Tomorrow, G20 leaders will convene in Hamburg – a historical port city and a success story in “making globalization work for all.” Ever since the city was created in 808, it has been open to its neighbors and to the world, adapting to successive waves of global integration by building on tradition, not becoming its prisoner. Shocks like the introduction of the shipping container saw the port change its focus toward new technology and the training and upskilling that allow people to adapt to a changing economy and ensure sustainable growth. The decline of shipbuilding and the oil industry stimulated entrepreneurs and the authorities to seek and invest in new opportunities.
The recently opened concert hall and promotion of culture is just one example of how Hamburg is capable of redefining itself. It also shows how this pleasant city thinks about well-being and quality of life, not just economic growth. That is a valuable lesson for all of us. We need to change our mindset – abandon the mantra of growing first and distributing later, and embrace equality and quality considerations beforehand. Putting people at the center of our policy making – as the G20 German presidency says – should be the focus of our thinking. We have to make the economy serve society.
This is a global challenge. Many people around the world are disenchanted because the growth model we have followed during the last decades has failed us on three accounts: the financial crisis, increased inequalities, and the impact on environment. We have to admit that in pursuit of economic growth, we have been blind to social progress falling behind. The bottom 40 percent of the income distribution have not seen their lives improve in the last decade. At the other extreme, the highest paid 10 percent of the population now earn 10 times more than the poorest 10 percent – up from 7 times 30 years ago. Wealth is even more highly concentrated – the richest 10 percent in the OECD countries own half of total wealth, while the bottom 40 percent own little over 3 percent.