Arthur W. Page Society

Davos – A Place for Surprises, and Undulating Expectations

One reason expectations always run high before the annual meeting of the World Economic Forum (WEF), I suspect, is that each year it becomes increasingly evident that without business clearing the way, governments won’t be able to tackle global problems.

So, get them all together – and something must happen, right? Well, kind of.

The “Spirit of Davos”, carefully nourished by WEF founder Klaus Schwab in whose rich, accented baritone the words carry both balm and barbs, is surely a great leveler. So that’s a good start.

The five days in Davos put top CEOs and other global opinion leaders at the same level as Presidents Dimitry Medvedev of Russia and Nicolas Sarkozy of France or Chancellor Angela Merkel of Germany. Not a bad thing, considering real accountabilities.

On the Magic Mountain, only the quality and timeliness of their message will count.
The problem is, not much that starts in Davos really gets implemented.

Any impetus unfortunately usually dissipates as soon as the event is over.

One essential truth remains: in today’s world, business has a bigger role than ever before. And that role is growing.

It is easy to satirize Davos, but the meeting also represents an ideal state for the human condition.

Where else do energized, insightful, powerful and well-meaning people come together to share big-picture ideas on how to “improve the state of the world”.

So, what is happening this year?

Opening day – and I’ll be a day late with these reflections, since I’m not there – displayed an enormous spread of viewpoints about the “new reality” Davos is examining. And in doing so, provided some surprises.

Who would have thought that Sir Martin Sorrell of WPP would show why rich-poor gaps actually hurt the economy – and that the trickledown theory is worthless?

In an opening panel, he said data shows that rich people will invest mainly in financial assets while the middle class and those emerging from poverty buy goods and services, and build houses.
The rich create financial asset bubbles. The rest help the economy grow.

Thus, just as in 1929 when the rich-poor gap was the widest the last time before peaking again in 2007, a financial asset bubble was created.
In 1929, the Great Depression followed, Sir Martin pointed out. What next?

Medvedev, who after the bombing at a Moscow airport cancelled his planned trip to Davos, arrived after all to deliver the official opening address.

He provided the second surprise.

After making clear that Moscow would crack down hard and also seek international cooperation to step up its fight against terror, the Russian President turned to his ambitions for his country.
Who would have thought that one main aim was to make Moscow an open, liberal, lightly regulated low-tax center for capital markets and the financial services industry?

Otherwise, it was pretty much business as usual.
Davos is the greatest time and place to launch stuff – and PWC published a study that shows that CEO confidence is on the increase again.

Our Page Society colleague and fellow blogger Richard Edelman launched his company’s excellent Trust Barometer.

As a CCO, I tried to time opeds and good research studies for Davos.

If you can get a crowd there, you’ve covered your top influencers. For the Shell CEO, three years running, we managed to place a bylined oped in the Financial Times early in Davos week.

Not only was he chuffed by all the comments he personally received in Davos as a result, we also managed to move a few needles, just a little.
And when Shell launched its Global Scenario update a few years back, Davos was the place.
Again, plenty of good response.

That’s the sort of work that is fruitfully deployed in Davos – but is it really about “improving the state of the world”?
Obviously, yesterday brought a lot more than I can cover here. Much more.

And an amazing amount of stuff was written in the past 24 hours about Davos 2011. Today, at 8.25 a.m. EST, the Google search for the terms “World Economic Forum 2011” yielded 33.2 million results, almost eight million more than yesterday
And that’s without any celebrity pull, unless you count articles about why Robert de Niro is not attending after all.

For a while a few years ago, it did seem as if the traditional Davos mix of political and economic power was going to be seriously diluted by celebrity power.

The corporate chieftains, amused at first, finally balked and asked the WEF to cut back on the shenanigans.

This, I believe, was after Sharon Stone once grabbed an audience microphone during a panel discussion in the big hall about poverty. She said it was time to do something, not just talk.
She told an amazed crowd that had just decided, then and there, to donate one million dollars of her own money. Stone, at her most steely, challenged all present in the main hall to make similar pledges – then and there.

Squirm, squirm. A million? My money? My own money?
So now we’re back to a Davos where the main players – business, governments and civil society – again can share deep insights, along these lines.

  1. They agree that something is amiss
  2. They agree that something must be done,
  3. They are not quite sure, though, what or how,
  4. But they are pretty certain that some other guy needs to make the first move

Bjorn Edlund
Retd EVP Communications, Royal Dutch Shell plc
Principal, Edlund Consulting Ltd.

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