A Global Economy that Works for Progress, People and Planet
Klaus Schwab with Peter Vanham
How can we build a global economy that works for progress, people and planet? Where did the economic system that prevailed in the post-war era succeed, and where does it need a course-correction? And how can we avoid the pitfalls posed by advances in technology and global trade, while harnessing their strengths?
World Economic Forum founder and Executive Chairman, Klaus Schwab, explores the answers to these questions in his latest book, “Stakeholder Capitalism”. In doing so, he shows how a more inclusive, sustainable, and resilient global economy post-COVID.
Schwab looks at various structural socio-economic issues we must urgently address, and which were present already before the current COVID public health crisis. They include:
- The challenge posed by rising income inequality around the world, including in societies where productivity and wage growth has slowed.
- Increasing market concentration in various industries, and the related issues of slowing growth, innovation and productivity gains, as well as a higher indebtedness.
- The short-sighted exploitation of natural resources, that is corroding the environment and affecting the lives of many for the worse.
Next, Schwab investigates the possible causes of these systemic issues – globalization, the Fourth Industrial Revolution, the use of natural resources - and looks for solutions in places as diverse as China, Denmark, Ethiopia, Germany, Indonesia, New Zealand, and Singapore. He finds that in many instances, the same causes for the challenges we face today, are the reasons for the advances in prosperity we have seen in other domains.
And, he finds new ways of doing things that can help build the future and put us on a more resilient, inclusive and sustainable path. What these solutions share, is their adherence to the “stakeholder model”. In it, various stakeholders of an economy don’t only look after their own interests, but that of society as whole, leading to a system of “stakeholder capitalism”. It contrasts to present systems where the interests of a single stakeholder prevail, such as shareholder capitalism, or state capitalism.
Ultimately, the stakeholder model Schwab suggests, is one where government, business, and individuals collaborate; where longer-term planning for future generations replaces short-sighted presentism, and where better measures of success allow us to move beyond a myopic focus on GDP and short-term profits.
Schwab concludes by discussing initiatives such as the “Stakeholder Capitalism Metrics”, adopted in 2020 by many of the largest companies in the world, or the Living Standard Framework of the New Zealand government. It is when we apply this model consistently, Schwab writes, that we can build a global economy that works for progress, people and planet.
Stakeholder Capitalism is published by John Wiley & Sons, and available globally as January 27, 2021, including at Barnes & Noble (US), Waterstones (UK), Thalia (Germany), Fnac (France), Kinokuniya (Singapore), the independent bookstores of Bookshop.org, and the Amazon and Kindle e-book stores in the Americas, Europe, and Asia.
The following people provided Advance Praise for Stakeholder Capitalism:
Stakeholder Capitalism offers a vision for politics and economics driven not only by value creation, but by values. Professor Schwab's timely book gives us hope for a future in which an 'inclusive and virtuous economic system, ' shaped by ideals like truth, trust, and service, might bind us together as one species caring for one another and for our planet—Yo-Yo Ma, Cellist
Klaus Schwab has encouraged his readers for decades to keep their eyes on the future because when we set our gaze on the horizon, our minds can better plan for the obstacles and opportunities before us. In Stakeholder Capitalism, Professor Schwab invites us also to look side-to-side, to the many constituencies in the public and private sectors that through partnership and collaboration can make the future brighter, more inclusive and more sustainable—Satya Nadella, CEO, Microsoft
Both readable and fascinating, Stakeholder Capitalism aptly explains why the twin curses of climate change and biodiversity collapse are so prevalent today, and what's stopping us from achieving a more sustainable and equitable global economy. Through his focus on values, Klaus Schwab acknowledges that head (intellect, rationality) and heart (love, respect, understanding) need to work in harmony for the well-being of future generations and our home, planet Earth—Jane Goodall, Founder, the Jane Goodall Institute; United Nations Messenger of Peace
In the 1970s, Milton Friedman famously defined 'shareholder capitalism, ' and companies were urged to orient themselves towards a single goal: returns for shareholders. Over the course of the last decades we have all seen that the complexities of the challenges we face require that businesses take a broader approach, trying to achieve a balance among several goals. This is not easy. That is why Klaus Schwab's new book is an essential guide. It explains the depth of the challenges we face and outlines a path forward that businesses must take if they are to thrive in the 21st Century—Fareed Zakaria, Host of CNN's Fareed Zakaria GPS
For decades, Klaus Schwab has helped to shape the debate on the global economy, and the role of business. Now, as we emerge from the COVID crisis, this incisive and timely book analyzes the myriad of challenges we face, and proposes a way forward powered by the power of innovation, fair competition and responsible business. All is not lost, but an urgent reset of capitalism is required. Stakeholder Capitalism is a call to action--and action is needed, now—Ana Botín, , Group Executive Chairman, Banco Santander
Fifty years ago Klaus Schwab first proposed his theory that businesses are not only responsible to their shareholders, but also to all their stakeholders. With a global economic system generating deep divisions and inequalities, Klaus renews his call for a form of capitalism that works for everyone and where businesses don't just take from society but truly give back and have a positive impact. Stakeholder Capitalism is an urgent call to action—Marc Benioff, Chair and CEO, Salesforce
If you think this is just another pre-COVID/post-COVID book, think again. Klaus Schwab draws on his vast experience to take us on a roller-coaster ride past the highs and lows of post-war capitalism. His knack for economic storytelling gives you a real and deep insight into where we are headed and what we should be aiming for—Alexander De Croo, Prime Minister of Belgium
We can no longer think short term. Companies need to answer to more than their shareholders; they need to be accountable to higher morals. Now, in the middle of the COVID-19 crisis, Klaus Schwab shows us that we cannot go back to business as usual. He inspires us to look at the current response of global solidarity between people, companies, and governments to this health crisis and see it as the unequivocal way to a new paradigm to tackle the climate crisis and the scandal of rising inequality in the world—Angélique Kidjo, Musician and UNICEF Goodwill Ambassador
For a half-century, Klaus Schwab has been consistent in his belief that public companies can drive great returns for their shareholders AND address society's most important priorities. The world now understands that the system he envisioned--what we call Stakeholder Capitalism--can align capital to those outcomes better than any other—Brian Moynihan, CEO, Bank of America
Stakeholder Capitalism offers a timely analysis that shows how the neoliberal economic system privileges billionaires and extractive corporations over the dignity of billions of people and the protection of our planet. As COVID-19 has deepened despair and economic, gender and racial inequalities, governments must--with stakeholders--act decisively to depart from shareholder-first capitalism and instead put human rights at the heart of our economy—Gabriela Bucher, Executive Director, Oxfam International
Professor Schwab's new book offers us insightful perspectives on the world's economic history and the thinking that has led us towards the greatest challenges we face today - none larger than climate change. More importantly, it offers a blueprint for the future, inviting us to build a more inclusive, prosperous, healthier and greener world by embracing Stakeholder Capitalism at scale—N. Chandrasekaran, Executive Chairman, Tata Sons
In Stakeholder Capitalism my good friend Professor Schwab outlines an inspiring way forward in making the global economy more equitable, sustainable and future-proof. A vision that fits in perfectly with all his efforts over the years to build a better world. Once again, Professor Schwab gives us food for thought and reflection with this fascinating book—Mark Rutte, Prime Minister of the Netherlands