Davos 2023: intense, unmissable

Just to put this into context: I did not arrive in Davos in a private plane, nor did I spend the five days in continuous 30 minute ‘bi-laterals’ with important CEOs, and I certainly was not in a glorious mountaintop chalet surrounded by staff. I took the bus from Zurich airport, spent most of my time in the conference centre on panels, and stayed at a cosy hotel in Klosters. But I must admit to dancing to the Pretenders at a tech party (that’s Chrissie Hynde for those of you who don’t go back that far).

I’ve been making the annual trek to Davos for more than a decade. Inevitably, every year I ask myself why. It’s probably the most intense week of my year and I arrive home exhausted. But for me, it’s one of the greatest shows on earth. And if, like me, you are curious about the world and how the governance and industry of the world works – this provides a front row seat.

Let me explain. When I teach our MBA students in my Future of Work elective, I talk about “multi-stakeholder approaches”. By that I mean that many of the challenges our students face, such as climate change or technological disruption, can only be addressed by multiple stakeholders. It takes governments, industrial leaders, social enterprise, civil society, educators, and citizens collaborating together.

And that, possibly more than any other event I attend, is what happens at Davos. At the top of a snowy mountain, with extraordinary security, government ministers and CEOs, heads of NGOs and young entrepreneurs pass each other in the corridors of hotels, greet each other as they slip along the Davos Platz, and nod to each other in the conference centre.

I sense these sometimes fleeting connections are important. Have they changed the course of history? I have no idea. But I know for myself, they’ve given me a glimpse into the agenda. Into the concerns and the aspirations of stakeholders that I might not experience in other situations. And it is these insights I bring into the classrooms of LBS and into my speeches, articles and books.

A meeting of minds

Here is how it works for me. Beyond the CEOs and government ministers, there are groups of academics (of whom I am one) who in a sense curate and moderate the emerging topics of interest. During the week in Davos we speak in workshops, moderate panels, hold press conferences, talk with those who are interested in our topics, bring research into the conversations.

Each of us academics has our own area of expertise. My passion is work. How and where work gets done, who gets paid what, how people are led, how companies relate to their stakeholders and wider society, how work will change over the coming decades. Over the years, I have chaired successive WEF Councils on the topic of leadership, job and skills. I’m currently co-chair (with Sharan Burrow, the General Secretary of the

International Trade Union Confederation) of the council on wages and skills. Each council is made up of members from all the stakeholder groups and we meet across the year to progress the topic.

Inevitably the takeaways from Davos are coloured by the tracks we took during the week. So, with this in mind, here are the themes I‘ve been mulling over since my return.

Let’s be honest – it’s a very tight labour market in most developed countries

One of the first panels I moderated was with the US Secretary for Labour, Martin J. Walsh. He’s very much on the side of the workers, and opened his remarks by reminding us that in November 2022 there were 10 million job vacancies in the US. That set the scene for a whole raft of conversations over the week about this very tight labour market in most high-income countries. Economists are reasonably clear on why this is happening. Demographics play a large part.

As Andrew Scott, Professor of Economics at LBS and I wrote in our books The 100 Year Life and The New Long Life, as people live longer and have fewer children, working populations age and shrink. Added to that, in many countries (particularly the UK) many over-50s have not come back to fulltime work after the pandemic. Research shows that, at least in the UK, this is a combination of ill health, caring for another, feeling economically secure as a homeowner, and simply not liking work.

There are also high quit rates which add to this instability. One leader told me that they have almost 60% annual turnover in their frontline jobs. One way out of this of course is good jobs. And for those interested in what these look like, take a look at the framework the WEF councils developed on good jobs.

Of course, when labour markets are tight, it encourages employers to consider more widely who could do the job. That could be a real benefit to the over-50s. For as Jo Ann Jenkins (CEO of AARP, the Associating of American Retired People) told me, over 70% of those members they surveyed said they had themselves been, or had seen, another older person discriminated against at work. And it could also encourage employers to go beyond educational qualifications when they advertise a job (more on this later).

It’s hard to make sweeping statements – there are significant differences across countries

After talking about tight labour markets, the US Secretary of State for Labour went on to share his aspiration for paid sick leave. I guess he knows this is already enshrined in labour laws in many European countries. For me as a moderator and synthesiser, it’s these differences that make it hard to talk about global issues on work as if all countries are similar.

Take demography, where there are significant demographic differences between countries. For example, whilst Europe and the US have a tight labour market, there is extraordinary population growth in Egypt and Nigeria and significant youth unemployment. There are also significant differences in labour laws and norms. So, whilst policymakers like to look to other countries as benchmarks (the education system of Singapore, or the labour laws of Denmark) in reality, each country has unique characteristics.

