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We live in fascinating yet ambivalent times. New discoveries and technologies continue to amaze us, while people, goods and information enjoy unprecedented mobility. Innovation and progress are spreading globally.
Over the past decades, life expectancy has increased rapidly around the world; more than one billion people have been lifted out of extreme poverty; more children are in school than ever before; and vaccines have saved millions of lives from some of the world’s deadly diseases. While we put more and more power into ever tinier computer chips and send gigabytes of data across oceans in seconds, we are inventing new and greener technologies to make things go even faster and protect our planet at the same time. Collectively, the world has accumulated an unprecedented level of knowledge and insight that can be used to improve the lives of future generations.
While today’s era of innovation and dynamism has brought prosperity to many parts of the globe, it has also ushered in a pace of change that can breed a sense of being left behind. The world is becoming more unpredictable. Progress has been uneven. Some have been left out by the spread of economic opportunity. This fuels feelings of dissatisfaction, vulnerability and anxiety about the future. I am particularly concerned about the lack of optimism and the polarisation that is increasingly taking root in Western countries. As a result, populist sentiment is on the rise. The specter of nationalism and protectionism has returned to the forefront of political discourse. Major new trade deals have been abandoned and existing ones are being called into question. In a year that marks the 60th anniversary of the Treaties of Rome, the foundations of European integration seem more fragile than ever.
To be sure, there are many legitimate reasons why some citizens feel anxious, left behind and therefore validated by populist movements and protectionist action. But protectionism certainly isn’t the right answer – new borders won’t bring back jobs and will not enhance prosperity. It is worth recalling that a few decades ago it was mainly nations in the developing world that resisted more openness to trade. Instead, they sought their salvation in the pursuit of national economic solutions. Before long, many of them recognised that they had maneuvered themselves into a dead end and changed course.
Now that the roles are somewhat reversed and the temptation to opt for national solutions has become more prominent among the OECD countries, we are well advised to remember that nationalist and protectionist agendas ultimately have negative consequences. The fact is: there are no examples of long-term economic success based on protectionism. This can’t be our long-term vision for our countries and for the world.
The good news is that globalisation is still alive and a force to be reckoned with, regardless of the many premature proclamations of its death. The latest ray of hope is the groundbreaking World Trade Organisation’s Trade Facilitation Agreement (TFA), which came into force in February of this year after being ratified by more than two-thirds of WTO members. The TFA is the most significant multilateral trade deal since the WTO was established in 1995. At its core, the TFA aims to simplify and speed up the cross-border movement and clearance of goods. By reducing costs, complexity and inefficiency, it will make life easier for a lot of companies that hope to expand their customer base abroad. And it will encourage many more micro-sized, small-sized and medium-sized enterprises to trade with the world.
The TFA illustrates why policymakers who wish to boost domestic prosperity would be best served by working with the international community rather than against it. We have seen in many places how increased trade and interaction have raised incomes, reduced poverty, created large middle classes and cultivated diversity. Globalisation in the digital age benefits everyone. It’s easier and faster than ever to seize upon groundbreaking innovations in a world where new ideas can easily cross borders. As a result, the global economic pie is not shrinking but expanding.
This, of course, doesn’t mean ignoring those who have suffered from or feel threatened by disruption through trade and technology. In fact, we have to do significantly more to support those that need it in a targeted and effective way. Disruptions may uproot existing business models, but they shouldn’t uproot people. To ensure that no one is left behind, we need new efforts to achieve equality of opportunity and maintain the chance for everyone to participate.
In this digital and interconnected age, I believe education will become the biggest success factor if we want to future-proof our economies – and thereby our communities. Our goal must be to empower people. Better access to high-quality education tailored to the changing world of work will enable them to keep pace with change. Everyone can contribute to this. Companies by constantly investing in their workforce, employees by committing to lifelong learning, politics and society by mobilising additional resources for the education system – and by ensuring that the results benefit everyone.
Also, while we need to arm people with knowledge and skills, we can certainly do more to ensure that all segments of society benefit equally from economic progress. First and foremost this calls for effective social systems to help people when they are in need. By cushioning entrepreneurial failure, these systems also encourage entrepreneurial risk-taking, thereby creating new employment opportunities.
But most of all, I believe we need more optimism. The world is indeed changing at an unprecedented pace. In the current environment, it is up to us to set the right course and remain in charge of our own destiny. Fear is a bad guide, and protectionism is not a recipe for success. To lead the changes ahead of us, we need to embrace global connectedness, welcome new technologies and make sure we tap into the worldwide flow of ideas and knowledge. Armed with this kind of attitude, I am very hopeful that we can give an even better world to future generations.
Dr Frank Appel is CEO of Deutsche Post DHL Group