This week marks the World Economic Forum‘s annual meeting in Davos, Switzerland. The event brings some of the planet’s most powerful people together to discuss global issues — but it’s an event that recently attracted criticism for being supposedly out of touch and irrelevant.
On the agenda for these political leaders, CEOs and activists is an assortment of high-profile concerns: climate change, the war in Ukraine, inflation and the increasingly fragmented world economic order. According to Zanny Minton Beddoes, editor in chief of The Economist, the summit may be on a downward trajectory but still has the important function of facilitating conversations among global changemakers.
“It’s … the gathering that everyone loves to hate … a whole bunch of the global elite, so to speak, trekking up to a fancy Swiss ski resort and then talking platitudinously about the important themes to save the world,” she said in an interview with Marketplace’s David Brancaccio. “But at the same time, I do actually think it’s useful. And it’s particularly useful in a world that is … fragmenting. It’s good to get people talking.”
The following is an edited transcript of their conversation.
David Brancaccio: The world is a dangerous place. It is a fragmented place. Have you ever attended Davos when that wasn’t the case? Yet I’m sure they’re gonna be talking about that.
Zanny Minton Beddoes: You are quite right. You know, Davos is the absolute king of platitudinous themes. This year, I think it’s Cooperation in a Fragmented World. But you know, it’s also the gathering that everyone loves to hate — a bunch of CEOs, I think it’s 600 this year, heads of state, finance ministers. A whole bunch of the global elite, so to speak, trekking up to a fancy Swiss ski resort and then talking platitudinously about the important themes to save the world. I get all of that, it’s all true. But at the same time, I do actually think it’s useful. And it’s particularly useful in a world that is, and actually, they’re right this year, that is fragmenting. It’s good to get people talking. And the real benefit, I think, of Davos is not so much the kind of panels of lots of people saying how important it is to cooperate. It’s the discussions that go on when people talk to each other. And that is like sort of speed dating or something. I mean, people have just a bajillion meetings. But I also slightly think its star is fading a bit. If you look at who’s coming, it used to be that there were really serious heavyweights. This year, there’s only one G-7 leader — Olaf Scholz, the chancellor of Germany. From the U.S. delegation, I think includes the secretary of labor and Katherine Tai, the U.S. trade representative. But you know, the president is obviously not here. Janet Yellen, the treasury secretary, is not coming. I mean, it feels to me like it’s a bit toxic to come here. It’s a bit politically toxic, and its star is also somewhat fading as a place that people feel they have to come to. And like any gathering, once I think that sets in, then it’s the question is whether it sort of unravels.
Brancaccio: You have to believe there’s going to be some discussion about realignments or some new road map for managing energy around the world, given Russia’s war on Ukraine. I mean both and the need to address climate change further.
Minton Beddoes: I hope so. And yes, there are sessions and discussions which are sort of around that theme. I mean, I think the really striking thing now is [that] 2022 saw three very, very big shocks hit the world. One was, of course, a geopolitical shock, [Russian President] Vladimir Putin’s invasion of Ukraine. Two, the energy shock that came from that and particularly from the weaponization of [natural] gas. And then three, the macroeconomic shock of suddenly going from a world of low inflation and low interest rates to a world where inflation is back and the [Federal Reserve] did the biggest tightening in 30 years. And that sort of shake-up from those three interlinked events of ’22, I think, is really shaping the horizon for ’23. And one real question is, how do you deal with the energy transition from a climate perspective? But also, energy, as you know, is newly a geopolitical issue and a macroeconomic issue. And so how do all of those fit together is, I hope, the subject of a lot of discussion.
A changing world order
Brancaccio: A big topic on my program here that we cover, as much as we can, is the promise and disruption of new technology on the workplace, for instance. And I see you’re on a panel, how do we prepare our workers or future workers for this disruption? I mean, some people think in the end, there’ll be more and better jobs. Some people aren’t so sure, but everybody agrees it’s going to be disruptive. And we’re not all that good at bringing the right skills to people at the right time.
Minton Beddoes: I think that’s right. I think one of the things we’ve learned, if you look back at the last couple of decades, and don’t forget, we are in the middle of this digital, technology-led revolution that started a while ago, and it’s still got a long way to go. And thus far, we haven’t been very good at retraining people. We haven’t been very good at giving people the skills they need, a lot of people, to really succeed in this, in this new world. And yet, there’s going to be a lot more disruption ahead. I mean, one of the buzzwords this year is “generative AI models” or “foundational AI models.” You know, ChatGPT has really caught global attention. That potentially is a whole load of different jobs affected, creative jobs affected. Look, I’m, as you would expect, David, ultimately very optimistic. I don’t believe that there is a fixed number of jobs. I think all of this technology can augment labor, as much as substitute for it. It can help people do different kinds of jobs and do their jobs better. But you’re certainly right that we need to rethink education systems, training systems. We have a kind of very 20th century education system for a very different economy. It seems kind of crazy that people do all that education and training at the beginning of their career and much, much less as it goes on. That’s a kind of buzzword, but very, very little has really been done about it.
Brancaccio: Now, I’m talking to you, you know, after an experience of three years where global supply chains turned out to be vulnerable. You have countries like the U.S. and China shoving each other apart. I realized I’m talking to the editor of a publication founded on the idea of freer trade, but you wonder, could they have done a panel at Davos this year entitled, “Globalization Is So Yesterday”?
Minton Beddoes: I suspect they probably have one that’s something like that, although they probably won’t admit that it’s “yesterday.” Look, I think we are very clearly entering a new world. I actually think it’s not the right way to talk about it being a deglobalized world. If by “globalization” you mean the flow of goods, services, ideas, people across borders, the world is still globalized. It’s just a very, very different kind of focus. And it’s becoming much more fragmented. And I think, and this is what worries me, we’re seeing the unraveling of the sort of open, rules-based system of international trade and investment that we used to have. What we’re seeing now is a much more zero-sum mentality — much more government intervention, much more industrial policy, much more subsidies, much more focused on export controls, investment screening. And what’s really striking is that this shift is being led by the United States. And the U.S., for understandable and, in many ways, good reasons — the rising concern about the competitive and strategic threat from China, the Inflation Reduction Act has huge subsidies for electrification and full clean tech. But it’s also got an agenda about, you know, bringing jobs back to the United States, and therefore, it’s quite protectionist in who has access to this. And then the Europeans, as a result, are going to increase their own subsidies. And we have, I think, a fragmenting away from an idea that trade and investment was good for everybody to one where each country is looking out for itself. It’s focusing more on bringing jobs home, having supply chains at home. It’s understandable why that’s happening. But I think once you move away from a rules-based order, it can very quickly unravel, and that fragmentation, that unraveling, is what really worries me, and we’re gonna have a much less efficient, less prosperous, more costly and ultimately, perhaps, less safe world.
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