In recent decades, the global economy has experienced a golden era of growth in gross domestic product (GDP), trade, and foreign direct investment. The social dividend has been huge, with extreme poverty more than halving from 1990 to 2015.
But now, there are signs the global economy is slowing down, raising questions over whether it will be able to repeat the trick of the last 15 years. China is engaged in a difficult economic transition, with many other emerging and developing economies facing strong headwinds too. Trade’s share of GDP is declining for the first time in 30 years. Global unemployment reached 197 million last year, while 600 million new jobs are needed just to keep up with population growth.
The environmental costs of the old growth model are growing, too. Environmental externalities like carbon emissions, natural resource degradation and loss of ecosystem services cost the world over $4.5 trillion a year. Resource prices are becoming more volatile as 3 billion more consumers join the global economy, and the supply of resources like water and land remains finite. The global carbon budget for keeping average warming below 1.5 degrees Celsius is set to be used up in just five years.
Yet new growth models that are both more attractive and more affordable are coming into view, opening up huge new potential markets and value chains while increasing the alignment between business and societal interests—and a generation of new sustainable growth players is increasingly positioning itself to take advantage of these changes. In the process, they could play a pivotal role in delivering the Sustainable Development Goals (SDGs) agreed last year—but only if the right conditions are in place.
To explore these opportunities, the Business and Sustainable Development Commission will explore:
- The size of the economic prize that will be within reach if the world achieves the SDGs, as well as the sector-level transformations that will be needed within four key systems: food and agriculture, cities and mobility, extractives and materials, and health and education.
- The new business models being pioneered by both insurgents and “radical incumbents”, and how these are breaking traditional trade-offs between quality, cost, and social and environmental impact—as well as how these new opportunities are creating network-based first-mover advantages for early adopters.
- New financial models ranging from impact investment to millennials’ rapidly growing willingness to invest in line with their values, and from new data underlining the alignment of financial value creation with high environmental and social performance to radical innovations in supply chain finance that could dramatically increase developing country SMEs’ access to credit.
- The new social contract that is starting to emerge between business, government, and society; how it is starting to play out in fields ranging from job creation to innovation and full cost pricing; and what needs to happen to take it to the next level, moving beyond incremental change to the transformations necessary to achieve sustainable development.
The Business Commission’s global report will be published in January 2017, with a range of commissioned research and evidence papers on the themes above published throughout 2016.