There are signs that short-term thinking is increasingly driving business decisions with companies placing an insufficient emphasis on long-term economic vision. This is driven partly by the environment of low growth, rising social unrest, discontent driven by migration and socio-economics, and political dysfunction that business leaders operate in. A transformational mind set is needed to tackle this. For example, to counter short-termism, asset owners can demonstrate leadership by working with their asset managers to implement investment strategies changes that are in line with environmental, social and governance best practices. A company that does not add value to society should not exist. Businesses can help by pumping capital into the right areas and embarking on corporate social responsibility projects, and through this, help communities around them.
Technology-driven labour displacement has resulted in a growing number of people who are increasingly disillusioned with globalisation. But while globalisation has been blamed for current societal ills, it is the lack of policy action by governments in tackling the challenges arising from technological disruption that is the main problem. There will always be winner and losers amid the rapid pace of change. Thus, policy support must be provided by governments so that displaced individuals can be reskilled and retooled for the future. Technological change and innovation, in and of itself, is a force for good.
Compared to the rest of the world, China is still registering growth. However, it faces some key challenges. First, growth is slowing on an L-shaped growth trajectory. Hence, pinpointing when exactly the economy will bottom out is a difficult task. Second, China is currently undergoing an industrial transition. Older industries – such as labour intensive and heavy industries – which used to support growth are losing competitiveness and suffering from overcapacity. To spur China's growth, there is a need for newer industries to take over. One area is E-commerce, which has experienced growth of 40% in recent years. While Beijing is aware of the changes that has to be made, the question lies in whether the transition will be smooth. As it is, wages are rising faster than productivity and there is concern over whether this is sustainable in the long-term.