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Creator of the World Economic Forum Klaus Schwab is a subscriber to the stakeholder theory, where every company is responsible for the society around them. But is it pipe-dream altruism, or the way forward?
This week, our eighth and last visionary is a man who believes in broad-stroke solutions. What is more, they have made him “indisputably the most powerful connector in the world”, as Forbes said a few years ago. The reason for that, the magazine wrote, on their “World’s most powerful people” list, is that he “brings together nearly everyone on this list – plus Bono”. And that is exactly Klaus Schwab’s big idea: bringing people together – to meet, eat well, talk, get to know each other. He himself calls it the “stakeholder theory”, in which every individual, company and organisation realises that they are “accountable to all parts of society” and acts accordingly. Schwab’s biggest, most visible accomplishment is the World Economic Forum, that he founded and still organises every year. Although it’s yearly meeting in Davos looks like any other talkfest that leads to nothing, it has in fact set the global agenda since its inception, and has brought more adversaries together than the United Nations. In 1988, Greece and Turkey signed the Davos Declaration under the watchful eye of Schwab, narrowly avoiding a war between the countries. A year later, North and South Korea had their first ministerial-level meetings in the Swiss Alps, while the two Germanies discussed reunification there. Peace in Northern Ireland was partly brokered in its meeting rooms, Mandela and De Klerk met there for their first joint appearance and the parties in the Middle East often book a conference room in Davos. It is amazing what can be achieved by simply putting enemies at the same table, especially if you don’t demand results.
Klaus Schwab was born in 1938, in Germany, but on the Swiss border. His father, who was a businessman, was able to cross that border during WWII, while the son and his mother had to stay behind in a country that became progressively more and more war-ridden. It made the young boy acutely aware of the strangeness of borders: destruction and death on one side, peace and prosperity on the other. He never forgot that perplexing experience or the growing need he felt to devote his life to advocating dialogue and peace. First he decided to get himself an education that would be rounded enough to make it possible for him to communicate with as many different people as possible. He got himself a Doctorate in Economics from the University of Freiburg in Germany, then a Doctorate in Engineering from Zurich, Switzerland, topped off with a Masters of Public Administration from Harvard in the US. Now ready, in 1971 he started the European Management Forum, bringing together business people from all over Europe to talk about the future of industry in the region. At about the same time he also became a member of the steering committee of the Bilderberg Group, an annual private conference of the European and American political, industrial and academic elite, that had been taking place in The Netherlands since 1954. Schwab took his format for the European Management Forum from this group. Participants had to be invited, would only be the best of the best and conversations were to be kept private. They functioned according to what is called Chatham House Rules: you can use the information you’ve gained, but you cannot tell anybody who the source of that information was.
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Another aspect that Schwab liked in the Bilderberg Group was its unapologetically ambitious aim. For the Bilderberg Group, it was, as one of its founders once said: “one-world government… Those of us in Bilderberg felt we couldn’t go on forever fighting one another for nothing and killing people and rendering millions homeless. So we felt that a single community throughout the world would be a good thing.” Schwab is, if possible, even more ballsy. His World Economic Forum, which was the 1987 successor to the European Management Forum, is “committed to improving the state of the world” and operates as “a force for good”. The WEF, an “international organisation for public-private cooperation”, holds four annual meetings that get tongues wagging all over the world. First of all, there is the conference in Davos, always in January, so it can “shape global, regional and industry agendas at the beginning of the calendar year”. In 2017 it brought together 40 heads of state, 20 Nobel Prize winners, 300 ministers, almost all NGO’s, as well as industry leaders, academics and the media. Nowadays, the airspace about Davos is closed when the meeting is on, and 5,000 soldiers from the Swiss Army provide security. And that is necessary because anybody who is anybody will be there. It is, as Schwab set out from the start, a proper “Global Commons”. There is a Board of Trustees that has attracted diverse people like Al Gore, cellist Yo-Yo Ma, Christine Lagarde and Queen Rania of Jordan, who are instrumental in getting the invitation list just right. Not bad for a little get-together thought up by a private person.
