Klaus Schwab’s step back prompts fresh questions over Davos

Klaus Schwab, 86, has had such a tight grip on the World Economic Forum that there are doubts over the future of the conference should he suddenly become incapable. Copyright 2024 The Associated Press. All Rights Reserved

You can even detect the uncertainty over the future of the World Economic Forum (WEF) at Davos from its own annual crowning blandishments.

Check out our selection of newsletters. Subscribe here.

The theme for WEF 2019 was “Globalisation 4.0: shaping a global architecture in the age of the fourth industrial revolution”. For 2023: “Co-operation in a fragmented world”. For 2024: “Rebuilding trust”.

It is an awkward time for elitist gatherings of business and politics given rising geopolitical tensions and cracks in the multilateral order. So that makes the announcement earlier this month that Klaus Schwab, WEF’s octogenarian founder is stepping back from his day to day management of the shindig something of a moment for Davos.

That has occasioned a fresh round of hand-wringing over how Davos will continue: so tight has been Schwab’s grip on WEF and so unclear how much influence he will continue to wield as chair of the organisation’s board of trustees, that there are doubts over the future of the conference should its 86-year-old founder suddenly become incapable. (He is, by all accounts, still in rude health).

+ WEF founder Schwab announces retirement from leadership role

They add to the broader question: with a new schism between Russia and the west and an increasingly sparkish geopolitical situation in east Asia, how Davos can possibly stay relevant? And is the timing of Schwab’s choice to step back a portent of change.

‘Is Davos still worthwhile?’

“Its globalist raison d’être is in retreat. National fealty is in vogue,” declared the Financial Times in an editorial this January, which asked “Is Davos still worthwhile?”

Davos will probably endure, despite the evident challenges to the globalising world that made it, simply because no other prestige opportunity to convene so many powerful and interesting people from politics and commerce exists.

But maybe there is also a more fundamental ailment. I don’t think the challenge for WEF — or its great archetype, ‘Davos Man’ — is just about coming to terms with deglobalisation so much as its history and an understanding that the present is not the solid ground we think it is. Many of the assumptions that underpin a Davos view of the world are a product of a very specific period in time.

+ Circus? Zoo? Criticism and praise for WEF 2024

WEF is a triumph of a mindset about the nature of progress that has dominated most western politics since the end of the cold war. The great philosophical and political questions of human life are settled, it says, and the future will be based on ladder of technology with commerce scaling to better humanity from here on in.

Schwab, an engineer turned economist by training, might be said to personify the development of this thinking. He started Davos as the European Management Symposium in 1971, turning into the World Economic Forum in 1987. First the forum was all about corporate management, then it became about management in a global context. And eventually it became about the best management of that global context.

As it turns out, however, people are not actually just consumers, or stakeholders with incentives, alignments or values which can be smoothly judged, nudged and satisfied. They are crooked timber. And some social problems require — or they force — political change more radical than the typically cautious approach of many governments.

Lifting economic wellbeing

Globalisation has been a force that lifted the economic wellbeing of countless people around the world. But it also has driven some of the global strains. More of it — or rather, better management of it — may not ameliorate them.

Populists, for all their nasty faults, know this intuitively. And it is why they are flourishing in this period of social and economic dislocation. They speak to people’s identities and they promise to smash a consensus perceived as smugly out of touch.

An in-depth report by my colleague Guy Chazan this week examined the increasing support for the anti-globalist far right among Europe’s youth. Germany has been a huge economic beneficiary of globalisation and its fruits since reunification. How then, can we explain why the Alternative for Germany is the most popular party for 14- to 29-year-olds? What does all this mean for the post-Schwab WEF?

The companies, billionaires and legions of consultants that fill Davos each year may want to take a pause in thinking how they can change the world through their management of it, and give a little more time to thinking about how, in the coming years, it may seek to change them.

Copyright: The Financial Times Limited 2024