In a not-so-subtle rebuke of Donald Trump, he called on the world’s richest 1% to ‘pull their weight’ in the global economy, attacking Russia for testing the fault lines of the current world order and described Nato as a ‘sacred obligation’. A strong start before most had sipped their first cup of coffee.
The excitement continued for the remainder of the day, with the IMF’s chief Christine Lagarde announcing that the middle classes were ‘in crisis’ and Alibaba founder, Jack Ma, issuing a brutal theory of how America went wrong over the past 30 years: War and Wall Street, apparently..
Even the Panama Papers scandal (remember that?) reared its head again.
And all of this happened before Jamie Oliver and Richard Curtis were caught playing Pokemon go in an effort to raise the awareness of poverty and hunger around the world. An alchemistic conjuring act of the deeply serious and strikingly pointless.
Feast your eyes on a day two’s snapshot!
Digital & Tech
The sometimes ambiguous relationship between technology, jobs and productivity – wrapped up in the debate around the 4th industrial revolution and AI – continued to divide opinion as the tech hot topic at this year’s WEF.
Manpower released an upbeat report on the future of employment – finding that 83% of employers intended to maintain or increase their headcount despite the impact of digitisation. While IBM’s CEO Ginni Rometty and ABB CEO Ulrich Speisshofer echoed the sentiment with the latter adding that “Employment, prosperity, wealth and automation goes hand in hand if deployed in the responsible way”.
But the WEF’s Global Risks 2017 report warned that, as a result of AI and other disruptive technologies, long-term jobs are giving way to self-employment in the “gig” economy, leaving individuals to shoulder more responsibility for the costs of unemployment, sickness and old age.
Alarm bells were also rung for the finance sector where blockchain technology – a ledger system or database that uses ripple technology to hold all data and bank account information in a cloud (and without regulation) – is expected to be used by eight of the world’s 10 biggest investment banks to cut 30 per cent of their costs.
‘Mad-cap sci-fi proclamation of the day award’ goes to George Whitesides, CEO of Virgin Galactic, who reckons we could very soon be traveling around the world in rockets connected by “spaceports”: “You basically jump in a spaceship and go around the planet”. Who knows? Mind you, who are we to mock? Ten years ago the idea of streaming music from anywhere in the world or making video calls would have seemed far-fetched too.
And finally, it might be an unfair national stereotype but the Swiss are certainly living up to their safety-first reputation. According to Bloomberg, Swiss police are being trained to shoot down drones in the skies above Davos and stop ‘covert missions’, people ‘taking pictures’ or ‘mapping police and security positions’. Sounds more like a story line in Grand Theft Auto to us.
What’s happening at the business end?
Job creation in an era of heightened uncertainty continued to be a big issue in business circles. And a stark warning for policy makers came from Michael Saunders, a Bank of England policymaker, who highlighted that the cost of unemployment had climbed significantly since the 2008 financial crisis. “Reduced job security and the greater financial cost of unemployment may reduce workers’ bargaining power,” he said.
Added to this, “the middle class are in crisis,” said IMF’s Christine Lagarde in the morning session of day two. Drawing comparisons between a squeezed middle and a sense that the rich are finding ways to play the system, Swiss anti-corruption expert Mark Peith, who was part of the Panama Papers Probe team, called for an end to corruption. “The Panama Papers showed the world how the crooks of the world stash away their money.”
Along with Nobel-prize winning economist, Joseph Stiglitz, Peith claimed in a joint report that transparency was at the heart of many of the world’s current headaches. Lack of transparency in global financial markets has led to a framework which supports corruption, tax evasion and tax avoidance, they claimed.
Don’t we all love cash? Billionaire founder and chairman of Dalian Wanda Group, China’s largest real estate developer and the world’s largest movie theatre operator, Wang Jianlin, certainly does. During a conversation about how sport generates wealth, he chuckled, “I love money”. At least someone’s honest.
While some spend, some people are having their money snatched. Talks on the dark side of the 4th industrial revolution require businesses to integrate cyber risk in their overall risk management strategies. “CEOs have to have some understanding of technology and the threats associated with it in order to run their businesses efficiently,” said leading IT consultant Walter Bohmayr. “An organisation will be breached – this is the “new normal”.
Planet of the elites: Ideas, Challenges and Leadership
Why are we fed up with experts? Because they were wrong, argued psychology professor Molly Crockett and author Philip Tetlock on day two’s morning briefing at the launch of ‘failings in forecasting.’
They touched on the polling and economic predictions relating to Brexit, the total fudge in political pollsters in the US election, as well as the inability for Europeans to perceive the strength in the anti-establishment sentiment in Italy. Can they adapt their models to navigate large swathes of data to better predict 2017, or will they hammer the final nail in their own coffins?
Alibaba founder Jack Ma has a brutal theory of how America went wrong over the past 30 years. It focused too much on war and Wall Street, claimed the Chinese guzilionaire. Pointing to tech giants Microsoft and IBM he provocatively asked: “The profit they made was larger than the top four banks in China put together … But where did the money go?”
Weighing in on India’s controversial debate over demonetization, Mukesh Ambani of Reliance Industries lauded the government’s cash-less ambitions as proof that “India is ready for 4th industrial revolution”. Paypal CEO Dan Schulman believes that for the 2 Billion people of the world living outside the financial system, fintech is indeed the future. He agreed to take up arms, stating that “the war is against cash”.
With Donald Trump’s inauguration rapidly approaching, there is an inescapable animus towards this ‘global order’. And while The Donald hasn’t been physically present, he’s never been far from people’s minds. As Friday approaches, all eyes at Davos will be on this historical moment and what it says about the global world order WEF represents.
#WEF2017 is trending, but who is cutting through the noise?
There were three standout brands to watch yesterday:
Gavi and Lifebuoy announced an innovative partnership to work on the protection of children under 5 from disease and premature death.
Education is key. P&G and Always, in line with their brand goals, used Davos to commit to supporting women and girls in the challenges they are facing due to the Syrian refugee crisis.
In Davos gossip: A bit of moderation has crept in. Google has abandoned its flashy party which last year saw the crowds dancing as Chic and Nile Rodgers belted out tunes. But rumour has it that Russian oligarch Oleg Deripaska still takes his villa high up the mountain and hosts a party for those who can linger to ski and drink champagne at altitude.
And of course, our Davos celebs showed how it’s done with Matt Damon stealing the limelight with a circuit of media interviews and panel discussions raising the issue of water and sanitation through his not for profit, water.org. And what a tour de force it was. A Hollywood super star and statesman in the same breath. Lesson: Pick an issue and make it your own.
What’s happening today?
- For the world elite, the 4th industrial revolution just never gets old and it will continue to animate discussions – Google founder Sergey Brin will be talking on the subject;
- Theresa May will be making a special address, you can expect the markets’ rollercoaster ride to continue, along with queries over Brexit and;
- “Zohra”, Afghanistan’s first all-female orchestra, are hoping to capture the imagination of world leaders and challenge international stereotypes of Afghanistan by empowering young women to follow their passion.
See more information on the agenda here: https://www.weforum.org/events/world-economic-forum-annual-meeting-2017/programme
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October 21, 2020