This year’s World Economic Forum meeting in Davos has proved to be a curiously damp squib, just at the time we really need it to get to grips with the permacrisis afflicting the world economy. Perhaps, political leaders and corporate executives alike were nervous about showing off their wealth when much of the globe is locked in an inflation-driven cost-of-living crisis.

Some political leaders chose not to attend. The UK’s Prime Minister this month, Rishi Sunak and his chancellor, Jeremy Hunt, stayed home. The consensus was that this was to show that they were concentrating on addressing the country’s problems. And yet, given that many of the problems are based on global issues — like supply chains and energy shortages — doesn’t it make sense to address them at the highest level?

A global permacrisis needs global solutions

Indeed, in a time of global permacrisis, we genuinely require global cooperation to ease some of the problems. Sure, shortening some supply chains and making local business more sustainable on its own terms makes sense after the few years we’ve been through. However, global imbalances of resources, labour, and skills mean that complete economic isolation is neither achievable nor desirable.

As WEF founder Klaus Schwab told a pre-event press conference:

“Only personal interaction creates the necessary level of trust, which we need so much in our fractured world.”

And some of the reports are surprisingly upbeat. Here’s Huw van Stenos, vice chair of Oliver Wyman, writing for the WEF website:

Relief at least came because three macro scenarios are not playing out as feared: China has ended its zero-Covid policy and reopened; inflation is abating; and Europe got lucky with a warm winter and falling energy prices.

The permacrisis is… not quite as bad as we feared?

Hope amidst the permacrisis

The past three years have trained us to look for the problems, after decades dominated by techno-utopianism. But there are still plenty of emerging technologies that open up considerable possibilities for the future — if we can survive the present. As the House of Beautiful Business newsletter put it:

We learned that the AI revolution, in the form of ChatGPT, has finally arrived (and is coming for our jobs…); that Web3 and its infrastructure is here to stay; that the metaverse must be diverse to avoid the shortcomings of Web2; and that synthetic biology has huge potential but remains underfunded.

Despite the tech winter we’re enduring now, these technologies will find their use in the coming years. But we now have to moderate that optimism with some of the realities of our current era. Back to the newsletter:

We also heard that growth alone is no longer good enough, that Europe needs to get its act together on clean tech, and that ESG might have become too politicized to still serve as an effective framework. We also observed that Western business is struggling to cope with Russia’s absence: a recent study indicates that only about eight percent of EU firms have divested from the country.

And the second point, about the desperate need for clean tech, might be the biggest one of them all.

Challenging the Climate Crisis

Beyond the short-term factors that are part of the permacrisis, the climate crisis lurks. It promises new problems in the future — and makes some of the current ones worse. We need to decarbonise our economies — and fast.

As Reuters highlighted, there’s growing tension over who will “own” the energy transition. On one side, higher energy prices might actually be good news, in the long term:

Awash with cash after a year of high oil prices, fossil fuel producers have the firepower to invest in green energy. But efforts on CEO green pledges and climate financing appeared sluggish.

They have the cash — but do they have the will and the corporate agility to act on it? Some people clearly think not:

On the outside, Greta Thunberg and activists called on the energy industry to stop hijacking the transition to clean power. On the inside, political leaders like Keir Starmer railed against new oil investments and Pakistani climate minister Sherry Rehman pushed for loss and damage funding.

Yet van Stenos remains optimistic:

Energy security and climate policy are shifting the investment narrative and the flow of capital. A private gathering of some of the world’s largest asset owners and investors, held by FCLTGlobal, underscored the deep and growing interest, despite the ESG (environment, social, and governance) backlash narrative.

Global cooperation needs a stable footing

In the face of an uncertain future, we need global bodies capable to coordinate truly pan-national responses. So, this is a terrible time for the future of the World Economic Forum itself to be in doubt — but it is. Not because there’s any immediate risk of it going away, but because its founder and guiding force is aging:

Schwab turns 85 in March, and it’s an open question whether he will pass the torch at all. Rupert Murdoch hasn’t. Warren Buffet hasn’t. In an era of active aging, why should Schwab?

Schwab has been the central guiding force of the Forum since its foundation last century, and currently, its future without him seems unimaginable. The clock is ticking on his reign, as without a clear successor, the future influence of the Forum must be in doubt.

As Politico reported:

A peek behind the curtain of WEF’s governance system is jaw-dropping. WEF’s governing statutes, published in 2015, state “the founder designates his successor.” As one of our WEF insiders pointed out, there’s nothing in that text to stop Schwab trying to control the process from beyond the grave — by dying in office, and then nominating his successor in his will.

Hardly a model of a good, stable transition. To have the one major international body that brings both politics and commerce together in an attempt to improve human life teetering on the edge of a succession crisis right now is not the point of stability we need.

Photo by Evangeline Shaw on Unsplash