Why we need institutions to solve the world’s problems

With the extraordinary measures from the European Central
Bank this week, the world is once again looking to monetary
policy to provide a source of stability. It is necessary to look
back only a week to the causes of the current currency volatility
and it will be clear that central bankers’ best efforts will not be
enough if all the major stakeholders in this crisis do not act
together.
This week’s events are the latest of many examples I have
observed in nearly half a century in global affairs. The “wicked
problems” which direct events on a global scale can only be
addressed when all stakeholders of society are able to come to
common agreement through dialogue and interaction, based on
mutual trust.
The world is now beset with interconnected, complex challenges
driven by unprecedented global forces. These forces are well
known, if not well understood, and have been much discussed
this week in Davos – not only in the economic sphere, but
equally in the geopolitical, technological, and social dimensions.
From the breakdown of nation-states to the burnout of leaders
They include the breakdown of nation-states as citizens redefine
their identities through the forces of technology and
globalization, the changing nature of work and a critical
employment crisis in both developed and developing countries,
long-term shifts in growth levels across the developed world, a
“mid-life crisis” in emerging economies, a “burnout” syndrome in
leaders who are stretched to their limits,  and the re-emergence
of strategic competition between countries and regions as the
realities of resource limits take effect.
These and many other global trends are multiplying the number
and complexity of challenges which reach beyond traditional
spheres of governance and the formal frameworks of our
international system.
Challenges such as these demand a new kind of global
institution. While we may not entirely know what the institutions
of tomorrow will look like, we do know that the environment in
which they operate will not be any easier than the one we
currently live in.
We know that the institutions of tomorrow will need to be
informal, flexible, and agile, because challenges are emerging
faster than ever and institutions need to be responsive above all.
We know that they will need to be networked, because challenges
cannot be addressed without the most relevant leaders and
insightful expertise in the room. We also know that institutions
must be able to bring people together online as well as in person,
as progress is made through continuous interaction, face to face
and virtually.
Importantly, we know that institutions, to be effective, need to be
trusted and impartial.
This week, the World Economic Forum received formal
recognition as an international institution for public-private
cooperation . It is my hope that this will provide the basis for
fulfilling our mission, to give both context and challenges a
continuum where leaders can shape answers that go beyond the
interests they represent and move us forward.