Finextra attended a very different, digital Davos this year which centred on ‘The Great Reset’. Covering global insights into the impact that fintech has on wider issues such as responding to Covid-19, restoring economic growth, and advancing a new social
contract, for its 50th year the event also focused on wider themes such as bolstering global efforts to addressing climate change and reaching net-zero objectives.
From Christine Lagarde to Bill Gates to Sundar Pichai, we’ve compiled comments from key leaders across the globe who addressed the forum, setting the tone of global economic dialogue and presenting a call to action to both private and public institutions
on turning goodwill into practical, tangible progress.
Here is a sample of their most salient remarks:
Addressing the forum on Monday, President of the European Central Bank Christine Lagarde broke down the key positives which have emerged from the Covid-19 crisis along with the challenges we face into the future.
Once we’re through to the ‘second phase’ of the 2021 Covid-19 recovery Lagarde explained, “it is most like going to be a new economy, which will be associated with positive developments and also with challenges.”
One of these positive developments noted by Lagarde is that many advanced economies, particularly in Europe, have leapfrogged by about seven years in terms of digitalisation. She added that it is likely that there will be a 20% increase in the amount of
people working from home post-pandemic and that technological changes are affecting the world for the better, with VC capital being targeted at sectors being affected by social distancing.
On the other hand, the ECB President raised the reduction in investment toward innovation and R&D by 14% in the Euro area.
The challenges which have emerged in 2020 will have to be factored into future policies, she argued, and that “favouring and supporting investment into this new economy” is critical. “On the fiscal and monetary policy front, authorities will have to stay
the course and continue to show support, at the same time, investment will have to really be focused in order to lay the ground for a new economy where scarring will be hopefully avoided or reduced.”
When asked about what exactly is needed to achieve net-zero, Bill Gates commented that while “the good news is that a lot of companies are taking carbon into account” in their investment decisions, the next big step will be getting people to monetise these
decisions and put that money into areas of greater impact.
The founder of Microsoft and the Bill and Melinda Gates Foundation argued that the way forward in the areas of scaling up voluntary carbon markets is to connect private sector payments to innovation.
Gates also drew the link between the need for greater volume and price reduction, stating that “we need to connect companies’ willingness to fund [green] activity to the innovation cycle. If a green product is very highly priced there is no market for it,
but if you drive that volume up the price delta can come down.”
Ursula von der Leyen
President of the European Commission (EC), von der Leyen reflected on the intense attention paid to digitalisation at Davos in 2020, adding that the pandemic has triggered a massive acceleration of the process and that the EU hopes “the 2020s can finally
be Europe’s Digital Decade.”
Von der Leyen explained that the EU will dedicate 20% of NextGenerationEQ to digital projects in order to nurture innovative ecosystems and boost the vibrant startup scene in cities like Sofia and Lisbon, and ideally become a global hub for artificial intelligence.
The EC President also took the opportunity to address the “darker sides of the digital world” to criticise and warn of the negative role larger digital companies played in the storming of Capitol Hill earlier this month. She stated that this “is why we need
to contain this immense power of the big digital companies. Because we want the values we cherish in the offline world also to be respected online.”
Without mincing words, von der Leyen stated that the Commission wants it clearly laid down that internet companies take responsibility for the manner in which they disseminate, promote and remove content. “No matter how tempting it may have been for Twitter
to switch off President Trump’s account, such serious interference with freedom of expression should not be based on company rules alone.”
She furthered that this is the reason why there must be legal frameworks for such far reaching decisions, mentioning the Commission’s new rulebooks for its digital markets, the Digital Services Act and the Digital Markets Act.
Inviting EU friends in the US to join the Commission’s initiatives, von der Leyen added that “together, we could create a digital economy rulebook that is valid worldwide: it would go from data protection and privacy to the security of critical infrastructure.
A body of rules based on our values: Human rights and pluralism, inclusion and the protection of privacy. So Europe stands ready.”
Salesforce CEO Marc Benioff made quite a splash at a panel on stakeholder capital earlier in the week, stating that during the pandemic, “it was the CEOs in many, many cases all over the world who were the heroes.”
Responding to moderator Gillian Tett’s question around the role business has played for the provision of solutions, rather than just waiting for governments to act, he said that it was the CEOs who stepped forward with their financial resources, corporate
resources, employees and factories to pivot rapidly and not for profit, in order to save the world.
“There has been a mantra for too long that the business of business is business, but today the business of business is improving the state of the world.”
He tempered the comments by noting that there were bad actors at play during 2020, referring to “bad actors and their CEOs” who did not step up to stop lies and misinformation, which he states led to many people losing their lives.
Referencing the 2021 Edelman Trust Barometer, Benioff commented that business has replaced governments and non-governmental organisations as the most trusted institutions during the Covid-19 pandemic.
