The solutions to the world's most urgent challenges are within reach, but we only have ten years.
As you look at the crises the world faces, a striking pattern reveals itself. We have ten years to find answers and implement them. We cannot use 20th century logic to meet this challenge. That logic has led to steady improvements in living standards across the world, but it has also given rise to these challenges and failed to meet them. We need systematically different approaches to creating a better future, building on the creativity and power of markets but setting them in a new context.
PwC’s book Ten Years to Midnight: Four urgent global crises and their strategic solutions by Blair Sheppard and his team examines the root causes of the crises and suggests a few strategic solutions that could begin to fix them.
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Four crises
The world’s most acute issues PwC summarized in ADAPT (see PwC's ADAPT framework) set in motion four broad crises that, if not addressed, will cause irreparable harm in the next ten years: a crisis of prosperity, a crisis of technology, a crisis of institutional legitimacy, and a crisis of leadership. All dangerously intertwined, these four crises have forced us to rethink and reconfigure the future. They have also been accelerated by the COVID-19 pandemic.
It is felt acutely by young people starting out in the world of work - at a time when unemployment and underemployment is rampant throughout the world, work is becoming more insecure, housing costs are up to 40 times1 the median income in some cities and the aging populations in many countries will mean a growing tax burden falls on their shoulders. But this is not just a crisis for youth. At the other end of people’s working lives, people face retirement with grossly insufficient savings, and a host of people mid-career have mortgages, childcare and education costs while being at real risk of job loss due to automation and other factors.
1. Source: https://www.numbeo.com/property-investment/
A crisis of technology. Innovation has fuelled amazing improvements in quality of life and productivity around the world, but our systems for keeping negative effects in check have proved themselves not up to the task. PwC estimates that, by 2030, 36% of jobs held by those with medium education and 44% of job held by those with low education could be lost to automation1. Whether you think about the impact of our 20th century energy infrastructure on our atmosphere and climate, or the impact of the large technology platforms on our society, we are seeing technology create new problems as unintended consequences. From the dramatic changes to the human brain and behaviour, to the invasion of privacy, to the loss of work across all elements of the workforce technologies that were intended to provide real benefits to society also cause real harms.
1. Source: PwC, “Will Robots Really Steal Our Jobs? An international analysis of the potential long term impact of automation,” 2018. PwC analysis, based on data from the OECD Programme for the International Assessment of Adult Competencies public database http://www.oecd.org/skills/piaac/publicdataandanalysis/
Our institutions have not kept up with the changing needs of society. As the world has rapidly evolved, the governance and customs of major societal institutions remained locked in the past. The result is not that those institutions maintain their past role, but instead that the force of change warps the way they work. For example, 13 of the 15 most polarizing brands1 in the United States are media companies.
1. Source: “Media Companies Dominate Most Divisive Brands List, and It Keeps Getting Worse,” Morning Consult, October 1, 2019, https://morningconsult.com/2019/10/01/polarizing-brands-2019/
The most obvious example is the incredible lack of action taken to address climate change. The overall goal of the 2016 Paris climate accord was to hold global average temperature increases to “well below 2 degrees centigrade above pre-industrial levels.” Out of 195 signatories, only seven countries met this goal and none of them are major contributors to greenhouse gases1. But we are also seeing it on other issues that require global cooperation - from economic stimulus to vaccine development. When people’s local concerns become too acute, leadership behaviour gets increasingly parochial and the world is perceived as a zero-sum game.
1. Source: “Climate Action Tracker,” https://climateactiontracker.org/countries
Solutions
We have ten years to make fundamental, systemic change, at scale. We cannot use 20th century logic to address these challenges. It was that logic that created the crises. The book provides an alternative path that builds on the best of our thinking and proposes how to modify our approaches to adapt to the context, challenges and opportunities the world faces today. It needs to be replaced with a new way of thinking about what success means and how to achieve it.
Rethinking Economic Growth—Local First
It starts by rethinking globalization. The classic logic of macroeconomics since World War II asserts that globalization and global trade create wealth and prosperity. And, they do. The problem is that this economic success resulted in the crises identified above. The world is no longer willing or able to consume at scale products or services produced by another low-cost region. We need to turn the logic of globalization on its head and focus on developing successful local economies first.
Reimagining Success—Thriving in a Broken World
The ways in which we have always measured success no longer work. A narrow focus on GDP has caused countries to miss the deep differences in the well-being of their citizens; growth has not been universal. In addition, economic growth is not always aligned with social progress. In focusing on shareholder value, organizations have lost sight of their larger responsibilities to the societies in which they operate. We need to redefine success so that it is inclusive and recognizes the deep interdependencies at the heart of the sustained success of any country, organization or person.
Repairing Failing Institutions—Cementing the Foundations
We need a period of institutional repair. We cannot have educational establishments preparing students for the world of the past rather than the one they will enter any more than we can rely on global institutions to coordinate across an increasingly fractured world. Each institution needs to identify its core role in society, revitalize its commitment to playing that role and redesign itself with today’s context in mind. Governance needs to engage stakeholders broadly while permitting rapid change.
Refreshing Technology—Innovation as a Social Good
The problems created by technology will not be solved by technology alone. Technology is indifferent to its outcomes so it is only when we are astute about its unintended consequences - and, for example, design with social good in mind - that it can work to serve society’s broader needs. To achieve this it is critical to focus on at least five simple ideas: we cannot control what we do not understand; increasingly information is both a public and a private good; all organizations have agendas so civil society must play a role; we need to learn how to govern things we cannot see; and people’s use of technology is the most critical determinant of its positive or negative consequences so we need to discipline ourselves.
Massive and Fast—Problems That Cannot Wait
All of the ideas outlined above would ordinarily take time to execute and we do not have it. We don’t have ten years to make a start; we have ten years to make fundamental, systemic change. There is very little precedent for solutions required so quickly at such scale, but we can see some evolving that borrow from lessons of history, such as the Marshall Plan.
Leadership: Reframing Influence—Balancing Paradoxes
Driving that scale of change in today’s world will take leadership fit for the task. We need a new model. Leaders need capabilities and sensibilities that seem at odds with each other: technologically sophisticated while also deeply aware of human systems and psychology; heroically courageous, but humble enough to listen and change course if needed; deeply aware of the foundational elements of the things we are trying to change, but highly innovative to name a few (see PwC’s Six paradoxes of leadership). The foundational task for leaders of nations, institutions and businesses is to foster this kind of leadership so the world can meet the crises that threaten us all.
Finally, while the book was written prior to COVID-19, the pandemic has accelerated virtually every trend discussed. It is intended to remind everyone that there is very little time to rethink and act before the world becomes a much worse place. But, this book is ultimately hopeful. The authors have faith that humanity will rise to the challenge and offer both a frame to understand the current state of the world, and a way to think about creating the future that will serve all in under 200 pages. Its exhortation is to get to work.
About the lead author
Blair Sheppard
Global Leader, Strategy and Leadership for the PwC network
Blair Sheppard joined PwC in 2012 as the global leader for strategy and leadership. Blair leads the team responsible for articulating PwC’s global strategy across 158 countries and the development of the current and next generation of PwC leaders. He is also Professor Emeritus and Dean Emeritus of Duke University’s Fuqua School of Business.
Blair has advised more than 100 companies and governments in the areas of leadership, corporate strategy, organizational relationships and design, and has published more than 50 books and articles. His most recent articles, A crisis of legitimacy and Adapting to a new world published in strategy+business magazine, focus on the most acute global challenges facing the world today, including those of the post-COVID-19 landscape.
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Director, Global Strategy and Leadership, PwC United Kingdom
