Need to find new ways to tackle unemployment, inequality and growth, says Klaus Schwab

Klaus Schwab, Founder and Executive Chair of the World Economic Forum, called for a “paradigm shift” in the approach to social and development challenges during his address to the International Labour Conference.

News | 11 June 2012
GENEVA (ILO News) – Innovative ways to tackle unemployment and inequality must be found quickly to ensure the delivery of socially sustainable development, World Economic Forum Chair Klaus Schwab told delegates at the International Labour Conference.

“To achieve progress, we have to innovate and build social development models that go beyond public finance in order to have much wider impact and scale. This can only be done by leveraging private initiatives through public-private partnerships or through social entrepreneurship,” said Schwab .

“The walls between public and private sectors are disintegrating. It is evident that the challenges we face cannot be met by financial fire hoses alone. The input of technology and innovative, entrepreneurial solutions are needed,” he said.

“We face a 600 million jobs challenge in the next decade. Today, 200 million people worldwide are unemployed, including 75 million young people. 40 million people are estimated to enter the labour force every year into economies that cannot accommodate them. Furthermore, about 910 million workers earn wages less than US$2 per day and 75% of the global population have no adequate social protection,” he said, citing ILO figures.

Despite such challenges and the realities of a “hyper-connected” world, the response has remained largely unchanged for the past 70 years: “We rely on a nation-state based negotiation process to resolve our global public good challenges, such as trade, climate change, nuclear proliferation and sustainable development,” Schwab said.

But the world needs “a paradigm shift” where “entrepreneurship is the driver of economic progress, but always has to be in service of society. “Private business has to work hand in hand with government and civil society to create the synergies needed to improve the state of the world.”

Schwab praised the ILO, saying it is the international organization that comes closest to the “the stakeholder concept to which the World Economic Forum is so much committed”.