Davos, the World Economic Forum (WEF) and its founder, Klaus Schwab, have become more famous than ever over the past two years – but not for the reasons they might have wished.
As COVID-19 spread and the world battled the pandemic, Mr. Schwab and the WEF, not to mention regular delegates such as Bill Gates, were the subject of a string of outlandish conspiracy stories, including most went back to the premise that they were determined to dominate the world.
Leaving aside the grim details of these stories, they seem to have missed the most important point of all, far from becoming more powerful than ever, Davos failed.
Before going any further, it should be pointed out that it is surprisingly difficult to determine what “Davos” is.
At its core, it’s a four-day meeting of businesspeople, politicians, academics, activists and, yes, celebrities, atop a mountain in a Swiss ski resort .
There are speeches from world leaders, forums where people talk about the big issues of the day, from poverty to climate change to inequality and countless meetings and parties outside the official cordons of the World Economic Forum.
Bankers come here to meet potential clients and do business in hotel suites, politicians have quiet bilateral meetings with their peers and with businessmen.
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What is Davos and what happens at the World Economic Forum meeting?
But there are two overriding reasons why Davos matters. The first is: the power of summons.
It depends on whether he can convince enough influential people to come here, so that other influential people can rub shoulders with them.
The second is something deeper: most delegates here enjoy a world where capital and trade flow freely from one part of the world to another. This place is not the explanation for the globalization of the past decades, but it has certainly thrived in this world.
And on both fronts, things are not looking good for Davos.
There are many A-list delegates coming to the forum this year, from the German Chancellor Olaf Scholz to US climate envoy John Kerry, not to mention corporate stalwarts like JP Morgan chief executive Jamie Dimon and, of course, Bill Gates.
But the guest list this time seems much lighter than usual.
There is no American President, no British Prime Minister and even Emmanuel Macron gives the meeting the cold shoulder – no wonder given that these nations, and so many others, are fighting against a Cost of life crisis at home.
The end of globalization itself?
But more importantly is the fact that the very world in which Davos thrived is disintegrating.
There is a war in continental Europe. Indeed, some have described the conflict as Ukraine simply like the first movements of a world war.
Relations between China and the West are at a new low point. Countries around the world are reorganizing their supply chains and the era of unfettered globalization seems to be coming to an end.
Davos has been written off many times before (perhaps including by yours truly), but each time it has managed to defy such predictions.
Many people thought donald trumpElection of would be catastrophic for the forum, but he has attended more than once and was here at the last winter meeting in early 2020.
Still, there are two other reasons, in addition to the two above, why Davos faces its biggest threat yet.
The COVID hit at face-to-face events
The first is the pandemic that erupted shortly after that last winter meeting, which undoubtedly dealt a blow to face-to-face events like these.
Davos may be bigger and more influential leagues than most corporate jamborees, but at its core, that’s ultimately what this event is all about, and thanks to Zoom and remote working, the jamboree industry business is trapped in a deep recession of its own.
The other question goes back to something that Klaus Schwab, the forum’s founder, has often talked about before: stakeholder economics.
This idea, which he dreamed up decades ago, is that companies do not exist in isolation: they are at the crossroads of different groups, from shareholders to customers to employees and, for that matter, the state and society in which they operate.
The idea was that by engaging more sensibly with each of these parties, the stakeholders could all come together. The Forum’s official motto is “Committed to improving the state of the world”, but it might have been better to borrow BT’s old slogan: “It’s good to talk”.
Yet, in the face of the cost of living crisis, those lines of communication seem to have frayed, if not broken.
There have been more industrial actions in recent months than at any time in decades.
The dialogue seems to fail.
On almost all fronts, Davos therefore seems to be in great difficulty.
Far from having taken power in recent years, it is more threatened than ever.
The next few days will ring with fanfare in this Swiss city: Ukraine, the state of globalization, climate change, all these issues will be debated here by leading panels.
But quietly, almost indistinguishably, this place loses its importance as the world around it changes.
