Making sense of Davos

January 9, 2012

When the World Economic Forum publishes a well-researched report on global gender gaps, sustainable consumption, water security or competitiveness, it fuels global debate. When it gathers its Members from the business world with others from a broad swathe of society (academics, artists, politicians, human rights campaigners, trade unionists, environmentalists and more), it becomes either the sinister architect of a global conspiracy or the convener of a pointless gabfest: Weltverschwörung or waffle.

So what is the Forum? I can’t pretend to give you the definitive answer, but I can tell you how I make sense of it, having spent my working life in television news and higher education. It might be helpful to start by saying what it isn’t.

It is not a lobbying or advocacy group. The world’s biggest companies have little difficulty in securing private meetings with whomsoever they choose. Politicians have good reasons to meet with companies who might be employers, and financiers who might be investors. Trade associations, employers’ groups and national chambers of commerce all host such meetings and campaign on behalf of their members. This is not the role of the World Economic Forum.

It is not a networking association. The British prime minister’s country residence at Chequers has long played host to eclectic gatherings where journalists, bankers and celebrities are encouraged to rub shoulders. Doubtless there are interesting conversations over the marmalade, but that’s not the role of the World Economic Forum either.

So, what is the Forum’s reason for being? There is a German part to the explanation and a Swiss part. For the German part, you have to step back to the country post-World War 2: destroyed by extreme nationalism; divided by communism; its Western leaders seeking to rebuild their industry on a model that could also rebuild their society.

That process meant re-imagining industrial politics. At its heart was the idea that business did not exist simply to serve shareholders. Instead, an enterprise should recognize its place within a constellation that includes employees, suppliers, consumers, neighbours and beyond – its “stakeholders”. For a firm to be accountable only to shareholders was too narrow. Corporations needed to embrace their broader responsibilities as social, political, intellectual, cultural and even artistic or spiritual actors. And understanding those responsibilities required interaction.

The idea doesn’t have an easy English label, and it is hardly in common currency. The Forum calls it the “multistakeholder” principle, and that principle extrapolated to a global level is what gathers Members of the World Economic Forum with other global stakeholders.

The World Economic Forum has one simple motivation in bringing people together – “convening” in the jargon of international organizations. It believes that its Members can only truly understand their interests by encountering the interests of others.

Then there is the Swiss part: participation. Perhaps it reflects the tradition of mountain communities that responsibility be shared, that every view must be integrated, that one cannot simply abrogate one’s membership in a community. It is an old idea. It was probably old when it was articulated by one of Geneva’s most famous sons, the political philosopher Jean-Jacques Rousseau. For the Swiss, it is a principle of their democracy – the Konkordanzsystem.

That democracy at federal, cantonal and town level is consulted in the preparations for the Forum’s Annual Meeting in Davos. Davos is an independently-minded mountain community, steeped in Switzerland’s direct democratic tradition. Its altitude and an enterprising doctor, Alexander Spengler, made it a destination for well-heeled tuberculosis sufferers. Thomas Mann set his comedy of ennervation, The Magic Mountain, in one of its sanatoria. Albert Einstein helped kick-start its reputation as an intellectual retreat (video).

Davos today is a working alpine town. The town’s tourism is a functional contrast to the chocolate box world of Villars, Zermatt and St Moritz. The Forum’s Annual Meeting boosts the local economy, but not its winter sports. Barely one-fifth of those participating can be accommodated in a five-star hotel. The local ski-lift company has contemplated shutting the lifts during the Meeting. When I’m there, as a member of the Forum, I sleep on a single bed and share a bathroom. Hardship? Not really, but it is work.

And that suits the Forum, because it deals with the world as it is, not as it would prefer it to be. It is not a decision-making body. Nor is it a conspiracy in which the horological components of global governance and industry are wound together to frustrate the rest of the world.

For the businesses and organizations and individuals who come together in Davos, the opportunity simply to meet with one another, to think outside their usual entourage of attendant counsel and advisers, and to have no predetermined outcome assigned to every encounter is both a relief and an opportunity. It brings together competitors and colleagues, protagonists and antagonists, the well respected and the heartily reviled, without requiring all who enter to adhere to its precepts or accept its principles.

It is an incrementalist organization. It moves slowly, and a diverse funding base means that it is not a hostage to any interest. Much negotiation and planning is required simply to arrive at a consensus around which debate can take place. But when that consensus is achieved, movement can be profound.

Fabians would recognize the benefits of a platform from which Nelson Mandela could announce his economic policy for the post-apartheid era in South Africa. It can inspire extraordinary acts of philanthropy, like those of Bill and Melinda Gates. It can provide a global microphone to someone like Aung San Suu Kyi. Like any platform, its power comes from the people who stand upon it, and their power in turn derives from the strength of their organizations, their office or their ideas.

At any gathering of the powerful, most often power remains frustratingly unwielded. Swords stay planted in stones. And so there is frustration. Why doesn’t the Forum DO something? Why does it take in country X, leader Y? Why does it nudge gently rather than poke aggressively? How can it let things stay the same?

Everyone who works for a complex organization makes compromises. Sometimes those compromises come off, and the reward is progress. Sometimes they don’t. Encouraging power to accept responsibility can be a cover for expediency, but it can also prompt change. Organizational cultures are self-reinforcing. If enough people within an organization judge their own contribution by its mission “to improve the state of the world”, it puts a value to their work and gives them meaning.

The world remains a complex and dysfunctional place. Yet it is a bigger and better place than the world I grew up in, in the world’s first industrial economy. In the early 1970s, women like my grandmother wore headscarves to go to market; heat and water came from coal scraped from scuttles; and a job meant simply work for men – labour that was fuelled by tinned food and forgotten with weak beer, the wireless and the football pools. And this life was the best on offer for the most-favoured millions. This was the world in which the Forum was created.

I am convinced that economic progress can drive social and political progress. Later this month, the World Economic Forum, under the rubric of the theme of its Annual Meeting – The Great Transformation: Shaping New Models – will ask participants in Davos to think again about how the world works. The Forum too recognizes that even its own model needs to be questioned. Often and regularly.

Crossposted from Forum:Blog.

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