How Government and Business Can Tackle Big Global Crises Together

ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.

If there were ever a time for world governments and businesses to come together to fix a crisis, the pandemic should have been it.  Sure, there were some big successes — not least three vaccines in record time. But with millions dead and Covid still running rampant, we certainly can’t call it a win.

So what does that mean for all the other huge crises we’re facing today — from political polarization to unfettered technology, climate change to a war in Europe being waged by a nuclear power?   Can we get it together — locally, nationally, globally – and work to solve these problems in a more cooperative and coordinated way?

Our guest today thinks we can — with much more pragmatic public and private sector leadership. Having spent the past few years in a perpetual state of anxiety about these issues, I’m glad to hear it. But I’m going to need some convincing and I’ll bet that many of you listeners do too.

Ian Bremmer is a political scientist, president and founder of Eurasia Group, and author of the book “The Power of Crisis: How Three Threats – and Our Response – Will Change the World.”

Ian, thanks for being on the show

IAN BREMMER: Hey, I’m very happy to join you.

ALISON BEARD: So I just outlined some of the macro problems that I’m most worried about. What is keeping you up at night?

IAN BREMMER:

Well, nothing keeps me up at night, because first… I mean, truly. I’m an early riser. By dinnertime, I’m usually thoroughly exhausted. I’m not by temperament and anxious person. But that’s not what you were asking.

I worry about a world where half of the species that were around when I was born aren’t going to be. I worry about the ability of humanity to change the planet, whether you’re talking about potential World War III with the Russians, or whether you’re talking about robots taking over the world and disruptive technologies or a new pandemic that would kill 10 or 20 or 100 times more than the 10 to 15 million that have already died from COVID, I mean all of those things are about human’s ability to affect the planet as opposed to just living on it and being affected by it. And as we have that capacity, we have to find ways to live sustainably with each other and live sustainably on it.

ALISON BEARD: So what has stopped us from making meaningful progress so far on those three big ones that you talk about in the book and that you just outline? Sort of the environmental crisis, geopolitical, and technological.

IAN BREMMER: Well, I think we are making meaningful progress, certainly on climate. It’s just that it took us half a century before we were willing to really get started. So it’s going to be much worse than it needed to be. In the case of climate, I mean, you said in the opening we got it so wrong. And I agree. There were a huge number of mistakes that occurred, a lot of indifference politically, a lot of tribalism, a lot of fighting both inside the US and between the US and China. We can point to those things.

But I will tell you that Europe learned a lot of lessons from the past crises that they had. For example, the global financial crisis, from the Brexit crisis, and their response to the pandemic made Europe stronger. So it wasn’t every country trying to go for themselves. Instead, it was Europe making sure that Europe had vaccines. Think about how radically different that is from when the Germans were telling the Greeks, “You guys are lazy and shiftless. You don’t pay taxes. Unless you go through a depression, we’re going to force you out of the EU.” A complete seat change because of the pandemic. So I think that we are on the right track in responding to all these things. And even with some of our most difficult challenges, you can point to places where that’s happening.

ALISON BEARD: But even you point to some extremely significant roadblocks or ways that we’re hindering ourselves, US political polarization, and then also this increasing rivalry between the US and China, those things seem to be escalating.

IAN BREMMER: They are.

ALISON BEARD: How do we turn them around to make sure they’re not stemming the potential progress we could make?

IAN BREMMER: The reality is that the most powerful country in the world today is the United States, and we’re also the most politically dysfunctional and divided of all of the major advanced industrial economies. And that’s not getting better. It’s getting worse. And everything is just getting more anxiety inducing and more us versus them in the US. Also, the most powerful two countries in the world, the US and China, have a relationship that has absolutely zero trust and the trajectory is negative. We are not in a new cold war, but is heading in that direction.

The reality is that for the next 10 years, every policy I look at that could fix those things is very unlikely to come about. Let’s take the fact that the United States is deeply politically dysfunctional and divided and won’t be able to fix this and be an effective global leader. Let’s recognize that the US China relationship is going to have an absence of trust. There will be no kumbaya moment. And even given those two things, let us recognize that there are plenty of ways that we can have effective responses to big global crises.

