DAVOS, SWITZERLAND: Trust in both society’s institutions and capitalism is strained despite strong economic performance, according to Edelman’s 2020 Trust Barometer.
The study found that 56% of the global population said "capitalism as it exists today does more harm than good in the world."
Most people also said traditional institutions, such as government, media, business and NGOs, don’t have a vision for the future that they can get behind. Fewer than half of respondents said government (35%), media (35%) and business (41%) have a vision for the future. NGOs received the highest approval at 45%.
Now in its 20th year, the 2020 Trust Barometer’s results upended conventional wisdom that GDP growth correlates with higher trust, said Edelman global CEO Richard Edelman. This is the result of the broad belief that prosperity is not being fairly distributed.
The study was originally built on the work of political scientist Francis Fukuyama, who advocated that economic mobility supported by a strong legal system could sustain and develop trust. However, events following the 2008 financial crisis and the ensuing recession proved to Edelman that model may "not [be] sufficient," he said.
While much of the media narrative about socialism has focused on young people, Edelman said his work found little difference among age groups, noting the belief that capitalism does more harm than good is "universal."
Fifty-three percent of respondents over the age of 55 said capitalism does more harm than good, as was the case with 57% of the 18-to-34 age group and 59% of people ages 35 to 54.
"The essential truth is: people are scared," Edelman added. "Their fears are overcoming their hopes."
In 15 of the 28 markets surveyed, most people said they will not be better off in five years, including the U.S., where only 43% of respondents said so, representing a 7% decline.
Japan was the most pessimistic market, with only 15% saying they’ll be better off in five years, followed by France at 19% and Germany at 23%.
The most optimistic country was Kenya, where 90% of respondents said they’ll be better off in a half-decade. Indonesia came in second at 80% and India and Colombia tied for third at 77%.
The study also found a growing "trust" chasm between elites and the public that could be a reflection of income inequality, Edelman said. While 65% of the worldwide informed public said they trust their institutions, only 51% of the mass public said the same.
Twenty-three of the markets surveyed had double-digit gaps, including France (21 points) and Germany (20 points). Eight markets had record trust inequality, representing an all-time high.
Globally, 83% of employees worry they will lose their jobs because of a lack of training, cheaper foreign competition, immigration, automation and the gig economy. Another 57% said they’re losing the respect and dignity they once enjoyed in their country. More than three-quarters (78%) said "regular people [are] struggle just to pay their bills as elites get richer than they deserve."
While trust has not correlated with GNP growth, Edelman said future versions of the Trust Barometer will be built on a new framework. "The next model of trust balances competence and ethical behavior," he added.
Business is seen as the most competent of institutions, ahead of NGOs, government and media. It’s the only institution seen as competent, but respondents said it’s too self-centered. The only institution seen as ethical was NGOs.
While 82% of respondents said businesses should pay decent wages and 79% said they should retrain workers who may lose their jobs to automation, only a third think businesses will actually do so.
Edelman said last week that he was planning to use the research as a rallying cry for businesses to enact change when unveiling the report at the World Economic Forum in Davos, Switzerland, on Monday.
Calling the Business Roundtable’s assertion that corporations should have a purpose greater than shareholder value "damn important," Edelman added he wanted to see more tangible action from business leaders.
"That’s what I’m going to tell them," Edelman said. "That’s my close. The time for talk is over."
This year’s Trust Barometer pulled data from more than 34,000 respondents in 28 markets, 1,150 respondents per market. Fieldwork was conducted between October 19 and November 18, 2019.