• Economics

Davos and beyond

Davos and beyond

The 43rd World Economic Forum Annual Meeting at Davos attracted the usual array of the world’s political, business and thought leaders. But what should we really learn from the event? Attendees from London Business School offer their insights.

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Over five days in January the World Economic Forum gathered together some of the world’s most powerful people to discuss a range of pressing issues from the future of Europe to the transformation of the healthcare sector.

This year’s theme was Resilient Dynamism and the conclusion of the debate was guardedly optimistic, while warning against complacency. “The optimism for recovery is there,” Axel A. Weber, Chairman of the Board of Directors of UBS, Switzerland, and a Meeting Co-Chair, declared. “The feeling is that the worst is behind us.”

Fellow Co-Chair Frederico Curado, President and Chief Executive Officer of EMBRAER, Brazil, agreed. “Hopefully, the good feelings this week were not too optimistic but will translate into investments,” he said. “Jobs are the main issue. Unemployment is a huge issue for everyone.”

Lynda Gratton, one of the six-strong contingent from London Business School, taking part, compared this year’s event with that of 2012.  “Looking back to the 2012 Davos, the talk was all about the final playing out of the financial crisis and the deep concerns about the break up of the Eurozone. Just a year later, and the mood seemed more optimistic, though with a strong undercurrent of realism. For me, one of the emerging challenges of Davos was around youth unemployment, while one of the strongest threads of opportunity was the relentless advance of learning technologies. Combined, these two developments could lead to the paradoxical situation of highly educated people with no jobs.”

The global economic outlook was the subject of much debate. Mario Monti, Prime Minister of Italy, accepting that his country had “failed to take on the challenges of globalisation”, defended his government’s record in office, claiming that “leadership is the opposite of short-termism”. Christine Lagarde, Managing Director of the International Monetary Fund, predicted that 2013 would be a make-or-break year for the global economy. She urged leaders to maintain the reform momentum in pushing through the necessary restructuring that they have started.

Closing the gender gap was the subject of a major plenary session discussion. Defending plans to have at least 40 per cent of board seats in European companies occupied by women by 2020, Viviane Reding, Vice-President of the European Commission and Commissioner for Justice, Fundamental Rights and Citizenship, concluded: “Sometimes you need political leadership to change the business world.”

My personal Davos

Aside from the headline stories, every attendee has their own Davos experience. The huge range of sessions and participants ensures that no one has the same experience – whether it be bumping into Bill Gates on the shuttle bus or standing next to a world leader in the hotel lift.

“Davos always has impressive performances by heads of state but the highlights are invariably more personal and relate to individual stories that overcome cynicism about Davos and its global network and make you realise how global networks focusing on individual good really can make a difference,” observes Professor Andrew Scott.

“What I learned was that business people are more optimistic on Europe than politicians and regulators – or citizens. That the world is becoming ever more uneven, whether within economic blocs such as the EU, or within countries, with increasing gaps between haves and have nots,” says Professor Michael Jacobides.

“Most useful for me was being able to have informal meetings with many alumni, senior management of our executive education clients and recruiters, donors and potential speakers.  The most relevant discussion was that on the impact of on-line learning and how we should be involved,” says Sir Andrew Likierman, dean of London Business School. “The highlight was how many people held the School in high esteem - there were unsolicited testimonials from many who deal with us, alumni and those that hire them.  Most gratifying was the praise for our graduates from a US recruiter who is the alumnus of another business school at the party being held by that school.”

The education debate also attracted the attention of Lynda Gratton who featured in two sessions on the mindful leader and the next generation workforce.  “It seems that the promise of extensive virtual learning is rapidly being delivered. In the Forum, Professors from MIT and Stanford spoke of their determination to put their classes online for all to engage with, while Bill Gates made it clear that this was something he was personally committed to supporting. There are still issues of certification and verification of skills, but these seem relatively easy to solve,” she says. “There has been talk about fundamentally restructuring education for years. In fact, some have seen education as the last bastion of traditional hierarchical practices. Luckily, it seems that the momentum for education for all is finally beginning to build, fueled by lower-cost computers, greater levels of connectivity, and a willingness from some teachers to make their classes available online for free. As a consequence, there are those who say that, perhaps within the next five years, the education landscape will be profoundly transformed.”

There was a sense that change in education is already underway. “With firms such as Coursera and Udacity providing online courses from prestigious universities for free to massive online audiences an impact is already happening,” says Andrew Scott.  “What top business schools such as ours will have to continue to do is make the lecture experience more than the conveying of basic knowledge and be about interaction with faculty with academic expertise and real world experience, as well as having vibrant interaction between students and the degree programme itself, and focus on experiential material and strong networking.”

For Professor Costas Markides the highlight was the session entitled “Citizen power”.  “In the past, we needed hierarchies (such as firms or governments) to undertake major projects or major change efforts,” he says. “Now, we can have thousands of people, spread all over the world undertaking major projects without any of them belonging to the same hierarchy in a team or firm.  We have the tools to now mobilise thousands of people and to coordinate their efforts towards a common goal without having them be part of a hierarchy.  This is exciting!”

“The degree of optimism about the prospects for 2013 surprised me,” admits Andrew Likierman, quickly adding, “I was only too enthusiastic to share it.”

But is Davos still relevant? “Inescapably, it is, and not only because it is the ultimate networking event,” says Michael Jacobides. “In a world which is becoming ever more fragmented, and where problems are becoming ever more interconnected and interdependent, we do need structured opportunities to put the pieces back together. This isn’t a place to decide; but it is an opportunity to engage in a more frank exchange of ideas, gauge reactions, sense the mood, and make sense of the world around us. It also helps to put in perspective the daunting task of tackling the large, systemic issues that will become ever more important: From sustainability and food security, to the stability and redesign of the financial system, to the increasingly uneven nature of our economic system. Will we fix it by going to Davos? Surely not. But Davos can help nudge things in the right direction, or at a minimum help us make some sense of what needs doing.”

For those already looking forward to shaping tomorrow’s agenda, the 44th World Economic Forum Annual Meeting will take place in Davos-Klosters, Switzerland, from 22 to 26 January 2014.

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