In his opening address to the 2010 meeting of the World Economic Forum in Davos, French president Nicolas Sarkozy remarked on the financial crisis that brought the world to the very edge of economic apocalypse. “This is not just a global financial crisis,” he said, “it is a crisis of globalization.” He called on world leaders to correct the systemic imbalances that led to the triumph of markets over democracy and justice. “In the future, there will be a much greater demand for income to better reflect social utility and merit,” he said. “There will be a much greater demand for justice. There will be a much greater demand for protection. And no one can escape this. Either we change of our own accord, or change will be imposed on us by economic, social and political crises. Either we are capable of responding to the demand for protection, justice and fairness through co-operation, regulation and governance, or we will have isolation and protectionism.”

Like many heads of state, President Sarkozy certainly means well, but he doesn’t really show the way forward. He calls for more “international co-operation” and points to the G20 as a source of solutions and new models of global governance. He proposes taxes on financial speculation to help fund the fight against poverty. He demands that the world move quickly to adopt a more robust, binding global agreement on climate change.

All of these things, while necessary, are only the beginning of what is to be done. Like most heads of state, Sarkozy tends to see the same institutions that produced the current mess as the source of solutions and stability in the future. He argues for a change in values, but still takes most of the old assumptions about how the world works for granted. For example, he doesn’t consider the fact that markets may have triumphed precisely because our models of government and democracy are broken. He doesn’t call for a complete rethink of the top-down approach to global problem solving. He merely calls for the same old elite club of decision makers, except this time with a few additional members at the table. He doesn’t seem to recognize that the new models of social innovation and wealth creation that offer genuine promise are fundamentally incompatible with his outmoded vision of the role of the nation-state in a global economy. Sarkozy proposes traditional instruments like taxes and legal agreements, but they won’t be enough. Many of the time-urgent situations we face in this century won’t be solved without a more dynamic way to marshal and fully exploit the collective ingenuity of citizens and businesses around the world.

Sarkozy is hardly alone. Most world leaders – indeed, most leaders of business and government anywhere – harbour the same old tired set of assumptions about how to solve the world’s problems. And more often than not, they seem focused on tinkering with old models rather than moving to something new and viable. Consider the dysfunctional financial services industry. Conventional policy wisdom demands more regulation over financial markets. But no one stops to ask whether the current models of regulatory oversight and enforcement are truly equipped for the job.

Can a patchwork of national financial regulators – all operating in silos with a skeleton crew of underpaid and overworked employees – really be expected to exert meaningful control over a global financial system that operates at light speed and employs some of the smartest and most highly paid people on the planet? Isn’t it time for a new model of regulation: one that uses the Web to disclose pertinent information and enables a worldwide network of experts – including the thousands of analysts already employed by government regulators today – to pool their tips, risk models, and analyses in a wiki-like fashion? Sure, it would mean setting aside aspects of national sovereignty and requiring companies to disclose more information in more usable formats than they do today.

Climate change presents similar challenges to reigning orthodoxy about how to address global problems. The December 2009 meeting of world leaders in Copenhagen was once heralded as a defining moment for humanity and a chance to prove definitively that international co-operation can and will prevail against the challenges facing the planet. Despite years of preparation and many heads of state in attendance, Copenhagen produced a twelve-paragraph “accord” with weak targets, no details, and no binding commitments.

The failure to secure a meaningful deal in Copenhagen has many questioning whether a political deal is possible at all. “The forces trying to tackle climate change are in disarray, wandering in small groups around the battlefield like a beaten army,” said one senior British diplomat. Many politicians and pundits aren’t even in the right card game. They want to legislate climate change out of existence with a “cap and trade” system or a tax on carbon when evidence suggests that, over the long term, nothing short of a complete reindustrialization of the planet is in order. Getting the economic incentives right is an important start. But among other things, we need to rethink transportation, adopt new manufacturing and shipping practices, pull off a dramatic shift toward greener products and lifestyles, and retool our energy system, all while devoting enormous intellectual and financial resources to protecting the world’s most vulnerable peoples and locations from the effects of rising sea levels and other consequences. Surely a little bit of political tinkering will be insufficient to achieve all of this.

In short, many of our institutions are stalled, lacking vitality, leadership, and dynamism. It’s like every last ounce of oxygen has been squeezed out, leaving a mess of deflated expectations and chronically underutilized resources. This apparent paralysis, in turn, begs some pretty fundamental questions: if the knowledge, leadership, and capability required to solve the really tough problems can’t be found in the corporate headquarters and national capitals around the globe, will it be found at all? And if so, where will the new insights and leadership come from? Indeed, if our problems are not solvable by fine-tuning existing institutions, what new models and structures should replace them? Are you, wearing your various hats as an employee, manager, learner, teacher, entrepreneur, voter, consumer, community member, or citizen of the world, prepared to take on a larger role in reinventing our beleaguered institutions? What must be done to reboot business and the world and how can you participate?

We need individuals, companies, and organizations that are forging new models of problem solving in their sectors and industries – models that rely less on central control and more on getting a self-organizing critical mass of people and organizations working to initiate small experiments and social innovations that can mushroom into pervasive changes in societal behaviour. Put simply, these individuals and organizations have learned how to tap into the world’s decentralized sources of knowledge and capability using an approach that mobilizes not just the world’s largest companies and nations, but a whole ecosystem of citizens and organizations around the globe.

As citizens, and as leaders within our organizations, we need to look beyond the borders of nations and think about society in broad, global terms. If our problems are global in scale, then we need to come together as global citizens to solve them. A system erected around the primacy of national and corporate self-interests just isn’t going to cut it for this century.

From: Macrowikinomics by Don Tapscott and Anthony D. Williams ©Don Tapscott and Anthony D. Williams, 2010. Reprinted with permission of Penguin Group (Canada).