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Takeaways From the World Economic Forum in Davos

Emily Lombardo - Jan 24 2023
Published in: Public Policy
2023 brings uncertainty but also hope. 

Last year was marked by a ground war in Europe, rising inflation worldwide, and climate change-related natural disasters around the world. What are global leaders planning for in 2023?

From 16-20 January, the annual World Economic Forum meeting (WEF) was held in Davos, Switzerland. Roughly 2,700 government and business leaders from 130 countries attended the summit, themed “Cooperation in a Fragmented World.” The past few years have been a time marked with uncertainty and heightened risk for all industries, including global mobility, but there may be a glimmer of hope in the future. For global mobility professionals, the focus at the WEF meeting on improving inflation over the next year, both assessing and mitigating threats to a fragmented supply chain, and improving upon current sustainability efforts will be crucial for understanding the trends and forecasts in the industry for the coming years.

 

The Age of the “Polycrisis”

In the annual Global Risks Report traditionally released the Wednesday before the meeting starts, the WEF warned of the particular risk of a “polycrisis,” defined by the Financial Times in October 2022 as “a cluster of related global risks with compounding effects, such that the overall impact exceeds the sum of each part.” The report looks at food insecurity, the growing cost of living expenses, and demand for food, water, and critical metals and minerals that is outstripping supply specifically. Just how the COVID-19 virus led to the disruption of the global supply chain, the ripple of a particular crisis could cause another to bloom if not managed well. Connecting the effects from failing to properly adapt and/or prevent climate change to supply chain breakdown or disruption, interstate conflict, and a dearth of natural resources could make the 2020s the decade of a global polycrisis.

In order to slow or prevent a polycrisis from taking hold, the WEF recommends accelerated climate action taken by governments and corporations. Resource collaboration, technological advancements, and crisis management on a state and company level will be important in the tightrope walk to prepare against a new and continuing polycrisis.

 

Recession Worries Could Dwindle

The global economic outlook for the year ahead is more positive than expected, and world leaders are becoming cautiously optimistic about avoiding a recession. “Things are not great, but they are much better than they could have been,” said Daniel Pinto, JP Morgan’s president and chief operating officer, at WEF. While inflation and interest rates are still high, delegates say that the chances of an outright recession and economic contraction are decreasing.

This is partially due to an avoided crisis last year and a big change from China. Thanks to mild winter temperatures, rationed industrial usage of electricity and natural gas, and a focus on renewable energy resources, Europe managed to avoid the predicted power cuts and subsequent energy crisis. Europe has been worried about an energy crisis when Russia cut off natural gas exports in retaliation to receiving economic sanctions after invading Ukraine last February. With China’s borders now open, the International Monetary Fund has forecasted Chinese growth at 4.4% for 2023, adding to the more positive outlook. The WEF meeting also looked toward the future of workers’ rights in more developed countries, transitioning both state economies and companies to sustainable technology, and despite uncertainty, hope to achieve the goal of moving inflation back to 2% as quickly as possible.

 

Sustainability Will Become Even More Important

Vanquishing fossil fuels was top of mind for delegates at Davos. Swedish activist Greta Thunberg was at Davos to deliver a cease-and-desist letter signed by more than 800,000 people to fossil fuel CEOs and executives calling on them to not open new oil, gas, or coal sites and focus on clean energy transition. Fatih Birol, executive director of the International Energy Agency, remarked on the transition to renewable energy sources, calling renewables “the energy of peace” and emphasizing the need to transition to renewables for both environmental concerns and energy security concerns.

On top of concerns around fossil fuels, delegates reaffirmed their commitment to achieving net-zero carbon emissions by 2050 to stave off the effects of climate change. U.N. General Secretary António Guterres warned companies that immediate and specific action should be made as soon as possible, asking them to “put forward credible and transparent transition plans on how to achieve net zero—and submit those plans before the end of this year,” in a speech during the WEF. To mitigate fragmentation, decisive and specific climate action policies will be needed by governments and company leaders around the world.