Businesses, governments, and individuals are increasingly confronted with the reality of shrinking workforces, trade disruptions, higher costs of capital, and depleted natural resources. This multidimensional phenomenon of scarcity is here to stay – requiring us to rethink our current societal and economic models.

Since the industrial revolution, we’ve lived in an economic system predicated on high growth. For the past two decades, this growth has relied on the abundant availability of capital, labour, energy and natural resources, coupled with the advantages of global economic integration.

Yet, recent years have ushered in a new reality. In light of the Covid-19 pandemic and the Russian invasion of Ukraine, challenges have ranged, among many others, from energy shortages in Europe, rising food insecurities across Africa and the Middle East, to disrupted supply chains and the resurgence of domestic manufacturing. While some of these waves have receded in recent months, long-term trends signal a deeper systemic shift towards an economy defined by scarcity.

Towards a Time of Protracted Scarcity

Central banks globally have raised interest rates to combat rising inflation, putting an end to an era of cheap capital that lasted nearly 15 years. This shift reverberates across industries, prompting both established businesses and emerging startups to re-evaluate their strategies.

The world’s largest powers have increasingly shifted away from free trade policies, while a more multipolar world order and growing geoeconomic tensions between East and West have led to a slowdown in globalisation. The result is increased volatility in global value chains and more frequent disruptions.

Demographic change, marked by declining birth rates and aging populations, will dramatically shrink the labour force, not only across industrialised societies such as Germany and Japan, but also in emerging economies like China. 

However, perhaps the most consequential force of all is climate change, which looms large even if humanity manages to avert its most severe effects. We are faced with a dwindling carbon budget and the critical question of how to allocate it fairly, while rising temperatures and the related crisis in biodiversity will only exacerbate food and water scarcities.

What may become a new “era of scarcity” thus touches upon fundamental aspects of economic and societal development, including capital, traded goods, labour, and natural resources. The fragility exposed over the past three years and these long-term developments underscore the need for deeper systemic change.

Striving for More or Thriving with Less?

In essence, scarcity arises when the demand for a good exceeds its supply. In response, traditional growth-centric approaches focus on increasing the supply of goods through intensified resource exploitation or substituting one resource with another, such as replacing fossil-fuelled cars with electric vehicles or automating processes to replace human labour.

Throughout history, constraints have driven efficiency gains, sparked innovation, and led to the development of new technologies. However, an approach that simply seeks to substitute scarce goods with alternatives can swiftly encounter its own scarcity challenges: “Green growth” strategies, for instance, hinge on the availability of “sustainable” resources like recycled plastics, batteries, and green hydrogen. 

Yet, the growth in demand for these resources may soon outstrip their supply, despite significant investments and innovations. Additionally, such solutions may inadvertently generate negative environmental or societal consequences and create new scarcities. This calls for a broader discussion encompassing demand-side considerations when addressing scarcity.

The St. Gallen Agenda

The 53rd St. Gallen Symposium will delve into the multifaceted, emerging challenges posed by scarcity and tackle the difficult questions they raise: To what extent can innovation, efficiency, and circular models help to deal with intensifying constraints? And where do we need to consider deeper, more radical shifts and ask whether less may, in fact, be more? Year-round and at our main symposium in May 2024, our cross-generational dialogue will explore our annual theme within five key areas:

Resilient Businesses and Economies: For decades, growth-based economic models have relied on an abundance of labour, natural resources, capital, and energy, and benefitted from global economic integration. Considering long-term developments such as demographic change, rising costs of capital, the climate crisis and geopolitical shifts, we will explore ways to address protracted scarcities through more sustainable and resilient business models.

Equitable and Effective Governance: The intensification of scarcity in recent years has elevated the role of the state in the economy: governments around the world act as investors, suppliers and regulators to meet challenges such as energy insecurity, water stress, green infrastructure and inflation. We will debate the appropriate level and type of policy intervention and geopolitical cooperation to establish durable solutions.

A Sustainable Transformation: Dominant green economy approaches centre around innovation and substituting old with new technologies. Yet, they run into their own scarcity problems, when the supply of recycled plastics, batteries, or green hydrogen does not meet demand. We will discuss the extent to which sustainable business model innovations need to be complemented by deeper, systemic changes of reducing overall consumption.

Inclusive Societies: New, protracted scarcities and their consequences in terms of rising prices and reduced supply do not affect all members of society equally. When thinking about responses, both the potential and limits of individual behavioural change and the needs society’s most vulnerable members need to be considered. What role can individuals play in societal responses to scarcity and how do we ensure social equity in light of increasing constraints?

Responsible Innovation and Technology: Whether it’s the role of artificial intelligence to replace scarce human labour, renewable energy to power the green transition, or desalination techniques for drinking water, innovation is seen as a key component of solutions. At the same time, the advent of new technologies often creates its own set of challenges. How can innovations best help to anticipate and cope with current and future scarcities at scale?