Economic opportunity

What are the main responsibilities of a government towards its citizens? One of the basic covenants of social contracts in democratic societies is the promise to allow people to live their life freely and to ensure their economic well-being — at least by facilitating chances to develop businesses, and to pursue other economic opportunities. 

Trade is one of the founding elements of the transatlantic relationship.  Although leaders frequently reference shared democratic values, the alliance is still largely founded on trade and economic ties. As such, it is vital to nurture that economic relationship, especially as China’s rising prosperity has revealed differences between how the U.S. and Europe respond to economic competition.

Lack of Opportunity

Drawing on Sarah O’Connor’s Financial Times article “We are drowning in insecurity’: young people and life after the pandemic,” a text that all participants were asked to read, one participant argued that growing economic insecurity among the younger generation has served as a breeding ground for extremist political views both on the left and right. Radicalism partially stems from the lack of economic opportunities and unmitigated globalization that disadvantages some populations. The group generally agreed that lack of economic opportunity drove many Americans and Europeans into the arms of populists. 

 The NextGen Network members criticized insufficient regulatory measures, arguing that more attention should be paid to financial bubbles and the quantitative easing tactics taken by governments on both sides of the Atlantic. “Where is the money going? Not to the working class or even the middle class” they claimed. There’s a perception among the public that people – both in the U.S. and Europe – don’t have equal access to economic opportunities. 

Adapting to a Digital Economy 

Acknowledging the Biden administration’s greater willingness to tax the richest Americans than the previous administration, workshop participants argued that there is still significant need to modernize tax codes. Discussions on taxation must include the issue of digital taxation and be held at international, OECD level. If digital taxation is left out of the conversation, then the steps the Biden administration is taking will not be consequential enough. 

Strengthening the trade relationship is impossible without contending with the digital economy. Theoretically, the digital economy has been hailed as more inclusive than the traditional model, but the pandemic revealed a different reality. “We couldn’t even get schoolchildren across the United States to learn online” one person remarked. Remote working style is very beneficial for some people, but either costly or completely unavailable to others.  Relatedly, another expressed frustration with the fact that most discussions on innovation are focused on big tech even though a lot of the opportunities for growth right now are in the physical world, like in medicine and transportation. Both Europe and the U.S. would do well to remember that innovation is not confined to unicorn start-ups. 

Recommendations for strengthening economic opportunity:

  • Nurture economic relationships and embrace data as a new commodity.

  • Target innovation in more physical parts of the economy, like medicine and transportation.

  • Collaborate on issues of economic opportunities for the middle class.

  • Prioritize negotiations on EU-US trade agreements, like the new trade and technology council.

  • Prioritize economic inclusivity

NextGen Insight:

Increased Economic Inclusivity

by Savannah Lane

 

Increased Economic Inclusivity and Disrupting the Status Quo: It Just Makes Cents

The European Union and United States’ deeply intertwined trade relationship has established itself as one of the most robust bilateral trade relationships in the world, withstanding various trials and tribulations over time. Bringing together the minds of the “next generation” through the Aspen Institute’s NextGen Network, this cohort of young professionals from all over the world explored this relationship with the goal of a more comprehensive understanding of how to strengthen it. For decades, economic growth has been measured in ways that has promoted prosperity at all costs, excluding a fully collaborative growth model, and reducing overall opportunities for maximum efficiency. With institutions aimed to maintain not only this economically based security relationship, but collective security in general on a larger scale (NATO, the OECD, the United Nations, and more), we see a particular focus on the quantitative and measurable aspects of furthering economic opportunities and relationships. However, to meet the unique challenges that the 21st century has presented to the world thus far—and will no doubt continue to present—it is clear that the quantitative elements and methods of measurement of this unique relationship must take a more creative approach to build economic opportunity. 

In the year 2020, people around the world experienced anguish, loss, and suffering on a personal and international level that drastically altered the workforce and global economy following the novel COVID-19 pandemic. Throughout this global emergency, we witnessed the cracks in the system painfully emerge and widen. From the levels of unemployment skyrocketing, lack of access to technology and/or broadband access to maintain virtual schooling opportunities, lack of provisions and/or support for those with disabilities, and exacerbated gender inequalities due to existing gendered roles in the division of labor, the coronavirus proved to be a sustained disruption for billions of people around the world.  These challenges have even more so predominantly impacted women, communities of color, and those with disabilities. We are now at a critical juncture in which the recovery efforts to combat the challenges presented from the COVID-19 pandemic must also combat the challenges that lingered far before the widespread disruptions exposed them. With ever-widening inequalities and increased global vulnerability, international communities, governments, and institutions alike must commit to rebuild in a collaborative manner to combat these growing challenges. 

