Tag Archives: Leadership

The virtuous circle of what’s needed to trigger Europe’s digital sovereignty

By Stefano da Empoli – Like a prism that changes according to the perspective through which it is observed, there are many possible interpretations of the concept of digital sovereignty. In the past few days, Italian Prime Minister Mario Draghi has provided some inspiration for the right way to look at it. During a joint press conference with French President Emmanuel Macron, and held after the signing of the Quirinale Treaty, Draghi referred to European sovereignty as the “ability to direct the future as we wish.”

In the digital domain, the power to be the author of one’s own destiny can be won with two tools: sound rules and technological investment. Only a balanced combination of them, however, can produce digital sovereignty to the benefit of European citizens. Much has been said in recent years about the so-called ‘Brussels effect’, the title of a successful book by Anu Bradford, the Finnish-born legal scholar based at Columbia University in New York.

Through the definition of a robust and ambitious regulatory framework, the European Union has managed to establish itself as the main global rule-maker, influencing the legislation of other countries and inducing non-European companies to take it into account not only for products and services sold in the old continent but also elsewhere.

A meaningful case study is the GDPR, the European privacy regulation, which was approved in 2016 and came into force in 2018. One of the basic principles, that of privacy by design, i.e. already built into a product or service at the time of its conception, has become the mantra of many American companies in just a few years. While it is true that the US does not yet have a federal privacy law, California, which is home to most of the large American technology companies, passed a very similar one. more>

Fixing climate finance

Finance was at the heart of the COP26 rupture between developed and developing countries—it’s time for a new approach.
By Jeffrey D Sachs – The United Nations Climate Change Conference in Glasgow (COP26) fell far short of what is needed for a safe planet, owing mainly to the lack of trust which has burdened global climate negotiations for almost three decades. Developing countries regard climate change as a crisis caused largely by the rich countries, which they also view as shirking their historical and ongoing responsibility for the crisis. Worried that they will be left paying the bills, many key developing countries, such as India, don’t much care to negotiate or strategise.

They have a point—indeed, several points. The shoddy behaviour of the United States over three decades is not lost on them. Despite the worthy pleas for action by the US president, Joe Biden, and the climate envoy, John Kerry, Biden has been unable to push Congress to adopt a clean-energy standard. Biden can complain all he wants about China but after 29 years of congressional inaction, since the Senate ratified the UN Framework Convention on Climate Change in 1992, the rest of the world sees the truth: America’s broken and corrupt Congress remains in the pocket of Big Oil and Big Coal.

Finance is at the heart of the geopolitical rupture on climate change. Developing countries are already reeling under countless pressures: the Covid-19 pandemic, weak domestic economies, increasingly frequent and severe climate-related disasters, the multiple disruptions of the digital age, US-China tensions and high borrowing costs on international loans. They watch the rich countries borrow trillions of dollars on capital markets at near-zero interest rates, while they must pay 5-10 per cent if they can borrow at all. In short, they see their societies falling even further behind a few high-income countries. more>

Updates from McKinsey

The rise and rise of the global balance sheet: How productively are we using our wealth?
Net worth has tripled since 2000, but the increase mainly reflects valuation gains in real assets, especially real estate, rather than investment in productive assets that drive our economies.
By Jonathan Woetzel, Jan Mischke, Anu Madgavkar, Eckart Windhagen, Sven Smit, Michael Birshan, Szabolcs Kemeny, and Rebecca J. Anderson – We have borrowed a page from the corporate world—namely, the balance sheet—to take stock of the underlying health and resilience of the global economy as it begins to rebound from the COVID-19 pandemic. This view from the balance sheet complements more typical approaches based on GDP, capital investment levels, and other measures of economic flows that reflect changes in economic value. Our report, The rise of the global balance sheet: How productively are we using our wealth?, provides an in-depth look at the global economy after two decades of financial turbulence and more than ten years of heavy central bank intervention, punctuated by the pandemic.

Across ten countries that account for about 60 percent of global GDP—Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States—the historic link between the growth of net worth and the growth of GDP no longer holds. While economic growth has been tepid over the past two decades in advanced economies, balance sheets and net worth that have long tracked it have tripled in size. This divergence emerged as asset prices rose—but not as a result of 21st-century trends like the growing digitization of the economy.

Rather, in an economy increasingly propelled by intangible assets like software and other intellectual property, a glut of savings has struggled to find investments offering sufficient economic returns and lasting value to investors. These savings have found their way instead into real estate, which in 2020 accounted for two-thirds of net worth. Other fixed assets that can drive economic growth made up only about 20 percent the total. Moreover, asset values are now nearly 50 percent higher than the long-run average relative to income. And for every $1 in net new investment over the past 20 years, overall liabilities have grown by almost $4, of which about $2 is debt. more>

So where’s Europe’s real source of strength?