Of course, the World Economic Forum does more than have one meeting a year. Schwab believes that “the world is an interconnected system straining under the burden of its own complexity… We see the post-war balance between nation states and the institutional framework that worked to manage it disintegrating.” What is required is “a new kind of institution…that can bring together people who have the power to make change, to achieve mutual understanding and empathy, to come to common agreement and, where appropriate, push action forward.” Needless to say, in Schwab’s mind, this institution is the WEF, also because it is “independent, impartial and not tied to any special interests.” So apart from getting the great and good together in Davos, there is also at least one conference a year in China, called the Meeting of the New Champions, where “innovation, science and technology” are the focus. Also, the UAE hosts a yearly “Summit on the Global Agenda” with the aim of bringing together “the world’s leading knowledge community.” And there are “Industry Strategy Meetings” which “explore how industries can shift from managing to pioneering change.”
Schwab wants to build a “global community of peers” who can become the future leaders that will meet at the WEF. In 2011, Schwab added another layer, the Global Shapers Community, young people between the ages of 20 and 30 “who are exceptional in their potential, achievements and drive to make a contribution to their communities.”
There are hands-on projects too, obviously. Schwab is interested in nothing less than “shaping the future”, so the WEF organises, finances or coordinates thousands of small and bigger ventures all over the world. But for the energetic German, who boasts at still going on ski-marathons on a regular basis (even at age 79), the WEF was not enough. In 1998, he and his wife Hilde created the Schwab Foundation, a “select community of social entrepreneurs” engaged “in shaping global, regional and industry agendas that improve the state of the world” together with the people who were already doing that in the WEF. The Schwab Foundation, also non-profit of course, is even more hands-on than the WEF. In 2017, for instance, they named (and partially funded) twenty Social Entrepreneurs of the Year. They were people like Keller Rinaudo from Rwanda, who started Zipline, the first company to use drones to deliver vaccines, medicine and blood transfusions to rural areas in Africa. There are Vivek Maru and Sonkita Conteh from Sierra Leone, who head up Namati, that trains and supports local paralegals who help isolated communities in eight countries uphold their legal rights in cases of challenges to their citizenship rights, healthcare and land rights. There is Yves Moury, who started a business called Fundación Capital in Columbia, making sure that people with no access to financial services and social programs get the money and opportunities they need. Moury already reached 5 million people in 2016. And there are Christopher and David Mikkelsen from Reunite in Denmark, that reconnects refugees with their lost families. The Schwab Foundation finds those people, supports them and makes sure they get the attention and help they deserve.
In 2004, Klaus Schwab went even further, establishing the Forum of Young Global Leaders, bringing together 800 people under the age of 40, who have pledged to “operate as a force for good to overcome barriers that elsewhere stand in the way of progress. The community is made up of leaders from all walks of life, every region of the world and every stakeholder group in society” and the Forum takes them on a five-year “leadership journey that will help them break down silos, bridge cultures and use their collective skills to get things done”. Based in both Geneva and China, Schwab wants the Forum to build a young “global community of peers”, who can become the future leaders that will meet at the WEF. In 2011, Schwab added yet another layer to his global communication network, the Global Shapers Community, a network of local communities of young people between the ages of 20 and 30 “who are exceptional in their potential, achievements and drive to make a contribution to their communities.” To date, there are 450 “hubs”, consisting of 5,575 people, in most big cities in the world. Australia has six of them.
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Schwab, in the mean time, has only become more vocal and more radical in his views. In 2010, he predicted the current global upheaval in an article in The Guardian. At the height of the credit crisis, he wondered out loud if bankers’ bonuses were such a good idea. To him they were “a symbol of business’ bigger problem – an eroded sense of duty to the wider community”. He feared that this behaviour would lead to “a social crisis” with difficult times ahead. “If we want to keep society together,” he wrote, “a sense of community and solidarity are more important now than ever before,” if we don’t want to “undermine social peace”. Early this year, he blamed the election of Donald Trump and Brexit on the big end of town, that had gone on using people. It had created an “identity crisis” for the world, and a new class that Schwab described as the “precariat”, people who are not only unsure of their jobs, but of their purpose in life. At the World Economic Forum meeting in Davos, he rechristened neoliberalism, calling it “market extremism”, which had “become a toxic fuel for the stuttering engine for global growth” and “generated polluting side effects that are no longer tolerated by large portions of society.” Market-driven globalisation, in its present form, Schwab said, is “no longer fit for purpose”, because it has undermined shared values and led to “spiritual isolation” of too many people. The solution, as always with Schwab, is to “find long-term solutions based on dialogue,” while realising that we are in it together. The old man is almost 80 now and will die one day. But his work will live on, as well as the thousands and thousands of future-leaders he helped inspire. That, my friends, is a vision on a grand scale. And a fitting end to our little series.