Recover to Transform
Recover to Transform stems from the conviction that people, companies, and governments are facing a profound systemic shift that requires new ways of defining and addressing the challenges we face as a society.
From growing economic, political, and social inequalities that stand in the way of the Sustainable Development Goals, to the decarbonization targets that we are fighting to maintain in the midst of a global energy crisis, or the geopolitical battle for technology leadership that will define our future to a great extent, the risks, challenges, and opportunities that define this decade are highly interconnected and span the globe.
How can we tackle them? The reality is that we have no certainty as to what the best responses are, and we currently don’t have solutions for many of these challenges. We also lack a clear financing mechanism: estimates of the investment needed to tackle the global challenges stand at billionaire figures that are impossible for any country or multilateral organization to mobilize individually.
We will only find the answers if we change the tools we use to find them, starting with the way we understand the role of the State, the private sector, society and, above all, the interaction between them
What the authors of UNO38 agree on is that we will only find the answers if we change the tools we use to find them. This starts with the way we understand the role of the State, the private sector, society and, above all, the interaction between them.
If the State can no longer simply help companies by staying out of their way, companies can no longer exclusively focus on the economic benefit of their actions. Jordi Sevilla, under the paradigm “missions,” indicates how addressing complex challenges requires clear goals and solutions, capable of mobilizing the resources needed to transform society.
The State and supranational organizations taking on the role of incentivizing, regulating, and guiding private finance toward sustainability has led to growth of more than 30% per annum. This is one of the clearest examples of development under a common, compatible, and mutually beneficial purpose.
It is a question of redefining traditional roles, process, and focuses to catalyze solutions toward a common goal: progressing toward a more resilient, inclusive, and sustainable society as a pillar of the recovery.
One of the global challenges where this collaboration has already been implemented is in climate change. Joaquín Mollinedo reminds us that the National Integrated Energy and Climate Plan (2019) allocated 240 billion euros to energy transition alone. He indicates that based on a clear institutional and directional framework, “the private sector must provide not only an investment effort and capacity for implementation, but also knowledge and innovation, with medium- and long-term goals aligned with the general interest.”
“Those who sign up win” argues Ximo Puig. He points to the Region of Valencia where, “the leading company and the regional government have played the role of catalyst for initiatives: bringing together SMEs and leading companies, interconnecting sectors, and getting everyone involved in the innovation ecosystem”.
Raül Blanco exemplifies this when talking about PERTEs, which provide an incentive “to join projects and consolidate companies of very different sizes that need to work together, so they can contribute their experience in the definition and achievement of a great global project”.
The standpoint of Latin America shared by Gema Sacristán, Matías Kulfas, and Daniel Schteingart, among other authors, shows us the need to “shift from defensive measures with short-term goals to an agenda of sustainable and inclusive growth.” This in turn makes collaboration between the private sector and the public sector essential given the current restrictions monetary and fiscal policies place on companies.
Another thing that undoubtedly requires structural reforms is demonstrated by Rafa Domenech within the framework of the Recovery, Transformation, and Resilience Plan of Spain. He indicates that “its effect on the long-term growth potential of the economy will depend on the transforming nature of investment and on their interaction with structural reforms, particularly to what extent they increase the number and quality of jobs, and improve productivity”.
Fátima Bañez reminds us that if we have exited recent crises, it has been thanks to “the collaboration, dialogue, and a willingness to reach agreements capable of leading to improvements for the common good.” Marilyn Márquez gives us a practical roadmap for the search for these points of agreement and collaboration.
These and many other reflections from leading authors can be found in these pages. We seek to add a multilateral perspective to them.
It is more necessary than ever to advance toward common standards and integrated rules between countries that share similar values. Regulatory fragmentation on environmental matters or the digital economy only weaken us and creating uncertainty, lessening shared innovation and undermining our geopolitical positioning in a world in which radically different coalitions are emerging. The joint financing of investment and innovation programs, such as the IPCEI at a European level, will become increasingly more common to tackle the necessary major transformations on energy and digital infrastructure. This is important even if it sometimes leads, as in the case of the Next Generation instrument, to the issue of joint and pooled debt between countries that do not always agree on other matters.
None of this is utopian. We started to see these allegiances forming in a specific measurable way within the framework of the Next Generation EU instrument
None of this is utopian. We started to see these allegiances forming in a specific measurable way within the framework of the Next Generation EU instrument and in the response to Russia’s invasion of Ukraine. As Susana del Río indicates, “Recovery and transformation are connecting their dimensions to redefine the European project, focused on a united constitutional model.”
This boost, which also drives financial incentives, will not be enough by itself. New collaboration models require profound changes beyond external stimuli to become a reality. We need a more open and innovative culture at a public administration level, whereby the transformation of the role of companies as stakeholders in society goes beyond ESG data to form part of the DNA of their corporate governance and mandate to shareholders; whereby the public-private collaboration mechanisms are not just incentivized but expressly and consistently generated. In short, it is a question of redefining traditional roles, process, and focuses to catalyze solutions toward a common goal: progressing toward a more resilient, inclusive, and sustainable society as a pillar of the recovery.
