In the US and Europe, populism is on the march. Political establishments on both sides of the Atlantic are experiencing upheaval, as parties on the hard left and right attract support from disillusioned voters.
In what is being dubbed the “Trump effect”, after the controversial, outspoken and increasingly popular US business magnate and Republican party candidate, Donald Trump, political populism in 2016 is set to become, well, increasingly popular.
What’s behind the explosion in populism?
The latest Edelman Trust Barometer – launched today in Davos – could provide a clue as to what’s going on.
This year’s annual survey reveals that there is a growing trust disparity between the “informed public” (15%) and the wider population, which the communications group says is being driven by income inequality and different expectations of the future.
Source: Edelman Trust Barometer 2016
While trust levels among the informed public are the highest in 16 years, trust is below 50% for the mass population in over 60% of the countries surveyed, having barely changed since the global financial crisis.
The trust disparity has widened and is now at double-digit levels in more than half of the countries surveyed. The US has the largest divide, at nearly 20 points, followed by the UK (17 points), France (16 points) and India (16 points).
"We are now observing the inequality of trust around the world," said Richard Edelman, president and CEO of Edelman. "This brings a number of potential consequences including the rise of populist politicians, the blocking of innovation and the onset of protectionism and nativism."
The report links the widening gulf directly to income inequality. A double-digit trust gap between high-income and low-income respondents exists in nearly two-thirds of the countries, with the US (31 points), France (29 points) and Brazil (26 points) exhibiting the largest disparities.
The mass population also expects the future to be considerably gloomier than the informed public. In more than two-thirds of the nations surveyed, less than half of the respondents believe they will be better off in five years' time.
Mr Edelman added: "We must get beyond 'the grand illusion' that the mass will continue to follow the elites. This illusion was predicated on the belief that the informed publics have access to superior information, their interests are interconnected and that becoming 'an elite' was open to all who work hard. But the democratization of information, high-profile revelations of greed and misbehaviour, coupled with rising income inequality, have squashed those beliefs.
“The trust of the mass population can no longer be taken for granted."
Is it as bad as it sounds?
Maybe not. Overall trust in all four institutions covered in the report – government, business, the media and NGOs – has increased in 2016 and has reached its highest level since the global financial crisis, with business receiving the largest increase in trust among both the informed public and the larger general population.
This provides a unique opportunity for business leaders to help mend the trust divide.
According to the report, the public no longer thinks it’s only up to policy-makers and politicians to solve society’s big issues, with up to 80% of people saying business should take the lead.
Source: Edelman Trust Barometer 2016
Many of the business leaders gathering in Davos this week agree. Andrew Liveris, CEO, President and Chairman of Dow Chemical, believes companies need to use their “science, scale, and smarts” to address the world’s biggest challenges.
“Business has a unique and indispensable role to play in driving progress. The purest purpose of business, after all, is to solve problems and meet demand,” he writes. “And indeed, companies around the world are increasingly finding that we can do well not just while doing good, but by doing good.”
In an article about how businesses can contribute to achieving the UN’s Sustainable Development Goals (SDGs), Katherine Garrett-Cox, Chief Executive Officer of Alliance Trust, writes: “It is simple really – businesses that seek to benefit society will prosper, relative to those that act against it.
“The SDGs identify the needs of our global society and set out a path to meeting those needs. Companies whose products, services and operating practices help us to achieve these goals will be at an advantage.”
The Annual Meeting is taking place in Davos from 20 to 23 January, under the theme “Mastering the Fourth Industrial Revolution”.