Big Thinks is the Digital Magazine of the Global Mastermind Group

Crisis Transformation of Planetary Economic Systems

This is a turning point in the relationship between global, public, and private resources. Globalization is no longer a process, it is now a space of economic activity.

The global crisis entered an acute phase at the beginning of 2020 following a global pandemic. It has a universal, rather than a country-specific or a regional character, and is not financial or economic in its origin. At this stage, it has intertwined global problems in at least four areas: healthcare, economy, climate, and human capital. The result is a stunning transformation of economic systems and a turning point in the relationship between global, public, and private resources.

The nature and scale of the current crisis reveal a new and significant feature, perceived as a kind of punishment for globalization.  Globality is a category of objectively existing planetary economic space. It is constant, like a physical entity, while the state of integration of production processes in it is constantly changing to suit the evolving goals and means of achieving them.

The perimeters of this process are quite obvious; they can expand and contract within the framework of cyclical development. The new stage of globalization, as a single planetary space of economic activity, including not only dry land but also water, air, space, and virtual environment, is due to the development of technological innovations and has been extremely accelerated by the results of measures combating the health crisis.

Innovation is directly related to performance, and it has revolutionized industries over the past two decades where science, technology, engineering, and mathematics play a key role. For example, biotechnology and artificial intelligence have brought tremendous advances to medicine. Cars today contain more computer science than mechanical engineering. Agriculture has taken a new leap forward with the help of the Internet of Things, robotics, and satellite technology. Container transportation is carried out with “smart contracts” on blockchain. In a pandemic situation, both “old” and “new” sectors of the economy have switched to e-commerce in the global virtual space.

However, the negative effects directly caused by globalization and the uneven distribution of benefits from innovation have also become extremely aggravated in the current crisis.  The concentration of the extraction and appropriation of advantages is clearly expressed by the rapid growth of “quarantine stock” prices on world stock exchanges, while tens of millions of people have been left behind without work and prospects.

Moreover, climate changes caused by an accumulated growth of efficiency in deriving profit from the natural resources of the planet also hit the most vulnerable the hardest.  As discussed at the World Economic Forum (WEF), the results of pollution of the soil, air, water, and near outer space of the planet directly affect the health and livelihoods of millions of people.

The emergency measures undertaken by developed countries in the fight against the pandemic are hardly sufficient to cover the essentials and are limited in time. Meanwhile, developing countries are even further from being able to sustain the economic activity and basic needs of their population.  At some point, this dynamic can become cyclical: the longer the recession lasts, the more damage it will cause, and the longer it will continue everywhere.  And even when the restrictions are lifted, and part of human capital can return to work, many will lose income permanently.  This is largely due to the lack of a reskilling mechanism, which has also raised alarms at the WEF.

The uniqueness of the current crisis lies in the fact that its scale has vividly highlighted all manifestations of globalization as a single planetary economic space. Covid-19 has dealt a blow to the very essence of what it takes to be a human at work and at play, so this crisis is an extremely complex process that is still poorly understood. The health of the world, the global economy, the climate of the planet, the dire need for the reskilling revolution are problems that cannot be solved by even the best of minds, companies, or countries on their own without a shift towards innovative inclusive growth and global cooperation, i.e. globalization at its best.

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