Why an absence of A-listers at Davos is not just deep trouble for the World Economic Forum, but for globalisation too

Published

2 years ago

January 16, 2023

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Davos, the World Economic Forum (WEF) and its founder, Klaus Schwab, have become more famous than ever before in the past couple of years – albeit not for the reasons they might have wanted.

As COVID-19 spread and the world battled the pandemic, Mr Schwab and the WEF, not to mention regular delegates such as Bill Gates, became the subject of a suite of outlandish conspiracy tales, most of which came back to the premise that they were hell-bent on world domination.

Leaving aside the lurid detail of these stories, they seem to have missed the most important point of all, far from becoming more powerful than ever before, Davos is failing.

Before we go any further it’s worth pointing out that pinning down what Davos “is” is surprisingly tricky.

At its core, it is a four-day-long meeting of businesspeople, politicians, academics, campaigners and, yes, celebrities, up the mountain in a Swiss ski resort.

There are speeches from world leaders, forums where people talk about the big issues of the day, from poverty to climate change to inequality and countless meetings and parties outside the official World Economic Forum cordons.

Bankers come here to meet potential clients and do deals in hotel suites, politicians have quiet bilateral meetings with their peers and with businesspeople.

But there are two overarching reasons why Davos matters. The first is: convening power.

It stands and falls on whether it can persuade enough influential people to come here, so that the other influential people can rub shoulders with them.

The second is something deeper: most of the delegates here benefit from a world where capital and trade move freely from one part of the world to another. This place is not the explanation for the globalisation of the past few decades, but it has certainly thrived in that world.

And on both of these fronts, things are not looking good for Davos.

There are plenty of A-list delegates coming to the forum this year, from German Chancellor Olaf Scholz to US climate envoy John Kerry, not to mention the business mainstays like JP Morgan chief executive Jamie Dimon and, of course, Bill Gates.

But the guestlist this time around looks considerably less heavyweight than usual.

There is no US president, no UK prime minister and even Emmanuel Macron is giving the meeting the cold shoulder – little wonder given these nations, and so many others, are battling a cost of living crisis back home.

The end of globalisation itself?

But more important still is the fact that the very world Davos thrived in is disintegrating.

There is a war in mainland Europe. Indeed, some have described the conflict in Ukraine as simply the earliest movements in a world war.

Relations between China and the West are at a new low point. Countries around the globe are re-engineering their supply chains, and the era of untrammelled globalisation seems to be ending.

Davos has been written off many times before (possibly including by yours truly) yet it has managed each time to defy such prognostications.

A lot of people thought Donald Trump‘s election would spell disaster for the forum, yet he attended it more than once, and was here at the last winter meeting back in early 2020.

Yet there are two other reasons, on top of the two above, why Davos is facing its biggest threat yet.

COVID’s blow to face-to-face events

The first is the pandemic that erupted shortly after that last winter meeting, which has undoubtedly dealt a blow to face-to-face events such as these.

Davos may be leagues bigger and more influential than most corporate jamborees, but at its core that’s ultimately what this event is, and thanks to Zoom and remote working the corporate jamboree sector is trapped in a deep recession of its own.

The other issue comes back to something Klaus Schwab, the forum’s founder, has often talked about before: the stakeholder economy.

This idea, his brainchild from decades ago, is that businesses do not exist in isolation: they are at a nexus of various different groups, from shareholders to customers to employees and, for that matter, the state and society in which they operate.

The idea was that by engaging more sensibly with each of these parties the stakeholders could all get along. The Forum’s official motto is “Committed to Improving the State of the World” but it might have done better to borrow the old BT slogan: “It’s good to talk”.

Yet in the face of the cost of living crisis, these lines of communication seem to have frayed, or possibly snapped altogether.

There has been more industrial action in recent months than at any time in recent decades.

Dialogue seems to be failing.

On pretty much every front, then, Davos seems to be in deep trouble.

Far from gaining power in the past few years, it is under greater threat than ever before.

There will be fanfare aplenty from this Swiss town in the coming days: Ukraine, the state of globalisation, climate change – all of these issues will be discussed here by A-list panels.

But quietly, almost indiscernibly, this place is becoming less important as the world around it changes.