“When we were in Davos last year, I didn’t expect that I’d be going home and two months later, that my whole year would be obsessed with how I could use Salesforce to make lives better for the world during this pandemic, but that has been my entire year
[…] I think we have to say CEOs are definitely the heroes of 2020.”
Larry Fink, CEO of Blackrock, stated that “we saw an extraordinary shift in how investors invested across the industry.”
There have been significant changes in investor preferences which is tied closely to stakeholder capitalism and how a company and a company’s leadership and board are navigating it themselves.
“It's hard to measure what you're doing on the S side of ESG versus what you're doing on the sustainability side because they intersect and companies that are focusing on everything, are the leading companies in each industry.”
Fink added that a light has also be shone on the existential health of the world and investment alignment is reflecting this. He continued that the sustainability transition that we are going to be undergoing is a huge economic opportunity, “we're going
to be creating new technologies and new industries as other industries become less important. But we should focus on society's acceptance to create new jobs to create new technologies to move forward.”
While he acknowledged the hefty $50 trillion of investment that will be needed to get to net-zero world, Fink argued that the significant difference for investors will be access to more and better data. This data, he believes, will allow for more customised,
personalised investment portfolios that are better suited toward meeting sustainability efforts.
Speaking in frank terms to the financial community, special envoy for climate action and finance to the UN, Mark Carney, put the private financial
sector on notice to act on climate change by participating in this November’s COP26 summit in Glasgow.
The former Bank of England governor said, “if you are part of the private financial sector and you are not part of the solution […] you will have made the conscious decision not to be aligned to net zero. It’s a net-zero COP, that’s the objective and the expectation
[…] if you’re not in, you’re out because you chose to be out.”
Carney’s comments followed discussion that heavily focused on the need for “blended finance” which would see the public and private sector work together with greater effect to achieve climate goals.
While the global net-zero alignment is cascading down through the private sector, he warned that there isn’t the same level of orientation across the entire spectrum including multilateral development banks and development finance institutions.
“It will be a very odd situation if we have the core of the private financial sector and governments oriented to net-zero by Glasgow, but not the multilateral development bank community fully oriented to net zero.
“That’s part of what we need to fill in and crucially, if we can, this will help unlock very large, blended finance flows to emerging and developing economies. That’s part of the necessary architecture.”
Echoing the sentiment of Salesforce’s Marc Benioff, Dan Schulman, PayPal CEO
took to the digital stage to highlight that CEOs must support the global economy reset post Covid-19 with a consideration for progress, people, and the planet.
“This idea that profit and purpose are at odds with each other inside a business is ridiculous. In fact, I would argue that the two go hand in hand.”
Schulman said that senior leaders within companies have a responsibility to broader communities. “The pandemic just brought into stark relief issues and trends that have been with us for quite some time and may just not have been as visible.
“You've got several billion people throughout the world who live outside of the financial system. In the United States, you have basically two thirds of adults who struggle to make ends meet every single month,” Schulman continued.
In light of recent political, societal and social unrest, Schulman asked: “How can we expect somebody to embrace democracy when they don’t think that the system is working well for them? And they think that others are doing well, but they’re not doing well.
[..] I mean, where do the best employees want to work? They want to work for companies that are making a difference in the world.”
Founder, co-chairman and co-CIO of Bridgewater Associates spoke emphatically about the Covid-19 recovery, acknowledging that the political, economic divide is significant to addressing this issue effectively. The structural impediments of equality and education,
he notes, are tied to the mechanics of politics and the jurisdictional challenges that come with it.
Dalio stated that in order to address this, “what’s needed is something like a bipartisan ‘Manhattan Project,’” here referring to the ambitious plan the US launched during World War II to build international cooperation.
This ‘Manhattan Project’ Dalio called for would see “the relevant parties, leadership from the top, appoint a bipartisan group of people who are also skilled to engineer an encompassing plan that is acceptable broadly speaking.”
Doubling down on the point, Dalio added that President Biden’s intentions to be inclusive, to be a President of the
United States, and reaching across is a great objective.
But when viewing challenges through the lens of disparity of wealth in his home state of Connecticut, Dalio said given the level of need the resources and leadership simply has to come from somewhere and that is why the plan “has to be over-encompassing
and it has to be like a Manhattan Project.”
Former US Vice President Al Gore
provided an injection of optimism to forum discussions, mentioning the significance of commitment being demonstrated within the first week of the Biden Harris administration in addition to major new commitments by the EU, China, Japan and South Korea.
“We are in an almost unprecedented global transition. Many call it the sustainability revolution empowered by new digital technologies with much greater precision, than a couple of decades ago.”
Quoting Nelson Mandela, Gore added that it is always impossible until it’s done, and “what we’re seeing now is a gathering of the forces, both private and public, fuelled by this global conscience to secure our future, and the financing is going to follow those
CEO of Alphabet, a self-titled “technology optimist”, Sundar Pichai believes in people coming together to use technology for good.
