After Davos, CEOs Agree on One Common Need

GettyImages-512543390-compressorResponsive and responsible leadership was the official theme of this year’s World Economic Forum conference in Davos, attended by 3,000 luminaries, including 1,800 business leaders. A wrap of proceedings shows CEOs were prepared to offer much advice on how to bolster people’s trust in public and private institutions—though it remains to be seen if the general public will be convinced.

“Responsive leadership requires recognizing people’s fears and anger as legitimate,” Klaus Schwab, the chairman and founder of the World Economic Forum said in a summary of the proceedings. “Responsible leadership means providing inspiration and constructive plans for building a better future that is more inclusive.”

This year’s forum was unusual: for the first time in decades the Western world appeared to be turning its back on global trade. Britain had just voted to leave the European Union and the U.S. had elected a populist president pledging to tear up free-trade agreements.

“Responsive leadership requires recognizing people’s fears and anger as legitimate. Responsible leadership means providing inspiration and constructive plans for building a better future that is more inclusive.

The turbulent state of global affairs was best encapsulated by Chinese President Xi Jingping emerging as the unlikely global champion of free trade. “We should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all nations,” Xi said in a 90-minute address that was, for many, the highlight of the Forum.

Rising protectionism in America and Europe is, in large part, being advocated by millions of unskilled workers who have either lost or are fearful of losing their jobs to cheaper offshore labor, or automation that’s placing more power in the hands of highly-educated and tech-savvy citizens.

Critics of the forum, which is held each year at a luxury ski resort in the Swiss Alps, are inclined to argue the answer is income re-distribution via government intervention, such as higher taxation or curbs on ultra-high salaries. That notion found some support at this year’s meeting, with IMF Managing Director Christine Lagarde stating that excessive inequality puts a break on global growth and that the solution “probably means more re-distribution than we have at the moment.”

CEOs were more likely to focus on one commonly agreed solution, though: the need for skills training to allow individuals to grasp new job opportunities created by technology.

“We need to create a new narrative and restore hope for people who have been economically dislocated, especially from technology,” said Hewlett Packard CEO Meg Whitman, who was one of the Forum’s five co-chairs.

Salesforce CEO Mark Benioff said the consequences of not acting would be dire, warning that a global “digital refugee” crisis could be coming sooner than many people expect due to rapid advances in artificial intelligence. But he also noted that despite past technological disruptions, there are more people working in the world today than at any other time. “Throughout history, technology has displaced workers, but the workers have the opportunity to be trained or re-trained,” he said.

And new employment opportunities could by abundant, according to HealthTap CEO Ron Gutman, who told the Forum that sensors and wearable devices could facilitate a move from reactive to proactive medicine, creating a “new ecosystem” of jobs.

In its summary, the World Economic Forum named the establishment of the Compact for Responsive and Responsible Leadership as a key achievement of this year’s gathering. Developed by the International Business Council, the compact, which can be viewed in full here, will involve the establishment of a framework to allow managers to measure a long-term approach for their business. The index system will be presented in August.

SHARE
Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

PARTNER CENTER