I just mentioned one in terms of Europe and the pandemic. Climate change – we see an extraordinary amount of global investment away from fossil fuels so much so that the world is likely to be majority renewable energy in terms of global energy if you include nuclear in that. So in other words, majority, not fossil fuels by about 2045. And we’re talking about a trajectory of probably 2.5 centigrade warming. Just five years ago, there were people that were writing that we were heading towards 4 or 5 or even 6 degrees centigrade warming. And that change, which is still anxiety inducing. It’s not near where you want to be, but it’s not destroying the planet either.

That was done despite the fact that the United States and China at the central government level have done virtually no global leadership on climate. It’s been done by young people all over the world. It’s been done by banks who are recognized that their portfolios need to change. It’s been done by Europe. It’s been done by corporations. All of these bits and different actors all over the world that are making a real difference. And it turns out that when you add those things together, the fact that Washington and Beijing aren’t actually leading the world doesn’t necessarily make you want to crawl into a ball and feel like the end is nigh.

ALISON BEARD: So I was going to ask you how the corporate world business leaders can help bridge these divides within the US and between the US and China, but it sounds like you’re saying, “No, forget helping the bridge because the bridge isn’t going to happen. Instead, step up and lead on these issues yourselves.” So what specifically do you want to see from business leaders?

IAN BREMMER: Well, one we haven’t talked about yet is the role of disruptive technologies. We are going to need a global architecture, just like we did for the World Trade Organization on how globalization needed to be managed. We’re going to need that for data. We’re going to need that for algorithms, for artificial intelligence. And there’s no way that governments can do all of the driving on that. Because in the digital space, corporations in the tech space actually exert sovereignty. So those companies are the ones that are going to be the principle actors in building a world data organization. Those companies are going to be as important as governments, maybe even more important than governments in determining what are the rules of the road on ensuring the sanctity of your data and cybersecurity.

I mean, Russia’s just invaded Ukraine. And NATO is doing a lot to provide weapons systems for the Ukrainians to defend themselves. But on cyber, it’s actually companies. It’s companies like Microsoft that are actually going in and providing the understanding on, “Are you being attacked? What are you going to do about it? How do you defend yourselves? How do you identify that?” The biggest attack on the United States in the last two years was SolarWinds, and the US government wasn’t even aware of it until the private sector let them know. So there’s no question in my mind that it’s not just about the private sector taking some responsibility being stakeholders. It’s about them actually being core participants in determining what the rules of the road are going to be in many of these spaces.

ALISON BEARD: Yeah. And you do see that on climate too, with so many auto makers, for example, moving to electric vehicles, prompted by Tesla of course.

IAN BREMMER: And prompted by banks first who created the financing and said, “You know what? We know that with a 10 year horizon on our portfolios, thermal coal is not going to work. It’s not going to make our investors money. And so we need to shift the way we’re thinking.” That drove a lot of ESG. And then that created an environment where a company like Tesla was going to be taken a lot more seriously.

ALISON BEARD: I do want to dig a little deeper into technology, particularly as it relates to the US-China rivalry. You talk in the book about sort of these two tech ecosystems that are developing. So there’s sort of this geopolitical divide, but there’s also this technology divide. What are the implications of that for companies and for people and how does a world like that, that’s bifurcated, actually foster the kind of cooperation that you want to see? If you have China over here on one side and everyone else is cooperating, that doesn’t really work, does it?

IAN BREMMER: No, it doesn’t. And I think that we have to understand that the geopolitical environment when you talk about technology is bipolar. It is the United States and China, and all of the tech companies that really matter are in one of those two countries. The Europeans have much more effective regulatory environment, but they have none of the companies. Japanese have none of the companies. The Canadians have none of the companies. So in reality, it’s a two player game.

But the space itself is increasingly not bipolar. It’s increasingly technopolar. It’s being driven by the companies themselves. And those companies actually have very different perspectives on what kind of a world they see coming in the next 10 years.

