DAVOS, Switzerland — Davos is done for another year.
The World Economic Forum’s annual meeting in Davos, Switzerland, wrapped up on Friday after a whirlwind few days of forum sessions, meetings, dinners, and night caps. Business Insider had a team of six editors in the Swiss ski resort, who met with more than 40 CEOs and business leaders over the course of the week.
Here’s what they were saying:
Actually, the economic picture isn’t all that bad
The mood was generally pessimistic around the global economy, what with the trade war, a slowdown in China, and the notable absence of several world leaders due to domestic policy challenges.
That said, few people said they expected there to be a recession in the next 12 months, and several globally renowned investors told Business Insider they thought the US economy in particular is in much better shape than the mood would suggest, saying economic data doesn’t fully capture the benefits of advancements in technology.
Specifically, we repeatedly heard about the risk of the US “talking itself into a recession,” and one of the investors said that while this could be the 8th inning of the economic cycle in the US, like a recent World Series match-up, the game could last 18.
As for China, well, sure it’s slowing down. But China’s likely to introduce measures to juice the economy again, currency outflows are less of a concern than in the past, and even with a slowdown in growth, 5% growth ain’t bad, several attendees told us.
“Obviously the China-US situation is probably the biggest threat that could see a slowdown, especially in the Chinese economy,” Martin Gilbert, co-CEO of $736 billion Aberdeen Standard Investments, told Business Insider’s Sara Silverstein, echoing others at Davos. “We shouldn’t overreact to that. Even if there were no exports, the Chinese economy would still grow 5% a year on domestic growth. It’s still pretty resilient. Most countries would love to have a 5% growth rate.”
The mood around Europe was much less positive, in contrast, with the UK facing an extended period of political turmoil, Macron missing from Davos amid the yellow vest protests, and Germany close to a recession.
Tech’s getting ready for regulation
Microsoft, Palantir, Google Cloud, Facebook, AWS, Wipro, Infosys, and Cloudflare all had prominent spots on the Davos promenade, and much of the discussion over the course of the week centered around the possibilities offered by things like AI, big data, and cloud computing, along with the responsibilities and potential regulation of big tech.
Google’s CFO Ruth Porat set the tone on Tuesday at a panel discussion, highlighting how data could be used for good before praising European data privacy regulation GDPR. Microsoft president Brad Smith told my colleague Jake Kanter that US federal privacy laws are inevitable, and could come into force as early as this year.
“In a world where we’re all working with data I think we all have opportunities to ask how we can manage it better and in a way that sustains the public’s confidence,” Smith said.
Smith’s boss, Microsoft CEO Satya Nadella, also praised GDPR later in the week on a panel, saying he hoped the US would have something similar. And Facebook COO Sheryl Sandberg spent the week telling Davos attendees that Facebook was ready for regulation.
The healthcare industry’s excited about the potential of AI
One of the areas where tech has a huge amount of potential is in the healthcare space, from applying AI to data to aid drug discovery, to tracking patients to better measure improvements in their quality of life after treatment.
That’s lead to some dramatic shifts at drug companies. Novartis for example now has 400 data scientists on staff, according to Jay Bradner, who heads the pharma giant’s drug research and discovery as president of the Novartis Institutes for BioMedical Research.
And it’s triggered lots of conversations between different parts of the healthcare system and the tech sector. Peter Lee, corporate vice president of Microsoft Healthcare, told me that the company’s recently announced partnership with Walgreens would hopefully be the first of several with different parts of the healthcare system.
And Marc Harrison, the CEO of health system Intermountain Healthcare, said he was keen to work with tech companies with Microsoft.
“We’re interested in, not only automation, but how do we understand predictive analytics, how do we understand social biometrics,” Harrison said. “How do we really get as complete a non-creepy view of our patients as possible.”
Everyone’s talking about their company’s purpose
You couldn’t go far at Davos without hearing someone talking about their company’s purpose or mission.
Most would tell you that’s been a focus for years, of course. But it was put in sharp relief last year just before Davos when BlackRock chief Larry Fink sent a letter to CEOs stressing the need for a clear long-term strategy and an understanding of the societal impact of their business. At the time, it ruffled some feathers.
A year after that letter (and a Davos panel on the same theme led by Insider Inc. CEO Henry Blodget), it’s clear that the idea’s now mainstream. In simple terms, practicing better capitalism appears to be good for business.
Unilever’s chief marketer Keith Weed told my colleague Nich Carlson it’s proven the business case for operating sustainably, saying that the company’s sustainable brands are outpacing its other brands and delivering 70% of its growth.
“Companies are realizing that they can have an impact on improving the environment, and improving their quality and growing at the same time,” Marc Pritchard, marketing chief at consumer giant P&G, told me. “In fact, the two go hand-in-hand.”
And the chairman of Lombard Odier, a Swiss private bank founded in 1796 with over 274 billion Swiss francs ($275 billion) in assets under management, said this shift represents “one of the most interesting performance opportunities for our clients than we have ever had for the last 25 years.”
Who’s going to take responsibility for closing the skills gap?
Regardless of whether you think AI is going to create jobs or displace them, it seems fairly clear the skills required to succeed over the next 20 years are going to be different to the skills required in the last 20 years.
The Edelman annual trust survey, published just before the WEF meeting opened, found that 59% of employees worry about not having the training and skills necessary for a well-paying job, and 55% worry automation and other tech will make their job obsolete. A WEF report released a few days after the Edelman survey said 1.4 million US workers are likely to lose their job over the next decade.
“There is a large part of society that does not feel that this is going to be good for their future,” IBM CEO Ginni Rometty, said on a panel.
KPMG global chairman Bill Thomas told Henry Blodget that companies need to see investing in internal training programs as a competitive advantage.
“If you think about the evolution of where our workforce is going, whether that is the needs of our clients, whether that is the recognition that artificial intelligence, some of the disruption from technology that that’s going to have on our workforce — the truth of the matter is I’m not going to wait for a government response,” he said.
And a number of attendees we spoke to highlighted the increased importance and appeal of “learnability,” or an ability to continue learning news skills throughout one’s career. A certain percentage of employees will always jump at the chance to attend additional training, just as there’s a group that won’t be interested. The challenge is how to nudge the group in the middle.
Ellyn Shook, Accenture’s chief leadership & Human Resources officer, said the firm had created a Job Buddy for staff, making them aware of how much of their current role was at risk of automation, and which skills they should pick up given their current strengths. 4 in 5 staff said they’d take up the new training.
Still, a heavy weight is likely to fall on governments. According to the WEF study, the private-sector can only profitably reskill 1 in 4 of the 1.4 million workers likely to be at-risk workers over the next decade. With collaboration between companies, that number gets close to 1 in 2. That leaves the small matter of 700,000+ people in the hands of the government.