COVID-19: The Great Reset

by Klaus Schwab

The fault lines of the world – most notably social divides, lack of fairness, absence of cooperation, failure of global governance and leadership – now lie exposed as never before, and people feel the time for reinvention has come.

Many of us are pondering when things will return to normal. The short response is: never. Nothing will ever return to the “broken” sense of normalcy that prevailed prior to the crisis because the coronavirus pandemic marks a fundamental inflection point in our global trajectory.

At the very least, as we will argue, the pandemic will accelerate systemic changes that were already apparent prior to the crisis: the partial retreat from globalization, the growing decoupling between the US and China, the acceleration of automation, concerns about heightened surveillance, the growing appeal of well-being policies, rising nationalism and the subsequent fear of immigration, the growing power of tech, the necessity for firms to have an even stronger online presence, among many others.

we should take advantage of this unprecedented opportunity to reimagine our world, in a bid to make it a better and more resilient one as it emerges on the other side of this crisis.

The same tends to happen for big systemic shifts and disruption in general: things tend to change gradually at first and then all at once. Expect the same for the macro reset.

History shows that epidemics have been the great resetter of countries’ economy and social fabric.

Unlike previous pandemics, it is far from certain that the COVID-19 crisis will tip the balance in favour of labour and against capital. For political and social reasons, it could, but technology changes the mix.

This raises two questions: 1) What should the new compass for tracking progress be? and 2) What will the new drivers of an economy that is inclusive and sustainable be?

First and foremost, the post-pandemic

pandemic era will usher in a period of massive wealth redistribution, from the rich to the poor and from capital to labour. Second, COVID-19 is likely to sound the death knell of neoliberalism, a corpus of ideas and policies that can loosely be defined as favouring competition over solidarity, creative destruction over government intervention and economic growth over social welfare.