Davos 2012: Has capitalism got a future?
- 24 January 2012
- From the section Business
Has capitalism got a future? Is it fit for the 21st Century? And if it has and is, how must capitalism change?
The organisers of this year's World Economic Forum (WEF) have put some pretty crunchy questions on the agenda.
But as more than 2,600 of the world's richest and most powerful people come to the Swiss mountain village of Davos to discuss the state of the world, is it a topic that they want to talk about?
For some, these are clearly the right questions. "Is capitalism working? Will we grow again? Is the Western model still working?" asks John Griffith-Jones, the UK and Europe chairman of accounting giant KPMG.
"I'm really interested in hearing people talk about that," he says.
Mr Griffith-Jones talks of the need to find a "concept of responsible capitalism" and worries that even if Davos man and woman find a consensus, it will not be one that is very clear to people in the wider world.
The founder and driving force of the forum, Prof Klaus Schwab, is even blunter. "Capitalism in its current form no longer fits the world around us," he says.
Those are statements and questions that one would rather expect to hear from the anti-capitalist protesters who have come to Davos, and who were busy over the weekend building snow igloos and preparing a 50-people camp as part of their Occupy WEF protest.
"We'll make small actions in the village. We're going to disturb things a little bit,'' says organiser David Roth, president of the Swiss social democrat youth organisation Juso, as he prepares to camp out all week.
But heavy snow, bitter cold and the highly efficient forces of the Swiss police and army will make major protests unlikely.
It will be left to the WEF's participants and organisers to highlight the world's failings.
Prof Schwab speaks of a "dystopian future", where political and economic elites "are in danger of completely losing the confidence of future generations".
Indeed, a global survey released just days before the start of Davos, the Edelman Trust Barometer, suggests there has been a sharp drop in public trust, not just in in business but especially in governments around the world.
Davos, in its very own way, illustrates that even for well-paid business leaders, the scars of the economic crisis of the past four years are still painful.
The eurozone, the financial sector, poverty, inequality, corporate responsibility and the rise of China: They all feature heavily in both the sessions organised by the forum, which is always eager to lob in a few inconvenient questions, and the topics of many of the events organised by banks, industry groups and corporate giants.
It is gloomy business, albeit discussed while scoffing haute cuisine breakfasts, lunches and dinners in Davos' five-star hotels.
There is a danger, says David Jones, chief executive of French advertising firm Havas, that amid all the gloom the good news will be overlooked.
"I believe that things will not be as cataclysmic as many predict," he says, pointing to how China and India are still growing well, and how there has been a few good data out of the eurozone recently.
"But what tends to happen is that one topic will dominate everything."
Mr Jones is worried that key issues such as youth unemployment and global warming could be pushed to the sidelines.
Being fixated on the crisis could also make companies overlook the fact that doing business is changing in very fundamental ways.
Mr Jones calls it the "age of damage", where "social media create a world of radical transparency".
"Whether you are the head of an Arab country, the boss of BP, a misbehaving fashion designer or a footballer," he says, "basically what we are seeing every single day is the power of people to make leaders behave the way they want them to be."
Party is not over
Despite the gloomy mood music, there will still be plenty of the normal "Davos spirit" dominating the discussions in the event's main venue, the Congress Centre, and the surrounding hotels.
After all, no entrepreneur or business leader in his right mind would come to Davos and let the opportunity for some serious networking go to waste.
On Sunday, one investor at the tech-heavy DLD Conference in Munich was busy preparing the ground for some joint fund-raising with other venture capitalists, with the finishing touches to be applied this week in Davos.
And there are still plenty of parties and private dinners to be had. Some more exclusive, others less so.
The future may be uncertain, but as every businessman at the forum will tell you, risks harbour opportunity.
The Davos party is not over yet.