‘Saving Globalization’ in Davos

Flickr.com/The Session “Global Economic Outlook” at the Annual Meeting 2018 of the World Economic Forum in Davos, January 26, 2018; Copyright by World Economic Forum / Benedikt von Loebell

Just about a year ago, I wrote about the feeling of uncertainty in light of globalization struggles and a global populist movement, which seemed to be taking off. The uncertainty and concerns seemed to be a shared mood also during the World Economic Forum in Davos back then. Now, as a year passed and the 48th edition of the World Economic Forum was held in Davos at the end of January, is the mood any different?

Based on the main theme of the forum this year, which was ‘Creating a Shared Future in a Fractured World’, we may assume that alongside the realistic view of the current situation, there is also a positive outlook for the future. According to The Globe and Mail account, this year’s mood in Davos could be characterized ‘by growing optimism tinged with anxiety’. Indeed, as reported in Deloitte’s recent report, we are currently experiencing synchronized momentum of the world economies, and the outlook for businesses around the world is positive, hence the optimism. At the same time, the challenges of globalization, as well as the worries over populist and protectionist tendencies were still present. French President Emmanuel Macron warned everyone not to be naive, as ‘…globalization is going through a major crisis’. Echoing this acknowledgment, Angela Merkel said that ‘multilateralism is under threat’ and that these challenges cannot be solved by protectionism, emphasizing the need for openness and collaboration. Finally, the backlash against globalization was named among the three main threats to civilization by Indian Prime Minister Narendra Modi, emphasizing that “everyone is talking about an interconnected world, but we will have to accept the fact that globalization is slowing losing its lustre.”

Thereof, despite the global economic momentum, there was no room for self-complacency among the global political and business leaders in Davos. The majority agrees that something needs to be done about saving globalization and making it fairer to everyone, yet, the ideas on how to do it are rather dispersed. On a larger scale, there are proponents of the ‘America first’ approach and the ones, who call for more a cooperative approach. Other than these trade matters at the governmental level, discussions over the future of globalization seemed to showcase quite a few possibilities and directions of positive impact. Global leaders suggested several solutions, from including poor rural populations into job markets, and improving access to university education, to adjusting to the new automatized economy.

The role of global businesses for these positive changes was highlighted by Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. Professor Schwab argued that the biggest priority of all should be to rebuild the foundations of society and that global businesses should take the lead. Specifically, businesses can show the lead in restoring social contracts, which allow for mutual trust and shared prosperity between capital and labour. According to Prof. Schwab, our focus should shift towards quality of economic growth, which is based on equality and opportunity for everyone. Interestingly, in support of such an idea, the World Economic Forum launched a new metric, the Inclusive Development Index, which would allow to measure countries’ sustained and inclusive economic progress.

During the forum the positive global economic forecast was also presented, promising the global economy to continue to recover in 2018 and 2019 due to active trade and investment. Yet, given continuous geopolitical risks, it can hardly be left to its own devices. Professor Schwab urged everyone to ensure that ‘the Fourth Industrial Revolution unfolds with humanity at its centre, not technology’. That seems like a task requiring efforts of multiple stakeholders, namely governments, global businesses and civil societies.

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