WEF: Does the 4th Industrial Revolution Include Anti-Corruption?
The World Economic Forum brings together world leaders, corporate titans and other headline invitees for its annual blue chip meeting. So why are issues of corruption, transparency and accountability missing from its agenda?
Participants will discuss the idea that our globe is entering a fourth industrial revolution of innovation and disruption. Given how much openness and corruption matter for companies’ growth, investment and innovation, it’s hard to see how anti-corruption won’t be part of the next industrial revolution.
Transparency and openness can increase profit as well. One study suggests that open data could reduce the costs of corruption by about 10 per cent. Just in the EU, the costs of corruption shave one per cent off the region’s GDP, equivalent to an annual loss of 120 billion euros.
Take open data as an example, embraced by G20 governments in November 2015:
- For the G20, the uptick in growth from making their data open is estimated at around US$13 trillion over the next five years, the equivalent of 1.1 percent GDP growth.
- For the EU, opening government data is projected to increase business activity by 40 billion euros each year, with indirect benefits totaling up to 140 billion euros annually.
- For companies, investing in data also has its own pay off, with estimates ranging from 20 to 60 per cent increases in revenue, based on similar returns for investments in research and development.
Open data is a critical tool in fighting against corruption. How? It provides more evidence so that corruption can be detected. It also increases the accountability of individuals, helping to deter future cases of corruption.
So in Davos and beyond, companies need to get on board with the open agenda. Here are the four reasons why:
1. Openness enhances stability and lowers risk
Entering new markets or dealing with new partners or suppliers put businesses at the risk of corruption. Knowing whom a company is doing business with helps deal with supply chain risks and minimise legal liability.
2. Openness assures companies, consumers and citizens that we’re all getting the best deal
Public procurement is a key venue where companies and governments interact to deliver consumer and citizen services. But it comes with high corruption risks. Opening up the entire procurement process from bid to delivery can help mitigate problems of inflated or opaque contracts and shady deals.
3. Openness lowers costs and increases efficiency for businesses
When governments publish contracts, it helps filter out corrupt players and those hiding behind shell companies to do their dirty work. If company ownership is known, no one is going to find out after the bidding is done that the winning company is actually owned by a relative of the president – or that three of the four bids were submitted by the same company through shell operations.
4. Openness demonstrates that business is part of the solution
Openness is about sustainability. It builds trust in brands and sectors. Companies have a role to play in calling for higher standards on public disclosure. They need to embrace openness as part of innovation and changing the rules of the game.
So, how to open up?
Davos provides a key moment to fast-track the open agenda for companies. So does the B20 and other business platforms that can trigger quick action. In the end, being more open allows companies to prove they have nothing to hide. And that is innovation.
For any press enquiries please contact email@example.com