War, Economic Growth, Trust, AI, Trump and Climate Change Discussed at Davos

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Thousands of corporate executives, national leaders, consultants, futurists, solutions providers, activists and other well-heeled people attended last week's annual World Economic Forum (WEF) event in Davos, Switzerland. In conference sessions and in private conversations, various hot-button topics were discussed, such as war, economic growth, rebuilding trust, artificial intelligence (AI) and the prospect of a second Trump presidency. Climate change also was discussed, though it seems to have been relegated to the back burner, news reports agreed.

The theme of the four-day event was "Rebuilding Trust." Attendees recognized that was difficult under the best of circumstances, but it seems like a particularly uphill slog today as corporate profits soar and white-collar workers wonder if they will be replaced by AI in the drive to boost efficiencies and corporate profits.

Donald Trump's candidacy also was discussed, perhaps boosted by his decisive victory in the Iowa caucus, which took place on the same day the WEF event began. Conflicts in Ukraine, Gaza and elsewhere also were debated, both on their own merits as well as for how they could affect global economic growth.

A report from cable news outlet CNBC said the topic of Donald Trump "dominated" dinners and parties at Davos, with many mulling the former president's potential return to the White House following his landslide victory Tuesday in the Iowa caucus.

Both publicly and privately, U.S. corporate executives at Davos said they weren't particularly concerned if Donald Trump wins the 2024 presidential election, according to CNBC. Banking leaders, in particular, expressed confidence that America would be fine if Trump returns to the White House. But the report noted that several WEF attendees said non-American executives have privately expressed far more trepidation about a Trump victory than American leaders.

While many U.S. industry leaders at Davos seem unconcerned about a second Trump term, some foreign executives are "terrified," the CNBC report said, particularly when it comes to restrictions on immigration and potential global conflicts.

U.S. business leaders pooh-poohed those concerns. "We have a justice system," said one prominent business leader. "Congress will probably be divided. It's right to be cautious, but it won't be the end of the world."

One bank chief executive privately expressed annoyance over the news media's pondering of a second Trump presidency, telling CNBC he's "all bark and no bite." That bank chief also dismissed Trump's refusal to accept the results of the 2020 election as bloviation. "He's going to win the presidency," the CEO predicted. "Many of his policies were right."

James Dimon, chairman and chief executive at JPMorgan Chase and Company (NYSE:JPM) (New York, New York), did not predict a Trump victory, but he echoed his fellow bank executives' comments in an interview with CNBC: "Just take a step back, and be honest," he said. "He was kind of right about NATO. He was kind of right about immigration, he grew the economy quite well. Trade. Tax reform worked. He was right about some of China. "I don't like how he said things about Mexico, but he wasn't wrong about some of these critical issues. And that's why they're voting for him."

He said he would be prepared for a Trump or Biden victory in November: "We will deal with both; my company will survive and thrive in both."

On the subject of rebuilding trust, Rich Lesser, chairman of Boston Consulting Group (Boston, Massachusetts), told the Associated Press, "It's unrealistic to think that Davos--or any meeting, anywhere in the world--in one meeting can rebuild trust when it's fragmented on so many dimensions." But he added that conservations at Davos and elsewhere involving corporate leaders, government officials and the private sector help create "a starting point for rebuilding trust."

Attendees expressed the view that the global economic picture is a bit brighter than the conventional wisdom: inflation has declined sharply in the U.S., interest rates may be coming down and the U.S. stock market had a very good 2023. But they cautioned that there are a host of unknowns--wars in various regions, for example, tensions between nations that could lead to armed conflict and elections in the U.S., India, the European Union and South Africa--that could cause sentiment to pivot.

Regarding conflict, leaders from Ukraine and Israel spoke at the WEF event. Ukrainian President Volodymir Zelenskyy spoke of greater support--though not necessarily more weapons--as his country fought Russia. He tied Ukraine's fate to global security, saying in a Tuesday address, "Please, strengthen our economy, and we will strengthen your security."

Israeli President Isaac Herzog called for new approaches to peace and security for both Israelis and Palestinians. But he was silent on this country's siege of Gaza, now lasting over 100 days, following an attack against Israel by Hamas fighters last October.

AI and generative chatbots such as ChatGPT were topics of keen interest at the annual event, which ran January 15-19. Attendees debated whether guardrails on AI should be erected now, to shape how the technologies evolve, or if regulation should be delayed until the technologies become more mature.

Those conversations were aminated, in part, by a recent report from the International Monetary Fund (IMF) (Washington, D.C.), which estimated AI ultimately could affect the jobs of 40% of workers around the world. That number jumps to 60% in advanced economies, shaping fields as diverse as telemarketing and law.

Prior to the Davos event, the WEF released a survey that said 50% of economists surveyed believe AI would become "commercially disruptive" in 2024. One year ago, 42% of economists felt that way.

Although climate change was discussed at Davos, news reports said those conversations sounded less urgent or passionate than discussions over AI, Donald Trump or armed conflict.

"If you're not ready to acknowledge science and to recognize the reality of what is happening around the planet with greater intensity--storms, many more floods, torrential rainfall--the damage that is being done by the climate crisis is now costing us already in the billions," said John Kerry, the outgoing U.S. special presidential envoy for climate. "It's going to cost much more if we don't move now."

Fatih Birol, executive director of the International Energy Agency (IEA) (Paris, France), made this prediction: "The companies who do not put enough emphasis on energy efficiency will be less competitive."

U.N. Secretary Genera Antonio Guterres fused two topics, one more intently discussed at Davos than the other, when he said, "In the face of the serious--even existential threats--posed by runaway climate chaos and the runaway development of artificial intelligence without guardrails, we seem powerless to act together. As climate breakdown begins, countries remain hellbent on raising emissions." But, he added, "the phaseout of fossil fuels is essential and inevitable. No amount of spin or scare tactics will change that."

His remarks on climate change echoed the tenor of the most recent U.N. climate change summit in Abu Dhabi and recent publications by the IEA. For more on those topics, see December 15, 2023, article - U.N. Climate Summit Endorsed Transition Away from Fossil Fuels, but Questions Remain and October 25, 2023, article - Is Clean Energy Transition Really 'Unstoppable,' as IEA Asserts?

A New York Times report claimed that climate change has been "largely relegated to the back burner," despite 2023 being the hottest year in recorded history. Climate was displaced by trendier topics such as AI, war, economic growth and the possibility of a second Trump presidency.

"I think there's a little bit of sort of climate catastrophe fatigue," Andres Gluski, chief executive of AES Corporation (NYSE:AES) (Arlington, Virginia), told the Times correspondent. "People are like, 'Yeah, yeah, the world is going to end. But I'm still going to vacation on the Greek islands or the Bahamas.'"

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