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Davos Trends

I mentioned the Annual Meeting of the World Economic Forum in Davos in my previous column. Did I spot any law of the future trends there?

For one thing, I rarely if ever heard the words ‘rule of law’. There was a lot of interesting interaction about Big Challenges – economic crisis, environmental crisis, peace and security crises, development, cyber and digital challenges, Arab Spring, innovation, the need for values, and the rise of African and Asia. Rule of law is, I must suppose, assumed to be part of solving all that. But assumptions make me a little nervous. I did hear a few references to ‘human rights’. The Guiding Principles on Business and Human Rights are getting traction, but still at a rather high altitude.

The theme of the meeting – Resilient Dynamism – provoked some. Secretary-General Ban Ki Moon captured the ‘dynamism’ with the words “great transition”, recalling something he said in the speech with which he started his second term in January 2012:

Demographic transformation, the emergence of new centres of economic dynamism, accelerating inequality within and across nations, challenges to the existing social contract by a disillusioned, mobilized citizenry, technological and organizational transformation linking people directly as never before and climate change are all placing the foundations of our world and our global system under unprecedented stress. They are driving not just incremental but exponential change. They are deeply connected and increasingly complex.

Blame it on professional deformation, but reflecting on ‘resilience’ I quickly connect to the very concrete rule of law, despite its invisible presence in Davos. Resilience founded a rule system that provides predictability, a basis for trust, and a foundation from which to bounce back from that never-ending dynamism and volatility (which all experts say will increase). Someone may be murdered, a company may cause harm, someone may not pay back a debt, a state may misuse power, and all these things may interact to cause a sudden global crisis. But if there are generally shared rules to live by and to redress harms and settle conflict, then that enhances resilience to bounce back.

IMF boss Christine Lagarde formulated three solid core governance imperatives for today’s world: being open, inclusive, and accountable. It is interesting that she spoke of ‘governance’ and not ‘government’. That signals a consistent trend: government no longer rules the roost. So what does she mean? Openness:

an old lesson for a new era—that when countries transcend the narrow national interest and come together for the global good, everybody wins.

Inclusive:

Our close-knit world is a participatory world. The new generation demands opportunities for all and insists on tolerance, respect, and fairness for all.

And, accountable:

Beginning with the public sector, we have learned that good governance is the bedrock of economic success.[…] But the private sector also needs to be accountable. The goal of the private sector cannot be only profit; it must also be to add value, create jobs, develop the new ideas that drive an economy forward.

In the sessions on the eurocrisis it was evident how the leaders of Italy, Ireland, Denmark, The Netherlands, UK, and Germany struggled with playing chess on many governance- and rule-boards at the same time as they try to get their economies going again: national, regional, international, public and private, all intertwined. On some chessboards they lead, on others they follow. Save the bank, save country, save the euro, save the world economy. All at once. In the sessions on development, the same challenges surfaced. No talk of ‘state-powers’ that ‘set’ and ‘enforce’. The talk is of multi-actor partnerships, like the GAVI Alliance on children and the Global Fund on AIDS, tuberculosis, and malaria, of companies that proclaim social standards that go beyond pure profit and that police them in partnerships with many others. The CEO’s of Nestlé and Unilever – Paul Bulcke and Paul Polman – have staked the future of their companies on this.

In the 2011 KPMG report on Complexity for business, ‘rules’ and ‘government enforcement’ are ranked as the first and third most complexity-causing factors for business. That is likely to remain and we must not kid ourselves that it can be otherwise. Davos showed: the rule of law of the future, and actually already of now, is multi-actor, decentralized, and multilayered. It involves many more sources of governance than ever before. It involves a much wider governance bandwidth than ever before. We must be very careful that it does not become an afterthought. That would be very bad for our resilience.

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