I have been to Davos, and this is what it's really like

Davos gives politicians a stage on which to strut, and they like that. I’m pretty sure that is why Donald Trump decided to go

Hamish McRae
Wednesday 24 January 2018 13:41
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Many see Davos as the temple of evil
Many see Davos as the temple of evil

It is Davos time again. This year is a special one: for the first time since 2000 when Bill Clinton went, the US President is attending. To get Donald Trump to come is something of a triumph for Klaus Schwab, the German economics professor who founded the European Management Forum in 1971, which has developed into the premier global event for political and business leaders. The US is still the world’s largest economy and will be for another decade.

How should we react to this? It is hard to put Davos in perspective because it holds a mirror to our perceptions and prejudices about the world economy. People who see globalisation as a force for good, the driver behind the great burst of prosperity sweeping across the emerging world, see it as a celebration of the most successful half-century the world has ever known. Those who focus on the weaknesses and inequities of the present world economic system, which of course exist, see it as the temple of evil – a gathering of winners who have gained their position by exploiting others.

My own take is that this is more mundane. It is essentially a meeting for business leaders, and businesses fund it. They do so because it enables them to talk to their customers, suppliers (and sometimes rivals) in an informal and efficient way. It is a lot cheaper to get the 30-minute chat with a key customer in a hotel room in Switzerland than to have to fly across the Atlantic to do so.

The politicians and the celebrities are a layer on top of this. They provide the glamour – yes, in some quarters politicians are glamorous. And the academics, government officials, authors and charities who also go provide the intellectual backdrop. It is a brilliant concoction, and all the better if you ski. But you have to cope with people who are at the top of their various callings, many of whom, though by no means all, have a high level of self-regard. (Disclosure: I used to go most years but have not recently, largely because I am doing a rather different job now.)

If you think of it as a business event, and set aside your views about the global economic system, it becomes easier to assess.

For a start, there is a clear need for business leaders to have face-to-face meetings. We all know that in our personal lives. Is a Facebook friend the same as a friend you meet for a chat? Equally if a company is trying to sell an airline half a dozen wide-body jets, it needs its people to sit down with the airline’s CEO and team. So Davos passes the prime test of commercial purpose. I find it fascinating that in a world of extraordinary electronic communications there are more business conferences than ever before. Humans need to meet face-to-face.

That goes for political leaders too. I would not make too much of the value here. It gives politicians a stage on which to strut, and they like that. I’m pretty sure that is why Donald Trump decided to go. But as for meeting each other – well, the organisers would argue that there have been political breakthroughs as a result of conversations in Davos, but I am unconvinced that anything happens that would not have happened otherwise.

On the other hand I do believe that political meetings in Davos have never done any harm. Sometimes summit meetings between countries do fail, despite all the preparation, and damage is done. But the informality of Davos means that leaders can meet without any particular expectations and at the margin that must be a good thing.

The World Economic Forum at Davos: what is it, who attends, why is it important?

Beyond that, does the exposure of political and business leaders to other forces in society – for example missions from NGOs and charities – change anything? Put bluntly, do companies behave more ethically because they are confronted by people with different values?

I am inclined to be a bit cynical. While I have found many business leaders will spout fine principles, when you look in more detail at what line management does, there is at best a gap between principle and action, and at worst duplicity. Look at the diesel scandal. But, and this is important, meetings at places such as Davos do not make companies behave worse. They merely do not make them better.

That surely should be the key question. Does the Davos conference make anything worse? I cannot see how it might. I’m sure flying the US presidential team across the Atlantic does not come cheap, but by and large this is not a huge burden on taxpayers. Companies who send people assess the costs and the benefits and make a judgement. They don’t have to go if it is not worthwhile. The strutting is irritating, and that is not confined to the business leaders and celebrities. I have seen some journalists taking themselves a bit seriously. But the Davos meetings do, as a whole, pass the test of the Hippocratic Oath: first – do no harm.

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