The health and economic consequences of the pandemic have quickly escalated into larger crises. The announcement of this major crisis was there, but it was as if we all hoped for a better scenario. It's as if we were globally waiting for a solution that wouldn't require significant changes and individual-level initiatives. However, we are aware that the global economic system is not functioning. It doesn't work in anyone's favour, not for most people in terms of personal well-being, nor for the environment, nor for the benefit of capital owners.
Over the past two years, we've heard from every corner of the world that the current model of the capitalist economic order is flawed and that change is necessary. We see the highlighting of all its shortcomings, flaws, and a very poor attitude toward the basic unit of the capitalist system—the worker.
Carbon emissions have risen as the global economy resumed after the pandemic. Food and energy crises have been further exacerbated by the war events in Ukraine, directly leading to a surge in global inflation to the highest levels in decades, fueling social unrest.
Changes in monetary policies mark the end of an economic era characterized by easy access to cheap funds, which will have immeasurable negative consequences for governments, economies, and individuals, further deepening the gap, both within and among countries, between those who have money and those who do not.
Access to cheap money leads to stagnation or a complete halt of investment worldwide. We are aware that, in the long run, investments are necessary to improve productivity and increase economic competitiveness. Without investments, economies might achieve high levels of consumption, but with the consequences of creating an unbalanced economy.
Building upon the most serious risks we will face in 2023—rising inflation, food and energy shortages—we come to a global cost-of-living crisis that is already being strongly felt.
Continual supply-side pressures risk turning the current cost-of-living crisis into a broader humanitarian crisis over the next two years in many import-dependent markets.
According to a February 2023 Eurobarometer survey on "poly-crisis sentiment," 45% of respondents currently have "some" or "a lot" of difficulty with their personal incomes, while 46% of Europeans admit that their standard of living has already declined as a result of the growing crisis.
Countries experiencing the largest decline in living standards are Cyprus, where 70% of respondents say their standard has "already decreased," followed by Greece with 66%, Malta with 65%, France with 62%, and Portugal with 57%.
Such complex challenges cannot be solved with short-term decisions and plans; we need to take a long-term view and choose short-term priorities with which to begin adaptation. This applies to both private and business environments.
From today's perspective, I often return to Friedman's doctrine that the social responsibility of business is to increase profits, with the question of how he would describe business and its goals now. How he would define "value," who should benefit, and whether it's time to adopt a broader, longer-term view of the value that investments create for people, communities, and the planet.
It is expected that the technology sector will be one of the main pillars of industrial policy and increased state intervention. Fueled by government aid, military funding, and private investment, research and development of new technologies will continue at an aggressive pace over the next decade, bringing progress in artificial intelligence, quantum technology, and biotechnology. Hopefully, increased productivity and greater efficiency will contribute to reducing the negative impacts we face today, as well as to new risks we haven't considered in previous decades.
AI is already having a positive impact in many industries. It can automate processes to free employees from unnecessary work, help fashion companies design individual pieces according to customer habits or requirements, provide website design suggestions, offer individual product recommendations, deliver personalized learning options, monitor social media, serve as a personal assistant, and more. Even ChatGPT applies deep learning to discover coding errors and provide written answers to questions.
We await the moment when the predictions of David Sacks and Chamath Palihapitiya come true when we reach a point where the knowledge currently essential in technical engineering is replaced by AI.
For countries or companies that have the means for investment, new technologies will provide partial solutions to a range of emerging crises, from addressing new health challenges, better home-based treatment, and improved resource management to increased security or more optimal food production and consumption, even mitigating climate impacts.
For those who cannot keep up with these new trends, inequality and divergence will widen the gap, and the cost-of-living crisis will continue to rise.
Whether this technological development will lead to new risks that will further burden those who cannot meet the new demands of the labour market remains to be seen.
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