Rethink globalisation for fairer and more inclusive economic growth

In an era characterised by unprecedented global challenges, from supply chain disruptions to geopolitical tensions, the resilience and adaptability of our private sector remains more critical than ever.

I am reminded of a recent interaction I had with Adhiambo one evening. Adhiambo is a fabric trader who sells customised fabrics online. Her business has undergone no less than 10 iterations in the last year, as she optimises her products for global customers. Despite several setbacks related to her business model, she believes in her dream to tap into the global marketplace using digital channels.

Not surprisingly, her optimism is mirrored across Kenya’s private sector.

According to the Resetting Globalisation: Catalysts for Change report recently released by Standard Chartered, 81 percent of Kenyan business leaders agree that global trade allows for sustainable development, where no one is left out.

The report captures insights from over 3,000 business leaders worldwide, shedding light on the very resilient and evolving nature of globalisation.

Our research shows that business leaders in Kenya are most confident about the role that capital plays in globalisation and they are amongst the most likely to say that foreign investment has been instrumental to the growth and development of their economy.

Kenyan business leaders are also more likely than their peers in the other 19 markets surveyed to say that the solutions for climate change require a localised approach.

The report reveals a surprising confidence among business leaders in globalisation and trade, despite recent hurdles. This confidence isn't blind optimism; it's grounded in a recognition of the undeniable benefits that global trade has brought, particularly in sustainable development. A staggering 86 percent of leaders acknowledge this positive impact, challenging the growing scepticism around globalisation.

An essential aspect of this new globalisation is the emphasis on inclusivity and sustainability. There's a pressing need to balance growth with sustainability, especially in developing markets. The report's findings suggest that global trade isn't just an economic engine; it's a catalyst for sustainable practices and innovation.

This perspective is crucial as we navigate the complexities of environmental challenges and social inequalities. Forty-nine percent of Kenyan business leaders believe if sustainability is kept a paramount consideration, then countries should support the movement of goods and services with the least friction possible. There is hope for Adhiambo.

Moreover, the report highlights the importance of free capital flow. Almost all business leaders (95 percent) agree on this need – 97 percent in Kenya, underscoring the role of financial markets in fostering growth in both developed and developing economies. This perspective is pivotal, considering the increasing global focus on equitable economic development.

However, it's not just about capital and trade. The digital revolution has brought the world closer, with 75 percent of leaders acknowledging the positive outcomes of the free flow of data. This digital interconnectedness is reshaping how we think about finance, security, and talent mobility.

The global talent pool, as highlighted by 74 percent of leaders, has become a cornerstone for innovative and diverse business practices.

Kenya is a country adopting the widespread use of technology and digital tools in crucial economic sectors, including finance. Eighty-seven percent of Kenyan business leaders say that decentralised finance, which runs on technologies such as blockchain, will create a more equitable financial system. This can be achieved through the sharing of technological progress between countries allowing for the strengthening of digital assets resulting in a positive outcome.

A surprising finding from the report is that business leaders from emerging economies are more likely to trade higher returns for more responsible investments than their counterparts from the developed world.

Those from Kenya (45percent), Nigeria (46percent) and China (44 percent) are among the most likely to trade in higher returns for a more sustainable and responsible investment opportunity. From a global perspective, 59 percent agree that finding the highest returns is the most crucial factor in their investment decisions.

A great depiction of this is in Switzerland where only one in four investors would select a more responsible investment.

Despite these positive attitudes, the path ahead is not without its challenges. Global governance mechanisms, while effective in some areas, need to be reevaluated and restructured to address the nuances of today's global issues, particularly in environmental matters.

The report indicates a mixed response on the effectiveness of these mechanisms, with 70 percent  of leaders viewing them positively.

In conclusion, business leaders must respond to this call to action. We must rethink globalisation, not as a passive concept but as a dynamic, evolving process.

The next chapter of globalisation is not just about economic growth. It is about creating a fairer, more inclusive world, where technological progress benefits all, and sustainability is not just an afterthought but a guiding principle.

In the words of Bill Winters, Group Chief Executive of Standard Chartered, we need a "just transition" to ensure continued economic development without sacrificing our planet or leaving anyone behind. The future of globalisation is not just in the hands of policymakers and business leaders; it's in our collective effort to shape a world that values connection, collaboration, and sustainable growth.

The writer is the StanChart CEO and Managing Director.