Davos: A Catalyst for Change or Empty Promises?
Grace Watt, Staff Writer
February 23rd, 2020
As powerful leaders of industry, finance and politics arrived for the 50th annual World Economic Forum (WEF) in Davos, the promises of change and criticism of elites began once again. The exclusive event lead hundreds of CEO’s, state leaders and activists to swarm the small city in Switzerland, where they would discuss the world’s most pressing issues in panels and speeches, but also in private dinners at remote cottages. While the WEF insists they strengthen global ties and bring together the most powerful people in the world to enact change, the organization has often been criticized for its lack of action. To many, the conference in Davos comes across as out of touch elites coming together to wring their hands over global issues that aren’t faced by those in attendance.
WEF was founded in 1971, by German engineer and economist, Klaus Schwab and began as a meeting for European business and financial leaders about management practices and the direction of the European economic market. Schwab founded the organization with the ‘stakeholder theory’, a business approach that he helped define. It dictates that businesses have a duty to not only shareholders, but all stakeholders, such as employees, customers and the environment. The organization is funded by its own costly membership fees and holds events across the world, most notably the annual Davos conference. Here, many politicians favour making grand policy announcements, or activists enjoy launching new initiatives.
Every year WEF declares a theme for the conference based on the most relevant issues of the year, and for 2020 it was ‘Stakeholders for a Cohesive and Sustainable World’. The largest issues of concern were global warming and the question of maintaining a thriving economy with sustainable practices. In addition, the conference recognized the IMF projection of a slow-down in economic growth. This is due to greater economic uncertainty from trade and political tensions and the hesitancy shown by foreign investors. These pressing matters were the centre of the discussions and commitments that were made.
While the effects of the WEF conferences themselves are highly debated, the initiatives that have been announced have shown a history of clear and direct action. They include the Platform for Accelerating Economies (PACE), which looks to scale up circular economic practices, in which a business operates on renewable resources and excludes waste and pollution from their design plan. It was announced in 2018 and now 40 global leaders have committed to leading projects to introduce sustainable business practices. Every few years an initiative is typically announced and this year saw HRH Prince Charles announcing his Sustainable Markets Initiative in his keynote address. This five-point plan aims to accelerate the transition to sustainable markets with experienced council members, using the conference’s notoriety as a launching pad.
It’s evident to see the juxtaposition of the Davos Conference’s concerns and Schwab’s philosophy with its membership fees and grandiose events. On one hand, critics view the conference as the gathering of the most powerful and privileged to concern themselves about issues that they don’t have to think about otherwise in their day to day lives. Meanwhile, optimists look at Schwab’s ability to frame the mindsets of global leaders, and further his stakeholder theory, which would hold them accountable to much more than a profit margin. It’s important to appreciate that the invitees of the Davos Conference are invited because of their global value and success. The people who have had such vast momentum to create successful corporations, lead nations to prosperity or maintain stable banks are also the people who are going to be the most effective in producing global change. While keynote speeches and signed proposals can inspire and promote action, it seems to be the initiatives of these leaders that contain the best prospects for change.
Across the world, one can find critics and proponents of the WEF and the Davos Conference. The event has become so huge and schedules have become jam packed with dinners, mixers and private meetings that the goal of making meaningful connections can seem lost amongst the hustle to maximize the Davos experience. While the carbon emitted from the attendees’ private jets is not aligned with Davos’ proposal to be carbon neutral, this conference is where the facilitators of change are given the opportunity to network and discuss what needs to be done. With the recent tensions within the global market, between trade wars and hostile political relationships, it is significantly important to prioritize meaningful connections and common ground in the global economy. If this doesn’t happen, the IMF’s prediction will come to fruition and protectionist attitudes will lead to a slowdown in economic growth, less sustainable practices and a breakdown in connections.