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World's economic model deeply flawed: Study

Terming the current economic model of the world “deeply flawed”, a new study today said sustainable business plans can open up economic opportunities worth at least $12 trillion and generate up to 380 million new jobs by 2030.

Releasing the study ahead of the five-day World Economic Forum (WEF) annual meeting beginning today evening, the Business and Sustainable Development Commission said the next decade is critical for companies to open 60 key market ‘hotspots’, tackle social and environmental challenges, and rebuild trust with society.

The study, conducted by a grouping of more than 35 CEOs and civil society leaders, showed that “sustainable business models could open economic opportunities worth at least $12 trillion and up to 380 million jobs a year by 2030”.

Putting the Sustainable Development Goals, or Global Goals, at the heart of the world’s economic strategy could unleash a step-change in growth and productivity, with an investment boom in sustainable infrastructure as a critical driver, it said.

“However, this will not happen without radical change in the business and investment community. Real leadership is needed for the private sector to become a trusted partner in working with government and civil society to fix the economy,” it added.

In its flagship report Better Business, Better World, the Commission observed that while the last few decades have lifted hundreds of millions out of poverty, they have also led to unequal growth, increasing job insecurity, ever more debt and ever greater environmental risks.

This mix has fuelled an anti-globalisation reaction in many countries, with business and financial interests seen as central to the problem, and is undermining the long-term economic growth that the world needs.

“This report is a call to action to business leaders. We are on edge and business as usual will drive more political opposition and land us with an economy that simply doesn’t work for enough people. We have to switch tracks to a business model that works for a new kind of inclusive growth,” said Mark Malloch-Brown, Chair of the Business and Sustainable Development Commission.

“Better Business, Better World shows there is a compelling incentive for why the latter isn’t just good for the environment and society, (but) it makes good business sense,” he added.

The report said 60 sustainable and inclusive market hotspots in just four key economic areas could create at least $12 trillion, worth over 10 per cent of today’s GDP.

The breakdown of the four areas and their potential values are energy $4.3 trillion, cities $3.7 trillion, food and agriculture $2.3 trillion, health and well-being $1.8 trillion.

The Business and Sustainable Development Commission was launched at the World Economic Forum in Davos in January 2016 as a grouping of leaders from business, finance, civil society, labour, and international organisations.