– by Dominic Barton
For us, the annual meeting of the World Economic Forum is an opportunity to hear what’s on the minds of others and meet with clients to understand their priorities and challenges in an increasingly complex world. Here’s some of what we saw and heard:
- Growth continues (for now). Despite genuine anxiety about increased volatility and rising geopolitical risk, there was a general belief that US economic growth will pick up this year. Executives are hoping that the Trump administration delivers on its pledges to deregulate, lower tax rates, bring overseas corporate cash home, and invest in infrastructure—while avoiding truly damaging moves on trade. Strong US growth in 2017 would help bolster the rest of the global economy. Beyond this year, however, there was less confidence about the outlook.
- China steps up. China showed up in Davos as never before. In the first visit by a Chinese president, Xi Jinping gave a powerful defense of economic globalization “of the people, by the people, and for the people.” Beijing clearly intends to play a strong regional role through its Asian Infrastructure Investment Bank and One Belt, One Road initiative. But it will need to fill a bigger void if the incoming US administration pulls back from America’s traditional position of multilateral leadership. Meanwhile, despite concerns that globalization is under threat, the snowy streets were more crowded than ever with attendees from across Asia, Latin America, Africa, and Russia.
- “AI Davos.” More than two dozen conference sessions and various corporate kiosks were focused on artificial intelligence (AI), also the topic for our well-attended CEO breakfast. More broadly, the advances in technology labelled Industry 4.0 at last year’s meeting—digitization, 3-D printing, biotech, robotics, and the like—continued to dominate the business discussions. More and more companies see that getting ahead of this technology disruption is an imperative and not just something to explore.
- The business of business is. . .stakeholders. Many discussions underscored that we face unprecedented societal challenges on two fronts: first, educating and training workers at the scale required to take advantage of new technologies; second, ensuring that the benefits of the resulting productivity gains are shared widely. These pressing issues—combined with others such as climate change and migration—demand from business the type of “responsive and responsible leadership” that was the official theme for this year’s meeting. They also demand a focus on long-term corporate performance and health, not just quarterly earnings. As one CEO reminded us, the world’s first automotive engineers were not educated by MIT but by Ford.
Dominic Barton is McKinsey’s global managing partner.