Why you should be paying more attention to the World Economic Forum at Davos?

By Balasubramaniam N

Published on 10/10/2019

8 minutes

Every year in January, elite business persons, CEOs, Finance Ministers of many countries, and select Heads of the State from all over the world meet at the little town of Davos, Switzerland, nestled in the beautiful snowy Alps, to participate in the World Economic Forum.

Davos is a small town with about 11,000 permanent residents but is a very popular tourist destination. It is also home to some of the most alluring Ski resorts in the world and offers a breathtaking view of the undulating, snow-laden mountains. The clean, crisp air, gently warmed by the translucent azure sunlight filtering through the thin air, has long been the sanctuary of those who ail from lung diseases and wish to convalesce. Studded around the little town are quite a few sanatoriums where the sick can retreat for months or years if need be. Thomas Mann, the great German novelist, in his magnum opus ’The Magic Mountain’, created his fictional Berghof sanatorium based on one that he found at Davos. The Swiss are also known for their unparalleled hospitality and gastronomic delights. In all, Davos is a beautiful place to host the annual World Economic Forum, bringing together the most powerful men and women in the world for a week of incisive business discussions and to socialize (on the sidelines) without restraint.

2020 was the fiftieth anniversary of the WEF, and the theme of the conference is very meaningful: ’Stakeholders for a cohesive and sustainable world’. The fourth industrial revolution - the digital revolution, has opened up many growth opportunities for millions across the world, at the same time, there are grave challenges to the social and planetary ecosystems that threaten to overshadow such gains. It is forums such as the WEF that provides a beacon of hope at a time when a studied balance between technical progress, social equity, and social mobility is critical for humanity as a whole.

The European Management forum (the original avatar of the WEF), an NGO, was the brainchild of Klaus Schwab, a German and a highly decorated economics professor with impeccable academic credentials and equally savvy business and political connections. He established the forum in 1971, primarily as an event for European business leaders and political stakeholders to discuss and reassess their management practices. In 1988, the forum was rechristened as the WEF (World Economic Forum), and the scope of the meetings was widened to include the impact of business and technology on the society and the planet at large.

Participation in the WEF is by membership and invitation only. To become a full-time member, an organization should have an annual turnover of five billion dollars or more, and each year the membership renewal fees, depending upon the type of membership, can range anything between 50K to 300K USD. It is clear the bars for entry are high, and those who congregate at Davos can only represent leaders in their area of the industry and could derive substantial benefits by mutually engaging with other members. More than 500 public and private sessions are hosted throughout the week of the conference, and all the attendees are required to wear colored badges with strict thresholds for entry and exit into formal sessions or a discussion. The only way you would know that you are talking to the head of the state or a CEO or a senior journalist is by the color of the badges they wear, or perhaps the person in front of you needs no introduction because of his or her international stature.

To receive an invite to attend the WEF means that one has arrived in the world of business. However, not all view it that way. The conference has its share of detractors. Most famously, Samuel Huntington, the famous Harvard political scientist sarcastically invented the term “Davos Man” to refer to the participants as those who have little need for national loyalty and whose only agenda in the conference is to further their own corporate interests. Huntington’s observation may be true to some extent, but no matter how we view this congregation of the elite or the outcome out of their deliberations, there is no doubt that, over the decades, the WEF has evolved into a seminal event for candid business and social discussions among the world’s rich and the powerful. If not anything else, it sure is a welcome break for the executives to spend a week away from the craziness of their daily lives. At Davos, in the insulated atmosphere among the mountains, they can smile, drink, eat, think and talk their minds with peers. That can be a big relief to them, especially at the beginning of each new year.

The best part of the conference, at least the part I love watching on YouTube, is the face-to-face dialogues with Professor Schwab. Each year Dr. Schwab talks to a select group of technocrats and leaders on a variety of topics, usually with a small audience in attendance consisting mainly of reporters and young entrepreneurs. The quality of Dr. Schwab's questions, the preparation behind it, is always sensitive, relevant and pointed. It is not surprising that it should so, considering that Dr. Schwab is one of the most respected economists in the world, and all the leaders who share the podium with him have the utmost respect for his age, intellect and the phenomenal work he has done over the last half a century.

This time around, I enjoyed Dr. Schwab’s dialogues with Microsoft CEO Satya Nadella and Google CEO Sundar Pichai. In about thirty minutes each, the conversation ranged from AI and its ethical boundaries to data privacy and integrity to the uses of technology and finally to the sustainability of existing capitalist business models both from the perspective of the human society and the planet as a whole.

It is interesting that Dr. Schwab asked almost identical questions to Sundar and Satya. And both the young leaders shared some remarkable insights. Satya framed the essence of AI and ML in one simple statement,“In the past software produced data, and with AI and ML the data is writing the software, and that can be good or scary as one wishes it to be”.

Sundar responded to the general concern on the ethical basis of actions taken by AI, with a wonderful repartee couched in his trademark innocent smile. He said, “It is worth bearing in mind that humans often cannot explain why they did act in a certain way, AI algorithms are no different.” A clever answer to a tricky question. In all, there was an exquisite level of sophistication, erudition, wit, and poise in each of their answers, and what was even more striking was their ability to draw broader conclusions from specific details and connect the dots from different dimensions of their gigantic businesses.

Both men were very optimistic about Quantum Computing, and it seemed to me that the race is on to conquer the next wave of computing technology. It will be interesting to see who gets there first. It is a fascinating subject. I have been attempting to understand the rudiments of Quantum computing over the last several months, and the more I read the more exciting it gets. I hope to write a piece on that soon for the general reader.

Its origins go back to 1927 when the Nobel prize-winning Physicist Werner Heisenberg’s advanced the theory of quantum uncertainty, a theory that Albert Einstein wasn’t very enthusiastic about. More on it in an upcoming essay. But from the dialogues at Davos, it was crystal clear that quantum-based computing is where big investments are going to be, and the current state of the Quantum technology is still pretty much in its infancy, comparable to the stage of vacuum tubes in the binary computing history back in the 1940s and 50s.

While digital computing may not be replaced, Quantum computing aims at understanding and modeling fundamentally different issues in the natural world — especially at the level of molecules, cells and the atmosphere. IBM, Microsoft, and Google are the major players in the field, and each one of them has invested billions in the research and development of the area. It is interesting that in the 2020 financial budget, the Indian government has allocated 1.2 billion to Quantum computing.

It is a matter of pride that Deepika Padukone was one of the featured panelists in the forum. Her “live, love and laugh” movement founded in 2015, after her own tryst with depression has now become an international movement. Graceful and beautiful as ever, her discussion with Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization was a revelation. Wonderfully and spontaneously articulate, she reminded me of Ingrid Bergman in the manner she spoke her mind without inhibition. Mental health is a critical part of mental health, and the WHO has adopted Deepika as its ambassador to spread awareness on this issue. An honor and a grave responsibility indeed for this accomplished artist.

This has turned out to be quite a length essay. I could write more, but my intention is only to awaken an interest in the WEF, if possible, among interested readers. It is important for each one of us to understand the impact of technology and the revolution it has triggered over the last decade or more. All of us have been touched by this technological revolution, whether we perceive it or not.

What the future holds for us, we don't know. It is in forums such as these that we get a glimpse of the enormity of the technological disruptions happening around us, and more importantly, educates on what the industry thinks of the future? If this essay has nudged even one of my readers to seek out Davos 2020 videos on YouTube, my job is done.