Davos 2011: The optimism that dare not speak its name
- 31 January 2011
- From the section Business
The World Economic Forum in Davos, for five days the stomping ground for more than 2,000 of the world's richest and most powerful people, is over.
It's been an unusual Davos. Normally one big topic dominates the event, say trade or poverty, China, climate change or the credit crunch.
Usually there's also a scapegoat being chased through snowy Davos: big polluters, banks, hedge funds, private equity or sovereign wealth funds. It allows the assembled elites to go into a frenzy of chest beating, before going back to business as normal.
This year we had none of this - "probably a very healthy thing, it allowed us to talk about the issues," the chief executive of a FTSE 100 company told me.
'This may end badly'
If one really had to find a theme, it could be called "uncertainty", "volatility", "risk" or simply "nagging doubt".
Most Europeans and Americans may find it difficult to swallow, but 2010 was a really good year, not just for Davos man.
Most emerging economies have been growing at a fast pace. Many companies had to become leaner and more efficient during the crisis, and are now reaping the rewards.
Most of the bosses in Davos spoke of outstanding profits and were brimming with optimism; at times it felt as if they had to stop themselves from punching the air.
But with a few exceptions - like the banker who in a private session let down his guard and claimed that "boom times" were back again - they all had nagging doubts: Could all this be too good to be true?
Every admission of corporate success tempered with an aside that 2011 might not be quite as good, every forecast of economic growth came with a footnote that the recovery could be derailed by inflation, exchange rate fluctuations or trade wars.
One executive, in charge of a large multinational company, warned that volatility was "extremely up".
"I'm concerned that too many are too bullish, that this may end badly," he said during a session on "Globalisation 3.0".
Indeed, this year's Davos agenda looked a bit like a risk assessment form: Water scarcity? Check. War for talent? Check. India-China, friends or rivals? Check. Rebalancing the global economy? Tunisia, Egypt? Social Network addiction? Check. Check. Check.
As a result, companies find it difficult to plan ahead.
"In 2009, we had a visibility of one month ahead. In 2010 it was six months. Now it's at best a year, and that's really not long enough to make big investments," the chief executive of a large media company told me.
But risk harbours opportunity. Investors and especially hedge fund managers in Davos were hard at work trying to identify the big risks that would allow them to reap even bigger rewards.
The most important aspect of Davos, of course, is the networking: either planned well ahead with business partners and potential customers, or by chance, as participants cruise the hallways and crowd into sessions.
One African executive based in Lagos spoke of an amazing dinner he had had with the presidents of five African countries; back home it might be a challenge to set up a meeting with a minister.
Wandering through the conference centre it was easy to find economists and financial regulators discussing the finer points of macroeconomics, hear company bosses sketch deals, find ministers lobbying for investment or being lobbied for support, and observe the first tentative soundings for job opportunities.
Trevor Richard Dougherty, a young American video blogger and community activist sponsored by the British Council to come to Davos as a "global changemaker", even managed to land a job.
He got talking with Loic Le Meur, the founder of social media company Seesmic. Five minutes later he had the offer for a paid internship to bridge the time until he starts university this autumn.
This year the schmoozing and networking extended well beyond the forum's perimeter.
If 2008 was the year when Davos was blogged, then 2011 was the year when Davos was tweeted.
Hundreds of participants sent Twitter updates from the event, at times giving a better feel for what was going on inside the congress centre than any news agency could.
The forum's organisers got in on the act. Instead of sending official e-mails to journalists, they simply put all their announcements on the official @davos twitterfeed.
Public sessions were webcast; top leaders were interviewed in the "social media corner" and the results published on the internet.
The world was even allowed a peek into the "closed sessions" from which many reporters are barred: all session summaries were published on the internet.
All this turned Davos into a bizarre mix of openness and secrecy, with social media transparency stopping well outside the ultra-private bilateral and industry meetings.
Protests, what protests?
As always, security was heavy, with fences, barbed wire, snipers on the roof and airport-style checks to get into the extensively rebuilt conference centre of Davos.
The rebuilding by the way, removed some of the claustrophobia that used to haunt Davos events.
Unlike previous years, there were a couple of small demonstrations, a miniscule riot, and the explosion of some fireworks at a hotel, which shattered a window.
The participants barely noticed it, if at all. And it definitely didn't stop them from having a good time.
Yes, parties were still scaled down; banks especially continued to keep a low public profile (although they held plenty of very exclusive dinners and nightcaps for close friends and top business partners).
Even the official soiree on the last night of Davos, hosted once again by India, was a somewhat subdued affair - although a real (non-Indian) princess delighted the crowd with her Bollywood dancing skills.
The Google and McKinsey parties were still the best events in town, and by Saturday morning some of the older chief executives could not help but stifle a few yawns as they networked in the halls of the congress centre.
One hour of hardship
Did this year's Davos - committed by its logo to "improve the state of the world" - really make a difference?
Of course not. Short of waving a magic wand, getting instant results at such a sprawling event would be impossible. And if the participants were to take action, they'd be accused of carving up the world amongst themselves.
What Davos achieved, though, was to make powerful people think - about social entrepreneurship and new technologies, about tackling pressing topics.
It's events like Davos that help giants like Pepsi, Coca-Cola and Unilever commit to ambitious sustainability targets, from reducing water usage to sustainable farming.
Some of the rich people went on a "refugee run" to experience - for just under one hour - the life of a refugee (organised by the UNHCR and Crossroads).
Of course, events like this trigger a cynic alert, but participants did return truly shaken and eager to help.
In some ways, it was Davos in action.