Fireside Chat, Interview, Conference Presentation
Dr. Dambisa Moyo, Economist and Author of "How Boards Work"
- A global economic rebound distinct from a full recovery is underway, with inflation risks, aggregate demand shocks, and a specific economic drag forecast to emerge by the end of next year; climate change and the energy transition are expected to act as massive near-term growth drags.
- Inflation and demand shocks may exacerbate a K-shaped recovery where inequality widens, and if the U.S. fails to achieve sustainable growth of at least 3% annually, the international narrative defending democracy and market capitalism will struggle to gain or retain adherents.
- Demographic shifts project the U.S. to become a majority-minority society by 2050, yet underinvestment in education within minority groups could trigger a permanent recession by that time, while India is unlikely to reach herd immunity before February 2023.
- The U.S. government faces potential inability to meet entitlement programs, a deficit concern previously highlighted by the Congressional Budget Office in 2016, alongside infrastructure rated D plus and a lag in technology and data-driven governance compared to global competitors.
- China's government is perceived to possess the vision and capacity for large-scale programs comparable to the U.S. in the 1950s, posing a competitive challenge if it continues to demonstrate appealing economic results that contrast with U.S. short-termism.
- Short-termism in public policy and corporate behavior is expected to hinder long-term solutions, creating a disconnect between economic planning and political election cycles that necessitates reforms such as six or seven-year single terms for officials.
- Public officials are recommended to adopt clawback restrictions and malice clauses similar to private sector practices to ensure accountability for long-term outcomes, with compensation models inspired by the Singapore model to attract top talent.
- Companies and pension funds are expected to shift focus toward subcontractors and suppliers, and allocate portfolios more aggressively toward infrastructure build-out, as diverse firms are projected to demonstrate higher return on equity and lower costs of capital.
- A "wall of talent" exists among women, Black, Latino, Asian, and non-traditional backgrounds that corporations must access by broadening hiring and board apertures beyond the CEO pipeline to include expertise in technology, academia, healthcare, and geopolitics.
- Financial exclusion remains a critical issue for minority groups, specifically Black women, necessitating the dismantling of structural impediments like redlining and the expansion of capital access through initiatives such as "One Million Black Women" to improve financial literacy and savings.
- Institutional investors and asset owners are urged to utilize their "wiggle room" to direct capital toward social improvements, addressing the "jobless underclass" risk created by the confluence of technology, digitization, and demographic shifts.
- U.S. competitiveness is threatened by a perceived "impotence of public policy," a fractured corporate-government relationship, and a lack of cooperation with democratic allies on global challenges like pandemics, while the government is expected to have more room to innovate in asset management to address these gaps.