Growth

Whilst much commentary and analysis has understandably been focused on reaction to, and mitigation of, the immediate impact of the coronavirus crisis in Europe and worldwide, relatively little attention has been paid to areas of potential opportunity which the crisis may offer to improve policy for the future. This EPRS analysis looks at ten areas which may offer potential for progress, including working more closely together on health policy, using climate action to promote a sustainable recovery, re-thinking the world of work, future-proofing education, harnessing e-commerce and championing European values and multilateralism.

The current coronavirus crisis emphasises the need for the European Union to devote more effort to anticipatory governance, notably through analysis of medium- and long-term global trends, as well as structured contingency planning and the stress-testing of existing and future policies. In order to contribute to reflection on, and discussion about, the implications of the coronavirus pandemic for EU policy-making, this paper offers an initial ‘mapping’ of some of the potential structural risks which could confront Europe over the coming decade, with 66 such risks analysed briefly in a series of short notes. The document then goes on to take a closer look at some of the more immediate risks to be considered in the near term and outlines possible EU action to prevent or mitigate them over the remainder of the 2019-24 institutional cycle.

Social dialogue, defined as “all types of negotiation and consultation, and also the exchange of information between or among, representatives of governments, employers and workers on issues of common interest relating to economic and social policy” has been long employed as a tool in the governance of work, with the objective of delivering sustainable economic growth, social justice and the kind of high-trust work relations that are not only valuable in themselves, but that can also improve business performance and increase workers’ share in rising profitability. It includes tripartite social dialogue, collective bargaining and workplace cooperation. Collective bargaining is defined in the ILO’s Collective Bargaining Convention, 1981 (No. 154), as “all negotiations which take place between an employer, a group of employers or one or more employers’ organisations, on the one hand, and one or more workers' organisations, on the other, for: (a) determining working conditions and terms of employment; and/or (b) regulating relations between employers and workers; and/or (c) regulating relations between employer or their organisations and a workers’ organisation or workers’ organisations.” Freedom of association and the effective right to collective bargaining are the preconditions for successful social dialogue.The ILO Global Commission on the Future of Work, which examined the transformations underway in the world of work, emphasized the need for decisive action. It considered that the collective representation of workers’ and employers’ organizations through social dialogue contributes to the public good and called for public policies that promote collective representation and social dialogue. “Collective representation and social dialogue provide the institutional capabilities needed to navigate future of work transitions [....] At company level, works councils, consultation and information arrangements and worker representation on boards are all proven mechanisms to manage the challenges of change and to allow people to exercise influence over their working lives. Collective bargaining is a fundamental right and a powerful tool for economic success and social equity, not least in times of transformational change. Tripartite social dialogue allows opportunity for the partners to the social contract to consider the broader societal issues that change brings and to guide policy responses. The ILO Centenary Declaration for the Future of Work adopted by the 108th (Centenary) International Labour Conference of the ILO states that “social dialogue contributes to the overall cohesion of societies and is crucial for a well-functioning and productive economy.” Social dialogue is not only a necessary tool for managing change and addressing the transformations underway; it also helps in addressing the long-standing problems we already face. Work in the informal economy, for example, still accounts for more than 60 per cent of the world’s employed population, exceeding 90 per cent in parts of Africa and Asia. Even in the formal sector, some workers may remain trapped in jobs that offer barely subsistence-level wages and inadequate social protection in return for long hours of hard labour in dangerous conditions. In moving forward to address the challenges of the future, we also need to solve the problems we already face by strengthening social dialogue institutions and enhancing the inclusiveness of collective representation at all levels.

