In a world facing increasingly formidable and complex global challenges, the role of economics in shaping our future is paramount. Short termism is particularly infamous for being ineffective in addressing todays pressing issues and is rather well known for exacerbating future problems, due to which it is the need of the hour to harness the potential of long-term economic thinking to re instil optimism for the future. Economics as a social science possesses a magnificent ability to act as a roadmap to cure our modern era problems.
Short-termism in economic policies often lead to volatility and uncertainty, whereas long-term strategies create a foundation for sustainability and development. South Korea is a perfect example for a nation that has placed heavy emphasis on education and workforce training for the last 15 years, due to which it has a literacy rate close to 100%. In fact, in 2020 itself South Korea spent more than $105 billion on education and workforce training. This investment has helped Korea become the world’s 13th largest economy, with a robust technology and manufacturing sector. Additionally, long term investment in human capital has helped South Korea build a resilient and adaptable labour force, which is productive as well as geographically and occupationally mobile, hence reducing structural unemployment and increasing the productive capacity of the Korean economy.
The world bank estimates that by 2030, the global cost on agriculture due to climate change will reach $108 billion per year. By 2070, the global cost of climate change is expected to reach $178 trillion, according to a study conducted by deloitte. Practices like transitioning to renewable energy sources or adopting circular economy principles require initial investments but ensure the creation of a healthy planet and present economic opportunities through green innovation and job creation. Thus, collaborative, long term thinking in the field of environmental economics and sustainability can be pivotal in solving daunting global challenges such as climate change. However, such transitions require a comprehensive policy framework to be built in place, which is only possible through long term, collaborative economic thinking which considers the perspectives of multiple stakeholders through a sustainable lens. A prime example of the same is the Paris agreement on climate change, signed in 2015 which has helped reduce the rate of increase in carbon emissions significantly.
The modern, increasingly globalized world is characterized with complex interdependence and perplexing diplomatic ties. Economies are part of an intricate global system, and collaboration between nations and stakeholders is essential to combat issues like poverty, inequality, and climate change. Long-term economic thinking within the United Nations has played a crucial role in addressing and solving myriads of global issues. Through initiatives like the Sustainable Development Goals (SDGs), member states have come together to set clear, concise and ambitious targets for poverty reduction, healthcare access, and economic growth. As a result, the UN managed to reduce the poverty rate from 23.3% to an impressive 9.2% in a mere span of 30 years.
Through a consistent investment in education, technology, and infrastructure, Singapore has demonstrated how forward-looking economic approaches can navigate rapid global changes with optimism.
In conclusion, long-term thinking in economics is the key to fostering optimism in the face of daunting global challenges. It promotes stability through fostering collaboration, and equips economies to adapt to rapid global changes. Embracing long-term thinking is not merely an option; it is an imperative for securing a better tomorrow for all.
“Expenditure on Education as a % of GDP in South Korea (2010 – 2020, %).” GlobalData, www.globaldata.com/data-insights/macroeconomic/expenditure-on-education-as-a-of-gdp-in-south-korea-2091067.
“Deloitte Research Reveals Inaction on Climate Change Could Cost the World’s Economy US$178 Trillion by 2070 | Deloitte Global | Press Release.” Deloitte, May 2022, www.deloitte.com/global/en/about/press-room/deloitte-research-reveals-inaction-on-climate-change-could-cost-the-world-economy-us-dollar-178-trillion-by-2070.html.