Davos 2024: What business leaders need to know

Hosted in an alpine resort town, even the setting of the World Economic Forum’s Davos conference inspires intrigue. Let’s demystify the conference and explore what business leaders need to know.

Q: What is Davos?

A: It’s a ski resort near Zurich, Switzerland. Apart from that, though, it hosts the annual meeting of the World Economic Forum (WEF) every January. This begs the question:

Q: What exactly is the WEF?

A: The WEF, also known as the “International Organisation for Public-Private Cooperation”, was founded in 1971 by Klaus Schwab with the express purpose of “building a platform where business leaders could meet, interact, and collaborate with stakeholders from government and society”.

Professor Schwab hatched the idea of the WEF as an annual occasion to realign global business with his other idea, dubbed: “stakeholder capitalism”. In essence, it means that corporations should serve not only their shareholders but also all relevant stakeholders, including “employees, society, and the planet”.

Each year, the WEF brings together business leaders from its approximately 1,000 member companies along with politicians, charities, academics, and hordes of journalists.

Q: What has the WEF achieved?

It’s difficult to say. Many attendees say it’s not so much about the keynotes; instead, it’s an opportunity to network and to establish and deepen international conversations. It’s “business dating on steroids”, as McKinsey senior partner Enno de Boer put it.

That said, notable initiatives have been birthed at the global conference, including the Net Zero Asset Owner Alliance, through which the world’s largest pension funds agreed to decarbonise their asset holdings.

Q: What are the ‘themes’?

Each year has a “theme”. Notable ones from recent years include:

• 2016: “Mastering the Fourth Industrial Revolution”
• 2019: “Globalisation 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution”
• 2020: “Stakeholders for a Cohesive and Sustainable World”
• 2022: “History at a Turning Point: Government Policies and Business Strategies”
• 2023: “Cooperation in a Fragmented World”

These themes might seem broad, but that’s kind of the point. The agendas are appropriately expansive so as to touch on any relevant major global concerns that might be worth addressing. This year’s theme, “Rebuilding Trust”, was no different.

Q: What was discussed this year?

As usual, the discussions were wide-ranging this year. According to Reuters, the following were touched on in most depth:

1. Middle-Eastern conflict
2. Red Sea
3. China
4. Artificial intelligence (AI)
5. Debt restructuring
6. Economy
7. Banking
8. Energy
9. Ukraine
10. Gender

Of the above, it seems AI took centre stage.

Q: What was said about AI?

It will surprise no one that AI was covered in considerable depth this year. Of most concern to political leaders and business representatives alike were questions about how best to regulate AI and, naturally, how to profit.

On the regulation side, analysis began with mapping the risks associated with the ongoing AI transformation. First, attendees asked what kind of job market disruptions might be in store. As covered in a recent HR Leader article, the International Monetary Fund projected that up to 60 per cent of jobs in developed economies will be affected by the technology.

Business leaders like OpenAI’s Sam Altman and Microsoft’s Satya Nadella emphasised the need to train and educate people to make better use of the technologies and to mitigate the impacts of inevitable job displacements.

Secondly, attendees considered how best to regulate other AI concerns around things like copyright and data security. Philosopher Michael Sandel, for example, explored the ethical side of AI, addressing concerns around its “impact on human authenticity and the blurring lines between virtual and human connection”.

Regarding the use cases for AI, attendees considered the potential productivity gains to be made through broader uptake of existing and emergent technologies. According to futurist Ravin Jesuthasan, the conference made it clear that adoption does not necessarily mean productivity gains. It all comes down to the way it is used and how it is integrated into existing operations.

“[Generative AI’s] blazingly fast uptake is consistent across regions, industries, and roles – however, it does not inherently translate to productivity. In fact, only 61 per cent of survey respondents report increased productivity from using gen AI,” explained Mr Jesuthasan.

Research shared by the WEF also found the following:

• Seventy-five per cent of surveyed companies expect to adopt AI.
• Fifty per cent of surveyed companies expect AI to create job growth, and 25 expect job losses.
• Employers expect 44 per cent of workers’ skills to be disrupted within five years.
• Sixty per cent of workers will require training before 2027, while only half will have access to adequate training opportunities.