Worries about income inequality, jobs disappearing due to automation and environmental sustainability are all feeding wide-scale distrust in capitalism as the world knows it, according to a new study released Sunday.
Edelman, a public-relations firm, conducted its 20th annual analysis of public trust in major institutions, surveying 34,000 people in 27 countries and Hong Kong. The data reveal both skepticism about those institutions—including government, business, the media and nongovernmental organizations—and a hunger for leadership on important issues.
Anxiety about future employment prospects, wage gaps between the rich and middle class and corruption have made many people question the very systems of capitalism and democracy, the study found.
“Fears have eclipsed hopes,” said Richard Edelman, the company’s chief executive.
Even in strong economies that appear to be close to full employment, trust in institutions is crumbling, a sign that many people feel left behind, he said. He described this year’s findings as “the great trust paradox.”
Capitalism Under Fire
Globally, 56% of respondents said that capitalism in its current form does more harm than good. In the U.S., that percentage was slightly lower at 47%. In several other developed economies, distrust of capitalism was higher, for instance at 53% in the U.K. and 69% in France.
Fewer than 20% polled globally said the system was working for them personally.
More Pessimistic Than Optimistic
Many people don’t believe they will be better off in five years. That is the case in some developed locales with advanced economies, including the U.S., Japan, France and Hong Kong.
A higher percentage of people see their lives improving in emerging markets, such as India, Saudi Arabia and Mexico. Even in those countries, that majority has eroded over the past year.
CEOs Step Up
When it comes to looming societal challenges, 92% of people said it was imperative for their employers’ CEOs to speak out on issues from the ethical use of technology to climate change, and three-fourths said they believed chief executives should be the drivers of change, rather than waiting for government intervention.
Some CEOs have picked up on this already. Lawrence Fink, chief executive of BlackRock Inc. has been outspoken on topics like slow wage growth and jobs lost to automation. His widely read annual letter to investors, released earlier this month, said that BlackRock would take a tougher stance against corporations that aren’t providing a full accounting of their environmental risks, part of a slew of moves by the investment giant to show it is doing more to address investment challenges posed by climate change. Days later Microsoft Corp. said it would take more carbon out of the air than its operations and those of its supply chain produce by 2030.
Citing the gig economy, the potential for a looming recession, lack of training and advancing automation, 83% of people said they worry about becoming unemployed.
More than 60% of those surveyed said that technology changes too quickly and that the government doesn’t understand it well enough to regulate it effectively.
On the other hand, more than 60% of respondents do trust the traditional media. But many people lack confidence in what they read and hear more generally, especially on social media.
Under New Management
Less than half of those surveyed trust religious leaders, their government or the very wealthy, choosing instead to put their faith in scientists and members of their own communities.
“People trust experts, and they trust people like them—employees or fellow citizens,” Mr. Edelman said.
Crisis of Competence
No institution—not business, government, media or nongovernmental organizations—is seen as both competent and ethical. On the issues that Mr. Edelman believes will be most important in the coming decade—sustainability, income inequality and retraining—government still earns stronger trust than business, he said.
Some companies are so worried about winning back public trust that they have named chief trust officers.
Don’t Be Evil
Nearly three-fourths of respondents said they believe a company can both increase profits and improve the community where it operates.
The results indicate that people are telling companies, “we don’t expect you to run like a non-profit leader. It’s OK for you to make money and still be ethical,” said Tonia E. Ries, executive director of intellectual property at Edelman.
On Friday, home-sharing company Airbnb Inc. said it would update its corporate governance strategy to emphasize company “stakeholders”—including guests, hosts and employees—not just investors. The company will convene a “Stakeholder Day,” modeled on an annual shareholder’s meeting, and modify its compensation program to reward achieving goals like improving guest safety.
“Serving all stakeholders is the best way to build a highly valuable business and it’s the right thing to do for society,” the company said.
Write to Kathryn Dill at [email protected]
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