces need to be digitally savvy in order to be employable. To also include those who are not yet in the workforce or are presently unemployed, countries must embrace digital inclusion and digital skilling like never before.
Governments need to immediately gauge the skills mismatch in their country’s labor supply, understand its root causes, and identify the policy measures that can erase the mismatch by promoting reskilling and lifelong learning among workers. This shift toward greater use of automation, AI, and other forms of digitization has been underway for several years and has been accelerated by COVID-19. While some jobs are being taken away from humans, many new ones are being created. Policymakers need to plan for these changes not just over the coming years, but also in the short-term.