During those terrifying first few months of the pandemic in spring 2020 a call-to-arms could be heard.
An idea that this crisis could become the catalyst for a more equal world, perhaps by harnessing the (arguably illusory) ‘we’re all in this together’ zeitgeist.
The clarion call came from billionaire CEOs and environmentalists alike. JP Morgan’s Jamie Dimon wrote of his ‘fervent hope that we… rebuild an economy that creates and sustains opportunity for dramatically more people’; at the same time Greta Thunberg was urging the world to take a ‘new path’ because ‘our society is not sustainable’.
Modern economists such as Thomas Piketty argued Covid-19 was a unique chance to reduce inequality, as did Black Death historian Walter Scheidel, who used previous pandemics to illustrate his point.
By June that year – when worldwide Black Lives Matter protests were spurring many businesses to boost their diversity programmes – the World Economic Forum (WEF) and Prince Charles joined forces to launch a new plan to stimulate post-pandemic growth: The Great Reset.
The Great Reset
‘The pandemic represents a rare but narrow window of opportunity to reflect, reimagine and reset our world,’ said WEF founder and Chairman Klaus Schwab. ‘Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a “Great Reset” of capitalism.’
Two years on, wherefore art the Great Reset now? The campaign hasn’t been helped by its ‘Build Back Better’ motif being co-opted by politicians as diverse as Joe Biden and Boris Johnson, still less by conspiracy theorists fearing it’s part of a plan to control people’s every action.
That doesn’t mean that the sentiments behind it are dead and buried. As Peter Drobac, Director of the Skoll Centre for Social Entrepreneurship, explains, the onus should fall on corporations rather than governments.
‘This is the moment business can step forward to really think about how our actions can respond to immediate problems but also build a world that’s fit for purpose and make our children’s futures safer and brighter. Clearly, governments can’t handle this on their own: we’ve seen our political leaders aren’t up to the tasks. Instead, this is a time for new thinking and risk-taking: it’s a time for entrepreneurship and businesses to step up,’ says Peter.
Social entrepreneurs come and disrupt the status quo; they see around corners and find opportunities others don’t
One notable achievement of last year’s COP26 climate summit came not from governments brokering agreements, but business: the $130 trillion (£97trn) pledged by the Glasgow Financial Alliance for Net Zero coalition of banks, investors and insurance funds. Peter believes social entrepreneurs could also drive change.
‘[The Great Reset] is a moment made for social entrepreneurs,’ he says. ‘Social entrepreneurs come and disrupt the status quo; they see around corners and find opportunities others don’t. During the pandemic, they’ve been filling the void [usually occupied by governments], supporting those with social vulnerabilities in the UK or who need oxygen in India. Over the next 25 years, that’s going to be really important’.
Business schools will have a crucial role in shaping future social entrepreneurship. The School established the world’s first impact investing executive programme, with one alumnus launching Barclays’ first sustainable investment fund. Every year, the Skoll Centre also runs its Map the System competition. In 2021, it brought together students from international educational institutions to address issues ranging from food poverty to sustainable cities.
‘[At the School] we do a lot of work with students on entrepreneurship, and how you can move into a big firm and actually have influence and drive change. There are plenty of examples of people who want to do the right thing, but they just don’t know how,’ adds Peter.
Social entrepreneurs may need to seek the nous of more experienced business executives, as illustrated by Digital Divide Data (DDD), a New York-based ‘impact sourcing’ organisation that provides digital content, data and research services through operation centres in Kenya, Cambodia and Laos that offer career opportunities to people from underserved communities.
‘DDD’s founder and initial management team knew they focused most of their energy on the company’s social mission rather than on making money, so they made sure their board included some tough-minded, business-savvy members to ensure financial sustainability; it was a decision that helped save the company,’ says Marya Besharov, Professor of Organisations and Impact and the Skoll Centre’s Academic Director.
Social entrepreneurs have also traditionally been stymied by their lack of funding. ‘They can’t access enough capital,’ says Alex Nicholls, Professor of Social Entrepreneurship. ‘Because they’re seen as ‘unconventional’, it’s difficult for them to grow.’
According to Alex, impact investment currently equates to less than $1 trillion of assets under management globally, paling in comparison with the $500–600 trillion of assets which sit with companies who purport to pursue a more sustainable agenda through ESG (environmental, social and governance) reporting.
