Globalisation imposes change in power equation

We are in the midst of a revolution. Some will call this revolution globalisation. Others will call it the knowledge revolution. Whatever we call it, we are witnessing everywhere a changing power equation. Power is moving from the centre to the periphery. Vertical command and control structures are eroding and are being replaced by horizontal networks of social communities and collaborative platforms.

Unprecedented integration and interconnectedness have created a true global neighbourhood. But, there is an underlying paradox here. Power is becoming more and more widespread, but as it does so, it is also becoming harder and harder to harness.

We have a de facto global world, but our institutions and systems of global governance are disintegrating. In principle, we should now move to a higher global level of consciousness, identity and, of course, organisational structure, but the underlying organisational principle in our world has dramatically changed.

Function

The world is certainly becoming flat, that much is clear, but that is only the first part of the equation - simply a description of the state we have reached. What is more interesting is how we will reinvent ourselves, our social relations and our power structures within this flat world. How will a flat world actually function?

Our global institutions and governance structures have not moved with the times; they were built on the concept of nation states, mainly designed to protect national interests but fostering no sense of global trusteeship.

What is clear, however, is that global trusteeship, global stewardship is needed more than ever since we have to confront so many global challenges simultaneously. The world has become a complex and dangerous place requiring urgent, effective mechanisms to address all the challenges in a proactive, comprehensive and systemic way.

As we always aim to be a part of this search for new mechanisms and new joint approaches to global problems, we hoped to marshal a broad ranging group of stakeholders at our Annual Meeting in Davos [concluded yesterday] to tackle these multifaceted problems in a multifaceted way.

There are complex challenges facing leaders from all sectors of society.

Let me start with the unsustainable way we treat our biosphere - increased levels of atmospheric carbon, growing water shortages, expanding deserts, shrinking forests.

This environmental damage plagues countries around the world - industrialised and developing alike - not to mention all the social challenges and tensions that result from rapid resource depletion and dislocation.

Second are the economic challenges. There is a growing danger that current economic development will become stuck in the sins of yesterday and today.

Despite the underlying robustness of our expanding global economy, the instability of international imbalances continues to widen, and income gaps between and within countries continue to grow.

We cannot continue to follow the principle "consume now and pay later".

On a political level, recent events have highlighted the realities of global impotence. We are witnessing profound decay in the structures we have historically used to manage our world.

We are witnessing the de-globalisation of a globalised world as the UN, the Bretton Woods organisations and many other multinational frameworks are struggling to keep up with changing global needs. This is made clear by our collective incapability to deal effectively with rogue states, with failed states, with terrorism and other events, from the collapse of the Doha trade talks to the crisis in Darfur.

Governance

These developments indicate that existing global governance systems can no longer meet all the challenges of the 21st century in their present form. But all reforms that are based just on prolonging the paradigms of the past will fail in our new flat world.

On a societal level, the question is: can we cope with the speed of change? On the other hand, people have also developed a new social sensitivity for everything which is not flat. This is why the new social movements are often driven by young idealistic crowds and not by the traditional left. But there is a contradiction between this new idealism and reality because globalisation does create winners and losers. Rather it pushes us into a world that is socially not flat.

The gap between those able to ride the wave of globalisation, especially because they are knowledge- and creativity-oriented, and those left behind is becoming wider at global, national, corporate and individual levels.

Finally, on a cultural level, we are witnessing a world in search of its soul, its roots and a re-emergence of cultural and religious identities.

This 'flattening' world presents ever more opportunities to which individuals and institutions must adapt. What we need to do is connect, and reconnect, leaders from business, politics and civil society to form new coalitions to improve the state of our world and shape a new collective will. It is perhaps ironic that surrounded by the mountainous peaks of Davos later this week we will be working on how to take advantage of a flattened world for the good of all!

The writer is the founder and Executive Chairman of the World Economic Forum.