We are in the midst of a revolution. Some will call this globalisation. Others will call it the knowledge revolution. Whatever we call it, we are witnessing everywhere a changing power equation. Power is moving from the centre to the periphery. Vertical command and control structures are eroding and are being replaced by horizontal networks of social communities and collaborative platforms.

Unprecedented integration and interconnectedness have created a true global neighbourhood. But there is an underlying paradox here. Power is becoming more and more widespread, but as it does so it is also becoming harder to harness. We have a de facto global world, but our institutions and systems of global governance are disintegrating. In principle, we should now move to a higher global level of consciousness, identity and organisational structure, but the underlying organisational principle in our world has dramatically changed.

The world is certainly becoming flat, that much is clear, but that is only the first part of the equation — simply a description of the state we have reached. What is more interesting is how we will reinvent ourselves, our social relations and our power structures within this flat world. How will a flat world actually function?

Our global institutions and governance structures have not moved with the times; they were built on the concept of nation states, mainly designed to protect national interests but fostering no sense of global trusteeship. As we have seen on countless occasions in recent years since the end of communism, any action on forming a global coalition to achieve common ends — if it happens at all — is strictly limited in terms of timescale and scope, and usually limited by the narrow interests of nation states.

What is clear, however, is that global trusteeship, global stewardship, is needed more than ever, since we have to confront so many global challenges simultaneously. The world has become a complex and dangerous place requiring urgent, effective mechanisms to address the challenges in a proactive, comprehensive and systemic way. As again we aim to be a part of this search for new mechanisms and joint approaches to global problems, we hope to marshal a broad- ranging group of stakeholders at the World Economic Forum’s annual meeting in Davos to tackle these multifaceted problems in a multifaceted way.

Let me highlight just some of the challenges that will be exercising leaders from all sectors of society as they meet in Davos this week, and which demand a co-ordinated, multistakeholder approach.

Let me start with the unsustainable way we treat our biosphere — increased levels of atmospheric carbon, growing water shortages, expanding deserts, shrinking forests. This environmental damage plagues countries around the world, industrialised and developing alike, not to mention all the social challenges and tensions that result from rapid resource depletion and dislocation.

Second are the economic challenges. There is a growing danger that current economic development will become stuck in the sins of yesterday and today. Despite the underlying robustness of our expanding global economy, the instability of international imbalances continues to widen, and income gaps between and within countries continue to grow.

We cannot continue to follow the principle “consume now and pay later”. This concerns not only the American consumer but all of us who try to avoid the reforms needed to safeguard our environment and adapt our social, health and educational systems. Sometimes it seems that we as a society have lost our genetic drive to take care of the next generation.

On a political level, recent events have highlighted the realities of global impotence. We are witnessing profound decay in the structures we have historically used to manage our world. We are witnessing the de-globalisation of a globalised world as the United Nations, the Bretton Woods organisations and many other multinational frameworks struggle to keep up with changing global needs.

This is made clear by our collective incapability to deal effectively with rogue states, with failed states, with terrorism and other events, from the collapse of the Doha trade talks to the crisis in Darfur. These developments indicate that existing global governance systems can no longer meet all the challenges of the 21st century in their present form. Yet all reforms that are based just on prolonging the paradigms of the past will fail in our new flat world.

On a societal level, the question is: can we cope with the speed of change? On the other hand, people also have developed a new social sensitivity for everything that is not flat. They feel instinctively that a flat world also requires a new sense of equity and solidarity. This is why the new social movements are often driven by young, idealistic crowds and not by the traditional Left. But there is a contradiction between this new idealism and reality, because globalisation does create winners and losers. It pushes us into a world that is socially not flat. The gap between those able to ride the wave of globalisation, especially because they are knowledge and creativity-oriented, and those left behind is becoming wider at global, national, corporate and individual levels.

Finally, on a cultural level, we are witnessing a world in search of its soul and its roots, with a re-emergence of cultural and religious identities. The web culture — the new flat world with two billion people interconnected next year, able to exchange and share texts, voice, data and video and to interact individually or in groups — does not necessarily foster a true global culture or identity in a quasi-unlimited multichannel world. Much to the contrary. The trend is towards individualisation, tribalism, renewed localisation. The buzzword in the Web 2.0 world is community, but if we are not vigilant these will not be communities acting in the global interest.

When the world moved from local to global, from the village to more centralised power structures in the 19th century, the liberal ideology evolved based on the need to protect the individual against the collective, against the superpower of governments and against bureaucratic institutions.

Now, with the new revolution, where power is moving back into individual hands, a new imperative seems to gain ground as a basic political principle: to protect the collective against the individual, justifying such an approach with the argument that the individual may have destructive capabilities that in the past only a few countries had. Where is the equilibrium in this fight of the collective versus the individual? If we can find this new balance, then we can hope to make a flattened world work for the good of all.

This flattening world presents ever more opportunities to which individuals and institutions must adapt. What we need to do is connect, and reconnect, leaders from business, politics and civil society to form new coalitions to improve the state of our world and shape a new collective will.

Professor Klaus Schwab is the founder and executive chairman of the World Economic Forum

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