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The Future of Wealth Insights from Discussions Building on an Ini4al Perspec4ve by: Prof. Julio J. Prado | IDE Business School | Ecuador
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Context The ini4al perspec4ve on the Future of Wealth kicked off the
Future Agenda 2.0 global discussions taking place through 2015. This summary builds on the ini4al view and is updated as we progress
Ini4al Perspec4ves Q4 2014
Global Discussions Q1/2 2015
Insight Synthesis Q3 2015
Sharing Output Q4 2015
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Inequality On The Agenda Inequality has become a concern not just for developing countries but also for
those in the US and the Euro Zone: 56% of people living in rich countries believe the most pressing problem of the economy is inequality.
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Human Capitalism There is an increasing pressure to move to a new form of capitalism, one with a more human side to it that reconnects with the need to create and distribute wealth for the benefit of society rather than for the benefit of a select few.
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Influence of China As the importance of China as a producer and consumer grows, there is increasing concern about how a poten4al downturn in that economy will affect the rest of world, s4ll feeling the pinch from the last recession.
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Increasing Tensions It will be very difficult to revert the trend of stagnant growth and high inequality that is seen in many of the richest economies leading to increasing poli4cal and societal tensions and poten4al flash points.
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Overseas Ownership Greater wealth creates more op4ons to invest money in state-‐owned projects all over the world, especially in those countries who have deficits, leading to a shi^ to overseas ownership of na4onal treasures in many parts of the world.
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A SystemaBc View Policy makers from around the world will have to look at the problems
of wealth crea4on and wealth inequality in a more systemic way, with the use, for example, of a complexity framework.
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Seeing the Bigger Picture We need to start looking at the issues of wealth crea4on not in isola4on, looking at specific solu4ons for each country but to think of solu4ons for a
system that is interconnected and complex.
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Top-‐down and BoGom-‐up It will be necessary to adopt both a top-‐down and bo`om-‐up approach
that involves society as a whole and especially private business, in the process of crea4ng wealth and reducing inequality.
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Avoiding Unrest We need to address the issues of wealth crea4on and wealth distribu4on in order to avoid a build-‐up of societal pressure that leads to poli4cal
instability, societal unrest and even regime change.
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Reassessment of Causes and Effects The causes and the effects of the Great Depression and the Great Recession need to be reassessed in the light of their effect on wealth: Especially how
different policy responses affected wealth crea4on and distribu4on.
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CorporaBons in Society The shi^ for companies being ‘apart from society’ to being ‘part of society’ sees a different type of accountability being required from society as the real purpose of the corpora4on is remembered – but shareholder primacy remains.
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Visibility and Transparency of Wealth If we are to shi^ to a fairer, more just divide and distribu4on of wealth, the changes will driven by increasing transparency on pay and wealth as well as rising social and consumer tension coupled with direct shareholder ac4vism.
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Measuring Wealth in a More Human Way As we evolve from seeing progress purely as growth of GDP and income per capita to a more holis4c understanding and measurement of wealth, the
metrics by which we judge success will have to be reinvented.
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ConBnuous Learning to Enable Employment As the pace of change accelerates, the knowledge economy grows and the
value of accredita4on declines. This leads to a shi^ from "educa4on then work" to a world of "con4nuous learning” needed to keep us all employable.
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Changing Dynamics of ConsumpBon A move to more conscious consump4on of experiences instead of the hyper-‐consump4on of stuff results in a shi^ in the u4lisa4on of assets and social view of status and hence associated anxiety around progress in a low-‐growth world.
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Re-‐distribuBon of Wealth As baby boomers in the West age and spend, the burden on society grows and average produc4vity declines -‐ with emerging markets ever more influen4al. So what role will Government play in bridging the gap.
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Scarcity of CriBcal Resources As access to key resources con4nue to underpin wealth crea4on,
shi^s in the view of what is a cri4cal resource -‐ something we need or something we want -‐ start to change the balance and benefits of ownership.
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