It is already the start of the third month of 2017. We have been so absorbed with the daily barrage of news from Washington, DC and Mar-a-Lago, and news about news, both fake and real, that it seems all other headlines have been crowded out. So much else needs to be done in 2017 to create the headlines we would like to see in the months ahead. It is time to “carpe annum” ― to seize the year.
No doubt, 2017 will live in the long shadow of 2016. We must also find ways to take stock and push beyond the shadows. Of the many from which to pick, we found 5 developments from the past year worth noting in its impact on our work ahead:
Dwindling Hopes for the Long-term in the Near-term: The election of Donald Trump in the U.S., Brexit, the Italian referendum and a wave of populist politics around the world are likely to affect the state of international cooperation on solving global problems. Industrialized world governments will be under pressure to retreat from long-term commitments on issues ranging from tackling climate change to investing in sustainable development and promoting global inclusion. If there was a gap in public sector long-term investment before, it has been widened.
- What this Means for 2017: The private sector, among the biggest losers from reversals in sustainable development ― since businesses rely on emerging markets and sustainable supply chains for long-term growth ― will have to step up and help fill the void. Our Inclusive Innovators study makes this point.
Falling Returns on Innovation, Despite Rising Valuations for Innovators: The world’s elite marked 2016 ― beginning with the World Economic Forum’s annual meeting in Davos ― as the year to focus on bold innovative transformations, such as the Fourth Industrial Revolution, one “characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.” Automation, AI, Data are riding high. Uber’s valuation just keeps rising, from just around $50 billion a couple of years back, inching towards the $70 billion mark by the close of 2016. Venture capital and innovation resources are disproportionately skewed towards industrialized world problems. Yet, living standards and productivity in the industrialized world have not proportionately improved. Since the 1980s, wages in the U.S. have stagnated and labor’s share of income has fallen; according to the Economic Policy Institute, middle-wage workers’ hourly wage is up 6% since 1979, low-wage workers’ wages are down 5%, while those with very high wages saw a 41% increase. The growth of total factor productivity, a measure that captures the contribution of innovation, peaked in the 1950s at 3.4% annually and is down to an average of 0.5% a year for the current decade. No wonder we see populist anger rising in proportion to the rising Uber valuation.
- What this Means for 2017: Innovative capital, technology and talent need to be re-focused towards more fundamental societal needs: productivity, jobs, inclusion, development. We are working with the World Economic Forum towards this end.
Declining Trust and Increasing Reliance on the Digital Ecosystem: There are as many mobile phone subscriptions as people (more or less). Not that everyone has a mobile phone, but by 2020, 70% are expected to be smartphone users – an astounding and unprecedented penetration of modern technology. The average American logged up to 10 hours a day communing with a screen in 2016. At the same time, our trust in digital technology has been declining: cyber-attacks, credit card fraud, phishing, fake news hogged a disproportionate share of the not-so-fake news headlines in 2016.
- What this Means for 2017: As trust falls and our digital enthrallment rises, we need to track both trajectories and devise policies, behaviors and, yes, even technology solutions to help close this growing digital divide ― between trust and thrall. Our Digital Evolution and Digital Trust research will shed light on this question.
It Was the Winter of Despair, It Was the Spring of Hope: Critical indicators of the state of the human and planetary condition broke historic records in 2016. To consider just three: carbon dioxide in the air officially passed the symbolic 400 ppm mark, never to return below it in our lifetimes, according to scientists; the world’s poorest region, Sub-Saharan Africa experienced the slowest growth rate in 20 years; the number of forcibly displaced people around the world reached the highest on record at 3 million. At the same time, there were reasons to celebrate. Again, consider just three: the number of tigers in the wild rose for the first time in a century, while the US Fish and Wildlife Service planned to take the Greater Yellowstone ecosystem population of grizzly bears off the federal list of endangered and threatened wildlife; after the Colombian peace deal, the “geography of war” shrank to less than a sixth of the world’s population, confined to an arc between Nigeria and Pakistan; acid pollution in the atmosphere is back to where it was in pre-industrial times.
- What this Means for 2017: Much needs to be done to keep the “spring of hope” breezes blowing, even as the political winds in many countries, most significantly the U.S., will be decidedly wintry. We are awash in data and artificial intelligence is at the threshold of overwhelming real intelligence; these amazing innovations need to extend beyond informing Amazon’s next product recommendation or the next Netflix flick. They need to be harnessed to ensure a more informed citizenry and engender bottom-up behaviors that help improve the human and planetary conditions. We intend to work across multiple centers at The Fletcher School to explore this issue.
Entrepreneurship is Both Cool and Hotly Contested: Millennials admire startup founders and revere self-employment, according to a study reported on NPR in September 2016, but the economic environment is too unforgiving for them to feel confident about embracing it. Our millennial students discovered such mixed feelings about entrepreneurship not only in the Boston area, but in places as different and distant as the Arctic Circle and the Middle East. Nathan Cohen-Fournier researched Nunavik, in the northernmost Québec province. Thanks to the effects of global warming, marine transportation through the Arctic is becoming a reality and the Inuit inhabitants of Nunavik are discovering new business opportunities. Cohen-Fournier wonders how private opportunity-seeking entrepreneurship can co-exist with the fundamental Inuit values of sharing and solidarity. Nadim Choucair and Tom Flynn went to Lebanon to learn about the effects of the Lebanese central banks’ Circular 331, a guarantee scheme to increase equity investment into Lebanese start-ups. The results were contentious: while much-needed capital was injected to jumpstart entrepreneurship, it may not have been enough – an entire ecosystem needs to a cultivated, which is much harder. When only money is injected, many in the community felt that only the banks and the VCs were the beneficiaries, while unmet needs remained just that: unmet.
- What this Means for 2017: Startups spot unmet needs and unexploited opportunities – and 2017 will have many of them around the world. Entrepreneurs do well by focusing, often at the cost of seeing the larger picture, For this, they need to be paired with those with “contextual intelligence” skills, who can fill in the gaps. Building contextual intelligence is the central purpose of our education at Fletcher’s Institute for Business in the Global Context.
With that, let’s seize 2017. There is so much work to be done to shape the headlines to come on topics beyond the ones that have dominated the first two months. There are so many opportunities to build on 2016’s legacy and so many opportunities to leave it behind.
Bhaskar Chakravorti is the Senior Associate Dean of International Business & Finance at The Fletcher School at Tufts University and founding Executive Director of Fletcher’s Institute for Business in the Global Context. He is the author of the book, The Slow Pace of Fast Change.