I mean, when you look at someone like an Elon Musk, right? I mean, on the one hand he’s got SpaceX, which is really a partner of the US government. It’s a national champion for low earth orbit. NASA and the Pentagon are his two most important clients. If it wasn’t for his relationship with the US government, SpaceX doesn’t work. On the other hand, you’ve got Tesla that is partnering with Chinese companies and scientists to drive their artificial intelligence breakthroughs.

And then you have Elon Musk wanting to buy Twitter and basically saying governments aren’t going to be relevant and we’re going to ensure that we have freedom of speech for everybody. Those are three very different models. And the fact that there are different models among American technology moguls, there’s also different models for Chinese technology companies. They have some companies that are national champions that are really aligned with the government and they have others that are trying to be global players.

Think how different Apple is from Google. Google has no access to China at all. Apple’s like fundamentally on the ground in China. And that what they’re trying to do is ensure that everybody that wants a device is going to buy an Apple device everywhere. Those provide very different perspectives in how these companies are thinking about the future of global data, global tech, global algorithms, the surveillance revolution. And I think it’s enormously important to understand what the future of technology will look like. You can’t just look at what the policies that are being driven by the US and China. You have to look at these tech companies as actors in and of their own right, then it becomes a lot more complicated.

ALISON BEARD: So what should they be doing better? How can they step up in these situations where the rivalry continues, the Republicans and Democrats are still fighting? What should big tech be doing at this moment to make sure that they’re saving us from them or ourselves?

IAN BREMMER: Yeah. No, I mean, I do think you’re right to say it’s from them and from ourselves. Because when we had big food in the ’50s and ’60s and the Americans are becoming the most obese country in the world with all the type 2 diabetes, you didn’t have any effort on the part of the corporations to stop or to limit ensuring that citizens ate as much fat, salt, and sweet as they could possibly get, because that was what was going to drive profitability. It was very cheap and you could maximize your business model that way.

The same thing is happening with the body politic when disinformation and polarization is being just mainlined right into your brain by these corporations. And I do think that as we move towards the metaverse and as young people are spending much of their time as they develop interacting online, intermediated by these algorithms, it’s absolutely essential that the corporations themselves start understanding what the impact of those algorithms are going to have on society, on individuals, on the planet. They have to be willing to test them. They have to write codes of ethics for AI. It can’t just be a libertarian model that you’ve got to figure it out for yourself and your own family.

I mean, I think it’s pretty clear that when the executives of a social media company won’t let their own kids be on it, that there’s something fundamentally problematic with that model. And I think that in the same way that a lot of oil companies were unwilling to do anything until young people said, “You’re destroying the planet. You don’t care about our future. We’re going to make a difference and we’re not going to buy from you. We’re going to hurt your brand,” I think that’s what needs to happen in the relationship between consumers, citizens, and these corporations.

ALISON BEARD: Essentially your premise is that crisis is what prompts action. And we’ve had some big crises, but we’re looking at some even bigger ones. And the hope is that these even bigger ones are what will unite us in some fashion, public and private to work together to fix them. What gives you confidence given the limited success that we have seen in pockets? What gives you confidence that everyone is going to find a way?

IAN BREMMER: Oh, no, I don’t have confidence. I’m hopeful. Hopeful is not confident. I mean, this book is really a way for individual citizens who feel powerless, and showing them that indeed these crises are already creating real opportunities. You mentioned Ukraine. Macron, the French president said that NATO was brain dead. And then after February 24th, when the Russians invaded Ukraine, he said that NATO had electroshock therapy. And now it has a mission and the Fins and the Swedes are going to join. The Asian allies are coming to the Madrid Summit at the end of June. And they’re much more aligned with NATO, when before the pivot to Asia from the United States looked like it was leaving Europe behind. No, now you’re actually bringing the advanced industrial economies together. Putin did that. Putin created enough of a crisis that all of the advanced industrial economies in the world said, “My God, we can’t just allow the alliances and infrastructure and institutions we have to continue to drift aimlessly. We have to actually build them up.”

