Opinion: Does the Davos World Economic Forum Matter in Today's Complex Economy?
New York: Recently it has become fashionable to bash “the Davos elite” and condemn their supposed deleterious effects on the world’s economy. The phrase and its connotations deserve examination. Does the Davos World Economic Forum matter in today’s world? Do the attendees make a difference?
The answer may depend on where you live, and your macro-view of global economics.
Many parts of Asia, Africa and Latin America are subsistence economies primarily focused on agriculture and direct services such as local transportation, sale and provision of basic goods and necessities, and the physical well-being of the populace (local doctors, dentists, midwives, healers, religious and community leaders, etc). The bulk of their spending power stays local - - going to provisioners, service providers, and bureaucrats within their own country, or a bordering state. The vast majority of these consumers do not hold passports nor even consider international travel an option in their future. The impact they feel from foreign societies and economies located more than, say, 500 miles away is almost imperceptible. By many standards, their lives are limited.
Increasingly over the last several decades, a growing proportion of the planet participates fully in the global economy and live fuller, more productive lives as a result. Throughout much of the world, people own laptops, tablets and of course mobile phones, and are connected to varying degrees by television and the internet. And these consumers have become very familiar with the advantages of inexpensive data (in the form of news, sports, marketing, entertainment, etc.) and fast commerce: they shop online, and have begun to expect secure, rapid delivery for their material needs, consumer items, clothing, and even small, impulsive purchases.
To citizens of western democracies, none of these examples appear surprising in the least; it’s just assumed that in today’s world, you can search for items online, and purchase them forthwith. This is the new norm. Except it’s a very complicated norm.
These international commerce examples, as well as the trillions of other cross-border interactions, require a very complex, finely tuned network of suppliers, logistics, financiers, translators, fulfillment persons, middlemen, infrastructure and mechanisms spread across many continents.
This complexity does not come about randomly - - it is planned - - and many of the planners are Davos attendees (aka, the Davos elite) who specialize and enjoy the pursuit of international business. Otherwise it would not work.
Davos attendees understand that, in order to permit such beneficial commerce, governments of all sizes (city, state, regional, national, and extra-governmental) must have the appropriate treaties and legal frameworks in place.
Davos attendees understand that the scientific research and standards must be agreed upon, shared and promulgated properly. Davos attendees understand that all the business mechanisms and infrastructure must be prepared and tested to operate properly, whether it’s which company is soliciting overseas for business, how suppliers get paid, who’s translating the texts and emails, which company is supplying the algorithms for pricing, etc.
Davos attendees understand particularly well that when undertaking a commercial venture, the most profitable and efficient business persons will take a global view of their resources at hand: they will source and utilize all appropriate supply companies in all regions and countries legally available by taking into account their relative comparative advantages for completing a task (whether it’s resource procurement, processing, manufacturing, customizing, finishing, packaging, shipping, etc).
In this manner, Davos attendees achieve their most important goal: greatest return of value to their shareholders (their boss/owners are profitable and happy).
But these Davos attendees are also providing less tangible returns to the world: maximizing client satisfaction (their customers are happy, and presumably they will be repeat customers); minimizing waste (less pollution - a positive benefit for all); and maximizing understanding between cultures (another public good which benefits all people).
By preparing and establishing this shared culture of international communication and commerce, the Davos World Economic Forum has significantly enhanced international understanding across many cultures and countries, and given disparate, even warring nation-states substantial commercial reasons to be peaceful and pursue commercial goals together. It’s peace via purchase orders: rather than tossing missiles over borders, launch freighters; instead of sending supersonic fighter-bombers overseas, ship out slow cargo flights loaded with toys and gadgets.
If that doesn’t matter greatly in today’s chaotic world, what does?