UK Chairman of KPMG, Simon Collins, discusses Actions to Achieve Inclusive Capitalism

Simon Collins
UK Chairman and Senior Partner, KPMG LLP

Capitalism has triumphed in the intellectual and practical debate: every other system has been broadly discredited. Within a capitalist system, wealth is created, innovation is fuelled and everyone can benefit. Except that there is an increasingly uneasy feeling about just who is benefiting, in what proportion and at what cost to society.

Massive global shifts make this harder to analyse; the world's manufacturing and consumer base has shifted east, technology has replaced swathes of jobs and capital is much less important than ideas. Within developed countries, these trends are driving a need to shift economies towards new knowledge and skills, and to focus on productivity gains. All of this at a time when there is an ever-louder clamour for social justice.

As a generation of political, business and social leaders we need to defend capitalism - not by attempting to justify its less desirable outcomes, but by harnessing its unique abilities to drive greater overall benefit to society. To do that credibly requires a deliberate programme of change.

First, I believe, we have to demonstrate conduct that shows why business is good for the communities in which we operate. Obviously that means that we should not cause outright harm: we must put an end to environmental damage, egregious tax avoidance and mis-selling scandals. But we also need more positive action, particularly in the context of the big global trends outlined above. We need to create jobs with greater dignity and prospects for advancement. We need an approach to supply chain management and sourcing that weighs sustainability alongside cost. And we need to demonstrate a more inclusive approach to an increasingly diverse working population.

Good business is good for business. It results in the right relationship between business and society. That's what inclusive capitalism means to me.

A necessary enabler for this change is a drive by investors to reward good business. That is not achieved by a boxticking focus on governance, nor by obsessing about quarterly financial metrics, but by a shift towards measuring longer-term business performance and wider social impact.

Governments must play their part too, through consistent rather than competitive behaviours around international tax, financial regulation and trade agreements.

We are all implicated and we must all act, deliberately and with urgency - because inclusive capitalism is, in the final instance, the only defensible form of capitalism.