Key takeaways from the 2020 Davos-Klosters World Economic Forum
Last month, from the 21st to the 24th of January, the usual suspects met at Davos for the annual World Economic Forum. For those of you who don’t know, the WEF hosts an annual forum for prominent business leaders and politicians. They gather to discuss, among other things, the state of the global economy.
This year, the theme of the conference emphasised the role of all businesses as ‘Stakeholders for a Cohesive and Sustainable World’.
Theme of Sustainability
The threat of global warming and an impending climate catastrophe hung over the event, rightly occupying much of the discussion. Greta Thunberg followed up her impressive speech in 2019 with a powerful rousing call-to-action this year.
She criticised the growing culture of carbon offsets and planting trees, claiming they are a cosmetic fix to an embedded issue.
The forum saw serious commitments made to reducing plastic waste and re-affirming commitments to the Paris Climate Accord. However, resource consumption and global demands for energy are still rising at alarming rates. It remains to be seen, therefore, whether the Davos conference will lead to serious and immediate action at a global scale.
The event drew some of the best and brightest from across the world to speak about a huge array of issues. The Prince of Wales used the forum as a platform to propose changes to “how we deploy taxes and regulation to attain sustainable markets.”
Al Gore compared the climate crisis to historic crises such as Dunkirk and 9/11.
Sajid Javid risked angering the most pessimistic of activists when he outlined Britain’s largest priority. The ex-Chancellor stressed that ensuring a trade deal between the UK and the EU, not curbing climate change, was top of the UK’s list.
Trump, in typically bombastic fashion, attempted to overshadow many of the speakers when he claimed that climate change activists were ‘prophets of doom’. He did so while talking glowingly of the US’s continued economic strength.
This year’s Forum appeared to want to promote something different: the idea of stakeholder capitalism.
Stakeholder capitalism is the notion that businesses should seek to meet the demands of all interested and affected parties. It is a concept that suggests businesses put the needs of customers, communities, suppliers and the environment on an equal priority with its shareholders.
Following Davos, optimists have suggested that real questions are being asked of modern capitalists. It is too early to tell whether these questions will put an end to unchecked profiteering. But it is refreshing to see concerns of the everyday men and women enter the debate.
And perhaps we are witnessing a change in the way modern business is conducted. In the UK, for example, the Streamlined Energy and Carbon Reporting regulations mean businesses are required to monitor their operational emissions to ensure they remain compliant.
The results of conscientious policy, such as the SECR regulations, will only be obvious in the long-term. However, government backing for it and similar policies certainly marks a positive, and necessary, step toward curbing capitalism’s excesses.
An understated takeaway from Davos is the huge role digital technologies will play in the coming decades. Disruptive technology like machine-learning, blockchain, autonomous driving, and gene editing were all topics of discussion.
In what is being called the Fourth Industrial Revolution, the WEF sponsored the creation of various platforms where interested parties can discuss the new digital age. With four platforms titled ‘Technology Governance’, the WEF sought to prompt a conversation about what the future of tech might bring.
Whilst the advancements in AI and machine-learning open up various possibilities, the WEF emphasises the need for a clear stance on data and how it is gathered and used.
Christian Klein, Co-CEO of SAP, the European software giant, said this “It is up to all of us to use technological advancements to tackle the world’s greatest challenges and turn them into our biggest opportunities.”
An Unsettled World
The Forum’s attendees were asked a series of questions on what they perceived to be the greatest threats to global capitalism. The Global Risks Report comprises the answers to these questions and is categorised to present a risk report from different demographics.
WEF members were split into two categories: Multistakeholders, the forum’s attendees, and The Global Shapers, its network of young people driving dialogue and change.
Their answers are presented as a dossier on economic threats, and perceived threats, as understood by members of the WEF.
Multistakeholders expect the worst short-term risk to be the potentially costly and destabilising effects of an economic decoupling between the US and China. Ongoing trade friction between the two countries has been costly for the global economy as a whole and a future trade deal would do a lot to stabilise the situation.
In keeping with the theme of this year’s forum, many expected worsening climactic changes to threaten the global economy in the short term. Of those present, 77.1% expect to see damaging ramifications from extreme heat waves, while 76.2% saw destruction of natural ecosystems to be a potential problem.
Notable, however, is the fact that of the top five short-term threats Multistakeholders foresaw for the modern world, only two related to the environment.
The Rise of Youth
Greta Thunberg, ostensibly the voice of today’s youth, ensured conversation did not stray far from the environment. In a notable change from older attendees, Thunberg, and her peers, see impending climate collapse as the biggest issue facing the world right now.
According to the capitalist world’s influential youth actors, the Global Shapers, all five of the most threatening potential influences to our modern world are related to a changing climate.
88.8% of the Global Shapers agreed that the risk of extreme heatwaves would increase in 2020. Furthermore, 87.9% agreed that destruction of ecosystems would increase in 2020, while 87% agreed that health issues related to pollution would increase in 2020.
A United Front
Despite the disparity with regards to short-term threats, the Multistakeholders and Global Shapers came together in assessing the challenges capitalism faces for the further-flung future.
Extreme weather, climate action failure, and biodiversity loss are all among the most likely and impactful threats the WEF foresee for the next ten years. With the WEF drawing attention to these threats, it falls to the influential actors of the capitalist world to enact policy and change to subvert them.
If you want to read more about the WEF’s Global Risk Report, you can access the document here.