The 50th World Economic Forum, themed Stakeholders for a Cohesive and Sustainable World, was held from 21-24 January in Davos, Switzerland. The theme highlights WEF Founder, Klaus Schwab’s idea that companies must create benefits for all stakeholders: customers, employees, suppliers, communities, and shareholders. The focus this year was on sustainable investments and how to make businesses more climate friendly.
In a report released earlier, the WEF said severe threats to the climate account for all of the top five long-term risks: failure of climate change mitigation and adaptation; extreme weather events; environmental damage; biodiversity loss; and natural disasters, such as earthquakes and tsunamis. For this Forum, 3,000 participants from around the world converged to assist governments and international institutions track progress towards the Paris Agreement and Sustainable Development Goals, and facilitate discussions on technology and trade governance.
Sustainability issues dominated the global policy agenda. However, bridging the chasm between profits and greener approaches is a tricky topic. For example, US President Donald Trump withdrew from the Paris Climate deal arguing that the rigid climate policy targets penalized US businesses.
Discussions and presentations revolved around six inter-connected topics:
- Technology: How to create a global consensus on deployment of Fourth Industrial Revolution technologies
- Healthcare: Using technology to improve medical facilities, diagnosis etc.
- Ecology: How to mobilize business to respond to the risks of climate change and protect biodiversity
- Economy: Status of the global economy and how it can be improved
- Society: How to reskill and upskill people in the next decade
- Geopolitics: How the “spirit of Davos” can create bridges to resolve conflicts
The Fourth Industrial Revolution
Technological progress over the last few decades has been astounding. Disruptive technologies like blockchain, autonomous vehicles, and gene editing are impacting the lives of individuals and societies; and the decade ahead will be dominated by innovation. World leaders are trying to develop and apply technologies that benefit both people and the planet.
In 2020, the Fourth Industrial Revolution will provide ubiquitous connectivity opined delegates at the WEF. But these new connections and technologies increase the risk of cyber-attacks. Issues discussed included:
- As internet users increase in emerging economies the same challenges of disinformation and cyberattacks experienced in more cyber-advanced countries will occur
- More data will be created and collected than ever before, making policy attempts to protect this data more urgent
- Business leaders will need to create a strong cybersecurity culture
The adage “cyber strategy is business strategy” will resonate strongly from 2020 onward. To address these challenges and risks, leaders should avail themselves of new knowledge, processes and tools to ensure responsible use of data and build resilience and digital trust.
Technology and Healthcare
Global health at the beginning of the new decade is paradoxical. According to the World Health Organization, global life expectancy has risen to 72 years, child mortality rates have halved since 1990, maternal mortality fell 38 percent between 2000 and 2017, and polio has been eradicated (99 percent). But on the other side:
- There is a rise in non-communicable and lifestyle diseases like cancer, diabetes, hypertension, and mental ill health
- Great strides in global health mask huge inequalities in the burden of disease
- Air pollution is a health crisis killing more than four million people a year
Technology will be one of the key trends in healthcare as in virtually every sector. Big Data opens up huge potential for customized treatments, better diagnosis, and new cures; but raises ethical questions about fair access and the use of personal data.
Scientists believe that the extreme weather occurrences resulting from global climate change are caused by greenhouse gas emissions that trap heat in the atmosphere. As the year began, Australia was burning, Jakarta was under water, and Norway recorded its warmest January day ever.
For the first time, the WEF opened its doors to teenage delegates fighting to secure a better future for the planet and its 7.7 billion people. Greta Thunberg, the Swedish climate change activist, warned "our house is still on fire" and demanded an immediate halt to investments to fossil fuel subsidies, exploration, and extraction. Veteran climate campaigner Jennifer Morgan said “the worlds of business and finance are heading for another crash if they don't make big changes on the climate.”
Some highlights from the conference:
- Climate change action is needed more than ever
- In 2020, countries must show progress on the Paris Agreement
- Investments in fossil fuels must be reduced
WEF 2020 “practiced what it preached” relative to sustainability. Awarded the IS0 20121 standard for sustainable events in 2018, the event is fully carbon neutral through reducing, calculating, and offsetting event-related emissions. Initiatives include using locally-sourced food suppliers; alternative sources of protein to reduce meat consumption; sourcing 100 percent renewable electricity; and reducing or eliminating the use of materials that cannot easily be recycled or reused.
The Economics of It All
The global economy is at a crossroads. Rising inequality, trade wars, disruptive technologies, and climate change threaten economic growth at the start of the new decade. The Global Risks Report 2020 states that the global economy "is facing an increased risk of stagnation... all while citizens worldwide protest political and economic conditions and voice concerns about systems that exacerbate inequality." According to the report, the need of the hour is a transition to a greener, more equitable economy for productivity and sustainable growth.
The IMF has some specific policy recommendations. It calls for stronger multilateral cooperation, especially in the areas of trade, cybersecurity, and the effort to curb climate change. According to the IMF, countries must enhance inclusiveness, ensure that safety nets protect the vulnerable, and use governance structures to strengthen socio-economic cohesion.
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Keywords: World Economic Forum, Davos, Climate Change, Sustainability, Fourth Industrial Revolution, Healthcare, Technology, Environment, ARC Advisory Group.