1 week Ago
This story appears in the November 2024 issue of Forbes Asia. Subscribe to Forbes Asia This month Forbes will host its 22nd Forbes Global CEO Conference in Bangkok. Among the attendees and speakers will be famous entrepreneurs, leaders of world-beating companies, sovereign wealth funds, venture capital and private equity firms, and an intellectual splash of leading economists.
The agenda is titled “New Paradigms.” Forbes believes that coming out of 2024, conventional models of leadership will face storms of change: new governments from elections, greater trade tensions, volatile energy transitions, wildly accelerating tech—the list goes on. Amid this tumult, global leaders might well question their assumptions and try fresh frameworks to move forward, survive and thrive.
The magical formula for economic growth is not one, two or three things. It is hundreds of things done right. For the sake of space, let’s list some key growth ingredients: • Education – Needs to be good quality, widely accessible.
The slowest growing geographical sector in the world is Europe. Is it a coincidence that European universities no longer dominate a list of the world’s best? • Rule of Law – Simple idea here. If entrepreneurs are to stake their future on a business, they’ll need assurance their business can operate in a fair and predictable legal setting.
Or else they won’t do it, or move to another country. • Pro Trade – Trade strengthens all parties. It delivers lower prices for consumers.
It makes domestic industries compete at a world standard. Are tariffs ever justified? Sure. But tariffs are like medicine.
At some point, countries must flush the tariff pills or fail to gain strength. • Ease of Starting a Business – Here’s a shock. Entrepreneurs don’t start businesses for the thrill of filling out forms.
• Stable Money – As Forbes Media chairman Steve Forbes likes to point out, it’s hard to build a house, hospital or highway if the value of a meter or kilogram is constantly changing. Hard to finance a business, too, when the currency bobs up and down. • Simple, Flattish Taxes – Complex taxes benefit only large established companies with armies of lawyers and accountants.
Complex taxes are also an incentive for taxpayers to cut corners (e.g. cheat).
Governments will never get their predicted tax revenue when taxes are complex. Money goes into hiding. • Non-Punitive Regulations – To paraphrase Chinese military strategist Sun Tzu, regulations are political war by other means.
The German government shut down the country’s perfectly running nuclear power plants to make a political statement—thus making it reliant on Russian natural gas. Not good. Now German companies—including its renowned producers of autos and chemicals—pay among the world’s highest electricity costs.
Germany let politically inspired, punitive regulations drive its economy into a ditch. • Respected Leadership, Corruption Not Tolerated – See Singapore, copy Singapore. • Heavy on Government R&D, Light on Industrial Policy – America’s vaunted tech industry can thank large military R&D budgets, from space (NASA and semiconductors), to communications (DARPA and the internet).
Another smart move (or stroke of luck) was to not try to back individual companies. When the American government has tried that, as in the case of solar manufacturer Solyndra in the early 2000s, the result was poor. Leaders can wreck an economy with one or two bad decisions.
To build a thriving economy takes hundreds of things done right—and one desired outcome for our Bangkok event is to help attendees identify a paradigm to guide them to do that..
