The global summit in the Alps

By John Gapper
Thursday, January 24, 2008


It is that time of year again. Some 2,500 business people, politicians, artists and newly dubbed “global leaders”, together with another 10,000 or so support staff, journalists and hangers-on, are set to make their way up a Swiss mountain.

Going to Davos sounds like going on retreat – but in practice it is hardly akin to visiting a spa. Participants have to rise early to catch breakfast discussions and then spend the day trudging around in the snow to their next appointments. At times, the retreat it most feels like is Napoleon's from Moscow.

Why does everyone bother?

That is a hard question to answer because the annual World Economic Forum, which has been going since 1971, is an improbable event. Partly a talking shop, partly a global policy forum, partly a venue for a bout of parties and dinners, partly an excuse to escape the office, Davos has become a fixture on the political and business calendar.

If it did not exist, nobody would feel an urgent need to invent it. Yet since it was invented by Klaus Schwab, himself an improbable figure, it has steadily gained in reputation and influence to the point where, a few years ago, it was notorious enough to be reviled by anti-globalisation protesters as a forum for the global elite.

Since then, aided by Mr Schwab's wily invitation to some of his critics to join the party and the emergence of China and India as clear beneficiaries of global trade, the controversy has died down. The WEF has carried on expanding into a year-round think-tank and organiser of regional economic summits.

On the face of it, there is no reason why Mr Schwab, an economist and former business professor, should be able to get figures such as Tony Blair, the former British prime minister, Al Gore, the former US vice-president and Nobel Prize-winner, and Bono, the Irish rock star and campaigner, all of whom will attend this year, to come to Davos.

Mr Schwab has less political star-power or financial influence than other figures who have formed their own Davos-like events. One is Bill Clinton, whose Clinton Global Initiative takes place each autumn in New York. Another is Michael Milken, the financier and philanthropist, who offers his Milken Institute conference in Los Angeles in the spring.

Yet Mr Schwab, who is 70 this year, remains the one to beat. He carries it off with a style that combines intellectual heft with some deft glad-handing and showmanship. He understands well the need to keep producing events that are newsworthy as well as worthy, and shuffles his invitation list to achieve that effect.

Even Mr Schwab does not work miracles, however. Attendance at Davos can be patchy: the heads of technology companies, including Sergey Brin, Larry Page and Eric Schmidt of Google, can be found there, for instance, but fewer leaders of big media groups attend. Pharmaceutical bosses appear but not those from some other industries.

There is also the “Davos curse” – the problem that a chief executive whose company is not doing well can appear to be gallivanting when he or she should be minding the shop. That was the fate of Carly Fiorina, former chief executive of Hewlett-Packard, who lost her job shortly after a Davos appearance in 2005.

But there are enough business leaders who enjoy the exposure and the chance to talk about broader issues than their latest results. Bill Gates, who occupies the roles both of business entrepreneur and philanthropist at Davos, is this year giving a talk on “a new approach to capitalism in the 21st century”.

So Davos remains the place to be in January for a surprising number of busy people. They are not required to be there. Despite the fears of some outsiders and the aspirations of Mr Schwab to achieve results, not many decisions get made during the formal debates on economic and political topics.

Instead, there is a lot of talking and, more to the point, listening. “If you look at most big political gatherings, how often do they listen and discuss?” says Lee Howell, head of the agenda for this year's Davos meeting. “Mostly they are pronouncing. There is no shame in having people listening for once.”

Thus, the value of Davos is deceptively simple. It is that Mr Schwab has, over the years, persuaded enough politicians, business people and specialists in sciences and the arts to turn up together and share their knowledge and opinions with others. Once he got enough of them to come, the event gained its own momentum.

This means that, even if there were not a tightly organised set of formal discussions, a lot of people would find value in simply bumping into others on the Davos shuttle buses or in hotels and having spontaneous conversations. Everybody who comes to Davos has at least one serendipitous encounter while out and about.

Indeed, a lot of organisations – particularly the investment banks and consultancy firms that provide a lot of financial support for the WEF – use the event to talk to clients. Bankers can fix meetings not only with chief executives but also with government officials and those in charge of hedge funds and sovereign wealth funds.

Mr Schwab is also artful enough to make the agenda sufficiently vague and diverse that everyone can find something worth talking about. This year the overall theme is “the power of collaborative innovation”, which is typical of Davos in being so broadly phrased that it can be interpreted to mean almost anything.

Some of the 235 sessions on the formal agenda will examine climate change, water scarcity and US financial problems; others will address the growing importance of sovereign wealth funds, alternative energy and the proliferation of nuclear weapons. The WEF prefers the agenda to be somewhat freewheeling.

That can lead to some of the big set-piece discussions in the Congress centre being well-meaning and full of waffle. But there are usually enough smaller forums – particularly those held over dinner in the evening, or late at night in the conference hotels – that offer both access to interesting people and food for thought.

In fact, the discussions and talks that often attract most interest – particularly from spouses who are invited along – are the off-beat ones. Last year, a talk about depression by a panel of psychiatrists was packed out and some forum-goers took the chance to play chess against Anatoly Karpov, the former world champion. Others trooped into a blacked-out tent to participate in a “dialogue in the dark”.

This year, the tent discussions will be visible but people will have to communicate in sign language and the debate will be led by deaf and dumb guides. Meanwhile, Alice Waters, the well-known chef who runs Chez Panisse in San Francisco, will be preparing an organic meal from local ingredients that will be both eaten and discussed.

Thus, despite all the people thronging round town, the packed schedules and the formal dinners, Davos still retains an element of fun and spontaneity. In the end, that is probably what keeps the regulars devoted. Politicians and business leaders are hardly off-duty but the formality breaks down a little at high altitude.

This makes it a bit easier to break through the frenetic schedules of everyday working life and have a fruitful chat with people who are usually guarded closely by personal assistants, PRs and diary schedulers. For that alone, it is worth the annual hassle of wending one's way up a mountain in Switzerland.