Exploring potential scenarios and quantifying their possible impacts

Inform your discussions and decisions this week. The global financial system underpins the functioning of economies, enabling everything from international trade and investment to innovation and economic development. Hence, financial fragmentation (defined as a reduction in international financial integration and the disruption of cross-border payments, credit and investment that ultimately reduces cross-border capital flows) is a huge problem. It restricts access to capital, creates wide regional interest rate gaps, and hinders the productive flow of resources. The list does not stop there: financial fragmentation also limits people’s access to finance, hampers sustainability, and deepens inequality. Financial fragmentation has significantly expanded the SDG investment gap, which represents the shortfall in funding required to achieve the Sustainable Development Goals. According to UN Trade and Development, this gap has expanded to $4 trillion, up from $2.5 trillion in 2015.

Growth at a crossroads: measuring the cost of financial fragmentation a new report from Economist Impact, supported by Swift, a messaging system for bank payments, examines the issue. Drawing on an economic-modelling exercise and on expert insights, it outlines three potential scenarios for financial fragmentation through 2030 and quantifies their potential impacts on global GDP and employment.

Small and medium-sized enterprises (SMEs) face their own critical challenges that will affect their growth. Get future ready: uncovering future-proofing tools and tactics for businesses shows that the next three years will be crucial for SMEs, which make up 99% of businesses in OECD countries, as they try to ensure long-term growth as well as short-term survival amid resource constraints and limited market access. A report by Economist Impact, supported by Citi, finds that many SMEs currently underestimate the importance of future-proofing. We also find that SMEs’ well-known agility should nonetheless empower them to turn disruption into opportunity.

Also in this issue, explore how investors can?best select whether to invest in AI tech developers or in businesses adopting AI. And read how adopting regenerative techniques in farming has the potential to help improve agriculture across Africa. Plus, as we edge closer to the 2030 deadline for the UN’s Sustainable Development Goals (SDGs), catch up on our conversation with Vidar Helgesen , executive secretary of the Intergovernmental Oceanographic Commission and assistant director-general of UNESCO on what progress has been made for ocean health in terms of SDGs, and what is still needed.

Financial fragmentation is on the rise, potentially threatening global economic growth along with jobs. Explore three potential scenarios of financial fragmentation and what impact each would have on the global economy.

Along with other groups and institutions, business has a trust problem. Humanity, consistency and shared values could help fix this.

Join us in Tokyo on March 12th-13th to instigate action towards developing a sustainable ocean economy and to encourage new partnerships across industries, with NGOs, scientists, technology developers and investors to develop strategies to restore ocean health.