Tech monopolies, America first and Jack Ma: this is WEF 2018
Heads of government and state, business leaders, NGOs and other influencers met in Davos, Switzerland, for the World Economic Forum (WEF) last week. This prestigious annual meeting is an opportunity for dialogues and debates about big social and economic issues that face today’s world. Let’s find out what happened during WEF 2018, also known as the thermometer of power.
By Michael Kunst, February 5th 2018
The WEF was founded in 1971 by Klaus Schwab. His purpose was to create a platform for resolving international problems. Nowadays, it is seen as one of the most important conferences in the world. Prior to the meeting, the WEF always publishes a report that includes the risks that experts and other decision-makers foresee in the coming decade. Uninterrupted in this report is climate change, this year accompanied by cyber security and geopolitical tensions. The report is important because it shows the issues which are seen as global dangers by the ‘powers of today’.
Tech companies’ monopolies
The first major discussion was about monopolies of giant tech companies. The forum wants to reduce the, sometimes, massive monopolies on tech markets without damaging the companies’ innovation powers. Believe it or not, this urgent appeal was made by Marc Benioff, founder of tech company Salesforce. “Ten years ago, we were too late to formulate rules which hold back banks from risky financial products. This is the time for governments to make an end to tech monopolies”, Benioff says. His opinion is widely spread. Some say his interest is to tackle competitors in the market. But asking for such rules means that also Salesforce will have to deal with potential anti-monopoly rules. Benioff seems to be fair in his appeal.
Reducing the power of the Big Five is also on this agenda. Big Five? Yes: Apple, Alphabet (parent company of Google), Facebook, Amazon and Microsoft. It is no longer a question whether these companies dominate markets and have access to important data. It is all about the question how to regulate their power. A British scholar, named Guy Standing, says: “Companies as Facebook and Google are the robber barons of the 21th century." There are already experiments going on which are about sharing crucial data between companies. This would attribute to reducing monopolies. But a much-asked question is: why do these companies have such data? Oxford scientist Rachel Botsman recognizes the sake of that question: “A fair question. Nowhere is written down that data is a company’s property.”
Beside the agenda of the WEF, all participants were nervous for one more thing: what will US president Donald Trump say during his visit at the forum? Trump started his speech clear: “There has never been a better time to hire, to invest, to build and to grow in the United States." It is the first time in eighteen years that an American president participates at the WEF. Trump took the opportunity to defend his ‘America first policy’ and told the forum some results: “Consumer confidence, business confidence and manufacturing confidence are the highest they have ever been in many decades. After years of stagnation, the United States is once again experiencing strong economic growth." But the core of his message seems to be cooperation. “America first does not mean America alone”, Trump says. “America is open for business and we are competitive once again.”
Reactions on Trump’s speech were different. The International Monetary Fund acknowledged that recent tax cuts were a reason that forecasts about economic growth of this year lifted to 2.7 percent. Others expressed unease with America’s foreign policy and immigration policy. Arne Sorenson, CEO of Marriott International, gives a good description: “Words around immigration, or words around some of these other issues, can be interpreted in the rest of the world as words of welcome or relatively less welcome.”
Mark Rutte’s money talk
Dutch prime minister Mark Rutte also attended the WEF. But the WEF had a clear message for the Dutchman. Beside the 7th position on the global scale of social equality (Inclusive Development Index), Rutte was warned that the Dutch position might be in danger. “Years of focus on the GDP have led to high rates of inequality”, the WEF report says. There is one clear solution according to the forum: a more progressive tax system and higher taxes on financial capital.
Rutte also had a conversation with Alibaba founder Jack Ma, who has an estimated 39,5 billon euro capital. “I talked with Jack Ma about e-commerce”, Rutte says. “The e-commerce market has a thirteen percent annual growth and has a big impact. Ma is in this sector one of biggest actors”. Alibaba has a revenue that makes the company the 21th economy in the world. Rutte’s purpose was to promote the Netherlands as a country with many advantages for such companies.
Where is Xi Jinping?
Only one of the so-called G7 countries was not present. The Chinese president Xi Jinping decided to stay in China and had sent a government delegation to Davos. Xi has important things to do in his country. He had to chair a meeting of China’s leading body for guiding economic and social reforms. Xi seems to focus on laying out his own strategy for China’s global role at home. As one of the Chinese newspapers puts it: “The world has never focused on China so much and needed China so much as it does now." In other words, if you want to do business with the most important country in the world, you better come to Beijing instead of waiting in Davos.
Hoog tijd dat overheden techmonopolies aanpakken – 23 januari 2018 – NRC
Donald Trump tells WEF: ‘America is open for business – 26 januari 2018 – TIME.com
Rutte promoot Nederand bij Jack Ma – 25 januari 2018 – De Telegraaf
Advies WEF aan Nederland: belast vermogens meer – 23 januari 2018 – De Volkskrant
Xi Jinping had better things to do than go to Davos – 24 januari 2018 – Quartz Media