This article first appeared in The Edge Malaysia Weekly on June 1, 2026 - June 7, 2026

Wars, the rapid acceleration of artificial intelligence (AI), environmental degradation and an expanding global population are deeply interconnected forces reshaping markets, governance and the social contract itself. Supply chains fracture under geopolitical tension while war economies erode purchasing power and disrupt access. At the same time, AI-driven automation is redefining labour markets at unprecedented speed, sometimes displacing roles faster than new ones can be created and hollowing out segments of the middle class.

Simultaneously, pandemics, environmental disasters and armed conflicts are not only destabilising economies but also directly reducing human capital through loss of life, displacement and long-term health impacts. Population growth further compounds these pressures. In many regions, the number of people entering the workforce is set to exceed the number of viable economic opportunities available to them. A growing proportion of the global population risks becoming economically marginalised before it even reaches working age while remaining a social and environmental strain during its upbringing.

Taken together, these dynamics point towards a structurally imbalanced future: a concentration of wealth and productive capacity among a small number of corporate and technological “winners”, and a vastly larger population with diminished economic power. This raises a fundamental strategic question that is too often overlooked: if large segments of the population are excluded from meaningful economic participation, who will generate the demand that sustains future growth and profitability?

In such an environment, traditional decision-making frameworks that are anchored primarily in financial and operational metrics are no longer sufficient. What is required is a systematic understanding of how decisions affect people: their behaviour, resilience, trust and long-term participation in economic and social systems. Crucially, this insight must then be used to reshape and align adaptive decision-making, policies and strategies.

This is precisely the role of social impact assessment (SIA): a structured process for analysing, monitoring and managing the intended and unintended consequences of policies, programmes and investments on individuals and communities. Far from being a compliance exercise, SIA is emerging as a strategic tool for corporations and governments navigating instability, disruption and structural transformation.

At its core, the corporate sector depends on people in three fundamental ways: as workers (decision-makers, inventors and labour), as consumers and as participants in stable societies. The current trajectory of technological disruption, conflict and demographic pressure threatens all three simultaneously. This is particularly significant given that these workers, consumers and social participants are not homogeneous, nor do they all have equal opportunities, either within society or within the structures of capitalism.

AI is increasingly capable of replacing not only routine labour but also cognitive and professional roles. While this drives efficiency and profit in the short term, it also suppresses wage growth and reduces the number of people with stable purchasing power. This is not merely a social or ethical concern; it is a direct threat to long-term business viability. Markets cannot function without consumers. Profit cannot be sustained without demand. And demand cannot exist without people who have income, security and confidence in the future.

Some analysts argue that SIA is slow, costly and potentially politically charged, diverting attention from core business imperatives and delaying profitable projects. This view is mistaken. SIA is not designed to halt investment but to improve it by identifying and mitigating social and regulatory risks that could otherwise destroy value while also safeguarding people. It helps understand potential social problems and transform conflictprone initiatives into opportunities that open new markets, secure stable labour and build longterm social licence. By systematically analysing how decisions affect communities, SIA enables companies to reduce risk, improve efficiency and generate new revenue streams by addressing the root causes of resistance and instability.

Investing in people is no longer a matter of corporate responsibility — it is a matter of economic survival.

In periods of geopolitical and market instability, risks are never linear. They are systemic, cascading across sectors and borders. As such, organisations are being forced to move from reactive risk management to anticipatory strategy.

SIA enables organisations to identify second- and third-order effects: how a factory closure affects migration, how displacement alters labour markets or how digitalisation reshapes workforce participation. Evidence shows that SIA strengthens risk management by identifying unintended consequences early, allowing institutions to mitigate reputational, legal and operational threats before they escalate.

 For corporations, this translates into:

This principle applies across sectors. When companies invest in fair wages, skills development and community stability, they are not merely “doing good”; they are actively sustaining the demand ecosystem on which their future revenues depend.

Projects across a range of sectors — including energy, infrastructure and land-intensive industries — rather frequently encounter community resistance, legal challenges, operational delays and reputational damage when they fail to account for social impact.

In 2015, Volkswagen bypassed social impacts of air pollution in its “clean diesel” rollout, deceiving regulators and consumers, resulting in US$33 billion (RM131 billion) global fines, recalls of 11 million vehicles, criminal charges against executives and CEO resignation. Operations stalled across markets while stock plunged 30%, erasing US$25 billion in market value overnight. When the scandal came out, the carmaker was hauled through the courts and ordered to refund eco-minded consumers more than US$11 billion.

In 2024, residents of Akishima city in western Tokyo started petitioning to block the construction of a large logistics and data centre by Singaporean developer GLP. The project is tied to GLP’s 31MW Tokyo West 1 data centre campus in the region. Over 220 residents expressed concern that the centre would harm local wildlife, cause pollution, increase electricity usage and deplete the city’s groundwater supply. The group filed a petition to review the urban planning process that approved the project, which is estimated to emit around 1.8 million tonnes of carbon dioxide annually. They also worry that the project would require cutting down 3,000 of the 4,800 trees on the site. Urban planning reviews and potential arbitration have delayed the project, damaging GLP’s regional expansion plans.

In 2023, China’s Xinyi Group’s US$11.5 billion quartz sand plant on Indonesia’s Rempang Island faced violent clashes as 7,500 Malay/Orang Laut residents resisted eviction. Indonesia’s National Commission on Human Rights said it found evidence of human rights violations carried out by joint forces of the police, military and public order officers. Protests halted construction, triggered government intervention and drew international scrutiny over indigenous land rights violations. Only 300 out of 2,600 families have accepted relocation amid the ongoing legal challenges. Residents of 16 villages refused any form of forced eviction and demanded that the government recognise their ancestral land rights.

These are not isolated incidents — they are symptoms of a broader failure to understand and manage social risk.

In an era defined by compounding disruption, the question is no longer whether organisations should consider social impact assessment but whether they can afford not to.

Markets, technologies and policies do not operate in a vacuum; they operate through people. If current trajectories continue, where technology displaces faster than it includes, where conflict and climate shocks erode human capital, and where population growth outpaces opportunity, the result will not be sustained prosperity but structural fragility.

A world with even a smaller number of profit holders and a large, economically excluded population is not a viable market system. To future-proof business, sustain demand and maintain social stability, organisations must place people at the centre of decision-making. SIA provides the framework to do so, not as an ethical add-on but as a core strategic function.

Because ultimately, the sustainability of profit depends on the sustainability of people.

Dr Jasmina Kuka, CEO and Founder of W!SE, brings more than 20 years of global experience in impact assessment and training

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