By Justin Urquhart Stewart – We are all familiar with the large political behemoths that dominate our globe, not just in terms of political influence, but also through their financial strength. The United States, although having a federal structure, has power centered very clearly on Washington. The same would apply to the other superpower, namely China, albeit under a completely different totalitarian political system. As events in Hong Kong have so perfectly illustrated, any thought of an alternative political view or opinion, let alone action, will not be tolerated.

We should also mention Russia, who although no longer a superpower, is still formidable and a potentially dangerous entity. By way of illustration, the value of the entire economy of this geographical giant, as measured by its GDP (Gross Domestic Product) is less than half of that of Germany. It, too, despite nominally titling itself as a democratic nation, is quite obviously under a firm central system of Putin’s command and control.

These three, therefore, stand in great contrast to the real strength and opportunity supplied by the structure of the EU. Since its birth back in the 1950s, some have desired and dreamt of creating an alternative to the US via “a United States of Europe”, with a similar centralized strength and concentration of power in order to combat those other leviathans. more>

Europe’s strategic autonomy: A good idea, but poor PR

By Kinga Brudzinska – The idea of EU strategic autonomy originated in the field of security and defence in St. Malo Declaration (1998) and later in the 2016 EU Global Strategy. But it was not until French President Emmanuel Macron’s speech at Paris’ Sorbonne University in September 2017 that the concept has started to evolve and expand to other policy fields (encompassing i.e. industrial and technological independence) and has gained ground in Brussels and the EU capitals.

In the face of the COVID-19 recovery, a rivalry between the US and China on the global stage and the EU’s ambitions to bolster its position in the world, the debate on Europe’s ‘strategic autonomy’ and its freedom to act, has been receiving even more prominence. Not always in a positive sense.

While some European leaders see the EU’s ability to act autonomously and more independently from the United States as a political imperative to enable the continent to decide its own future without overly depending on others, others look at it with more reservation and skepticism.

For example, in Eastern Europe, together with the Baltics – countries’ with a strong pro-American orientation – fear that investing in European strategic autonomy will weaken the long-standing transatlantic bond and will become a synonym for protectionism, especially without the UK in the EU. There is also an old distrust in the EU, including in Eastern Europe, about France’s real intentions. As noticed by the Economist, in short, the idea of “strategic autonomy” and “sovereignty” has exposed old cracks within the European Union over how far Europe should, or could, do more to defend itself. more>

‘History will not Judge us Kindly’

Thousands of pages of internal documents offer the clearest picture yet of how Facebook endangers American democracy—and show that the company’s own employees know it.
By Adrienne LaFrance – Before i tell you what happened at exactly 2:28 p.m. on Wednesday, January 6, 2021, at the White House—and how it elicited a very specific reaction, some 2,400 miles away, in Menlo Park, California—you need to remember the mayhem of that day, the exuberance of the mob as it gave itself over to violence, and how several things seemed to happen all at once.

At 2:10 p.m., a live microphone captured a Senate aide’s panicked warning that “protesters are in the building,” and both houses of Congress began evacuating.

At 2:13 p.m., Vice President Mike Pence was hurried off the Senate floor and out of the chamber.

At 2:15 p.m., thunderous chants were heard: “Hang Mike Pence! Hang Mike Pence!”

At the White House, President Donald Trump was watching the insurrection live on television. The spectacle excited him. Which brings us to 2:28 p.m., the moment when Trump shared a message he had just tweeted with his 35 million Facebook followers: “Mike Pence didn’t have the courage to do what should have been done to protect our Country and our Constitution … USA demands the truth!” more>

Updates from McKinsey

A first step to racial equality? “Fundamentally improve job quality.”
MCKINSEY GLOBAL INSTITUTE – JP Julien was nine-years-old when he learned that place matters.

Now an associate partner, JP co-leads our Institute for Black Economic Mobility and led the research for The economic state of Black America: What it is and what it could be. In 1998, he and his Trinidadian American family of six moved from a low-income town in New Jersey to nearby Bloomfield. The 15 miles in between made a world of difference to his life.

Twenty percent of his first town’s residents lived below the poverty line at the time. The grocery store was a 20-minute drive away, and there were few nearby parks or playgrounds. “My mom took two buses to commute to work in New York City every day—sometimes 90 minutes one way,” he recalls.

