Casting new light on basic income grants

Prof Deon Rossouw was invited to participate in the 10th World Forum for a Responsible Economy that was held across five cities in France from 10  to 14 October 2016. He was tasked with moderating a session on Basic Income Grants.

Basic Income Grants

The idea of basic income grants is not new, but it is receiving renewed attention due to amongst others the fourth industrial revolution that is increasingly making people’s skills redundant and shedding jobs – according to some experts between 20% to 50% of current jobs can be replaced by robots or artificial intelligence. A basic income grant can also liberate poor people, trapped in an endless struggle for survival that prevents them from fulfilling their potential and from exploring new opportunities.

Offering people an unconditional basic income so that they do not have to worry about mere survival, can unleash untapped potential and new opportunities, but it also comes at a cost. It can create new dependencies and the loss of meaning for those who receive a basic income grant, without having a job. Three pioneers who are involved in basic income experiments shared their experiences regarding basic incomes grant projects in which they are currently involved. They were Michael Bohmeyer, who runs a project called Mein Grundeinkommen in Germany, Dr Sarath Davala who is involved in the India Network for Basic Income, and Prof Olli Kangas who is responsible for the implementation of a basic income grant in Norway.

The panellists were unanimous in their appreciation for the difference that a basic income grant could make, but were divided on the way in which it should be financed and administered.

More about the 10th World Forum for a Responsible Economy

The general topic of this 10th Forum event focussed on the role of companies in society: beyond their economic performance and what could reasonably be expected from companies, what the minimum level of social responsibility that companies should embrace, as well as where the limits of what society can demand of companies lay.

Under the banner “What should we expect from Companies?” (or “What purpose do Companies serve?”), Forum deliberations were organized around three major headings.

The Labour Issue

Companies are responsible for creating jobs. Naturally. But will they be able to expand workforce participation to the point of eliminating unemployment?

Artificial intelligence, including the use of robots, will be accomplishing a greater number of human tasks with tens of millions of jobs being lost throughout the world. New kinds of employment would of course be created, but would the number of position openings be sufficient?

The trend towards “uber-izing” labor has led to downsizing the workforce in favor of other types of employments relationships with the company. Would this trend produce a situation with smaller company staff, while at the same time produce a greater number of individual entrepreneurs?

In the future, if “machines” replace – at least partially – human beings in the wealth creation process, how could the ensuing job shortage be remediated? Would it be feasible to envision, over the long term, widespread implementation of a “universal basic income“, along the lines of that being experimented in Finland and the Netherlands (Utrecht)?

The organisational issue

Companies’ organization and operations are in a state of flux. Such is the point of view adopted and defended by a range of corporate leaders like Pierre-André de Chalendar, CEO of Saint-Gobain, who considers that we have entered the era of “collaborative management“.

What are the forms and outcomes of this management with fewer hierarchical layers? How can managers and other employees become more involved in these decentralizing operations, especially with respect to raising the company’s overall performance?

According to the World Happiness Report, the “100 best companies to work for in America” operate more efficiently than those not on the list: to what extent can improving employees’ well-being (i.e. “workplace happiness”) contribute to creativity and performance?

What is the future of telecommuting? Technology breakthroughs can definitely stimulate its further development both within firms and by outsourcing certain tasks (see above discussion on “uber-izing” labor)?

What are or might be the consequences of these changes on labor relations (specifically on trade unions)?

The collaborative approach is obviously not limited to a company’s internal relations but can easily extend externally to joint corporate ventures and all the diversity they entail. Such a framework has the potential to form networks of companies (or networked companies), with a chain of segmented functions. Large “industrial” firms have already opted to no longer produce manufactured goods themselves, preferring instead to delegate this activity to subcontractors.

The advent of 3D printing could intensify this practice and introduce it into smaller-sized companies. How will this trend play out? What are the inherent risks as well as the opportunities?

The Territorial issue

Will the effect of globalization lead to standardized companies? Do differences pertain solely to the scale and sector of activity or can cultural specificities exert an influence (e.g. existence of a distinct francophone company) or perhaps geographic parameters (e.g. European company)? From this perspective, does the world offer certain aggregation trends better than others; hence, would some geographic sectors be more likely than others to give rise to responsible entrepreneurship?

At the “territorial” level (country, region, city), is it possible to generate “ecosystems” that foster “local” dynamics favoring a responsible economy. What are the most appropriate examples (especially in the cities and regions hosting this Forum)?

How do public authorities, at all levels, motivate companies to assume their global responsibility? What institutional and territorial systems are available to nurture the development of responsible companies? How would call for tender clauses be written to advantage responsible companies in procurement contract awards? Moreover, what kinds of tax incentives can be granted for approaches that incorporate corporate social responsibility (CSR)?

Next comes the topic of evaluation: according to which methodology and with which set of indicators are a company’s social responsibility and overall performance to be measured?

Is extra-financial reporting, more widely practiced by large (or medium-sized) companies, an efficient tool? Or for some, wouldn’t it be more of an alibi? A plethora of “CSR labels” are in circulation, which can on occasion lead to confusion. What’s the right approach to defining consensus indicators, recognized as being – at least in theory – universal?