This simply reinforces a learning I’ve had from my Davos experiences – that there are no easily solutions to complex problems, and there is no ‘one-size fits all’. So, when I teach our MBA students, I want to hear about their experiments in their country, and encourage them to listen and be empathetic to the experiences of others.

There is palpable excitement about AI – and underlying apprehension

You would have to be an uncurious laggard not to have been enchanted by ChatGPT, and inevitably this was the talk of the town. Everyone has played around with it, asking it inane questions, commanding it to answer in the voice of Shakespeare and so on. But beyond this excitement there was a sense that, finally, here is a

machine capable of performing ‘our’ jobs (rather than the jobs of ‘others’). And as one tech CEO told me, ‘Wait until you see what’s coming down the pipeline.”

I’ve taken this as an opportunity to reflect on what we know historically about the impact of technology on work. For despite the initial outcry about significant job losses, that has not been the case. That’s in part because when technology substitutes for a task, that task becomes cheaper to perform, and therefore the demand for it increases. The impact on radiologists is a case in point. For whilst technological diagnostics have substituted many of the tasks they perform, patients want more complex diagnostic MRI and CT scans. And secondly, a machine rarely performs the whole of a job, rather it substitutes for those specific tasks that can be automated.

That leaves the human worker to either upskill to perform the more ‘human’ and complex tasks of the job, or alternatively reskill to another adjacent job. However, a word of caution here. For as recent US data has shown, whilst low-skilled workers have not lost their jobs because of automation, for many their wages have gone down. So, as we think about the impact of cognitive technologies such as ChatGPT we need to bear this in mind. There will be winners and losers. Ominously, when I asked a tech leader where this left humans, his response (with no trace of irony) was, “They will check the output of the machines.”

What I will be suggesting to my students is they focus on developing the human skills that machines cannot perform – like creativity, empathy, curiosity, lateral thinking. All of which, of course, we teach at LBS.

There is much talk about the skills agenda

As technology marches on, the agenda for skills becomes crucial. If workers are to retain their jobs, then they need to upskill or reskill. The question is not if, but how, who and when. On the question of how, again the technologists had a response. Tech learning platforms like Coursera have experienced massive growth and these are seen to be one of the solutions to the thorny problem of scaling learning. As Coursera CEO Jeff Maggioncalda told me, the scaling of online learning increased dramatically during the pandemic and has been increasing ever since.

On the question of who gets trained, I noted a real sea change from an agenda that has historically been focused on knowledge workers, to a focus on front line workers. No doubt the labour market data focuses attention on these types of workers. And that’s important, for as Stefano Scarpetta, who leads the Directorate of Employment in the OECD reminded me, only 10% to 20% of total spend on training goes to people in these types of work.

Frankly, in the decade I have been attending Davos, the skills agenda has continuously been raised. This is clearly a multi-stakeholder challenge, and therefore like all such challenges, difficult to solve. Governments have a role to support individual workers (as they do in Singapore), or to support companies (as the UK government does with its apprenticeship levy). Corporations have a role to play, and some, particularly in “old” sectors such as telecoms, have really stepped up to this. Social enterprise can jump in, for example Hadi Partovi the founder of Code.org told me that the enterprise has trained over 75 million young people in coding skills.

However, this year there was a new skills agenda emerging. And that’s a belief that relying on education qualifications is inevitably discriminating against those without formal educational qualifications. And in many countries, that turns out to be a lot of people (for example, those with limited access to schooling or refugees who fled without their credentials). Hiring for potential rather than certificates might be a laudable aspiration, but in reality it is hard to deliver. That’s in part because educational qualifications are a relatively simple ‘signal’ to the labour market. Without this, what is the signal? It has to be skills. But here is the puzzle. Skills are hard to define and codify, hard to measure, hard to credentialise, and hard to communicate.

Not surprisingly, technology corporations and entrepreneurs are jumping in to try and solve this puzzle. It would be a great puzzle to solve. For as we consider issues of inclusion, how businesses give equal opportunities to people from backgrounds where getting an educational qualification is tough, that would be a real win. As Pete Schlampp, Chief Strategy Officer at Workday remarked on one of my panels, “Talent is everywhere, it’s opportunity that is hard to find.”

I came away from Davos with more questions than answers. But also, a belief that taking a front row at this extraordinary stakeholder event brings the realities of the world closer to me, and closer to the students I teach.