The pandemic has reminded us that we can't just aim for higher GDP and profits, thinking that their growth automatically benefits society.
A renewed focus on public health, the goal of zero emissions and the arrival of limits on capitalism will make 2021 the year of the Great Reset.
The year that has just begun could be historic, this time in a positive way. 75 years after the original “Year Zero” that followed World War II, we once again have the chance to rebuild. The process after 1945 was literal: building anew from the rubble of war. This time, the object of the Great Reset is to achieve a higher degree of social sophistication and create a solid foundation for the well-being of all people and the planet.
The post-war period
After the Second World War, with the last great Reset, we developed a new economic philosophy based on collaboration and integration. Material well-being was a primary goal.
This philosophy has given rise to international organizations such as the World bank, International Monetary Fund e the Organization for Economic Co-operation and Development, as well as the arrangements that would evolve in the World Trade Organization and the European Union.
Neoliberalism (a firm commitment to keeping markets free and governments at bay) has reigned in the West, where it has produced decades of prosperity and progress.
But this model broke.
Although covid-19 has given the final blow, it has been clear for at least two decades that the postwar model is no longer sustainable, from an environmental or social point of view (due to today's very high levels of inequality).
What awaits us now
The English historian Thomas fuller he famously said that “the darkest hour of the night comes just before the dawn.” Yet, we cannot simply assume that after an annus horribilis with the biggest health crisis and biggest recession in a century, a better year will just follow. We must act to do this.
I see three pillars to build on.
We will keep Covid at bay
First, 2021 could be the year we bring covid-19 under control.
If the current predictions are valid, several vaccines will be available: if they allow us to fend off the pandemic, we should take into account what we have learned from this crisis.
The first thing: although vaccines can bring stability, they are not a panacea. Like a peace agreement that ends but does not reverse the devastation of war, stopping the pandemic is only a first step.
The biggest challenge will be to correct the structural defects in our systems, many of which have failed to provide the necessary care and services to all who needed them.
It will be up to all of us to ensure that our health and social care systems are made more resilient for the next generation. 2021 must bring a “Great Reset” in how we approach economic growth and governance.
Zero emissions
2021 will be the year that all major governments, as well as large private corporations, commit to a “zero greenhouse gas emissions” goal. The great Reset will have to reverse the race towards disaster and bring the world into a virtuous circle of decarbonisation.
The European Union has already agreed to “enshrine climate neutrality into law by 2050“, China has pledged to become “climate neutral by 2060” and Japan has made a similar commitment to the 2050. With Joe Biden elected president, the United States is expected to rejoin the Paris climate agreement and aim for 100% clean energy and net-zero emissions by 2050.
These commitments represent a historical development. China, Japan, the United States and Europe together represent well over half of all greenhouse gas emissions and over half of global GDP. The goals outlined in the Paris Agreement are now largely achievable at national and regional levels. The countdown to the Great Reset is minus twenty-nine.
From short to long term
Ultimately, 2021 will be the year that companies shift from a strictly short-term profit orientation to strategies focused on long-term profitability, and the interests and contributions of all stakeholders.
In 2019, great business leaders embraced the concept of stakeholder capitalism, establishing the commitment with the Business Roundtable and then in the 2020 Davos Manifesto.
Stakeholder capitalism, or stakeholder capitalism is a system in which companies are geared to serve the interests of all: customers, suppliers, employees, shareholders and local communities.
With the development of clear “Stakeholder Capitalism Metrics” in 2020, all companies now have the tools to transform environmental, social and governance commitments into measurable actions. In this sense, a form of “Great Corporate Reset” has already begun.
This is also a historic turning point, a reset that will have global ramifications.
The four largest accounting firms in the world (Deloitte, EY, KPMG and PwC) have all contributed to the new metrics and can now incorporate them into their annual business performance reports.
A myriad of large financial institutions, from Bank of America to BlackRock, say they are increasingly staunch supporters of stakeholder capitalism.
Will it be enough to "gentle" capitalism to save the planet? Is there really the possibility of converting the "ferocity" of capitalism to pursue good? I'm skeptical, and I'll just say that a Great Reset could also mean put capitalism completely aside.
Three reset buttons, three pillars of a new world
In summary, these three main developments (renewed focus on health and resilience, zero-emissions commitment and stakeholder capitalism) tell us that 2021 is a new zero year.
The Great Reset, if activated with ample will and synergy, will be a foundation on which to build a new era of improved well-being, inclusive economic growth and climate action.
