You might be forgiven for thinking that, since the leaders from the world’s largest economies gathered in Davos twelve months ago, very little has changed. There are still major issues with global markets, falling oil prices, interstate conflicts and climate change.
Add to these factors the growing migration from war-torn regions, and terrorism, both on the ground and cyber-related, and it was a recipe for a very busy Forum.
What Was Different?
Despite all the pressing issues highlighted above, the WEF organisers picked a different topic to be the main theme for 2016 – Industry 4.0. This topic focuses on the so-called “Fourth Industrial Revolution”, where industries are increasingly digitised, and humans are replaced in many professions by robots or AI.
While this might be a positive thing for some of the attendees, including Jack Ma (Founder of Alibaba), Sheryl Sandberg (CEO of Facebook) and Eric Schmidt (Head of Alphabet, Google’s parent company), it is potentially very bad news for both blue and white collar workers, with an estimated 7 million jobs at risk over the next 5 years in the world’s largest economies.
Klaus Schwab, founder and president of the WEF, has written a book on ‘Industry 4.0’, in which he states, “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another.” This theme also included a discussion on ‘smart machines’ being used in war zones.
What Else Was on the Agenda?
A number of other major themes appeared on the agenda, including terrorism, the migration crisis, cybercrime, and the on-going impact of the slowdown in the Chinese economy on the financial markets of the rest of the world.
In the run up to the 2016 event, the Global Risks Report published by the WEF highlighted large-scale ‘involuntary migration’, for example from civil wars, as this year’s major risk in terms of impact, and mitigation of climate change as the most likely global risk. This is the first time that an environmental issue has topped this particular list.
Climate change was one of the hot topics of the Forum, as leaders discussed the next steps and how to build upon the COP Climate Change Agreement that was signed in Paris in December last year. Global climate change is seen as having a major impact on other risks, such as food and water shortages and regional conflict, so the topic was never far from the centre of discussions.
Leaders also managed to find time to talk extensively about the global markets, including the impact of the slowdown in the Chinese economy. Christine Lagarde, managing director of the IMF, spoke on Friday about the need for Chinese authorities to communicate better with global markets over moves in equities and foreign exchange markets, in order to head off any further market downturns.
However, it’s not all bad news, as Lagarde stated that China’s move from an export-led to domestic consumer market economy was “manageable”, while holding estimates for Chinese growth at 6.5 per cent. It’s hoped that this turnaround will arrest fears of another global recession.
As the Forum drew to a close on Friday, there was a sense that 2016 could be a year of major upheaval, with markets not expected to recover immediately, slow growth predicted for at least the first half of the year, and a solution still required for mass migration.
However, there also appeared to be a feeling of tangible outputs from a business point of view. The central theme of ‘Industry 4.0’ raised interesting points around the future of many industries, and in a number of sessions, there was agreement that business needed to step away from a narrow focus on profits and take steps to improve workers’ conditions, promote diversity and take a perspective that covered a wider group of stakeholders.
It will be interesting to see if we are still talking about the same issues when the 2017 Forum rolls around in 12 months.
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