Addressing these challenges will require remedying the systemic failures and complete exclusivity of the current economic model and focusing on building a more resilient and sustainable economic model through increased inclusivity at its very core. It should be noted that this paper does not seek to fully focus on the inequalities and challenges that inequitable wealth distribution presents to the global economy on a financial and personal level, but instead will focus on understanding how to implement and ensure more inclusive financial systems. Throughout this period of economic recovery, regrowth, and a rebuilding following this unique period in our collective history, the transatlantic relationship must be hyper focused on inclusion at all costs, creativity, and willingness to disrupt the status quo. Further, members of the transatlantic relationship must devote concerted effort to ensure that there are opportunities for collaboration and a seat at the proverbial table, regardless of gender, age, disability, technological developments, sexuality, and religion, among others. 

In an attempt to better understand the need for an inclusive approach to building economic opportunities, the Center for Economic Inclusion shares utilizing a growth strategy fostered by inclusive growth models provides increased efficiency and opportunities for more deeply engaged and innovative markets. Further, these studies demonstrated directly that inclusive growth makes fiscal sense. Moreover, research conducted by McKinsey & Company found that “unlocking women’s economic potential in the workforce over the coming years could add $2.1 trillion in GDP by 2025.” This study further articulates that a lack of inclusion economically results in slower economic growth, mobility, and distribution. So why is it that countries and companies alike are so hesitant to implement economic inclusive growth practices? With little understanding of how to tackle this vast problem of growing inequality, the lack of actionable steps for implementation makes this challenge daunting. Outlined in this paper are initial steps to move the conversation into action. 

1. Develop metrics of inclusion

Just as it is nearly impossible to diagnose a broken bone without x-rays or imaging, it is impossible to diagnose the reality of how deeply inherent exclusion is rooted in our economic models without concerted efforts to develop specific metrics and methods to properly understand the challenge of exclusive economic practices. It is imperative for economic policy makers and government institutions on both sides of the Atlantic to stress the need for a diagnosis period for underserved or underrepresented groups in the various sectors of the economy. From the grassroot levels of local government to international levels, it is critical to implement inclusive policy practices for increased metric determinants. Ideally, partnerships and efforts from local governments, NGOs, think tanks, corporations, and international bodies would push this momentum of understanding measurements of inclusive practices even further in stressing the importance of this evaluative period, as we see the world continue to change even more drastically with impacts from the pandemic.

To build inclusive opportunities and policies and create measurable goals, we must first understand what to measure to address the lack of inclusion in economic models. Efforts from NGOs and think tanks, like that of the National Democratic Institute and their efforts surrounding Political Inclusion of Marginalized Groups, corporations like that of Deloitte, and international bodies like the OECD, NATO, and the World Bank, all have a vested interest in seeing increased success from inclusive practices and the resources to propel this type of initiative forward. Alongside these initial metrics, it will be critical to incorporate the traditionally used quantitative measures and seek to understand all levels of barriers to access for a holistic understanding of the transatlantic economic relationship. It is important to measure typical economic indicators like income and consumption and further dive into metrics of those in the workforce that are not typically included in the labor market, like those who are differently abled, women, and others. Utilizing consistent and more creative markers for economic inclusivity across governmental and nongovernmental spectrums can lead to more robust economic policies and a better understanding of the trends and challenges to increasing inclusivity. 

2. Invest in multi-sectoral collaboration for inclusive economy

Efforts to build opportunities for partnerships between corporate settings, international institutions, policy makers, NGOs, and other organizations are vital to sustain the implementation measures to increase opportunities for those who have been traditionally excluded from the current economic model. Through a more thorough understanding of opportunities and potential for collaboration, the corporate world can be encouraged to work alongside at the diagnosis level, but also work to set clear and visible goals to understand, and work to prevent roadblocks in the path for inclusion. Moreover, schools, communities, businesses, and policymakers can encourage a partnership to build professional pipelines through increased mentorship, apprenticeships, visibility, and local programming regionally. Efforts to destigmatize local, regional, or trade-based schooling is also critical for increasing educational opportunities and efforts.

3.  Europe and the United States must demonstrate visible action to convene and collaborate at the highest level

Through a transatlantic summit dedicated to assembling leaders, advocates, businesses, and policy leaders alike, opportunities for continued efforts to bring inclusive practices to the forefront of both corporate and community worlds can be fostered. With a highly visible international summit of leaders from both the policy spaces and corporate worlds, we can see high-level meetings convened, communiques developed, and social media campaigns launched to accompany the international delegations and the results of the summit. Additionally, efforts to increase inclusion throughout the summit can be utilized with an offering of youth-led opportunities to empower conversation and challenges for change and potentially to even foster policy and/or essay-based competitions to put forth unique ideas and presentations. International opportunities for collaborative and increased visibility will serve as reminders of the need for open dialogue and progress in the realm of international inclusive practices. 

With the challenges that have been presented thus far in our continuously developing economy, there is no room for complacency. With anticipated radical changes from the world, the global economy, influence of technology and more, the ability to remain steadfast towards an economy of inclusivity will allow for increased participation and profits in the long run. Through these initial steps, Europe and the United States can harness the power of measurements of progress, clear goal setting, and collaboration to make a breakthrough towards global efforts of inclusive practices, becoming a leader in inclusive economy.