A survey conducted by public relations firm Edelman just prior to the gathering of the politicians and business tycoons of the world in the Swiss ski resort of Davos has revealed that there is a loss of confidence in capitalism around the world because of increasing income inequality.
According to the report that was released on Monday, 56 per cent of the respondents surveyed by it believed that more harm than good was being done by capitalism even though the last year noted good economic growth and almost fill employment in a number of developed economies.
Many expect that the conclusion of the survey that essentially reduces confidence in capitalism could become a talking point for the business executives and political leaders who are slated to join the annual meeting of the World Economic Forum in Davos.
“We are living in a trust paradox,” said Richard Edelman, the CEO of Edelman, which has been conducting its survey of trust for 20 years. “Since we began measuring trust, economic growth has fostered rising trust.”
There has been depletion in trust in capitalism because of rising inequality in many rich countries even though the report found that capitalism and its relationship with economic growth and faith in the system is still good in some parts of the world such as in the Middle East and in Asia.
“Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid,” Edelman said.
Edelman said that trust and confidence was being eroded because of corruption, corporate misbehavior and fake news. There are also rising fears of lob losses because of automation in the workplace, a shortage of adequate training of employees, immigration and the emergence of the gig economy. About 83 per cent of the employees surveyed globally expressed their concerns about their job security, the survey report found.
In relation to dealing with global issues the institutions that people most trust are business and NGOs which is being viewed as a thumbs down for governments that are run by populist and partisan politics.
The report also found concerns over climate change to be one of the major issues of concerns as respondents said that consumer concerns on the issue can no longer be brushed aside by business leaders because those brands that are perceived to be unethical can be quickly tarnished.
“There is a growing risk of brands getting sucked in and CEOs have a mandate from customers and employees to act,” Edelman said.
Climate change and sustainability will be placed at the heart of its investing approach by BlackRock, said the company’s CEO Laurence Fink in a recent interview. This investment management company manages assets totaling $7 trillion for investors. And no new investments in new coal-fired power plants will be done by Credit Suisse, the bank announced after a protest of its activities at a branch in Switzerland.
“Business is a catalyst for change,” said Edelman.
The survey involved 30-minute online interviews in 28 countries between Oct 19 and Nov 18 with more than 34,000 people worldwide.
(Adapted from JapanTimes.com)