The start of the decade has seen a convergence of three major trends: the accelerated use of Fourth Industrial Revolution technologies in the midst of the pandemic, job market disruptions to both remote work and work requiring physical presence, and a wide-ranging call for greater inclusivity, equity and social justice. Now more than ever, in the midst of such sweeping change, organizations have an opportunity to embed greater diversity, equity and inclusion. Societal change and the need for future creativity and innovation demand that business consider the best use of new technologies in enabling this journey. Successful organizations are powered by the diverse opinions, skill sets and life experiences of their employees. To tap into the full potential of human diversity, organizations need to hire diverse talent and create an inclusive working culture underpinned by a fundamental sense of belonging, fairness and equity, enabling people to bring their “full self” to work. In the Fourth Industrial Revolution, most companies are set to implement new technologies and practices to manage their workforces. However, implementing these tools without due consideration risks a range of unintended consequences which can ultimately undermine a company’s reputation and competitive position. Today, more than ever before, new workplace technologies and practices are no longer simply “neutral” with regard to diversity, equity and inclusion outcomes. Leading companies are increasingly recognizing this and proactively leveraging technology as part of organization-wide strategies for achieving “Diversity, Equity and Inclusion 4.0”. Conversely, companies without such an integrated approach are increasingly facing unintended consequences and risks when implementing new technology tools. Recent events are a reminder of the persistent inequities that continue to pervade our societies and economies. As companies seek to take on more responsibility for addressing social justice ensuring that diversity and equality becomes the norm in the very near future, a key pathway is to adopt an integrated approach to diversity, equity and inclusion in the workplace, and a renewed commitment to tangible change. Ensuring racial justice, gender parity, disability inclusion, LGBTI equality and inclusion of all forms of human diversity needs to be the “new normal” in the workplace set to emerge from the COVID-19 crisis.This toolkit is designed to highlight the opportunities and outline the challenges specific to greater use of technology in the service of diversity, equity and inclusion efforts. It is designed for organizational leaders, Chief Diversity and Inclusion Officers (CDIOs), and others actively working to promote diverse, equitable and inclusive workplaces globally. It is intended to complement a range of related publications produced by the World Economic Forum’s Platform for Shaping the Future of the New Economy and Society: “HR4.0: Shaping People Strategies in the Fourth Industrial Revolution”, developed in collaboration with the Forum’s community of Chief Human Resources Officers (CHROs) and a guide to sound decision-making in the context of the coronavirus pandemic, “Workforce Principles for the COVID-19 Pandemic: Stakeholder Capitalism in a Time of Crisis”.

Life has changed substantially for individuals in advanced economies in the first two decades of the 21st century as a result of trends including disruptions in technology, globalization, the economic crisis of 2008 and its recovery, and shifting market and institutional dynamics. In many ways, changes for individuals have been for the better, including new opportunities and overall economic growth—and the prospect of more to come as the century progresses, through developments in science, technology and innovation, and productivity growth. Yet, the relatively positive perspective on the state of the economy, based on GDP and job growth indicators, needs to be complemented with a fuller assessment of the economic outcomes for individuals as workers, consumers, and savers.
In a report, The social contract in the 21st century: Outcomes so far for workers, consumers, and savers in advanced economies, the McKinsey Global Institute takes an in-depth look at these changes in 22 advanced economies in Asia, Europe, and North America, covering 57 percent of global GDP. Among the findings: while opportunities for work have expanded and employment rates have risen to record levels in many countries, work polarization and income stagnation are real and widespread. The cost of many discretionary goods and services has fallen sharply, but basic necessities such as housing, healthcare, and education are absorbing an ever-larger proportion of incomes. Coupled with wage stagnation effects, this is eroding the welfare of the bottom three quintiles of the population by income level (roughly 500 million people in 22 countries). Public pensions are being scaled back—and roughly the same three quintiles of the population do not or cannot save enough to make up the difference.

These shifts point to an evolution in the “social contract”: the arrangements and expectations, often implicit, that govern the exchanges between individuals and institutions. Broadly, individuals have had to assume greater responsibility for their economic outcomes. While many have benefited from this evolution, for a significant number of individuals the changes are spurring uncertainty, pessimism, and a general loss of trust in institutions.

Policy makers, business leaders, and individuals will need to focus on two fronts. The first is sustaining and expanding the gains achieved through continued economic and productivity growth; business dynamism; investment in economies, technology and innovation; and continued focus on job growth and opportunity creation. The second is tackling the challenges individuals face, especially those most affected. Leaders are beginning to respond to these opportunities and challenges to varying degrees. However, more is needed given the scale of the opportunities and challenges, if the outcomes for the next 20 or more years of the 21st century are to be better than the first 20 and increase broad prosperity.

The reports are not academic research as such. The authors are academically qualified researchers, however, and they base their findings on academic studies. In this study, six major trends in Africa are defined as megatrends: population growth, climate change, urbanisation, migration, techno­logical development and democratic development.
Megatrends in Africa are deep and long-term transformation processes that are irreversible. They can and should be mitigated, but will inevitably require adaptation as well. The trends also have an element of foresight, in regards to how they are set to develop in the future.
All the megatrends are interlinked and affect each other. Population growth and climate change can be seen as mega-megatrends that have an especially strong effect on the other trends.
The study contains reports on all six megatrends, which are examined through a Pan-African lens. The study also includes a summary of all megatrends and the interaction of their effects.

Foresight Conference 2019 is organised by the Centre for Strategic Futures (CSF) in Singapore. The conference will be held on 25 and 26 July 2019, with the theme “Society 4.0”. This is CSF’s fifth Foresight Conference, which brings thought leaders and practitioners from different backgrounds together to explore emerging issues of global significance.
We loosely use the term “Society 4.0” to mean the society that will be and is already being shaped by the Fourth Industrial Revolution (4IR). Just as the First Industrial Revolution mechanised production via water and steam power and consequently reshaped economic, political and social structures, the 4IR is likely to have an equal or even more disruptive impact on the texture of society.