And I’m arguing that when you get crises like this, you need to find a way to take advantage of them. And you mentioned China, and it’s certainly true that China is much more aligned with Russia today than it was five years ago or 10 years ago. But the Chinese are not happy with how badly this is going. They’re not happy with the idea of being put in the same camp as the Russians if you’re Europe. And indeed in the last week, the conversations that Xi Jinping has had with Macron and with Olaf Scholz, the German chancellor, have been much more about, “Hey, can’t we find a way to get along?” There are opportunities that come out of these crises. And my book is really an effort to say we as human beings, we never actually really put effort in when it’s not hard. We just couldn’t be bothered. You know what? Now it’s getting hard and we can already see the way that humanity is putting effort in. I think that’s a big deal.

ALISON BEARD: You do have some specific recommendations, a green Marshall plan on climate change, a world data organization on sort of the threats of technology, but those kinds of institutions including some of the ones you’ve previously mentioned, the UN, NATO, they do have a reputation for bureaucracy and not necessarily problem solving. So why do you think that new global institutions can make things work going forward?

IAN BREMMER: Well, that’s kind of precisely the point that these institutions develop a reputation for ineffectiveness and bureaucracy when they are no longer new. And the reason for that is simple. It’s because when you create an international institution, any institution, it is aligned with the entrenched interests, power balance that exists in the world at that moment. Over time, the balance of power changes, but the institutions are usually very sticky.

So the security council, my friend, Antonio Guterres, he came out just a couple of weeks ago and said the security council was broken. Can you believe that? The secretary general of the UN said the security council was broken. Number one, because the Russians are run by a war criminal and they have a permanent veto. And number two, the two countries in the world that are powerful, that are most aligned, most aligned with the UN charter, most aligned with human rights support, most aligned with rule of law, most aligned with multilateralism, cannot be made permanent members of the security council. And the reason they can’t be made permanent members is because they lost World War II, Japan and Germany. That’s ridiculous.

Now, what can we do to fix that? Nothing in the security council. We need a new one. I mean, that’s fairly obvious. And so the point is, I mean, actually Donald Trump got this right in a very specific way. He recognized, for different reasons, that NAFTA was broken. Because when NAFTA was created, it was this fantastic trade organization that brought together the United States, Canada, and Mexico, these robust economies that do enormous amounts of trade and business with each other. And it reflected the whole trade relationship. By the time Trump became president, NAFTA was only involved in less than 50% of trade in North America and between those three countries. And the reason for that is because increasingly trade between the US and Mexico and Canada is about data and services, but NAFTA doesn’t cover those because when NAFTA was created, they didn’t exist as components of our trade.

I didn’t like the way Trump threatened the Mexicans and the Canadians to get it done. But the fact is, that the new USMCA is a new trade organization that is higher standard and reflects 21st century trade that is much more effective for our three countries than what we had with NAFTA. It is much less problematic in terms of bureaucracy. Why? Because it’s aligned with the way the world actually works today. So your question is precisely the point. It’s that when institutions are not working, you don’t say, “Oh, we don’t need institutions.” You say “Those old institutions no longer make sense for the world we are presently in. Don’t we need some new ones?” That’s the answer.

ALISON BEARD: We’ve talked about scenarios in which leaders in government and business have banded together around the pandemic in Europe, even more people brought into the fold around Ukraine. You tell a great story in the book about Gorbachev and Reagan, which I’ll let you tell. But I think the idea is when there is one very clear common enemy with no winners or losers among us, but sort of everyone on the planet loses in the face of this threat, that’s an issue and we can get together on it. Do you see climate change as that issue? The one that all of us can come together on.

IAN BREMMER: Clearly. And the pandemic was not because it didn’t have enough of a feeling of, “Oh my God, this is existential for us.” So Gorbachev and Reagan meet in person for the first time. And Reagan asks Gorbachev, “Mr. Secretary, if we were attacked by aliens, our planet, you’d come and support us. You’d fight with us to fight against these aliens, right?” And Gorbachev said, “Absolutely.” And Reagan said, “I would too.” The only people in that room, in that dacha, that little dacha in Switzerland were the translators and the two leaders. So no one actually ever even heard that story. It was never discussed for decades. Gorbachev revealed it himself.

