Why We Care About Davos

Hardly anyone here understands what all the fuss about Davos is. It is a small, snow-covered municipality in Switzerland situated 5,120 feet above sea level. While the beauty of the place is extraordinary, it is the World Economic Annual Forum held there yearly which draws worldwide attention. The World Economic Forum is an international organization whose proclaimed objective is to improve the state of the entire world by engaging top leaders from different countries.

While the international media and even some columnists here are all abuzz about the event, some might wonder what its relevance is to entrepreneurs and ordinary workers. What does it matter if a large number of the most influential leaders of the world are in Davos? For those who truly understand the significance of the meeting, there is plenty of extremely useful data.

Why Davos?

Before we go into the details of what we could get out of the event, it would help to look into some of the dynamics that give the Davos meeting its uniqueness. Here, there is an intentional effort to bring together the world’s top leaders in the most crucial sectors of society in order to better come up with solutions to world problems. There is a conscious effort to draw the best representatives from virtually every country in the world and get them to intermingle; this may be the ultimate in networking and many companies are willing to shell out large sums to attend.

I have read (although I cannot confirm the veracity) that it was in Davos where the late Nelson Mandela modified his view on what South Africa’s economic policy should be, after hearing from the talks of Bill Gates and Bill Clinton. This was an example of people being able to interact with their peers from differing fields.

There are many benefits of following the discussions in Davos. With so many top leaders making speeches, it is quite possible that at least some of them will disclose something that is significant. As they are powerful and influential, they have the capacity to make changes that can possibly affect your interests. You get to know information that may be useful in planning your future moves.

One of the most notable developments is the attendance of Hassan Rouhani, the president of Iran. His mere presence alone is a signal that Iran is finally trying to position itself in a better light with the world community. Iran has been dealt with severe economic penalties due to alleged efforts to develop nuclear weapons. There is now a strong possibility that oil production in Iran will increase eventually as investors are more likely to come in. This affects the price of oil in the long term. Businesses should welcome this prospect.

The surprising declarations of Shinzo Abe, the prime minister of Japan, have mixed implications. While on the surface it is very alarming as he compared Japan’s relationship with China as similar to Britain with Germany before World War I broke out, it also means that it is more likely that Japan will move production facilities in China to other countries. This increases the probability that some of those factories would be transferred to the Philippines, and this would consequently improve our economy.

In a long term assessment, Eric Schmidt, the chairman of Google, is of the opinion that the ongoing rapid advances in technology would create increasing unemployment as more tasks are automated. Although a bit controversial as there are also those in the opposite camp who believe that technological advances would create even more jobs, it is something to think about as Google is one of the world’s technology leaders and Schmidt may be privy to more information regarding this matter. There would probably be labor sectors that would be more affected than others.

On the finance front, Mark Carney, the governor of the Bank of England, said that he would consider an increase in interest rates. Although the impact would be much less than the tapering of the United States’ Federal Reserve, if implemented, this would still be an additional drag on the Philippine economy as some of the foreign funds here may look for better returns in England.

The above are just some of the luminaries who gave notable views in the Davos forum. We should view the news coming from Davos as one of our sources of guidance for planning. While we should not be distracted by the glamor of the event, it is wise to listen for comments that are relevant to our work, our company, and the Philippines’ economy.

*Originally published by the Manila Bulletin. C-6, Sunday, February 9, 2014. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.