Bloomberg Businessweek Europe - November 04, 2019

3

actionable solutions, and

inspire the world. This issue

of Bloomberg Businessweek is

dedicated to those ideals.

The New Economy Forum

is timely, first, because wealth

and power continue to shift to

the rising economies of Asia,

the Middle East, Africa, and

Latin America. Indeed, the

World Bank projects that in

2020 the emerging economies

will grow at 4.6% on average,

compared with just 1.5% for

developed economies.

The forum is well-timed

for another reason. It’s being

held in Beijing against a back-

drop of growing tension and

fundamental change in U.S.-

China relations. The next cen-

tury’s geopolitical landscape

hinges on how this suddenly

fragile relationship evolves.

As corporations, govern-

ments, and leaders of civil

society seek to navigate

the New Economy, a bet-

ter understanding of these

key shifts and shocks will be

essential. More than ever,

challenges around the world

are interconnected and

require joint solutions.

Take technology. U.S.-

China competition, such as

the races for dominance in

5G and artificial intelligence,

is a global challenge. Many

in the U.S. are so concerned

about the national security

implications of techno logical

interdependence that they

argue for decoupling. Such a

move could have far-reaching

effects, Balkanizing the world

and stifling growth. Efforts to

exclude one another’s tech-

nologies from national sup-

ply chains would contribute

to what I’ve described as an

economic iron curtain that

funda mentally breaks the

global innovation ecosystem.

Or look at global gover-

nance. Existing institutions,

pacts, and agreements need

to be updated to reflect

today’s realities. One clear

example is the World Trade

Organization, where success-

ful economies like China,

South Korea, and Singapore

are still able to claim devel-

oping country status. This

disadvantages not only

other developed econo-

mies, but also the develop-

ing nations that truly need

differ ential treatment.

And then there’s climate

change, the most formidable

economic and social risk fac-

ing mankind. Avoiding disas-

ter will require a truly global

effort, yet China—the world’s

largest carbon emitter—will

play an especially signifi-

cant role, since its emissions

exceed those of the U.S. and

European Union combined.

Moreover, China’s green

finance initiatives and the

prospects of a national car-

bon market could provide

major breakthroughs in the

battle to reduce carbon emis-

sions. If they’re successful,

similar initiatives could be

applied elsewhere.

Finally, consider global

growth and income dispar-

ity. The recent slowdown in

trade combined with rising

pressure on cross-national

supply chains has made it

increasingly difficult for multi-

national businesses to plan

for the future with enough

confidence to make long-

term investments. Increasing

income disparity, driven by

automation and globalization,

is also fueling a populist back-

lash around the world. These

issues demand adjustments

to our economic policies so

the benefits of growth can be

spread more broadly.

These are some of the cen-

tral challenges we face in a

world filled with increasing

uncertainty and risk. A crit-

ical goal for business and

policy leaders, therefore,

should be to better under-

stand these issues and to

develop strategies for miti-

gating their impact.

The forum aims not just to

curate that discussion, but

also to drive new solutions

and joint action. By bringing

together the best minds from

business and government,

and from developed and

emerging nations alike, real,

measurable progress can be

made toward addressing the

challenges of, and transition

to, the New Economy. <BW>

Paulson co-chairs the

Bloomberg New Economy

Forum advisory board

Bloomberg Businessweek � Introduction November 4, 2019

3

actionablesolutions,and

inspiretheworld.Thisissue

ofBloombergBusinessweekis

dedicatedtothoseideals.

TheNewEconomyForum

is timely,first,becausewealth

andpowercontinuetoshiftto

therisingeconomiesofAsia,

theMiddleEast,Africa,and

LatinAmerica.Indeed,the

WorldBankprojectsthatin

2020 theemergingeconomies

willgrowat4.6%onaverage,

comparedwithjust1.5%for

developedeconomies.

Theforumis well-timed

foranotherreason.It’sbeing

heldinBeijingagainsta back-

dropofgrowingtensionand

fundamentalchangeinU.S.-

Chinarelations.Thenextcen-

tury’sgeopoliticallandscape

hingesonhowthissuddenly

fragilerelationshipevolves.

Ascorporations,govern-

ments,andleadersofcivil

societyseektonavigate

theNewEconomy,a bet-

terunderstandingofthese

keyshiftsandshockswillbe

essential.Morethanever,

challengesaroundtheworld

areinterconnectedand

requirejointsolutions.

Taketechnology.U.S.-

Chinacompetition,suchas

theracesfordominancein

5Gandartificialintelligence,

is a globalchallenge.Many

intheU.S.aresoconcerned

aboutthenationalsecurity

implicationsoftechnological

interdependencethatthey

arguefordecoupling.Sucha

movecouldhavefar-reaching

effects,Balkanizingtheworld

andstiflinggrowth.Effortsto

excludeoneanother’stech-

nologiesfromnationalsup-

plychainswouldcontribute

towhatI’vedescribedasan

economicironcurtainthat

fundamentallybreaksthe

globalinnovationecosystem.

Orlookatglobalgover-

nance.Existinginstitutions,

pacts,andagreementsneed

tobeupdatedtoreflect

today’srealities.Oneclear

exampleis theWorldTrade

Organization,wheresuccess-

fuleconomieslikeChina,

SouthKorea,andSingapore

arestillabletoclaimdevel-

opingcountrystatus.This

disadvantagesnotonly

otherdevelopedecono-

mies,butalsothedevelop-

ingnationsthattrulyneed

differentialtreatment.

Andthenthere’sclimate

change,themostformidable

economicandsocialriskfac-

ingmankind.Avoidingdisas-

terwillrequirea trulyglobal

effort,yetChina—theworld’s

largestcarbonemitter—will

playanespeciallysignifi-

cantrole,sinceitsemissions

exceedthoseoftheU.S.and

EuropeanUnioncombined.

Moreover,China’sgreen

financeinitiativesandthe

prospectsofa nationalcar-

bonmarketcouldprovide

majorbreakthroughsinthe

battletoreducecarbonemis-

sions.If they’resuccessful,

similarinitiativescouldbe

appliedelsewhere.

Finally,considerglobal

growthandincomedispar-

ity.Therecentslowdownin

tradecombinedwithrising

pressureoncross-national

supplychainshasmadeit

increasinglydifficultformulti-

national businesses to plan

for the future with enough

confidence to make long-

term investments. Increasing

income disparity, driven by

automation and globalization,

is also fueling a populist back-

lash around the world. These

issues demand adjustments

to our economic policies so

the benefits of growth can be

spread more broadly.

These are some of the cen-

tral challenges we face in a

world filled with increasing

uncertainty and risk. A crit-

ical goal for business and

policy leaders, therefore,

should be to better under-

stand these issues and to

develop strategies for miti-

gating their impact.

The forum aims not just to

curate that discussion, but

also to drive new solutions

and joint action. By bringing

together the best minds from

business and government,

and from developed and

emerging nations alike, real,

measurable progress can be

made toward addressing the

challenges of, and transition

to, the New Economy. <BW>

Paulson co-chairs the

Bloomberg New Economy

Forum advisory board

Bloomberg Businessweek � Introduction November 4, 2019