In an age of conferences and meetups galore, the World Economic Forum at Davos, Switzerland continues to be the most high profile shindig around. The four-decade-old event attracts an array of bright and well-connected people from all over the world. This year's event is garnering even more attention as U.S. President Donald Trump declared his participation. Trump is the first president to attend since Bill Clinton in 2000.
The gathering is a smorgasbord of people from disparate fields, ranging from economists to politicians to actors and social workers. But, does a gathering of some of the world's smartest minds and influential thinkers really make a difference to the global economy?
A Lofty Goal and Vague Pronouncements
Davos' goals – to improve the state of the world – are lofty. Before the Internet era, the World Economic Forum was considered an exclusive and hush affair. After its establishment in 1971, the forum played a major role in advancing capitalistic values and forging relationships between disparate stakeholders. It set the agenda for global economic development, especially after the late 1980s when the Berlin wall came down, the Soviet Union disintegrated, and China emerged as a major power on the world stage.
However, increasingly the forum seems to be following the agenda instead of setting it. Based on breathless prose and endless dissections of its meetings on the Web, it seems to have devolved an expensive after-party with no concrete business.
As an example, consider the case of the conference's themes. Each year, the forum fixes a theme for the conference. The theme is supposed to reflect the times we live in, and for 2018 the theme is "Creating a Shared Future in a Fractured World." The problem is that those themes are vague and could easily encompass a broad variety of meanings.
Take its theme for 2014, for instance. That year, the conference discussed “The reshaping of the world: consequences for society, politics, and business.” The program included illuminating discussions with PepsiCo Inc. (PEP) Chairman Indra Nooyi on leadership (a topic on which she had already spoken several times earlier) and the state of neuroscience with actor Goldie Hawn. 2016's theme about robots and the fourth industrial revolution came after numerous books and articles had already been written on the topic in the last couple of years.
Even predictions made by attendees of the confab regarding the state of the world economy have gone wrong. For example, a number of Davos economists predicted better times ahead for the world economy (including China) on the back of low oil prices in 2016. As we already know now, the opposite happened.
There is an argument to be made regarding the networking made possible by the conference, however. In 2010, when the financial crisis was still making its effects felt in the global economy, there was a 23% surge in the number of bankers attending the conference. The then French President Nicolas Sarkozy spoke about the “need for reform of the international monetary system” and bankers tried to convince governments and regulatory bodies to “loosen the regulatory vice” on their system.
The Bottom Line
Before the fall of socialism, Davos played an important role in spreading Western ideas of economic freedom to the rest of the world. Through its gatherings and talks, the forum sought to convince the value in capitalism to the rest of the world.
The recent financial crisis and fall of Soviet Union have waned its influence, however. Now, the forum follows the global agenda, instead of setting it. In other words, its impact in the world of ideas has lessened even as it is perception as a networking spot for the world's elite has increased.