WEF and McKinsey launch the Global Cooperation Barometer

17 January 2024 Consultancy-me.com 5 min. read
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The world’s cohesion is under pressure, exemplified by the number of wars and (economic) conflicts. That is according to this year’s annual Global Cooperation Barometer, a report the gauges the current levels of global cooperation across five different pillars, which gives a macro look at global cohesion.

The Global Cooperation Barometer is conducted by the World Economic Forum (WEF) in collaboration with consulting giant McKinsey & Company. The report was launched at the kickoff of this year’s edition of the WEF’s annual meeting of public and private sector leaders in the Swiss mundane city of Davos.

McKinsey & Company is one of the top strategic partners of the World Economic Forum, feeding its community of CEOs and leaders with insights that can help shape future planning.

WEF and McKinsey launch the Global Cooperation Barometer

Some of the main conclusions from the Global Cooperation Barometer include things like the idea that competition between businesses does not preclude cooperation that can have a positive impact on the world, that cooperation should be seen as a tool that can help counter geopolitical shocks, and that organizations need to find ways to leverage cooperation as a way to avoid issues with supply chains, among other important points.

“It’s clear that on some dimensions the world has become increasingly divided, yet the barometer shows that when you look at the full picture, global cooperation has remained surprisingly robust over the last decade,” said Bob Sternfels, global managing partner at McKinsey.

“We’ve seen progress in collaboration across multiple areas, with special cause for optimism on climate and nature, and breakthroughs in frontier technologies that draw on global contributions to innovation.”

On the whole, the barometer shows that global cooperation, which had been on an upward trend for most of the past decade, has experienced a slight decline (down 2%) since 2020. That hiccup is, of course, linked with the global Covid-19 pandemic, which caused a general downturn around the world in many different areas.

Overall cooperation has been marred in recent years by conflict in many regions, including even Europe since the outbreak of war in Ukraine, which has significantly impacted economic powerhouses in Western Europe, like Germany, which struggled to find an alternative to Russian gas after sanctions, for example. The UN warned that early 2023 saw the highest level of violent conflict globally since World War II.

WEF and McKinsey launch the Global Cooperation Barometer

Pillars of global cooperation

The five pillars of global cooperation formulated by the Barometer are: trade and capital, climate and nature, innovation and technology, health and wellness. Most of these areas have been seeing a significant increase in cooperation in recent years, with the exception of peace and security. That reflects the wars and conflict that have been on the rise recently.

Overall, the highest levels of cooperation are seen in the area of trade and capital. Global economic integration has been growing for many years, driven by the highly interconnected nature of the global economy and an increase in trade and people flows. This all was impacted negatively by Covid-19, of course, but returned pretty swiftly to positive growth post-pandemic.

Since 2012, there has been a more than 30% increase in cooperation in the pillar of innovation and technology. Between 2012 and 2020, that was mainly in cross-border data flows and IT services trade, but since 2020, some crucial aspects, such as cross-border patent applications and international student flows, have begun to decline.

In the past two years or so, AI and generative AI have become the stars of the show in tech and innovation, with a huge amount of hype around powerful tools like ChatGPT. That trend is also unlikely to slow down any time soon, with a previous McKinsey report noting that generative AI, in all its myriads forms and applications, could add up to $4.4 trillion to the global economy annually.

The methodology for creating the Barometer included looking at huge amounts of data from places like the World Bank, the IMF, and various UN agencies, among other sources.

Davos

World leaders are currently convened at Davos to discuss and take action on the current state of the world economy and geopolitics. In the buzz of activity there have been panels and discussions on AI, talks on continuing aid for Ukraine, discussions on the escalating conflict in the Middle East, and, of course, there is a major focus on the challenges of climate change.

“Although the world is heading towards a dangerous divide by some measures, elsewhere there are prospects for and progress on cooperative arrangements. For instance, for the first time since countries began meeting to address global warming, an agreement was reached at the COP28 climate change conference on transitioning away from fossil fuels,” noted the McKinsey report.