Davos love-in a reminder of gap between rich and the rest

Davos love-in a reminder of gap between rich and the rest

Next week, around 3,000 global movers and shakers will assemble at the annual World Economic Forum gathering in the Swiss ski resort of Davos, writes Kyran Fitzgerald.

Donald Trump caused a minor stir in announcing that he would attend the event, where rock stars and charity sector CEOs rub shoulders with titans of technology and finance.

The Davos event has grown like topsy since it was originally conceived back in 1971 by Swiss Professor, Klaus Schwab.

The forum has an annual turnover of over $200m, these days. It employs over 600, mainly in Geneva.

Klaus and wife Hilde have built up various spin-off network enterprises, including a Foundation for Social Entrepreneurs, a Forum for Young Global Leaders and a Network of Global Agenda Companies.

Then there are the Global Future Councils attended by over 1,000 of the world’s leading thinkers. If you want to join the gathering in the snowy hills, be prepared to cough up.

In 2011, Business Insider detailed some of the costs. First, you pay an annual sub of $52,000. Tickets into Davos cost $19,000 each. Getting there by private jet, perhaps, $30,000.

To attend a private industry session, you become an industry associate. The cost in 2011 was $137,000 a year. To bring a colleague, it is necessary to get an upgraded annual membership at $263,000 a year.

If you want to bring up to five colleagues, you upgrade to strategic partner at a cost of $527,000.

Then you can also sponsor a session becoming a panel member in the process at cost unknown.

All this before your company has considered the cost of throwing a party.

The Swiss know how to get their pound of flesh.

What attendees get in return is the chance to rub shoulders with scores of key customers, government officials, regulators and the chance to build new networks. This really is where the sunny uplands of globalisation are located.

Davos has been a forum where corporate capitalism is celebrated in a suave understated manner and where hats are touched in the direction of rapidly emerging regions, sectors and firms. After the crash, some speakers chose to don sackcloth and ashes.

CEO of Standard Chartered Bank, Peter Sands talked of how the relationship between banks and society had “changed irreversibly” and how, as an industry, “we have managed to be tone deaf and insensitive.”

But as recovery spread out of Asia and to other emerging economies, it soon came to be a case of business as usual. The globalisation gravy train was rolling again as hundreds more millions joined the middle classes and the global business barons gathered in fresh wedges of loot.

In 2016, the CEOs of America’s top 500 companies gave themselves a collective pay rise of 16%.

The average CEO of one of the US’s 350 largest companies takes home more than five times the annual earnings of a typical individual in the top 0.1%.

The gap between the richest and the very richest is growing. Of course, the overall income and asset gap has grown in leaps and bounds since 1971 when Mr Schwab first put together his conference.

Since 2000, global wages have been held in check by offshoring, the emergence of low cost competition and technology led disruption.

While there has been a recovery in global wage growth since 2010, it has been modest and a deceleration has set in, according to the International Labour Organisation.

One quarter of total wages in Europe now go to the top 10% of earners, with less than 30% going to the bottom half.

The slowdown in wage growth has affected emerging economies. Growth has tailed back from 6.6% in 2012 to 2.5% in 2015 as many of these economies hit the wall.

Recent geopolitical events have challenged the presumption that greater financial and economic interdependence would foster the spread of democracy and boost stability. Events in the Middle East, North

Africa and the former Soviet bloc countries provide a cautionary tail — never mind the recent disruptive events in the US and EU area.

This year’s Davos theme is ‘Creating a Shared Future in a Fractured World’. Will the drivers of the new world order take some time out to consider the implications of the changes they have helped to unleash or will it be a case of onward and ever upward as the corporate chiefs catch up on the lives of their customers and friends and engage in serious schmoozing over the chilled wines, roasted meats and melted cheese?

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