Creating common purpose

PwC is asking important questions about how economies can more effectively deliver for society once again, and the role of business in this process.

Overview

For many decades, economic growth fostered huge progress in society. Billions of people were lifted out of poverty, and many were able to live longer, healthier, more prosperous lives. But today that linkage is under strain. The result? Economic growth has created global progress “on average” that is leaving many people feeling left behind. PwC has joined Global Solutions and other stakeholders in seeking ways to recouple economies and societies.

PwC’s purpose means we want to work with others to help tackle the biggest issues facing the world today. One of the most pressing is the dislocation that’s opened up between economic growth and social progress. For many years, three forces – globalisation, ‘financialisation’ (a focus on financial measures of success) and technology –  drove growth in the global economy, and in turn ongoing improvements in many people’s lives. But this can no longer be assumed.  The outcome is that some choices lie ahead: continue as we are, accepting more of the same, or start redesigning the system. What’s needed is a realignment of our societal and economic systems – including changes to the role that business plays in both.

 

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How can economies - and the businesses operating within them - evolve to better deliver for society so that society can better deliver for people? A common purpose is needed to realign business, economies and society. | Duration 2:09

 

Defining and creating a common purpose

We need to frame a common purpose that aligns economies and business in delivering for society. How can we do this?

Faced with today’s global challenges, it’s easy to blame one or other part of the current system for bringing them about. However, most components of the system are interdependent, and the strains on it interconnected. Only by looking beyond the symptoms of stress, and addressing their underlying causes, will we redesign our current system so the economy once again delivers more effectively for society.

One of the assumptions underpinning our current system has been that economic growth will automatically deliver societal progress. But this no longer holds true. An economy must deliver for the society within which it operates, or risk being “rejected” by it. Similarly, a business must generate financial returns in order to survive and prosper.  But it must do this in a way that is considered acceptable and sustainable by broader stakeholders, or risk losing its “licence to operate”. So, in each case, we need to be clear both on the underlying purpose – and also on what else needs to change to enable economies and businesses to deliver on it.  How should the ‘wiring’ that guides all activity within today’s system – regulation, incentives, investment objectives, reporting, and so on – be reconfigured to power the new one? It is hard to overstate the significance of this question, and it goes to the heart of the ability to create this “commonality of purpose.”

 

Four principles to help realign business, economies and society

Global connectivity and local initiative must go hand-in-hand

To achieve the realignment we’re seeking, global connectivity and local initiative must go hand-in-hand.

Global issues such as climate change, migration, health and technology require global approaches and collaboration. They transcend national borders. But cities, towns, and villages across the world are the natural meeting places for social progress and economic success. We need to foster local solutions to local challenges and enable communities to thrive, while doing so in a way that recognises the realities of an interconnected global world.

Measuring progress in terms of “global averages” has the effect of masking the many – often acute – challenges that occur at a local level. Taking action at the local level opens up the opportunity to target socio-economic benefits where they’re most needed. What’s more, this opportunity is increasing: as devolution and urbanisation continue, it’s not just action that’s being localised to cities and regions, but also the power to effect real change. That said, “localisation” isn’t just about place. It can also be defined by other shared interests: perhaps a manufacturing sector facing disruption, or rural households struggling to access broadband. All demand – and deserve – attention, recognising the complex interplay between local level challenges and global ones too. 

 

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Look beyond financial performance

We need to look beyond the financial towards positive, sustainable societal outcomes.

Human societies have always evolved and adapted their systems – economic and otherwise – to focus on the human-centric outcomes they wish to see delivered. We are probably at another great inflection point in this process. At root, an economy is an engine for matching human needs with opportunities. We need to look beyond GDP and shareholder returns  as the primary measures for success and work towards wider societal goals that are positive and sustainable. Setting objectives on this basis, and then measuring and reporting both at a macro level and for businesses should reflect these broader objectives.

In our current system, the success of an economy or business has usually been judged using financial metrics: primarily GDP and shareholder returns respectively. But GDP can’t answer the question: is life actually getting better or worse for most people? And shareholder returns provide no guidance as to whether a business is delivering on its purpose to contribute to society. The fact is, neither measure reflects any sense of longer-term sustainability. So we need to define the societal outcomes an economy  - and businesses operating within it -  should help deliver, and then measure progress against them in a more holistic and integrated way.

 

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Technology doesn’t care. But we must.

Applied humanely, technology can provide new and innovative ways to meet our needs.

Automation, machine intelligence, and disruption of communities are just some of the risks that technology is seen as posing to many people around the world. But technological advances also promise to help us create new industries and jobs, and find new ways of meeting ever-evolving human needs.

Today, technology permeates our lives – and there’s no precedent for the velocity and scope of the technological explosion we’re currently seeing. Many people are increasingly concerned about the implications of technology on everything from employment to privacy to politics. But as technology advances, it’s changing both our needs as humans, and also our ability to meet those needs. Which means that technology also brings unparalleled opportunities. To realise them, we must take a systems-wide approach and foster a beneficial role for technology in our society. Technology is neither inherently good nor inherently bad. What matters is that we think carefully about how we use new developments – and ensure the outcomes are both positive and sustainable.

 

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Educate for the future

The effects of technology on the future of work will be profound and transcend national boundaries. We’ll need to collaborate globally, while staying focused on humanity.

The AI revolution is here. As machines take over a rising proportion of predictable, cognitive tasks, we’ll see some jobs destroyed and others created. The skills needed for success will change, with lifelong learning becoming the norm. As our education and social support systems adapt to the new reality, the key will be keeping people at the centre.

New frameworks are needed to prepare workers for a future where technology augments human capabilities.  Education systems must adjust, fostering lifelong development both of technical skills and also creativity and problem-solving. Social protection systems must keep pace. Since these effects will transcend national boundaries, there’ll be a need to scale up cooperation across and between governments and businesses to manage these issues and support the development of skills needed for the future.  Throughout these changes, the key will be creating commonality of purpose for businesses and economies generally, consistent with the objectives of the societies within which they operate. After all, it’s people that really matter.

 

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Contact us

Bethan Grillo

Director, Global Purpose, PwC UK

Tel: +44 (0) 20 7804 5746

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