The annual meeting of the World Economic Forum (WEF) takes place in snowbound Davos, Switzerland, from January 22 to 25 this year. The theme is Globalisation 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution.
In his opening address at the pre-meeting press conference, WEF founder and chief executive professor Klaus Schwab distinguished between globalisation and globalism: globalisation is a fact and a philosophy, and will increase global interdependence; globalism is an ideology.
“Globalisation has produced more winners than losers, but now we have to look after the losers who have been left behind. Globalisation 4.0 must be more inclusive, more sustainable, and it must be based on moral principles.”
Davos 2019 will be welcoming some 3 200 participants representing the political sphere, private enterprise, civil society and the younger generation. Half of the participants will come from business, and with 1 500 participants taking an active role, this is therefore not a conference. It is a collaborative effort, with 600 sessions set to take place. The youngest participant is 16-year-old South African Skye Meaker, an award-winning wildlife photographer, and the oldest is legendary BBC narrator and natural historian Sir David Attenborough, at 92.
The core themes to be discussed: geopolitics in a multi-conceptual world, the future of the economy, industry systems and technology policy, management of systemic risk and resilience in systems thinking, human capital and society, and institutional reform and economic cooperation.
Challenges beset by challenges
There are, however, overarching challenges: a globalisation backlash, mistrust in governments, loss of faith in institutions, the constant threat of cyber disruption, increasing inequality, increasing protectionism, escalating refugee crises, a heightened risk of trade wars, slowing global growth, climate change, and the necessity of cleaner greener technology. Innovative thinking and solutions are called for.
Half of the global population is under the age of 27, and Davos 2019 is providing the younger generation with an opportunity to shape the future. Six young leaders have been appointed as co-chairs, and will join Microsoft CEO Satya Nadella in framing the discussions to be held over the week.
South Africa is sending a delegation, headed by President Cyril Ramaphosa. Regretfully, it appears that SA is stuck in a time warp. In 2018 its refrain was ‘SA is open for business’. Notwithstanding the weighty themes that are to be grappled with next week, the SA delegation has been instructed to present a unified positive image, and to encourage investment. I might be missing something, but Davos 2019 does not appear to be an appropriate venue to be showcasing investment opportunities?
To be blunt, SA does not have a rosy image as an investment destination. One does not have to look further than the WEF’s annual Global Competitiveness Index (CPI). In the 2006/2007 report, SA was ranked 45 out of 125 countries. Since then, SA has been slithering down the index, reaching 67 out of 140 countries in the 2018 report.
The country’s downward trajectory was hastened by poor rankings in health (mainly HIV/Aids and tuberculosis), information and communication technology adoption, skills (educational quality), the number of days it takes to start a business, institutions (crime, police services, public trust in politicians, diversion of public funds, efficiency in government spending, irregular payments and bribes, business costs of crime and violence), and infrastructure (quality of electricity supply). These are all areas under direct control of the government.
It is difficult to imagine how anyone could sugar-coat our rankings in the 2018 CPI report, all of which impact the cost of doing business. The South African delegates should be aware that out of 137 countries rated in 2018, SA ranked 136 for labour relations, 133 for flexibility of wage determination, 135 for homicide rate, 128 for number of days to start a business, 125 for organised crime, and 125 for health. Unsurprisingly, SA’s best ranking is for its financial system, which is ranked 18.
The CPI 2018 report incorporates a Fourth Industrial Revolution (4IR) measurement, and SA fares poorly. Digital skills are ranked 116, and the skillset of graduates is ranked 85. It is obvious that SA isn’t ready for the 4IR, and there is a great likelihood of 4IR creating greater divergence rather than more opportunities.
Davos 2019 will facilitate the identification of new issues, and new ways of dealing with old issues. It will engage with experts, but will also use cutting-edge technology such as data visualisation and new mapping technologies. Perhaps the SA delegation will come up with innovative solutions to the barriers to doing business in SA.