Davos 2017: Spotlight on responsible leadership

The flight to Zurich is packed. This is that time of the year when business leaders from around the world converge on a small village in the middle of the Swiss Alps for the World Economic Forum (WEF). Davos is not an easy place to get to, but over the decades, it has become a place for people from different countries and with different interests to get together.

There are enough sessions on science and technology as well as on social issues that you could devote yourself to fully, but for all intents and purposes, Davos is the place where people come to do business. As the CEO of one of the largest companies in India told me last year, “My schedule is completely packed with meetings but I am able to get a lot done since everyone I want to meet is here.”

Because of its ability to pull together such a galaxy of high-profile individuals, the theme of WEF becomes a way to focus on the most important and relevant issues of the day. Last year, the spotlight was on the fourth Industrial revolution (or Industry 4.0 as it’s also known)—the dramatic changes we are witnessing in industry after industry because of technologies like artificial intelligence, Big Data analytics and automation.

This year, the turmoil we are witnessing around the world is on top of everyone’s mind. In referendums and elections—in Brexit, in the Trump win, the loss in the Italian public vote—the individual is taking a stand and asking to be counted. The results are a reflection of the fear, uncertainty and helplessness that individuals in developed countries are feeling as income inequality increases and jobless growth becomes the norm even as corporate profits grow. Increasingly, people feel that they are being left behind. Every economist of repute can make the argument that an increase in global trade and open borders are good for the long run but when it impacts individuals personally, all these arguments are thrown out of the window.

Each time the electorate went to the polls in the UK, the US and Italy, they had critical choices to make regarding the free movement of goods and services (global trade) and the free movement of people (immigration).

For companies with a global footprint, both are critical to sustain growth in their top and bottom line. Corporate chieftains are being forced to understand the underlying causes of such nationalism and have no choice but to figure out how to address it.

India too cannot expect to be immune from these events. An increase in global trade is critical for our growth, especially in the creation of jobs. Our plans for GDP growth cannot be dependent only on an increase in domestic consumption. If nations become more restrictive in terms of access rather than being more open, we will be hurt significantly. The success of our IT services sector in the past two decades has enabled the creation of high quality, good-wage jobs and our ability to not only build on that but to build more industries like these will be constrained.

The theme for the World Economic Forum in Davos is “Responsive and Responsible Leadership”. The conversation is about how to ensure that growth in corporate profits goes hand in hand with inclusive development. One could indulge in a cynical perspective: That this issue didn’t really become front and centre until it started to hit the pocketbooks of CEOs—but it is clear that the conversation on the fringes has now become a very vocal dialogue.

And while there will be wonderful sessions at Davos on latest developments in science and technology and on social issues like the refugee crisis, the focus is on creating equitable growth so that everyone has a stake in the future. This is a dialogue that has important consequences for India and one we should follow.

Srivatsan Rajan, is chairman, Bain India.