Climate change. Social and economic inequality. An ageing population. It’s widely accepted that the world is facing some massive challenges. But how urgent are they? And what’s really needed to address them?
The plain answer is that they’re all more urgent and potentially more catastrophic than the vast majority of people suspect. And if the world fails to solve them within the next ten years, we – as a species and a society – are going to be in very deep trouble.
Why do we say this? First, some background. Before the pandemic, our conversations in countries all over the world showed us that people‘s concerns coalesce consistently around five issues, for which PwC created the acronym ‘ADAPT’: asymmetry (of wealth); disruption (of society and climate by technology); age (as the world’s population ages); polarisation (as the global consensus fragments); and trust (which is declining). COVID-19 has since accelerated all of these trends.
Drilling down into them, we found they were actually manifestations of four distinct global crises – of prosperity, technology, leadership and institutional legitimacy. While each of these crises is a problem today, they all share the traits that they get worse year-on-year and are driven by multiple factors, making them systemic and hard to change.
Even more worryingly, we concluded that in ten years’ time these crises – if unaddressed – will become critical, severely impacting lives and wellbeing globally. Here are just a few alarm bells. Some 42% of 55-to-64-year-olds in the US have less than US$10,000 in retirement savings1: they’re effectively facing retirement broke over the coming decade. Forest fires, if unchecked, will have reached the point in 2030 where ecosystems can no longer replace what’s burned2. And AI and robotics are set to trigger massive job losses throughout the 2020s3, at a time when cases of depression are rising in society4.
How can the world act and innovate at sufficient pace and scale to address and reverse these shifts? In our view, one of our essential hopes is entrepreneurial start-ups and the VCs that invest in them.
The reason becomes clear when you look at the other actors. The other potential agents of change likely cannot move fast enough to meet the tight deadline for solving the crises. Governments – and multilateral institutions – are beset by a lack of trust and entrenched challenges exacerbated by the pandemic’s fiscal hit. Large private sector organisations will also take too long, especially given their own trust challenges and pressures to maintain returns for public shareholders.
This leaves the entrepreneurial innovative start-up community and the people who invest in them – including high net worth individuals (HNWIs), who have the money and influence to really change the world – as the most viable leaders in catalysing change at the required speed. As an entrepreneur, you are the essential ingredient because the world needs three things: a massive infusion of innovation at a headlong pace; a huge number – literally tens of millions – of successful and inclusive new businesses that help to change the world for the better; and action that drives wealth and impacts locally to reduce disparities, while having the potential to scale up globally.
Only with a massive upsurge of start-ups – supported by like-minded VCs – can all of this be delivered. The solutions need to be created everywhere: this is a global need, so it will be vital to encourage entrepreneurship in places where support systems currently don’t exist, e.g. infrastructure and sources of finance. Success will also require an explosion in collaboration, both public/private and between corporates and start-ups, including corporate venturing. This multifaceted collaboration is an area where PwC has been catalysing action by working with organizations like the UN. So vast is the need for new solutions that only coordinated action drawing on everybody’s strengths – including the dynamism and diversity of the start-up community – can possibly meet it.
But as an entrepreneur, what qualities will you need to lead this change, and where should you focus? We’ve identified six paradoxes – all distinct yet interrelated – that startup founders will need to embody. For example, you’ll need to be a humble hero, with the humility to accept your great new ideas can be improved upon but the courage to take risks and drive them to realisation. A globally-minded localist, understanding and tackling local issues with a global worldview. A tech-savvy humanist, able to get the most from technology while improving people’s wellbeing. And more.
Assuming that – as an entrepreneur – you manage to reconcile these paradoxes, what should you prioritise? The key here is to think at speed and scale, and raise your sights from “pet” causes or projects to problems that really matter. Meanwhile, politicians should also focus on prioritising these issues, and incentivise "the private sector" to become engaged and invested in those priorities. There’s a useful lesson here in the UN Sustainable Development Goals (SDGs), which cover so many issues that there’s a risk none will be tackled effectively. But action on one or two will actually cause movement in the others. Take climate change and small business creation: targeting just these two will have positive impacts in areas from education to inequality to the circular economy.
As entrepreneurs set out to tackle the world’s problems, the investors that ultimately enable their innovation also have an obligation and opportunity to support them. The world clearly needs VCs’ ability to direct capital to the issues and localities where the need is greatest. But equally crucially, at a time when governments are often the only actors that can create the right context for innovation, investors must work with them to help do this while also engaging in public policy debate.
If all this happens, can the necessary speed of change be achieved? We think it can. If we as a global society accept and understand the sheer scale of the problems we’re facing, we can and will solve them. The pandemic provided a dramatic illustration of how the world can think and act at breath-taking speed when the urgency of the common need is clear: witness millions of workers switching to home-working within days or even hours, and vaccines developed in one-tenth of the usual time.
If we assume mankind will now act five to 10 times faster than in the "old normal", the next "10 years to midnight" could see us achieve as much as we did during the past 50-100 years. And think of all the changes and successes we have seen in that period. So, in facing the challenges of the next decade, we should draw on the experience and energy of the pandemic response to shape and drive how we tackle the bigger problems ahead.
Just imagine what the world could be like if we all step up and embrace these opportunities. In this world climate norms return. Global biodiversity is flourishing. Technology meets human needs without negative impacts. Institutions are trusted. And we have the leaders we need.
Sounds like a world you’d want to live in? Then answer this clarion call and join your fellow entrepreneurs already engaged in this fight. Together you can build a better world.
(1) Source: US Department of Labor
(2) Source: https://www.nationalgeographic.com/science/2020/01/extreme-wildfires-reshaping-forests-worldwide-recovery-australia-climate/
(3) Source: ONS; PIAAC data; PwC analysis
(4) Source: American Psychological Association, Journal for Abnormal Psychology, 2019, Vol 128, Number 3