The deeply flawed global economic model: study

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DAVOS: Calling the world’s current economic model “deeply flawed”, a new study today said that sustainable business plans can unlock economic opportunities worth at least $12 trillion and generate up to 380 million new jobs by 2030.

Publishing the study ahead of the WEF’s 5-day annual meeting which kicks off today evening, the Business and Sustainable Development Commission said the next decade was critical for businesses to open up 60 key market ‘hotspots’ , tackle social and environmental challenges and rebuild trust with society .

The study, conducted by a group of more than 35 CEOs and civil society leaders, showed that “sustainable business models could unlock economic opportunities worth at least $12 trillion and up to 380 million jobs per year by 2030″.

Putting the Sustainable Development Goals, or Global Goals, at the heart of global economic strategy could trigger a sea change in growth and productivity, with a boom in investment in sustainable infrastructure as a key driver, he said.

“However, this will not happen without a sea change in the business and investment community. Real leadership is needed for the private sector to become a trusted partner in working with government and civil society to fix the economy,” he added.

In its flagship report Better Business, Better World, the Commission observed that while the past decades have lifted hundreds of millions of people out of poverty, they have also led to unequal growth, growing job insecurity, ever-increasing indebtedness and ever-increasing environmental risks.

This mix has fueled an anti-globalization backlash in many countries, with business and financial interests seen as at the heart of the problem, and undermines the long-term economic growth the world needs.

“This report is a call to action for business leaders. We are on edge and the status quo will spark more political opposition and lead us with an economy that just isn’t working for enough people. We need to change course towards a business model that works for a new kind of inclusive growth,” said Mark Malloch-Brown, Chair of the Business and Sustainable Development Commission.

“Better Business, Better World shows that there is a compelling incentive that the latter is not only good for the environment and society, (but) it makes good business sense,” he added.

The report states that 60 sustainable and inclusive market hotspots in just four key economic areas could create at least $12 trillion, or more than 10% of current GDP.

The breakdown of the four areas and their potential values ​​are energy $4.3 trillion, cities $3.7 trillion, food and agriculture $2.3 trillion, health and wellness $1.8 trillion.

The Business and Sustainable Development Commission was launched at the World Economic Forum in Davos in January 2016 as a grouping of leaders from business, finance, civil society, trade unions and international organisations.

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