Davos lacks the Valley’s revolutionary ambitions; The tech set stands out while a familiar crowd returns to the task of making the world nicer

Davos lacks the Valley’s revolutionary ambitions
By John Gapper
The tech set stands out while a familiar crowd returns to the task of making the world nicer
Thousands of chief executives, politicians, leaders of non-governmental organisations and media folk are once again assembled in Davos for their annual debates on how to improve the world. It is a worthy affair, with “stakeholders” discussing how best to combine business with societal good, like an ersatz global parliament.
The World Economic Forum is evolutionary – it usually misses the coming crisis but Klaus Schwab, its founder and impresario, is brilliant at adapting to the last one. It absorbed the 1990s anti-globalisation protests by inviting NGOs and companies to forge a consensus, and tried the same after the 2008 crisis with banks and regulators.
The trouble is, despite the parties and whirl of events, Davos feels old and staid. The excitement is with the revolutionaries – the technology companies that promise to remodel the world, not just to strike a compromise with the existing one. As the late Steve Jobs of Apple said: “It’s more fun to be a pirate than to join the navy.”
It is also more appealing, especially to the squeezed, alienated millenials whose problems will be debated by the baby boomers in Davos, quoting what their children have told them. Silicon Valley has loftier ambitions than hashing out a compromise with politicians in a Swiss valley.
Take Bitcoin, for example. Instead of tackling banks with tortuously negotiated capital and liquidity standards and more rules, why not disrupt global payment systems with a digital currency devised by an unknown hacker and backed by cryptography rather than a central bank? It feels like a lot more bang for the buck.
Compared with this, the multinationals that embody the Davos consensus such as Unilever and PepsiCo – those that carefully involve NGOs in inspecting supply chains, conserve water and make their processed food healthier – are reformers, not revolutionaries.
Technology faces its own credibility problems. Google and others have been targeted by politicians for avoiding taxes and embarrassed by revelations about the National Security Agency’s intelligence activities. The enterprises that promise liberation through technology have became conduits for government surveillance.
Yet a technology billionaire in a hoodie still beats a middle-aged executive in a suit for popular appeal. In an annual global survey conducted by Edelman, the public relations group, 79 per cent of people said they trusted tech companies, compared with 59 per cent for energy groups and 51 per cent for banks.
That helps them to get what they want from governments. Technology companies and venture capitalists mounted a swift campaign to defeat proposed US legislation to curb copyright infringement in 2012. A popular uprising beat film and music companies that backed the law.
Silicon Valley sometimes flirts with breaking off from pesky government altogether. Larry Page, chief executive of Google, proposes setting up experimental camps similar to Burning Man, the Nevada desert festival, with new laws that encourage innovation.Peter Thiel
, the venture capitalist, wants to see offshore floating communities “to peacefully test new ideas for government”.
The danger for businesses that rely on the Davos consensus is that it has a habit of turning against them
It sounds barking mad, but one cannot fault these men for their ambition, or having an overarching vision of the future. There is a clear echo of American immigrants, who moved from Europe to a frontier land where they remade the rules.
No matter how implausible, this sense of possibility has greater romantic appeal than endlessly debating the old order. To millennials linked to each other on Facebook or Snapchat like nodes on a digital network while struggling to find themselves jobs and homes in overburdened, politically paralysed nations, it is a clarion call.
The danger for businesses that rely on the Davos consensus is that it has a habit of turning against them. Companies were more trusted than governments in the Edelman survey, but many people still want tighter regulation of business. Britons want more energy regulation; Germans more financial regulation; and the Chinese more food safety rules.
Popular discontent initially focused on banks after the 2008 crisis but it proved contagious. Ed Miliband, leader of the UK opposition Labour party, is now mounting a rolling campaign against “broken markets” in various industries, accusing big businesses of price-gouging.
It is not obvious why the private sector should be on the defensive. Few industries were bailed out like banks, or enjoy the same safety net. Recession-hit consumers dislike price rises but those pressures will be eased by the return of growth. Public policy bears much of the blame for the economic difficulties of young people.
As the global economy recovers, the future is open. Will businesses follow the path of banks, dragged into regulatory and political disputes, or that of technology – trusted to offer a better life?
One lesson to learn from Silicon Valley is how to tell a story. A lot of apps are trivial compared with, for example, supplying energy, food or medicine. As Bill Gates noted acidly in an FT interview, vaccines and child nutrition matter more than connectivity in poor countries. Internet companies are wonderful advocates for their own importance.
A second is to talk directly to customers rather than simply to politicians or “civil society”. If people think they are doing something valuable, the Davos consensus will follow. It is time to get out more.