The race to economic recovery is upon us as nations around the globe look to emerge from the global pandemic’s devastating impact with new prospects for a better economic future. As governments explore paths that can help propel their economies into a promising new reality, more of the same big-spending programs – as witnessed in response to the global pandemic’s profound disruption – is not the answer.
The inevitable path to economic recovery in today’s complex and ever-evolving global economy demands strategic government initiatives that feature smart spending programs targeting job creation, skills development, new business models and modern government frameworks.
A long-term view is essential. Make no mistake – there are no quick, short-term fixes in today’s unforgiving global economy. As it stands, historically low interest rates, massive pandemic-related stimulus programs, guaranteed-income initiatives, labor-market shortages, ands price pressures have all combined to fuel today’s precarious global conditions.
The International Monetary Fund (IMF) warns, for example, that global real-estate prices – backstopped by pandemic-related stimulus policies – have uncharacteristically surged among record sales in advanced and emerging economies and this trend now poses serious downside risk that has doubled compared to the pre-pandemic market1. Along the way, disrupted supply chains are contributing to significant global price pressures among consumer products and commodities.
Today’s crisis requires innovative global approaches
Emerging from today’s unique global crisis will likely demand progressive approaches that can provide a solid foundation for long-term growth and job creation. Smart governments should wisely spend the time and resources needed to identify both where they fit into the global economy and how best to respond with creative new programs that derive true value out of every dollar spent.
But beware – going it alone with inward-looking nationalist policies such as protective tariffs, product embargoes and the like may not solve the challenges faced. Global trends require global leadership. Economic recovery demands a holistic, multilateral global approach – one that ideally includes visionary new relationships between forward-looking governments and modern global businesses.
There is no ‘one size-fits-all’ approach that larger and more-advanced nations can expect to simply impose globally. Initiatives addressing today’s economic challenges will likely vary between the world’s advanced and emerging economies, the latter of which is expected to be much more dependent on government actions.
At the same time, nations will likely also experience pressure to resolve their economic challenges in a manner that’s culturally appropriate to their respective social norms, needs and expectations. Government leaders should therefore dig deep for innovative thinking and progressive approaches that can address today’s economic balancing act of aligning unique domestic needs with a holistic global perspective.
Leaders should share a common vision – to help restore trust
A holistic approach is indispensable. Governments everywhere should share a common vision on the fundamentals of what economic recovery looks like and what it will take to make it happen via smart investments, programs and incentives. Amid these differences exist countless similarities worth recognizing and capitalizing on in the drive for global recovery and growth.
It is also important to note that while today’s post-pandemic global economy is being viewed as a crisis, smart leaders are pursuing today’s challenges as a golden opportunity to advance the digital transformation of their economies and dramatically alter their trajectory into the future. Modern digital technologies are already accelerating the speed of government services and public access to information, while enhancing government transparency. Governments that fully understand their role in creating modern, automated, citizen-centric services that cater to digital economies will unlock new growth and success prospects for their societies.
Success on the economic-recovery journey also demands that governments address the lack of public trust in their leadership. And this will be no small task. According to the Organization for Economic Co-operation and Development (OECD), on average barely half of the people across the OECD’s 38 member nations – 51% – said they trusted their national government in 2020.
The Organization for Economic Co-operation and Development (OECD) warns that trust in public institutions and support for government policies and programs is now vital as governments take on the critical challenge of planning and implementing an inclusive recovery from the COVID-19 emergency2.
Workforce transformation has become crucial
Future workforce development is now critical. Economies pursuing recovery and growth should expect to need modern talent pipelines featuring the digital skills that are already beginning to render parts of traditional workforces obsolete. Significant investment in education and skills development are key to success.
Creative new relationships between private industry and government, ideally creating a sense of shared ownership on the future of work, is the way forward on this front. That includes – amid budget restraints and the need for innovative government spending – creative incentives that promote and sustain business activity, skills training and job creation.
Not to be underestimated is the need to view the global workforce as a key asset that individual nations can capitalize on in the drive for recovery and growth. Governments should aim to promote workforce mobility among nations and apply their respective immigration programs strategically to fill local jobs and sustain growth.
In our view, it’s human capital that underpins economic prosperity, making investment in workforce transformation, skills training, education and worker mobility absolutely essential to recovery and growth.
Ultimately, today’s economic reality demands nothing less than smart spending, a new mindset, creative programs and new relationships that, combined, can help position governments and organizations to emerge from today’s crisis with promising new prospects for rapid global recovery and sustained growth.