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Getting to grips with Davos

The World Economic Forum in Davos has come in for much criticism, but it provides an unrivalled opportunity to get to grips with the challenges of the future writes Michael Izza.

When you read this piece, I will have just returned from Davos in Switzerland where I was attending the World Economic Forum’s 48th annual meeting. It is an extraordinary affair, which attracts heads of state and leading politicians, businessmen, philanthropists, academics, film stars, musicians, artists, charities and international organisations such as the UN, the World Health Organisation, the World Bank and the OECD, to a small town high in the Alps. Where else would you find US president Donald Trump rubbing shoulders with Narendra Modi, the prime minister of India, our own PM Theresa May, Jean-Claude Juncker, president of the European Commission, Cate Blanchett, Cyril Ramaphosa, the newly appointed deputy president of South Africa, Elton John, Canadian prime minister Justin Trudeau, Peter Maurer, president of the International Committee of the Red Cross, and IMF managing director Christine Lagarde? And they are all there to use their collective social conscience to create a better world.

Since most – but by no means all – of the participants come from the echelons of the world’s most successful people, you could be forgiven for thinking that it’s all a bit hypocritical. It’s one of the ironies of Davos that while the participants are busy being concerned about income inequality, housing and lack of social mobility, crates of champagne, smoked salmon and caviar are flown up the mountains to feed them at countless evening receptions. And somehow people can hold these two apparently contradictory views in their minds at the same time. So I don’t blame people for asking whether Davos has a continuing role in the 21st century. But I would argue strongly that it does.

This year the theme for the meeting was creating a shared future in a fractured world and the aim was to find ways to reaffirm – in the light of increasing protectionism – international co-operation on shared interests, including international security, the environment and the global economy.

At a national level, the World Economic Forum (WEF) was also seeking solutions to the growing divisions within countries, resulting from breakdowns in the social contract because of the failure to shield societies from the “transformational impacts of a succession of shocks, from globalisation to the proliferation of social media and the birth of the Fourth Industrial Revolution” (technology). Hence the loss of trust in institutions and the undermining of the relationship between business and society.

Davos gives me the opportunity to hear people who are at the top of their game talk about subjects that in my normal day to day activities I wouldn’t get to spend a lot of time on but which inform my role as chief executive. Many of the topics – agile thinking, social mobility, the impact of technology, the UN’s sustainable development goals, a world of strong economies – are areas that we have been exploring at ICAEW as part of our public interest remit. I have often been able to use something I’ve learnt at Davos. Last year, for example, I attended a private breakfast on climate-related financial disclosures. They will require banks and insurance companies to look five, seven and 10 years ahead and say what impact it would have on their business if some of their investments or activities were to be left behind by technologies. That’s a huge breakthrough for businesses to have to disclose their so-called “stranded assets”. Five years ago investors were saying they didn’t need to be told about stranded assets: now, with the pace of technological change, they are the first to be asking companies to make those disclosures.

Davos has a record of warning about future events – in 2011, for instance, it focused on what was then a little known issue called “digital wildfires”, which the WEF defined as “a fear that cyberspace would become awash with fake news and misinformation”. Sound familiar? Furthermore, thanks to meetings in Davos in recent years, initiatives are under way to develop vaccines for future pandemics and to save virgin rainforests in Africa.

I firmly believe that the fact that Davos can attract such a wide range of movers and shakers is more important today than it has ever been. We need opportunities like it to talk, exchange ideas and help to build bridges. As WEF founder Klaus Schwab said: “The sheer scale of the challenges our world faces makes concerted, collaborative and integrated action more essential than ever.”

Originally published in Economia on 8 February 2018.