Davos is a lovely gathering place, but as the 2020 World Economic Forum wraps up, the road beyond this picturesque town splits and twists.
From the keynote addresses, panel discussions and hallway chatter, it’s clear that we’ve entered a new decade of divisions: a world caught between the mountains of America, China and a Britain-free Europe.
The best-selling historian, Yuval Noah Harari, took centre stage to outline the major disruptions – technology, nuclear weapons and climate – that will shape the 2020s. A lack of U.S. leadership in each space makes the world more dangerous, Harari argued, blaming a “Me First” mood in global politics. “The global order is now like a house that everyone inhabits and no one repairs.”
Harari’s talk focussed on technology – and the social and political walls it will build within countries and between them. Such barriers will be erected by an emerging plutocracy of data oligarchs and a new kind of serf he calls “the useless class.” “How does a 50-year-old truck driver train to become a software engineer or yoga instructor for software engineers? The real struggle in the 21st century will be against irrelevance. It’s much worse to be irrelevant than to be exploited. This will lead to a useless class and it will be separated by an ever-growing gap with the elite.”
Artificial intelligence will exacerbate those divisions, as the world is rebuilt around tech hubs that will hold sway over billions. “We are now hackable animals. The power to hack human beings can be used for good purposes, such as providing better health care. But if this power falls into the hands of a 21st century Stalin, it will create the worst authoritarian regime the world has seen.” Even the elites at Davos won’t be safe, he stressed. “Just ask Jeff Bezos. In surveillance regimes, the higher you rank in the hierarchy, the closer you will be watched.”
Harari warned we will lose power over all sorts of decisions – our agency – as the platforms accelerate what they’re already doing. Google will decide what we know, Netflix what we enjoy, Amazon what we own, leading us to “philosophical bankruptcy.” “If we develop an arms race in AI, it doesn’t matter who wins. The loser will be humanity.”
The trouble with Harari’s argument is it assumes global sway by these firms, and that’s less and less likely in an increasingly polarized world. Europe clearly has headed in its own direction on data regulation, and will do so with carbon regulations. In another WEF session, European political leaders stressed their intent to push ahead with a digital tax that may make life more difficult for American platforms. And America, even without Donald Trump, is likely to make it difficult for Chinese firms to thrive in North America.
With the long view of European history in her mind, the most significant speaker at WEF 2020 may be Angela Merkel, the German chancellor who came to Davos to outline the strategy for a post-Brexit Europe. The changes she described should not be underestimated in terms of their impact. Europe’s first priority, once Britain is out, will be a Green New Deal that aims to make Europe the first carbon-neutral continent. “The whole way we do business will have to change,” she told the Forum. Europe will require new supply chains, new industrial processes, new electricity grids and new power sources, including, Merkel said, a lot more hydrogen. “The way we produce steel will have to be changed completely.”
The new Europe will also try to build a special relationship with China, starting with a summit next September between EU and Chinese leaders. Next up will be a renewed focus on Africa, which will be the fastest-growing region – demographically and perhaps economically – through the 2020s. We could see a Eurafrica emerge.
Merkel conceded Europe can’t do it on its own. There are technologies – chips and semiconductors – that it will need from other markets, and it will remain ingrained in a U.S.-dominated global financial system. She added that Europe needs to regain some confidence, that it can drive innovation like it has over the centuries. And ultimately, it will need more multilateralism – a rejuvenated World Trade Organization, a reinvigorated NATO and a repurposed IMF and World Bank. That won’t be easy. “This shift of power fills people with concern and that triggers tension we need to contend with,” Merkel said. “The fact that people aren’t willing to talk with each other fills me with grave concern.”
This was her 12th Davos, and the 50th Forum since it was launched in the depths of the Cold War, when the world, and Europe, was deeply divided. Merkel left the Forum with a clear message that is as true now as it was then: “I’m convinced the price of inaction would be higher than the price of action.”
As Senior Vice-President, Office of the CEO, John advises the executive leadership on emerging trends in Canada’s economy, providing insights grounded in his travels across the country and around the world. His work focuses on technological change and innovation, examining how to successfully navigate the new economy so more people can thrive in the age of disruption. Prior to joining RBC, John spent nearly 25 years at the Globe and Mail, where he served as editor-in-chief, editor of Report on Business, and a foreign correspondent in New Delhi, India. He is the author of three books and has a fourth underway.
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