Lessons from Davos

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From the 20th to the 23rd of January, the World Economic Forum held its annual meeting in the snowy ski resort of Davos-Klosters in Switzerland. The meeting bring together prominent leaders from all around the world. Politicians, corporate leaders, academics and diplomats, amongst others, from over 100 countries congregate to discuss the big issues affecting the international community under the WEF mission statement of “improving the state of the world”.

Tickets come at a cost. Davos is invitation only and before you can go you must first be invited to be a member of WEF. The New York Times found a few years ago that the most basic membership costs 50,000 Swiss francs ($52,000) and the ticket will cost you another 18,000 francs ($19,000). The exclusivity of the event is the source of most of the criticisms of Davos. Concerns have been raised that such a forum encourages ‘groupthink’. The panels do tend to be remarkably one sided. In the run up to the Global Financial Crisis, the issue was ignored by the WEF. Nevertheless, the conference does provide some insight on key issues, such as the future of the European Union, gender parity and the ‘Fourth Industrial Revolution’.

Image: www.weforum.orgOn the agenda in Davos was the ‘The Future of Europe’, as the Prime Ministers of France, the Netherlands, Greece, as well as Germany’s Finance Minister and the Chairman of Eni, discussed at length the problems facing the continent. Security and terrorism was the first issue discussed amongst the panel, with Manuel Valls (Prime Minister of France) advocating closer integration to combat these issues. Wolfgang Schauble, the Federal Minister of Finance of Germany, added, “I agree entirely with Prime Minister Valls….there is a threat weighing on us from international terrorism and it is asymmetric and we can only fight this together if we have a common foreign policy.” The refugee crisis is another core concern for European governments, with Mark Rutte, the Prime Minister of the Netherlands, warning that “when Spring comes the numbers will quadruple…We cannot cope with these numbers any longer.”

Emma Marcegaglia, the Chairman of Eni, said that any fragmentation of Europe would be a “total disaster” for European businesses and that Europe must “stay together”. The solution to Europe’s problems is “to go back to our common values. The answer is to act together. Also, if we think about what is going on in the economy – things about what is going on in the emerging markets, there is lower growth going on, things about the oil price, things about what we are seeing now on the financial markets. The answer to all this is not nationalism, it’s not thinking inward, only thinking about the national electorate, only thinking about the national problem. The real answer is to act as a whole.”

There was similarly a consensus on the panel regarding the issue of Britain’s upcoming in-out referendum. “I believe a United Kingdom outside the European Union will be worse off. It will not have the influence in the world it has today. Isn’t it strange to even debate a Brexit at a time when the world is facing all these huge issues and challenges?” says Prime Minister Matt Rutte, “the United Kingdom is influential [in the EU]. David Cameron is influential. He is an excellent Prime Minister. He is making his points to the European Council. He has a lot of credibility and influence there.”

Another panel, ‘Progress towards Parity’ shifted the focus to gender gaps. The panel comprised of Melinda Gates, Sheryl Sandberg (COO, Facebook), Justin Trudeaux (Prime Minister of Canada), Zhang Xin (CEO & Co-founder of SOHO China real estate) and Jonas Prising. Ideas were shared on the most effective ways to combat inequality in the work place. Justin Trudeau advised that “Men have to be a big part of this conversation”. Melinda Gates advocated for a more effective system of parental leave, particularly in the United States where these measures are notoriously weak. Jonas Prising advised that childcare should be as accessible and robust as possible. Sheryl Sandberg made the case that it was not just the moral arguments that mattered, but that “it’s the smart thing…If you can use the full talents of the workforce, you are going to outperform”.

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The only sign of disagreement on the panel came when Zhang Xin, who runs the largest real estate company in China, told the crowd: “I believe in quotas”. Sheryl Sandberg queried how effective quotas were in dealing with the real issues, responding “quotas can be effective and there’s different countries and different models. They haven’t been effective in moving the things which aren’t [the subject of] quotas. In Norway, there’s been a 40% quota for women on boards and women in Parliament for over 10 years…Do you know how many women run their top companies? 3.4%…It is not trickling down.”

Melinda Gates also raised concerns about the declining levels of girls studying computer science given that much opportunity in the world is in these kinds of technologies. This touches on a final central theme of Davos, the ‘Fourth Industrial Revolution’. Kalus Schwab told an audience, “Today I believe that we are on the cusp I believe of the Fourth Industrial revolution, powered by billions of connected devices, 3D printers and super smart robots, just to name a few. This revolution will not only change entire societies and economies. It stands to transform the very essence of human nature.”

An issue which was repeatedly discussed was the use of these technologies in developing countries and inequalities in access. Sheryl Sandberg emphasised the importance of opening access to as many people as possible: “Connectivity and data access is too important to keep it only to the worlds rich. There are four billion people in the world who don’t have access, and when they get access they are more highly educated, they have job opportunities, and they have longer, healthy, more productive lives.” Paul Kagame, the President of Rwanda, furthered this point by discussing the importance of embracing technology in addressing many of the problems in his country. It has played an instrumental role in growth and development across the region.

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