Business

Bosses of Octopus Energy and SSE clash over ‘postcode pricing’ proposals

Published

6 mins ago

June 17, 2025

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Bosses of Octopus Energy and SSE clash over 'postcode pricing' proposals

The head of Britain’s biggest energy supplier has claimed his competitors oppose proposals for so-called postcode pricing because they financially benefit from the current system.

Octopus Energy chief executive Greg Jackson told Sky News his business’s rivals were against customers being charged based on where they lived, rather than on a national basis, because they would lose out on profits.

He said: “A very small number of companies that today get paid tens of millions, sometimes in a single day, to turn off wind farms and generate gas elsewhere, don’t like it.

“The reason you’re seeing that kind of behaviour from the rivals is they are benefiting from the current system that’s generating incredible profitability.”

The government is currently considering whether to introduce the policy, which is also known as zonal pricing. Energy secretary Ed Miliband is expected to make a decision on the proposals by this summer.

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Octopus has become Britain’s biggest supplier with more than seven million customers.

Mr Jackson has been a vocal proponent, as he said he wants to charge customers less and boost government electrification policies by having cheaper electricity costs.

What is postcode pricing?

Sarah Taaffe-Maguire

Business and economics reporter

@taaffems

Zonal pricing would mean electricity bills are based on what region you live in.

Some parts of Britain, like northern Scotland, are home to huge energy producers in the form of offshore wind farms.

But rather than feeding electricity to local homes and businesses, power goes into a nationwide auction and is bought to go across Britain.

As the energy grid is still wired for the old coal-producing sites rather than the modern renewable generators, it’s not straightforward to get electricity from where it’s increasingly produced to the places people live and work.

That leads to traffic jams on the grid, blocking paid-for electricity moving to where it’s needed and a system where producers can be paid a second time, to power down, and other suppliers, often gas plants, are paid to meet the shortfall.

Zonal pricing is designed to prevent paying the generators for power that can’t be used.

It would mean those in Scotland have lower wholesale energy costs while those in the south, where there is less renewable energy production, would have higher wholesale costs.

Whether bills go up or down depends on implementation.

Savings from one region could be spread across Britain, lowering bills across the board.

Mr Miliband has said he’s not going to decide to raise prices.

However, SSE’s chief executive Alistair Phillips-Davies described the policy as a “distraction” and said it could affect already agreed-upon upgrades of the national grid that will lower costs.

“I think you’ve got a very, very small number of people who are asking for this. It’s just a distraction. We should remove it now,” he said.

While Octopus Energy estimates that said postcode pricing could be introduced in two to four years, Mr Phillips-Davies said it could take until 2032 before it was implemented, by which time Britain would have “built much of the networks that are required to get the energy from these places down into the homes and businesses that actually need it”.

“We just need to stay true to the course,” he added.

Unions, as well as industry and energy representatives, have also spoken out against the policy. Opponents include eco-tycoon Dale Vince and trade body UK Steel.

A joint letter signed by SSE, UK Steel, Ceramics UK and British Glass, along with the unions GMB, Unite and Unison, said zonal pricing could lead to scaled-back investment due to uncertainty and higher bills.

A separate letter signed by 55 investors, including Centrica and the Ontario Teachers’ Pension Plan, has also criticised the policy.

However, Mr Jackson said many investors had not voiced opposition, with thousands of small and medium businesses instead backing the policy in the hope of paying less on energy bills.

Business

Poundland shake-up will see 68 stores and two distribution sites shut

Published

8 hours ago

June 17, 2025

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Poundland shake-up will see 68 stores and two distribution sites shut

The new owner of the discount retailer Poundland has revealed proposals to close 68 stores and two distribution centres under a shake-up that will also see frozen food and online sales halted.

Gordon Brothers, the investment firm which snapped up the struggling brand for a nominal sum last week, said its recovery plan “intended to deliver a financially sustainable operating model for the business after an extended period of under-performance”.

The plans are understood to be leaving 1,350 jobs at risk.

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It currently employs 16,000 people across the business.

Poundland said it was also seeking store rent reductions more widely under the plans.

Sky News reported on Monday that if creditors backed the restructuring, with a vote expected in late August, 250 of Poundland’s sites would also see their rent bills reduced to zero.

Poundland said its future focus would be on profitable stores, with its web-based operations becoming confined to browsing only.

As a result of the new priority, along with a shift away from most chilled and all frozen products, the company said it would no longer need its frozen and digital distribution centre at Darton in South Yorkshire.

