Davos 2018: Five Takeaways

 

This year the theme for Davos was “Creating A Shared Future in A Fractured World” and like every year was filled with hundreds of official panels, scores of semi-official breakfasts, lunch, dinner and “night-caps” and thousands of private meetings in secured locations all over the snow laden town.

The sheer scope of the occasion makes any comprehensive summary difficult, since one only is exposed to a tiny fraction of what transpires, but here is one perspective on the key takeaways.

1.Economics Trump All.

This conference at its core remains a business and financial gathering and with worldwide stock markets at a record high, the mood was the most bullish in over a decade. The money-oriented crowd had turned much more positive on Donald Trump, whose election had filled the conference with angst and teeth gnashing last year. Healthy financial markets and the expected –at least in the short term—benefits of the tax cut have eclipsed the darker and worrying behavior of the individual.

Trump came to invite companies to move more of their activity to the United States and there was widespread belief that the administrations reduced regulations and taxes has made the US much more competitive than ever before.

Another key sub theme at the conference was Crypto-Currencies. With the rise in Bitcoin and other crypto, panels on block chain and crypto were sold out and standing room only. I attended some on block chain technology but it was clear that the crowd wanted investment guidance versus understanding the power of trusted distributed ledger.

Economics trumps everything including Trumps other behavior. The final score is money. Imperative to remember in a Machiavellian world.

2.China India America and the rise of Economic Nationalism.

 The future is increasingly going to be driven by three countries, China, India and America. A modern CIA for short.

America has always been a dominant player and economically it has never looked stronger.

This was India’s Davos starting with Sharukh Khan, India’s biggest star being feted at the opening awards ceremony (along with Elton John and Cate Blanchett), to Narendra Modi the Prime Minister given the opening keynote and 130 Indian CEO’s with huge delegations hurtling through the streets which were bedecked with huge outdoor ads beckoning companies to come to India. After China and America, India is where most businesses plan to increase activity as a country of billion plus people with the two-thirds younger than 35 is run by a pro-business Nationalist.

While the Indian and US Presidents and delegations were around in large numbers the country that really stole the show was China. One of its efforts known as the One Belt, One Road Initiative launched in 2013 to connect via land and sea routes over 80 countries, 60 percent of the world’s population and nearly half the GDP is an indication of the sheer enormity and long term outlook of China’s ambitions. In contrast to what appears to be a short term oriented US agenda, Chinese leadership looks like Jeff Bezos and Amazon thinking for the long term with a global domination mindset. The Chinese are taking up the mantle of free trade and globalization (even though they have much higher tariffs than the United States).

The recent Edelman Trust Barometer showed a significant majority of the Chinese trust their leadership and government while this trust is crumbling in the West.

Africa and Latin America seemed like after thoughts, the United Kingdom clearly marginalized as there was very little talk of Brexit and Teresa May’s talk was sparsely attended compared to the Indian, US and French leaders.

Speaking of Europe, the great hope is Macron and France which were seen as a transformational leader rejuvenating a country that is finally ready to be modernized. But even Macron was clear that without a strong united Europe, France would also be an also ran in a China, India and America world.

What was clear was that while Davos is big on globalization and leaders used the word all the time, we are seeing the rise of economic nationalism with China, India and America competing for business and influence.

3.Technology Everywhere with an emphasis on AI and Data Driven Platforms. And the need to learn. Facebook/Zuckerberg as Voldemort.

 Klaus Schwab the head of the World Economic Forum that owns Davos wrote a book last year on the Fourth Industrial Revolution noting how various forms of technology were re-writing the future. This Fourth Industrial Revolution has become a sub-theme of the last few conferences and while Mr. Schwab touches on a broad swath of technologies including modern materials and bio tech, the star at this conference was Artificial Intelligence and modern data driven platform companies like Facebook, Amazon and Uber.

In the past, there used to be several panels on digital or mobile or technology but now technology is so pervasive that it is embedded into every conversation and every discussion. The breakthroughs in Artificial Intelligence and the dominance of companies like Facebook who have harvested and monetized our data flavored many conversations.

Here there was less optimism and some concerns particularly the impact of employment and whether the platform companies had grown too powerful.

A study by BCG indicated that even in the US more than a million white color workers will lose their jobs to AI and this loss of jobs and increased inequality that might result worried some. Could AI worsen the underlying strain of populism that has unmoored politics recently?

On the positive side, recent studies show for every job lost to automation in the short run, there are 2.4 jobs created in the mid-term so the issue is really about how to re-train and provide support for those who will lose their jobs in the near future.

Upskilling, re-training and ensuring continuous learning were the themes of many panels.

While AI was seen as a double-edged sword, the power of the big data platforms in increasingly seen as bad.

If there as a villain at this conference it was Mark Zuckerberg (who does not attend) and Facebook. Marc Benioff the CEO of Salesforce called for more regulation. George Soros asked for the platforms to be broken up. Mark was equated to a seller of addictive nicotine. At a dinner with four Nobel prize winners on Economics, I heard all of them state that the data ownership of the large platforms was dangerous and driving inequality.

So many places and times I heard Mark Zuckerberg being mentioned but not in name but as some dark force like Voldemort in Harry Potter.

4.#Me Too.

 The #Me too movement was pervasive and while Davos is still predominantly (79%) men, the cultural impact of the recent Women’s movement was everywhere.

Of particular note was a statistic that if women had the same opportunity as men to be in the workforce in Japan and India, the GDP of these countries would be 9 and 21 percent higher.

While equal pay and equal participation and equal rights are a key to the movement a particularly emotional example of the impact that today’s women leaders have on the future generation is illustrated by this article of a panel at Davos with Peggy Johnson of Microsoft as reported by the Washington Post:

DAVOS, Switzerland — The technology executive began to tear up. Peggy Johnson, who leads business development at Microsoft, was telling a roughly 200-person audience at the World Economic Forum about her daughter — how the young woman does not laugh when men in her office make dirty jokes.

“I always laughed,” she said of her younger self, a striver in corporate America. “I thought I had to.”

Johnson wondered where her daughter had found the strength to keep a straight face when such gags, especially at a woman’s expense, weren’t funny.

“She said, ‘Mom, you don’t laugh,’” Johnson said, her voice breaking. “She learned it from my 50-year-old self. Because I don’t laugh anymore. I’m in that position of power now.”

The room burst into applause.

5.The World Is Getting Better and Science and Reason are Key.

I once read a line in a book that went like this: “I am not scared of the world or the future but I am scared of the headlines”

Today there are significant issues all around the world with millions in poverty, millions underfed and shut out from opportunities and in pain.

But besides the economic boom, the rise of women and China and India and the wonders of technology that make things sometimes magical on a wide spectrum of measures the world is getting better, safer and richer.

I listened to a talk by Steve Pinker the Harvard Professor who is about to publish a must-read book called “Enlightenment Now!” who used data to show how since the Renaissance and the rise of reason and science the world has made great strides.

Yes, the world is getting much better than ever before because of reason, science and It is why it is these values that must be preserved and the real threat to the future is leadership of some countries including the United States who are either living in an imagined reality or scuttling investments in science and education.

All of us need to keep this in mind and think outside our boxes and bubbles.

The future is bright as long as we are willing to learn, think and understand the other.