Davos 2024: How a small Swiss town became a powerhouse for economic change

Davos is not just a gathering; it's a power play. The real influence often lies in informal settings – private dinners, sideline meetings and impromptu gatherings. These are where deals are made , initiatives are shaped and future policies are drafted. Understanding the dynamics requires a look beyond the main stage to the quieter corridors where global leaders converge. The small town in the canton of Graubünden, Switzerland, is renowned far beyond its geographical size. Nestled in the Swiss Alps, it is known primarily for hosting the World Economic Forum (WEF), making it a synonym for influential global discussions on economics, politics, and society . The high-profile nature of the events it hosts stands in stark contrast to the town's quiet charm. Not only is it a meeting ground for the world's elites, but it its renowned skiing and health care facilities add to its appeal. “Davos is a useful forum for the dissemination of ideas within an audience of global leaders, and for networking between them,” Dimitri Vayanos, Professor of Finance at the London School of Economics and Political Science and director of Financial Markets Group, told The National . “Bringing diverse perspectives on how best to address global challenges can generate new ideas and approaches. “The discussions at Davos have been impactful, as have been the networking and bilateral deals that are being made.” The town first rose to prominence with the founding of the World Economic Forum in 1971 by Klaus Schwab. Initially a European-centric gathering, called the European Management Forum, it was envisioned as a platform for businesses to catch up with US management practices. But its scope rapidly expanded, and by the late 1970s it had started attracting political and world leaders alongside business executives and intellectuals. In 1987, The European Management Forum was renamed the World Economic Forum to reflect its broader agenda. The choice of Davos as the location for these high-profile meetings wasn't accidental. Professor Schwab, a German-born engineer and economist, wanted participants to be able to escape from the everyday hustle and bustle of life. His personal appreciation of the setting and its conducive environment for reflection and discussion, played a key role in his decision. He hoped Davos, which inspired Thomas Mann's novel The Magic Mountain, would help people feel relaxed enough to speak frankly, while maintaining camaraderie of purpose and mutual respect. This became known as the “Davos Spirit”, still the hallmark of the forum's gatherings. The World Economic Forum is traditionally held in January, this year from January 15-19. Renowned for its exclusive roster of attendees and high-stakes discussions, the WEF is a pivotal event on the international stage, shaping policies and steering global agendas. It acts as a convergence point for political leaders, business moguls, leaders of international organisations, celebrities, intellectuals and journalists to tackle critical global issues such as economic trends, climate change and international conflicts. In recent years, the Davos forum has expanded its focus to include broader social, environmental and technological issues. Mayor of Davos, Philipp Wilhelm, said the town relies on the WEF, with some of its 42 hotels charging up to $53,000 per night for their top suites. “A lot of companies, and a lot of people, rely on revenue from the WEF. “Some of the businesses are really dependent on the WEF week, when a few of them may make about 40 per cent of their annual income,” Mr Wilhelm said. “Actually, I got into politics thanks to the WEF, because I started to think about how the economy works, how politics work. It was my entrance point.” Davos increasingly addresses issues faced by diverse communities worldwide. The forum has become a platform for raising awareness about challenges in less privileged regions, making global leaders more accountable and responsive to varied societal needs. Davos has played a crucial role in initiating and fostering social initiatives. The forum has also been a ground for discussions and commitments towards tackling climate change, promoting sustainable development and protecting biodiversity. The WEF has progressively emphasised the use of technology for societal good, catalysing initiatives that range from healthcare advancements to educational innovations. Hosting the WEF in Davos brings with it a complex interplay of economic and environmental impacts that significantly affect the local community. Economically, the event is a boon, as the influx of visitors boosts revenue for hotels, restaurants and other businesses. This surge in demand often translates into temporary job opportunities and increased local income. Additionally, the global exposure Davos receives from hosting such a prestigious event enhances its profile as a destination, potentially attracting more tourists and investors year-round. However, the economic benefits come with their challenges. The event can lead to inflated prices for local services and accommodation, adversely affecting residents and smaller businesses not directly involved in the WEF. The economic windfall is often unevenly distributed, with larger businesses and the hospitality sector reaping most of the rewards, potentially exacerbating inequality within the community. Environmentally, the WEF serves as a critical platform for global environmental dialogue. However, this is contrasted by the significant carbon footprint generated by the arrival of thousands of participants, many via private jets and vehicles. This influx places a considerable strain on local resources like water, energy, and waste management services, challenging the infrastructure and the environment. The need to constantly upgrade facilities to accommodate the WEF also raises questions about sustainable development in Davos and long-term ecological impacts.

Davos 2024: How a small Swiss town became a powerhouse for economic change

Alps community has become the World Economic Forum's unconventional headquarters