OPINIONS

Date: 6 June 2022 Author: Anna Radziwonka

World Economic Forum – Davos 2022

The World Economic Forum was founded in 1971 by the German business professor Klaus W. Schwab. It is a forum for exchanging opinions and discussing the greatest (not only economic) problems of the modern world. Leading businessmen, politicians and scientists take part in these meetings. Usually it takes place in January, but exceptionally this year it has been postponed due to the Covid-19 pandemic.

SOURCE: FLICKR

This year, the Forum was held under the slogan “History at a turning point – government policies and business strategies.” Before the event, Klaus Shwab said that it was the most up-to-date and momentous event since the Forum was founded over 50 years ago. It was taking place during one of the greatest geopolitical and economic tensions in the world, such as the war in Ukraine and the humanitarian crisis . It was underlined there that “No representative of Russia was included in the official guest list. Borge Brende, said that excluding Russia from the Davos Forum was the right decision. Klaus Schwab added that “Russian aggression will in the future be described as breaking the post-war, post-Cold War order” and that the Davos Forum will do whatever is necessary to support Ukraine.

The war in Ukraine

The topic that dominated the Davos meetings was the war in Ukraine. Volodymyr Zelenskiy was the special guest of the Forum. He called for further financial assistance to defend and rebuild the country. He also asked for further sanctions against the aggressor. Most of the leaders assured their support and expressed their unity with Ukraine.

However, a dissenting opinion of former US Secretary of State Henry Kissinger appeared. He expressed the view that the war cannot continue any longer, Russia has always been the guarantor of the balance of power in Europe, therefore Ukraine must take into account the loss of certain territories. These words sparked a lot of negative feedback around the world.

Economy

A significant part of the speeches and discussions at the Forum were devoted to the world economy, the issue of its recovery after the pandemic, debt in the world, inflation, world trade and wages.

The Covid-19 pandemic, the invasion of Ukraine are events that strongly touched the foundations of globalization as we know it. Will it be replaced by regionalization, economic separation, and self-sufficiency? On the other hand, the need to jointly counter possible threats (e.g. another pandemic, loss of livelihoods, humanitarian crises) speaks in favor of globalization, though perhaps in a different, more regional form.

One of the priorities of the forum participants was food and energy security. Fossil fuels still provide more than 80 percent of the world’s energy. Pandemic limitations of supply chains, economic and geopolitical instability, and trade disputes – indicate the need to accelerate the energy transformation to ensure the provision of safe and affordable energy for all. The reduction in the production and supply of grains from Ukraine, as well as Russia, which is subject to sanctions, signals a long-standing food crisis threatening the population of the whole world, especially in areas that are constantly affected by hunger.

Reports on the search for alternative food sources, e.g. blue food, i.e. products of aquatic origin, turn out to be interesting.

The climate crisis is associated with the energy crisis. However, you cannot choose between them. The role of business and entrepreneurs in the modern world was discussed at many Forum sessions. World leaders discussed what they are doing for the planet and people in the age of threats, especially those caused by climate change. The global initiative The First Movers Coalition (FMC), made up of over 50 companies, is very interesting and important. Their approach is unique in terms of purchasing obligations in the heavy industry and long-distance transport sectors, which are responsible for 1/3 of global emissions. In order for these sectors to decarbonise at a speed appropriate for the planet, they require low-carbon technologies. Unfortunately, they are not yet competitive with the existing high-carbon solutions. To stimulate the market, accelerate its transformation, coalition members commit to purchasing some of the industrial materials and long-distance transport they need from low- or zero-carbon suppliers despite the high cost.

They are also working together to remove obstacles to the development and supply of low carbon technologies. Forum participants called for a new form of ecological capitalism, in which all companies will start to rely solely on renewable energy sources. It requires a lot of investments in clean technologies and innovators who develop eco-solutions. It was emphasized that we already have the tools for changes, but there is no political will. To sum up this topic, there were words from one session, ‚ÄúPolitical actions and technology can help, but what we really need is a change in our attitude towards our planet and its people. When we change our economic systems, we must respect all life on Earth. Compassion must play a key role in our decisions.”

The ongoing impact of the Covid-19 pandemic was part of many discussions at the Forum. The necessity of joint action and providing information in order to protect life, health and livelihoods in the event of another pandemic was emphasized. Experience in recent years has highlighted the differences in health equality between low and high-income countries, prompting interviewees to discuss ways to accelerate filling these gaps. Economic and social uncertainty, existential threats (armed conflicts, climate change, the necessity to migrate) contribute to growing mental health problems, especially among young people. Therefore, attempts were made to identify ways in which leaders can improve health systems, also in the area of mental health, and ensure equal access to them.

Work

Work was another topic of the Economic Forum days. It was emphasized that the years of the pandemic, the overlapping economic and climate crisis and warfare plunged another over 200 million people in the world into poverty. The collapse of companies as a result of pandemic lockdowns and interrupted supply chains have severely limited labor markets. The ongoing technological changes, the need for green transformation, and climate migrations will force the necessity to retrain training even as estimated by a billion people. This is a pressing social and economic challenge for the world. The need for investment was emphasized, especially in poorer regions, ensuring diversity, equality and economic integration. During the debates, the emphasis was on activating women, which could help to alleviate some of the demographic and cultural prejudices in the distribution of financing. The pandemic, the change of the way of working to remote, prompted the forum participants to focus on the hybrid work model, as well as the four-day work week, which, as research has shown, can increase productivity, reduce overhead costs, improve well-being, attract, and retain talents. These models also create opportunities for the creation of new jobs.

Technology

The development of the technologies of the future was also one of the leading topics of the forum. The time of the Covid-19 pandemic meant that more and more people used various media and technologies to obtain information, educate themselves, do business or make social contacts. A new concept was born – Metaverse. Some call it “the new social platform”, others call it “a new internet experience that connects multiple sites and platforms.”

These are future permanent and interconnected virtual environments in which social and economic elements reflect reality. Users will be able to interact with it and interact with each other simultaneously on different devices and technologies. The future of the meta-universe will be shaped mainly by 3 technologies: virtual reality, augmented reality, and computer-brain interfaces.

The real benefit of it will be the ability to integrate and superimpose digital content with our physical world.

This will benefit creators, architects, engineers, educators, students and many applications (e.g. purchasing).

Enterprises and companies will enable cooperation to operate on a larger scale, faster. Productivity and efficiency will increase, as well as training from military to scientific (e.g. medical – providing real-time visual data in an extended operating room).

The necessity to create “the next version of the Internet” and digital experiences for children and their well-being was emphasized. It will become more important to protect the privacy and safety of users, and to create regulations eliminating intimidation, discrimination and destructive stereotypes.

Above are the topics of the Economic Forum in Davos, which abounded in discussion panels and meetings. Let us hope that the conclusions reached by the participants will be implemented for the benefit of our planet and its inhabitants.

Bibliography:

May 26, 2022 Gayle Markovitz – Business Editor, World Economic Forum

May 25, 2022 Will Kenton

 

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