- The World Economic Forum’s annual gathering of business and political leaders has been officially called off this year, after many delays and false-starts.
- When it reconvenes in the first half of 2022, at Davos or perhaps somewhere else, the event will look very different.
- What remains to be seen is whether the WEF’s elite, and high-priced, confab can ever regain the status and influence it once had.
- See more stories on Insider’s business page.
Predicting the demise of the World Economic Forum annual meeting in Davos is nearly as old as the five-decade-old event itself. Yet with an embarrassing string of postponements and cancellations, it is worth wondering again how long the expensive and tedious yet lucrative gabfest in the Swiss Alps can last.
“Davos” is the brainchild of Klaus Schwab, an 83-year-old German academic who hosts a wide variety of potentates, corporate chieftains, scholars, and assorted hangers on to his one-of-a-kind, weeklong meeting. I’ve been to Davos five times, and like many attendees I have a love-hate relationship with it. I delight in the many interesting people I meet and the winter splendor of Switzerland. I loathe the pretentious obeisance to the illusion of corporate goodness as well as the time and effort – a week to prepare, a week to endure, a week to recover – of the whole ordeal.
Now questions abound, not only about the future of Davos, but also the whole class of pricey, elitist, corporate-financed confabs WEF pioneered. WEF undoubtedly shot itself in the foot by stringing along its customers over the course of a trying year. And its missteps are the epitome of a cautionary tale of the perils of announcing overly optimistic plans in a pandemic. Most importantly, its next moves will be a decent tell if business travel will follow leisure travel in snapping back in countries where vaccination rates are high. To wit, if CEOs stop raising their brandy snifters in a cozy Swiss chalet, will commerce march on anyway?
WEF last met in January, 2020, even as Covid was locking down China despite the attendance of a massive delegation from that country, led by Vice Premier Han Zheng. (A month later banking pooh-bah Jamie Dimon joked that Davos might have been a superspreader event; perhaps he wasn’t wrong.)
As 2020 progressed, WEF was determined to reconvene in 2021. It originally announced Davos would go on as planned, but with a slimmed-down group and a virtual sideshow. Then it made plans for a May event in Lucerne, Switzerland, before switching locations to Singapore. After that, WEF pushed back the Singapore event twice, first by two weeks, which would have been around now, then to August. Finally, last week, it called the whole thing off, promising only to attempt an annual meeting in the first half of next year in an undetermined location.
Schwab, a man not given to doubts, acknowledges he goofed. “We were perhaps too optimistic,” he recently told the German newspaper Süddeutsche Zeitung. He claims demand was strong for the Singapore event but that the pandemic made things too unpredictable. Now, says, Schwab, whenever WEF does gather its members again, it will try to tone down the sheer scale and extravagance. “We are looking at a new design for our annual meeting, more personal meetings and group work, no more big plenary sessions unless Joe Biden and Vladimir Putin are on stage,” he says. (If anyone could pull that off, by the way, it is Schwab, who beckons princes, presidents, and celebrities.) “The event has to become more intimate, fewer people – and less hustle and bustle, if I may put it that way.” Says Schwab.
Like every high-end event organizer, WEF furiously stood up digital get-togethers during the pandemic. “We made ourselves into a global private TV network,” says Adrian Monck, a WEF managing director and head of its communications. He says the organization has hosted more than a thousand sessions of one type or another since the pandemic started.
WEF likes to portray itself as more than its Davos meeting and as more than an event host. But there’s a reason it was so reluctant to cancel its main conclave: it needed to give members and partners reasons to re-up their annual fees, which are critical to keeping WEF running. True, it’s a Swiss non-profit. But it’s also an enviable commercial enterprise. For the year ending June 30, 2020, the last period WEF has reported, this “public interest” organization brought in a whopping $410 million in revenue in the form of memberships, attendance fees, and partnership sales. It pays almost all of it out each year in staff salaries and other operating expenses. Even still, a year ago it had about $335 million in cash on its balance sheet.
One wonders what it will possibly do with all that money. It probably depends on whether its well-heeled customers, many of whom, contrary to Schwab’s assertion, didn’t thrill to flying to Singapore in the dead of summer, stick with it.
Monck, the communications chief, says WEF revenue has been resilient, down a smidge year over year, and that renewals have been only a bit below the normal rate. He says the organization is aiming for a January meeting and that the locations with which it has relationships are potential spots. But obviously WEF is thrice-bitten, thrice-shy about committing.
Others have adapted too. TED, a US-based tech-inflected competitor to WEF, similarly went virtual last year. It is planning an in-person event in August in the city where it started, Monterrey, CA. The theme: “The Case for Optimism.” Another competitor for WEF’s supporters, the finance-focused Milken Global Conference, plans a meeting for mid-October, “Charting a New Course,” at its longtime venue, the Beverly Hilton in Los Angeles.
TED and Milken are largely domestic affairs, the former known for its programming flair and the latter for its must-attend financial-world cachet. For them, a global online audience is an opportunity whereas WEF’s reason for being is bringing together a global audience. Jay Herratti, executive director of TED conferences, tells me 75% of TED’s online audience is outside the US.
Betting against WEF has been a fool’s errand before. It is a proven master at getting the powerful to pay dearly to discuss the problems they themselves created. Moreover, the irony of its self-inflicted wounds is that WEF’s messages of stakeholder capitalism and business with a purpose have never been more in fashion. And yet, for all the world’s problems – global wealth inequality, uneven vaccine access, concentration of power among tech companies, to name a few – it isn’t at all clear that Davos, metaphorically or physically, will be the best place to discuss them going forward.
In other news:
It is an iron clad rule of journalism that three observations of any given phenomenon constitute a trend. I therefore declare a full-fledged outbreak of “boomeranging” among top-tier talent at big technology companies. A boomerang employee is someone who leaves, typically voluntarily, only to return later. The returning executive is cast in the role of a conquering hero, the team leader who went to play elsewhere, only to find out there is no place like home.
Two big-time tech executives recently came back to the companies where they made their bones. Pat Gelsinger, an Intel lifer before leading software maker VMware, is now the chip giant’s CEO. (In 2018, at a Fortune conference, I ambushed Gelsinger to ask if he wanted to be CEO of Intel, and he professed his love of the software business. Some things take a while.) Similarly, Adam Selipsky spent 11 years at Amazon Web Services before becoming CEO of Tableau Software, now owned by Salesforce. He’ll replace Andy Jassy as head of AWS when Jassy becomes CEO of Amazon. The most interesting boomerang of all is another Amazonian, Jeff Blackburn, who left Amazon after more than two decades to become a venture capitalist. Blackburn didn’t last two months as a VC before deciding to return to Amazon to run all media efforts, including Amazon’s acquisition of the MGM film studio and library.
The original tech-industry boomerang employee, of course, was Steve Jobs, hounded out of Apple in its early days, only to return to perform one of the greatest resuscitations in corporate history.
Adam Lashinsky is a Business Insider contributor and former executive editor at Fortune magazine, where he spent 19 years. He is the author of two books: “Inside Apple” (about Apple) and “Wild Ride” (about Uber).
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