Since my last visit to Davos and the WEF in 2011 (Christian Ulbrich and Peter Roberts represented us last year), the first thing I’ve noticed is that the meeting is clearly a much bigger event this year. There are more people from more companies and more governments, and that suggests more confidence than two years ago. The mood and ‘buzz’ in the air are distinctly more positive. Also, if 2011 was the year of the iPhone in Davos, 2013 is definitely the year of the iPad. It seems that you need WEF credentials and a tablet to attend.
My second observation is that the banks are back in force, and particularly the big U.S. banks. For reasons of image and ‘optics,’ and because they had to deal with so many pressing issues arising from the global financial crisis, banks were light on the ground here in recent years. Their renewed presence suggests that their problems are no longer as pressing as in the past.
At the banking session I attended today, regulation was a big topic. Banks worldwide are dealing with multiple layers and levels of new regulation. By making it harder for them to manage their business, this is perversely increasing risk rather than reducing it. There was also an interesting and sobering view that the new regulations will not prevent the next financial crisis but, at best, will make it a little less severe.
Third, in between today’s sessions, I met with clients and prospective clients. The list included the:
- Chairman of a major European bank, which is a client
- CEOs of three of the four big global accounting firms
- CEO of a large chemical company, also a client
- CFO of a major hotel chain, a client
- CEO of a leading, European-based electronics company, and a client
- Finance Director of a major aircraft manufacturer, a client
- CEO of a U.S.-based hotel REIT
- CEO of a major French telecommunications manufacturer, a potential future client
But enough title dropping.
Fourth, the economic session I attended today focused on the situation in Europe. The general sense is that the euro challenge is now stabilized – not solved, but stabilized – and is beginning to be seen as yesterday’s problem.
With the currency crisis moving into the background, two other issues have come up the European agenda. First, economic growth, of which there is precious little, even in the strongest European economies. And second, jobs, and particularly jobs for youth, who have suffered tremendously during the last five years.
My sense of the economic situation in Europe is that, while the euro, rather like the U.S. fiscal cliff, seems under control if not resolved, the agenda is shifting to an urgent need to drive growth. Add to that the recognition that growth will not come from government spending, but through business spending. Such growth will depend on more favorable employment law and business regulations across Europe.
A footnote: UK Prime Minister David Cameron’s plan to hold a referendum on Britain’s future in Europe was a popular topic in Davos today. Italian Prime Minister Mario Monti called Cameron’s comments “interesting” and thought they would set up the UK to remain in the European Union. The German and French executives I sat with at dinner tonight are desperately keen to see that happen because, without a UK presence, they see no credible economic, cultural and social links between Europe and the U.S.
Enough for today, more to come tomorrow.