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Future Shock Has Destroyed Trust

Future shock—too much change, too fast—has arguably become the predominant societal force in the world, 47 years after author (and Fortune writer) Alvin Toffler coined the term for the title of his 1970 bestseller. Now that it’s here, no one knows what happens next—Toffler predicted darkly that society wouldn’t be able to handle it—but business leaders had better take ownership of the resulting problems because, fairly or not, society is going to hold them responsible.

The latest evidence comes from research unveiled at Davos this week. The Edelman communications firm’s annual Trust Barometer showed public trust in institutions worldwide plummeting more precipitously than in the five previous years of the research. Now look deeper: Among general populations worldwide, 53% say the pace of change in business and industry is too fast. They worry about losing their jobs—60% because they lack needed training or skills, meaning their skills haven’t kept up with fast-changing job requirements, 54% because of automation, which means the same thing.

Now examine PwC’s new survey of CEOs, also announced at Davos. This global group of leaders is worried most about uncertain growth and over-regulation, but ranking a very close third is “availability of key skills.” The CEOs are worried about the same thing as ordinary citizens—that job requirements are changing faster than people’s ability to meet them. Combine that finding with the results of our own Fortune 500 CEO poll: The CEOs’ top concern for the past two years has been “the rapid pace of technological change.”

Everybody is saying the same thing: Too much change, too fast.

Clearly the practical crux of this issue is jobs, which is why business leaders are in the crosshairs as people struggle with future shock. By traditional standards the phenomenon is bizarre. Even in the U.S., with unemployment at a rock-bottom 4.7%, 57% of the population polled by Edelman agree that “the system is broken.” That’s higher than the global average.

Business’s response will not be simple or obvious. Companies can’t merely employ more people who aren’t needed. But the Edelman research suggests other effective steps. For example, among respondents globally, and especially among those who think the system is broken, the No. 1 action a company can take to build trust is “treat employees well.”

This is a make-or-break issue for business leaders. IHS Markit’s chief global economist, Dr. Nariman Behravesh, told Business Insider yesterday, “The challenge for the Davos elite is this—how can you help these people in the developed world to get the skills to take on new jobs, and what policies can be put in place? If they don’t, Davos will become irrelevant. This is a call to action.”

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What We’re Reading Today

UK Prime Minister advocates for hard Brexit
In a speech today, Prime Minister Theresa May said she will pursue a strategy of removing the UK from the European Union’s single market. The plan will allow Britain more sovereignty over immigration, but it also means she’ll need to forge new trade agreements, including with the EU. Parliament will have the opportunity to sign off on the deal to separate Britain from the EU. BBC

British American to buy Reynolds for $49 billion
In a move that will make Nicandro Durante‘s British American the largest listed tobacco company, it’s purchasing the remaining 58% of Reynolds American that it didn’t already own. Late last year, Reynolds rejected an offer from BAT, but Durante increased the bid by more than $2 billion, which clinched the deal.  Fortune

Trump criticizes House GOP tax plan
President-elect Donald Trump said that the House Republicans’ plan to revamp corporate taxes is too complicated. The plan would tax imports, but exempt exports, in what’s called a “border adjustment.” Trump said it typically means “we’re going to get adjusted into a bad deal.” It’s could add to the issues of contention between the incoming president and the Republican Congress. WSJ

China president defends globalization
As Trump enters the White House and Brexit unfolds, it was China President Xi Jinping who took the torch of globalization at the World Economic Forum at Davos, saying no side wins in a trade war. It’s the first time the head of a Chinese state has come to the summit, using the opportunity to target Trump’s trade stances. “Pursuing protectionism is just like locking one’s self in a dark room. Wind and rain might be kept outside but so are light and air,” said Xi. TIME

Building Better Leaders

One out of every five Obamacare plans…
…was opened by a small business owner or someone that’s self-employed in 2014, according to a new report. CNBC

There are no black women CEOs in the Fortune 500…
…starting at the beginning of this year. With Xerox CEO Ursula Burns officially moving to a chairman position for the now split company, it leaves a noticeable lack of representation in the top ranks. And the reason could be that companies are bad at identifying young black talent.  Fortune

Use the Power of 10 to improve networking
Cinnabon President Joe Guith says that having 10 leaders of other successful businesses that you hope to align with will strengthen your network around people whose values mirror your own.  SmartBrief

A Trump Reaction

GM to invest $1 billion into U.S. factories 
Mary Barra‘s company expects to create more than 1,000 jobs with the investment. While the announcement comes shortly after President-elect Donald Trump called out the automaker for not investing more in the U.S., GM said the investments have been planned for a while. Later this month, GM will also move forward with layoffs that will impact 3,000 employees. Fortune

Hyundai to invest $3.1 billion in the U.S.
The investment will roll out over the next five years, and may include building a new factory. While Hyundai hasn’t been pressured by Trump directly, it does have one of the lowest ratios of cars made in the U.S. to cars sold of any automaker. Chung Mong-Koo‘s company denies the investment had to do with comments Trump has made towards car companies. Reuters

Walmart to add 10,000 jobs
Doug McMillon‘s company says most of the jobs will be for those in stores, and Walmart will also increase skills-building training to 250,000 of its workers. Many of the jobs will likely come from new openings and remodelings of 59 Walmart and Sam’s Club stores set to open this year. Washington Post

Fortune Reads and Videos

Germany to Trump: The U.S. should build better cars
It’s the response from German Vice Chancellor Sigmar Gabriel, after President-elect Donald Trump threatened German manufacturers with higher taxes for not building more vehicles in the U.S. Fortune

The world could have its first trillionaire…
…in the next 25 years, if billionaires’s returns continue to see their current rate of growth. Fortune 

One of the big downsides of the new ‘fiduciary rule’…
…could be the increase in class-action lawsuits against financial institutions. Firms must show their advisors have a minimum standard of competency, something many may struggle to prove. Fortune

Apple’s British App Store prices jump over 25%
Brexit is to blame. Fortune

Happy Birthday

Michelle Obama turns 53 today.  Biography

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Produced by Ryan Derousseau
@ryanderous
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