The global economy is strong and there is near full employment. Even so many people in every developed market do not believe they will be better off in five years. A full fifty-six percent believe that capitalism in its current form is now doing more harm than good in the world.
“We are living in a trust paradox,” says Richard Edelman, CEO of Edelman who recently published the 2020 Edelman Trust Barometer. “Since we began measuring trust 20 years ago, economic growth has fostered rising trust. This continues in Asia and the Middle East but not in developed markets, where national income inequality is now the more important factor. Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid.”
The concerns are wide-ranging and deep. Eighty-three percent of employees globally are worried about job loss due to automation, a looming recession, lack of training, cheaper foreign competition, immigration and the gig economy.
Fifty-seven percent of respondents worry about losing the respect and dignity they once enjoyed in their country. Nearly two in three feel the pace of technological change is too fast. And there is no agreed-on truth; 76 percent say they worry about fake news being used as a weapon.
A record number of countries are experiencing an all-time high “mass-class” trust divide, spreading from developed into the developing world. Globally, there is a 14-point gap between the informed public and the mass population. There are double-digit gaps in 23 markets, including Australia (23 points), France (21 points), Saudi Arabia (21 points), Germany (20 points), the UK (18 points) and Spain (17 points).
Business (58 percent) is the most trusted institution, taking the lead role in global governance. The recent decisions by the Business Roundtable to endorse a stakeholder model for American multi-nationals, the initiation of Business for Inclusive Growth focused on fair wages by French multi-nationals and the Business Ambition for 1.5°C recognize the broader responsibility of the corporation.
“Business has leapt into the void left by populist and partisan government,” says Edelman. “It can no longer be business as usual, with an exclusive focus on shareholder returns. With 73 percent of employees saying they want the opportunity to change society, and nearly two-thirds of consumers identifying themselves as belief-driven buyers, CEOs understand that their mandate has changed.”
CEOs are expected to lead from the front. Ninety-two percent of employees say CEOs should speak out on issues of the day, including retraining, the ethical use of technology and income inequality. Three-quarters of the general population believe CEOs should take the lead on change instead of waiting for government to impose it.
“People’s expectations of institutions have led us to evolve our model for measuring trust,” said Edelman. “Trust today is granted on two distinct attributes: competence (delivering on promises) and ethical behavior (doing the right thing and working to improve society). It is no longer only a matter of what you do—it’s also how you do it.” ◊