And what was interesting is, people think it sounds kind of silly, but it actually built trust between the two leaders that ultimately led to a significant improvement in the arms control environment between the Americans and the Soviets, and also facilitated much more trust between the two leaders as Gorbachev started engaging in these extraordinary internal reforms that ultimately led to the collapse that in the sense the dismantlement of Soviet empire. And I think that it’s very clear that there are analogies, direct analogies to that are happening all over the world right now.

ALISON BEARD:

Particularly with climate change, don’t you think that Biden and Xi can get together on that?

IAN BREMMER: And that’s not because we like and trust each other at all, but rather it’s because it’s very clear that the alternative to the two largest climate carbon emitters in the world, finding some way to have common purpose on climate is going to be vastly worse for all of us and also for us individually. I think there’s no question. When the going gets tough, that’s when you look for opportunities. They also say it’s not just about crisis. Sometimes they say it’s hard to fix small problems, and sometimes the way you fix small problem is by making them bigger.

ALISON BEARD: And surely, multinational corporations in particular have a role to play here.

IAN BREMMER: One of the reasons we’re not in a cold world with China is the extraordinary economic interdependence between the two countries and the fact that private sector interests in both of those countries, which are very powerful, really want to ensure that that is not broken. In the United States, it’s hard to get smart governments done, but it’s relatively easy to stop things from happening. Private sector corporations in the US are very powerful. They’re very wealthy. The American system is run by money. It’s captured by lobbying interests, and they do not want the United States to make it impossible for them to do business in China. That’s a reality.

The government’s more powerful in China than it is in the United States domestically. But even in China, the private sector has very strong interests in ensuring that you have a lot of economic interdependence that persist between the two countries. And that does affect Xi’s governance, that does affect the way that the Chinese communist party decides to orient itself towards the US, towards the west.

ALISON BEARD: So in the conclusion of your book, you outline three possible futures for the world, nationalism, globalism, and techno utopianism. I’m curious as to which you hope for, and which you think sort of corporate leaders at every level and even citizens should be pushing for.

IAN BREMMER: Well, it’s funny. Obviously I hope for globalism in the sense that I believe that I’m more of a human being than I am an American. I believe that identity matters more. My last book before this was called US versus Them: The Failure of Globalism. Because what happened was a relatively small number of elites got fantastically wealthy in the west and forgot about the importance of the social contract, forgot about their own populations. And so now it’s “Make X great again.” And whether X is America or India or Canada or Germany, I mean, increasingly, this is the driver for the easiest way to make sure that you get lots of votes. It’s a US foreign policy for the American middle class. Well, what about the middle class for the world? Isn’t it important? How are you going to respond to climate change? How are you going to respond to the pandemic if you’re only caring about the United States? So that clearly has to be a driver for responding to solutions. The world is getting smaller. The crises are getting more global. But it can’t be a small number of global elites saying “We’re going to fix it. And we’re going to be the ones, because we’re fixing it, we will benefit ourselves and nobody else.”

ALISON BEARD: Terrific. Well, I will try to be less anxious and more hopeful going forward. Ian, thanks so much for joining me.

IAN BREMMER: My pleasure.

ALISON BEARD: That’s Ian Bremmer, president and founder of Eurasia Group and author of the book, The Power of Crisis: How Three Threats and Our Response Will Change the World.

If you got something out of today’s episode, we have more podcasts to help you manage yourself, your team, and your organization. Find them at hbr.org/podcasts or search HBR in Apple Podcast, Spotify, or wherever you listen.

This episode was produced by Mary Dooe. We get technical help from Rob Eckhardt. Hannah Bates is our audio production assistant and Ian Fox is our audio product manager. Thanks for listening to the HBR IdeaCast. I’m Allison Beard.