Several years later, the family moved to Bloomfield, NJ, about a 20-minute drive away on the Garden State Parkway. “I remember the first day we moved in,” he says. “We had our own backyard, a bank on the corner, a diner a block away. My mom’s commuter train stop was a five-minute walk. My parents let me ride my bike throughout the neighborhood.”

“In third grade,” he adds, “I realized for the first time how important place was in shaping opportunity and your life. And so this research resonated with me on a very personal level.” more>

Updates from Chicago Booth

Leading through Unprecedented Times
By Claire Zulkey – Classes for the 2021–22 school year don’t formally begin until September 27, but 40 second-year, Full-Time MBA students arrived on campus shortly after Labor Day to prepare for their role as LEAD facilitators. One of the first experiential MBA leadership development courses at a major business school, LEAD is an integral component of all MBA programs at Booth, with varied formats for Full-Time, Evening, Weekend, and Executive MBA cohorts. All first-year Booth students participate in LEAD, but only a select group of them come back as facilitators their second year to help mentor incoming students.

Traditionally, LEAD is conducted entirely in-person, and even includes an overnight trip to Lake Geneva, Wisconsin, where students participate in ropes courses, improv, scavenger hunts, ultimate frisbee, and other activities that foster collaboration, creativity, and camaraderie. Last year’s programming faced the challenge of moving online due to the COVID-19 pandemic. Even virtually, many first-year students gained valuable experience through the LEAD program, and were inspired to come back as LEAD facilitators this year. That includes Peter McNally, who recently completed a summer internship with the Boston Consulting Group. Prior to Booth, he built a research and consulting organization at the University of Pennsylvania focused on social issues around the globe.

“Last year’s LEAD facilitators did a good job making it feel welcoming. They brought a lot of enthusiasm and made it feel like this is a warm, positive space,” McNally says of his eight-person squad of other first-year students. “That’s easier said than done on Zoom.” He refers to each squad as “this little family.” He continues, “I’m not sure if this is something unique to Booth, but there’s a positive sense of competition: we want our cohort to be the happiest, the most welcoming.” more>

How democracy can win again

Democratic erosion in Hungary is symptomatic of structural problems afflicting most democracies, even threatening the future of civilization.
By Gergely Karácsony – My political awakening coincided with the systemic changes that unfolded following the collapse of communism in Hungary in 1989. I was both fascinated and overjoyed by my country’s rapid democratization. As a teenager, I persuaded my family to drive me to the Austrian border to see history in the making: the dismantling of the Iron Curtain, which allowed east-German refugees to head for the west. Reading many new publications and attending rallies for newly established democratic political parties, I was swept up by the atmosphere of unbounded hope for our future.

Today, such sentiments seem like childish naivety, or at least the product of an idyllic state of mind. Both democracy and the future of human civilization are now in grave danger, beset by multifaceted and overlapping crises.

Three decades after the fall of communism, we are again forced to confront anti-democratic political forces in Europe. Their actions often resemble those of old-style communists, only now they run on a platform of authoritarian, nativist populism. They still grumble, like the communists of old, about ‘foreign agents’ and ‘enemies of the state’—by which they mean anyone who opposes their values or policy preferences—and they still disparage the west, often using the same terms of abuse we heard during communism. Their political practices have eroded democratic norms and institutions, destroying the public sphere and brainwashing citizens through lies and manipulation.

Nativist populism tends to be geared toward only one purpose—to monopolise state power and all its assets. In my country, the regime of the prime minister, Viktor Orbán, has almost captured the entire state through the deft manipulation of democratic institutions and the corruption of the economy. Next year’s parliamentary election (in which I am challenging Orbán) will show whether Hungary’s state capture can still be reversed. more>

America is still stuck in the world 9/11 built

By Sean Illing – Did 9/11 pave the way for Donald Trump?

That’s a big question, and until I read Spencer Ackerman’s new book, Reign of Terror: How 9/11 Destabilized America and Produced Trump, I hadn’t really thought about it. Ackerman is a longtime national security journalist who’s covered the “war on terror” since its inception roughly two decades ago.

Ackerman’s answer to the above question is yes, but his thesis is even more pointed: The war on terror — and the panoply of excesses it unleashed — eroded the institutional armor of American democracy and left the country defenseless against its own pathologies. And those pathologies, which Ackerman lays out with meticulous attention, prepared the ground for a figure like Trump.

Reading Ackerman’s book was a bit of a whirlwind. I was 19 years old when the Twin Towers fell. I’ll never forget watching the planes hit the wall. I’ll never forget how confused and angry I was. And I’ll never forget the thoughts running through my mind as I realized I was heading to boot camp in just four months. more>