Yet, for many companies, ESG reporting means, as Alex puts it, ‘not really doing much other than taking out tobacco and arms from people’s portfolios and making them seem nicer’. If the Great Reset is to become a reality, new impact-led standards for reporting will be essential.
‘Sustainability accounting is so important because once the rules are rewritten and you get “impact” on P&L statements, it’ll really change things,’ says Peter, who notes the appearance of the ‘Accountants can save the world’ slogan on campus.
The International Financial Reporting Standards Foundation recently created a sustainability standards board. ‘That could establish a common baseline,’ says Alex. ‘That’s a potentially huge step forward. It would begin to weed out the greenwashing. If we get agreed standards, then the $500–600 trillion of assets under management that’s sitting within companies that talk about ESG could come into play, whereas at the moment, no one has to think about what that money is actually doing or its impact.’
Although new sustainability-led reporting standards and social entrepreneurship will be crucial to the Great Reset’s success, the real driving force could come from an unlikely source: workers. At the same time as the Great Reset was gaining traction in April 2020, the UN Special Envoy on Climate Action and Finance Mark Carney, writing in The Economist, predicted that ‘stakeholder capitalism’ would come under scrutiny. ‘Companies will be judged by “what they did during the war”, how they treated their employees, suppliers and customers, by who shared and who hoarded,’ he wrote.
Two years later, Carney’s predictions have come to fruition: the pandemic has led to labour shortages in many places, as millions of people have reassessed their jobs during the pandemic, with many leaving because they did not feel valued by their employers. As such, many organisations have been forced to undergo their own internal ‘reset’, such as allowing staff to determine their working hours or locations, bolstering mental health policies or ditching cultures of presenteeism.
Of course, inequality still exists – there is a vast gulf between staff complaining about Zoom fatigue and those in blue-collar jobs unable to work from home, for example. During the pandemic, food banks were used in record numbers, while total billionaire wealth reached a record $10.2 trillion according to UBS’ Billionaires Report (2020 also saw Amazon’s Jeff Bezos make $13 billion in a single day).
Yet, these CEOs will be crucial if business is to reinvent itself. The Great Reset requires ‘visionary leadership’ according to Peter, who notes that ‘if you have somebody like Paul Polman, the school board chair, who completely transformed a massive conglomerate during his 10 years at Unilever, it is possible’.
In fact, the charismatic leaders who could propel social change could come from anywhere, says Peter: ‘They could currently be leading an SME or working as an intrapreneur in a big firm; they could be running their own social start-up or non-profit; while some of the best social entrepreneurs I’ve worked with have come from the public sector: civil servants and those working in ministries of health.’
Peter cites knowledge equity – the notion that lived experience can be just as useful a source of new ideas as educational qualifications – as one means to forging a very different future. ‘All forms of knowledge and expertise are valuable,’ he says. ‘There might be a Malala or a Mandela in every community. And we need to unlock that potential. Elite universities are not historically very good at this stuff – people like me have lots of degrees, publish lots of papers, but people with lived experience of problems have tremendous potential to drive change.
‘So how do we build those coalitions and bring new people to the table? It’s not about tick boxes, but about valuing all forms of expertise. So we started a knowledge equity fellowship this year, with some amazing lived experience leaders from the UK, people who’ve founded their own organisations and have come to the School to contribute to our research and teaching.’
Capitalism means allowing capital to make a return on investment: the model has changed before and it can change again
Businesses may be key for driving the Great Reset, but little can be achieved without the governments who create legislation and regulation. Their bailouts during the pandemic led to a mindset shift, making the concepts of modern monetary theory (key tenet: nations should print as much money as they need) and universal basic income more credible.
Few people would want the suffering of Covid-19 to be the mechanism by which business is reimagined. Yet Alex is confident the Great Reset could be within our sights; too many within business now seem determined not to let this crisis go to waste.
‘The real takeaway is that capitalism made in the 18th century is not what it meant to Karl Marx and Friedrich Engels in the 19th century, which again is not what it means today, or even what it meant in the 1970s… The essence of capitalism is about allowing capital to make a return: the model has changed before and it can certainly change again,’ he says.