If only I had a nickel for every time during the World Economic Forum Annual Meeting 2013 that participants held up short-term thinking and actions as the bogeyman standing in the way of the Meeting’s Holy Grail: dynamic resilience.

Delivering a scathing assessment of the European Union’s response to the euro crisis, especially in the early stages, Italy’s Prime Minister Mario Monti blamed it for short-term thinking when “leadership is the opposite of short termism.” IMF Managing Director Christine Lagarde similarly urged longer-term policy strategies: “If we look beyond the short term, we would indeed move past the crisis,” she said.

This is hardly the first time anyone has criticized short-term thinking as a danger. But the chorus of voices creates a real opportunity to move from talking to doing. Let’s use it to create the right incentives to encourage politicians, businesses, investors – and, for that matter, individuals – to think and act for the long term as well as for immediate priorities.

Human nature is to value short-term over long-term rewards – but policies and systems can change their priorities. In the stock market, as the average time investors hold stocks has fallen from seven years in the 1940s to seven months by 2007, incentives have shifted to emphasize short term even more than before. Some reports put the average holding period at about under a week today.

Something has changed. How can we bring short term and long term back in to balance? Ideas circulating in Davos for how to encourage long-term thought and action included financing, budgeting, business strategy, governance and transparency.

Compensation incentives, including contingent bonuses, can encourage managers to change their priorities. This strategy is already being deployed; after the 2008 financial crisis, companies – many required by new laws – moved to restructure compensation packages to delay payment of bonuses. Businesses can add long-term planning and risk management to key performance indicators on which merit raises and bonuses are based.

Businesses and governments can incorporate more scenario planning. On the financing side, one of the ideas floated at a Wharton School of Business workshop was to create a programme of long-term, low-cost loans to reduce risk. The more people and organizations hold insurance, the more broadly the costs of long-term planning would be spread – potentially lowering both the cost of insurance and cost to taxpayers.

Matching long-term financing to long-term needs can help to finance needed investment. With roughly US$ 30 trillion in pension funds, including US$ 20 trillion in OECD countries, there is a large pool of funds – especially public pensions – tailor-made for projects like infrastructure and education that will yield benefits far into the future.

Requiring companies to quantify and report long-term risks can make the costs of inaction clearer and thus help level the playing field for companies that want to act with the future in mind but fear the impact of long-term investments on quarterly profits and investors’ views. I heard talk of some public companies considering going private so that they can make long-term investments without taking a drubbing. Delisting every company is obviously not an option, but the more long-term investors there are and the more influence they have, the more leeway companies have to think and act with the future in mind.

In the long run, to be sure, we all know what eventually happens. But thinking and acting wisely in the short term can make future challenges far less costly – and can open up long-term opportunities.

Author: Michele Wucker, a 2009 Young Global Leader, is President of the World Policy Institute, a New York-based ideas incubator focused on emerging challenges, thinkers and solutions.

Photo Credit: World Economic Forum