Capitalismo Social en Riesgo

Capitalismo Global en Riesgo

by Joseph L. Bower, Herman B. Leonard, and Lynn S. Paine

MARKET CAPITALISM has proven to be a remarkable engine of wealth creation, but if it continues to function in the next 25 years as it has in the past 25, we are in for a violent ride or, worse, a serious breakdown in the system itself.

The past 50 years have seen unprecedented economic growth, attributable largely to the spread of market capitalism across the globe. Business leaders asked to identify the issues of deepest concern to them pointed to forces that could disrupt the global market system in the coming decades: inequality in income within countries and across regions, migration, deterioration in the environment, a fragile financial system, and the inability of local, national, and international institutions to mitigate the problems. For market capitalism to prosper, business must lead—as an innovator, developing strategies that turn systemic problems into opportunities for sustainable growth, and as an activist, mobilizing coalitions of companies and governments to develop institutions that can support and strengthen the system.

The Forces of Disruption

Various forces that could severely disrupt the global market system in the decades ahead:

1. The fragility of the financial system. The financial crisis of 2008 showed that if these flows are unmanaged and unregulated, transparency can be reduced, and risk compounded, with devastating consequences
2. Breakdowns in global trade. The financial collapse of 2008 also demonstrated that trade can break down precipitously and with far-reaching effects
3. Inequality and populism. Populist politics could lead to harmful government interventions, such as overregulation of market transactions, confiscation of property, and other abrogations of property rights
4. Migration: Cross-border movements of people tend to trigger protectionism and anti-immigrant political reactions, which frustrate would-be immigrants, undermine potential solutions to labor needs in developed nations, and generate social conflict
5. Environmental degradation. The consequences could be seen in migration, the disruption of manufacturing and trade, and political instability
6. Failure of the rule of law. When bribes rather than competition determine winners, investment in innovation ceases to be worthwhile.
7. The decline of public health and education. Quality of education is in decline, and health care costs have become unmanageable everywhere.
8. The rise of state capitalism. some developing nations are giants. To the extent that Russia, China, and India play by their own rules, they have the potential to disrupt market capitalism as it is practiced in the developed world.
9. Radical movements, terrorism, and war. Sustained conflicts could disrupt the flows of goods, services, and capital necessary for the functioning of global markets
10. Evolution and pandemics. An outbreak of untreatable infectious disease could quickly disrupt trade and financial markets worldwide.
11. The inadequacy of institutions. Neither governments nor international institutions are set up to deal with systemic failure.

How Can Business Respond?

Businesses tend to have one of the following postures towards the problem:

• “Business as usual,” didn’t dispute the challenges presented by the disruptive forces. those in this group argued, the issues would take care of themselves through the normal mechanisms of government, business, and other institutions.
• “Business as bystander,” felt that the best contribution they could make would be to run their companies as efficiently as possible, leaving government to address major threats
• “Business as innovator,” saw business as better able than government to address serious challenges but thought that business would do so not by influencing policy but through innovations in products, services, strategies, and business models
• “Business as activist,” argued that business can and must become more engaged in shaping public policy, spurring government toward policies that would strengthen the market system

We see a need for “business as leader.” We believe that business—as an innovator and as an activist—must lead the kind of pervasive change that could improve the functioning of market capitalism

“Business as leader” produce a wide array of structural innovations. In addition to new technologies, products, processes, designs, and distribution systems—the kinds of innovation for which business is often, and rightly, celebrated—we need innovations in strategies and business models that explicitly seek to use disruptive forces as opportunities for growth and profitability. Business as leader would involve activism both at the level of local policies (such as a business that supports education and training relevant to its skill needs) and at the level of the broader system (such as a company that pushes for more transparency in the global financial system). Activism at this higher level often requires institutional innovation: the creation of entities that can organize large-scale collective action.

WE ARE CONVINCED that a host of problems could benefit from the attention of large enterprises that reframe them as opportunities. Perhaps governments should be doing this work, but there is no evidence that they will.

We believe that if business does not lead the mitigation of the forces disrupting our market system, then we may well lose it.

Capitalismo Global en Riesgo

By Joseph L. Bower, Herman B. Leonard, and Lynn S. Paine

MARKET CAPITALISM ha demostrado ser un motor notable de creación de riqueza, pero si continúa funcionando en los próximos 25 años como lo ha sido en los últimos 25 años, estamos en un viaje violento o, peor aún, un grave colapso en el sistema mismo.

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