He believes the real potential of AI will come into play in 10-20 years’ time, and while he doesn’t think that AI played a significant role in helping us navigate the pandemic, it is likely to be of great assistance by the time we next encounter a crisis
of this nature.
Though approaching AI responsibly and ethically is something Alphabet prioritises, Pichai explained, he believes that there is an extraordinarily important role to be played by regulation and independent or non-profit institutions. “I don’t think companies
alone can do this right.”
He exuded excitement around the progress of quantum computing over the next three to five years “because we will be able to harness the creativity of the world,” by letting other developers test quantum applications by providing the quantum infrastructure
that Alphabet is building.
On quantum computing directly, Pichai said the more time spent trying to understand it the more humbling it is, and that “anyone who claims to understand quantum computing doesn’t really understand it.”
Even more philosophically, Pichai concluded that “there is definitely something about the notion of the physical world as we perceive it that doesn’t represent the underlying reality. Humanity has a long way to go before we understand its true nature in
a deeper way.”
When probed about a concern that Chinese researchers may have reached a quantum advantage, Pichai took a more philosophical stance: “There is no doubt to me there is going to be progress in AI and quantum across the world. We are going to need better global
frameworks for AI safety. Just like to tackle climate change, we need countries to come together because no country can solve what is a planetary solution.”
He added that we should think early about coming together to solve bigger, global issues such as AI safety, but this will not be an easy thing to achieve as it is a multi-decade effort that needs willing governments.
On freedom of speech, Pichai had shared a ‘shocked’ reaction with Ursula von der Leyen when seeing images of the storming of Capitol Hill earlier this month, and argued that there are real societal issues to be debated around where the boundaries slide around
freedom of speech and what we need for a well-functioning society.
“These are important questions, and no single company can solve them. I’m glad there are conversations including potential regulatory approaches to give clear rules of the road and large technology companies have an important role and responsibility to get
this right. For Google, this is fundamental to our mission.”
Pichai explained that we’re dealing with an extraordinary moment where we saw the potential for real physical harm in the real world, potential for incitement to violence.
“There are boundaries to free speech. I do think it’s important for governments to debate this and give guidance and I also think it’s important that different companies have different approaches – that gives people choice, but we need clearer rules of the
Referencing the current short-squeeze being led by a force of retail investors, Pichai said movements in stocks are being discussed all over the internet and it shows that the internet is disseminating information at a scale never seen before.
“This phenomenon is bigger than any single company, it is here to stay and as a society we need to develop the next set of frameworks for us to work through.”
Morsels from country leaders
"Humankind is capable of great scientific feats…this shows the way out of this pandemic […] the pandemic has left deep imprints on our societies and our economies and it will determine how we live over the next few years […] We all live in one planet. In
such an existential crisis, shutting yourself off from others fails.”
"The economy of tomorrow is going to have to be an economy that thinks about innovation and humanity, we’ll get out of this pandemic only with an economy that fights inequality.”
“Science, technology and innovation is a key engine for human progress... China will create an open, fair, equitable and non-discriminatory scientific environment that is beneficial to all.”
"International institutions are weakening, regional conflicts are multiplying, the global security system is degrading […] There is a risk of collapse of global development, and a risk of a fight of all against all," he added.
"India has in these times of crisis fulfilled its global responsibilities from the beginning by setting up infrastructure related to vaccination. So far only two made-in-India vaccines have been introduced, but in the future, many more vaccines will be made
available […] We all have to act together, and I'm sure that we will be successful."
Lee Hsien Loong
"Even with vaccines, the pandemic is far from being quelled. New variants are worrying, and further mutations will surely emerge. Until a large part of the population is vaccinated, we need strong public health measures everywhere […] Governments will come
under more pressure to adopt protectionist and nativist positions."
“I am standing in the front line of the battle […] We are determined to deliver games that bring hope and courage to the world and a testimony to mankind prevailing over COVID-19."
"Amidst the protectionistic moves due to COVID-19, Japan will exercise leadership in efforts in expanding free and fair economic areas and strengthening a rules-based multilateral free-trading system."
"We're in an arms race, except it's not an arms race, it's a race between vaccination and mutation […] There are more mutations and there will be more mutations in future. We have to race as fast as we can to vaccinate first the risk groups and then everyone
else to give immunity and then expect the companies manufacturing the vaccines to modify their vaccines to accommodate the mutations as they develop ... that's going to be our life for the coming years.”
"I don't call them that much -- just five times a day," Mr. Netanyahu joked about the frequency with which he speaks with Pfizer executives about vaccine development and distribution.
Cyril Ramaphosa, President of South Africa
"The challenges we face were not created by the virus, they were created by us,” and that the destruction of our environment and conflict are "all the results of our own action, and - too often - our inaction."
Moon Jae-in, President of the Republic of Korea
“In the face of countless uncertainties and risks, there were those who never faltered but rose to the challenge. The history of humanity advanced as a result”