It was to shut later this year.

Poundland also planned to close its national distribution centre at Bilston in the West Midlands early in 2026.

The retailer said it expects to end up with between 650 and 700 stores after the overhaul – assuming it achieves court approval.

It currently runs around 800 stores across the UK and Ireland but stressed Irish shops, which trade as Dealz, have not been affected.

Poundland’s struggles in recent years have included increased competition, poorly-received stock and rising costs.

Its managing director, Barry Williams, said: “It’s no secret that we have much work to do to get Poundland back on track.

“While Poundland remains a strong brand, serving 20 million-plus shoppers each year, our performance for a significant period has fallen short of our high standards and action is needed to enable the business to return to growth.

“It’s sincerely regrettable that this plan includes the closure of stores and distribution centres, but it’s necessary if we’re to achieve our goal of securing the future of thousands of jobs and hundreds of stores.

“It goes without saying that if our plans are approved, we will do all we can to support colleagues who will be directly affected by the changes.”

Business

US-UK trade deal ‘done’, says Trump as he meets Starmer at G7

Published

9 hours ago

June 17, 2025

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US-UK trade deal 'done', says Trump as he meets Starmer at G7

The UK-US trade deal has been signed and is “done”, US President Donald Trump has said as he met Sir Keir Starmer at the G7 summit.

The US president told reporters: “We signed it, and it’s done. It’s a fair deal for both. It’ll produce a lot of jobs, a lot of income.”

As Mr Trump and his British counterpart exited a mountain lodge in the Canadian Rockies where the summit is being held, the US president held up a physical copy of the trade agreement to show reporters.

Several leaves of paper fell from the binding, and Mr Starmer quickly bent down to pick them up, saying: “A very important document.”

Sir Keir said the document “implements” the deal to cut tariffs on cars and aerospace, adding: “So this is a very good day for both of our countries – a real sign of strength.”

Mr Trump added that the UK was “very well protected” against any future tariffs, saying: “You know why? Because I like them”.

However, he did not say whether levies on British steel exports to the US would be set to 0%, saying “we’re gonna let you have that information in a little while”.

What exactly does trade deal being ‘done’ mean?

The government says the US “has committed” to removing tariffs (taxes on imported goods) on UK aerospace goods, such as engines and aircraft parts, which currently stand at 10%.

That is “expected to come into force by the end of the month”.

Tariffs on car imports will drop from 27.5% to 10%, the government says, which “saves car manufacturers hundreds of millions a year, and protects tens of thousands of jobs”.

The White House says there will be a quota of 100,000 cars eligible for import at that level each year.

But on steel, the story is a little more complicated.

The UK is the only country exempted from the global 50% tariff rate on steel – which means the UK rate remains at the original level of 25%.

That tariff was expected to be lifted entirely, but the government now says it will “continue to go further and make progress towards 0% tariffs on core steel products as agreed”.

The White House says the US will “promptly construct a quota at most-favoured-nation rates for steel and aluminium articles”.

Other key parts of the deal include import and export quotas for beef – and the government is keen to emphasise that “any US imports will need to meet UK food safety standards”.

There is no change to tariffs on pharmaceuticals for the moment, and the government says “work will continue to protect industry from any further tariffs imposed”.

The White House says they “committed to negotiate significantly preferential treatment outcomes”.

Mr Trump also praised Sir Keir as a “great” prime minister, adding: “We’ve been talking about this deal for six years, and he’s done what they haven’t been able to do.”

He added: “We’re very longtime partners and allies and friends and we’ve become friends in a short period of time.

“He’s slightly more liberal than me to put it mildly… but we get along.”

Sir Keir added that “we make it work”.

The US president appeared to mistakenly refer to a “trade agreement with the European Union” at one point as he stood alongside the British prime minister.

Mr Trump announced his “Liberation Day” tariffs on countries in April. At the time, he announced 10% “reciprocal” rates on all UK exports – as well as separately announced 25% levies on cars and steel.

In a joint televised phone call in May, Sir Keir and Mr Trump announced the UK and US had agreed on a trade deal – but added the details were being finalised.

Ahead of the G7 summit, the prime minister said he would meet Mr Trump for “one-on-one” talks, and added the agreement “really matters for the vital sectors that are safeguarded under our deal, and we’ve got to implement that”.