Some big investment management firms even had sessions on green financing in World Economic Forum.
Dr Partha Chatterjee
Sitting here in Davos and looking out to the beautiful snow-filled peaks glittering in the sunshine, a sense of timeless calm prevails. Yet, listening to various speakers in several sessions and talking to people all around, there is a sense of impending significant change in several dimensions, and one can feel the sense of excitement and anxiety all at the same time. If there is one thing that people here in the 50th World Economic Forum can agree upon is that the next decade will be very unlike the decades before, or at least it ought to be.
The first issue that has been discussed widely is that of climate change and sustainability. As I was driving up from Zurich to Davos, I could see a group of young people trekking up the mountain – Greta Thunberg among them. In her view of things, we need to bring in rapid and radical changes. On the other end of the spectrum is Trump, who arrived in a troupe of seven helicopters, pooh-poohed the whole issue of climate change and stated that “we must reject the perennial prophets of doom.” However, most people here at Davos are somewhere in between. There is almost no one who believes that climate change is not real or that no action is required to mitigate that. The real question is the pace of change and the kind of action that is necessary. The issue is not straightforward because intimately associated with this is the issue of accessibility and development.
Take the case of energy production. The world is still mostly dependent on fossil fuels which are highly polluting. There is no doubt that we would like to shift away from that; the question is how rapidly. As one of the panelists said, that at the very beginning humans depended only on biology – muscle power; then came the era of chemistry – burning fuels; now it is time we shift to an age of physics – solar, wind, nuclear. The good news is that many investors I met here think that there is a real opportunity in the low carbon economy. Some big investment management firms even had sessions on green financing. Maybe, for a change, the financial sector will be our savior.
Technology, particularly Artificial Intelligence (AI) was the other topic that came up in multiple conversations. No matter what the sphere of discussion was – be it climate change, energy, finance, and even leadership, different perspectives of AI were always quick to pop up. One set of conversations revolved around the capability and the degree of change and linked to the challenge of rationalizability or explainability. Given certain sets of inputs, an AI programme can come out with some predictions. The problem is, given the layered non-linear structure, it is often not easy to understand the “why” i.e. why did those inputs lead to that particular outcome? Then, of course, was the question of ‘use’ or ‘misuse’ of it. A case in point being the use of face recognition for mass surveillance. Similar anxiety surfaced in some conversations about the future of jobs in the face of this AI-driven change.
A big theme of discussions that was discussed widely was ‘responsible capitalism and inclusiveness.’ I don’t think the CEO of any big company missed saying what they are doing to ensure underserved and underprivileged groups are uplifted. They spoke about doing it through educating, skilling, providing flexible work hours, giving microcredits, reducing costs of microtransactions, and a variety of other ways. Yet somehow it felt that sincerity was lacking. Here again, technology came into the picture – everyone seems to be banking on digital transformation working its magic, almost like blind faith. There is no doubt, digital transformation can bring enormous gains, but without any complementary actions, that may not be enough to spread the wealth around.
Finally, an undercurrent that is all-pervasive is the geopolitical situation and the changes that a much more fragmented and the fractured world will bring. Surprisingly, it was not so much that this was a cause for concern, but more about how exactly it should be dealt with. It seems clear that the corporate czars have accepted the new state of the world, and at best, were mildly worried about the pace of this fragmentation. They are more concerned about ways to deal with governments, whatever the nature of the government might be. This might make sense from a shareholder perspective, but it is not good news for the society at large. Without the pushback from these large companies, nativist and divisive policies may flourish even more.
As the sun sets in this surreal world where dark-suited people are streaming by radiating pavilions surrounded by white peaks, it is clear that changes are afoot. What is not clear is how deep and drastic these changes will be. Let us just hope that, on the net, it will be for the good.
Dr Partha Chatterjee is the Dean of International Partnerships and Professor and Head of the Economics Department at Shiv Nadar University.