World Economic Forum 2013

The 2013 theme of Davos—"Resilient Dynamism"—included three pillars:

  • Leading through adversity, which addressed such topics as strengthening personal resilience, building resilient institutions and improving decision-making.
  • Strengthening societal resilience, which focused on sustaining natural resources, establishing shared norms and reinforcing critical systems.
  • Restoring economic dynamism, which examined how to achieve inclusive prosperity, unleash entrepreneurial innovation and rebuild economic confidence.
Thought leadership

From the Bain partners whose views are sought out by journalists on the floor to the formal reports led by Bain industry governors, Bain's thought leadership was prominent throughout the Forum. Among the most significant of Bain's many activities during the course of the week:


Bain's annual private breakfast panel. For the ninth year, Bain hosted its popular breakfast panel. An audience of nearly 200 senior business and government leaders, including many Bain alumni, gathered to hear Sir Martin Sorrell, CEO of WPP; Harish Manwani, COO of Unilever; and Bain partner Rob Markey, head of the Global Customer Strategy & Marketing practice discuss the topic, "Leading by Letting Go." Each shared his thoughts on ways that companies inspire and empower customers and employees in an era where social media and transparency of pricing and information challenge traditional company control of brand messaging and strategic values.
Watch a video of the breakfast panel>>

Industry Governors: Trade and open borders. Supply chain barriers—not tariffs—are the most costly obstacles to trade. That was the main conclusion of "Enabling trade: Valuing growth opportunities," a yearlong collaborative World Economic Forum project that examined how supply chain barriers affect cross-border trade. Mark Gottfredson, Global head of Bain's Performance Improvement practice, led the project, fielded journalists' questions at the Open Borders Governors' press conference and served as one of the hosts at the Enabling Trade reception and dinner.
Read the report>>
Read press coverage of the report>>

Industry Governors: Healthy living. Heart disease, obesity and other chronic conditions have become the biggest threats to human health worldwide. Consistent with its message of improving the world, the World Economic Forum last year launched the Healthy Living Initiative to prevent non-communicable diseases and promote healthy living. Norbert Hueltenschmidt, Global head of Bain's Healthcare practice, led Bain's involvement in the initiative and was one of the leaders of the discussion at the Healthy Living Governors' session.
Read the report>>
Read the Healthy Living Charter>>

Read about our previous work with the 2012 World Economic Forum.

Insights from the floor

mark-gottfredson-photoBelow is a summary of what Bain's partners at Davos did, heard and saw at the 43rd Annual World Economic Forum.

Cautious optimism and the Eurozone

The theme of this year’s forum was "Resilient Dynamism." Zhu Min, deputy managing director of the International Monetary Fund, set the tone during the opening panel, noting "At this particular moment, things are much better than 12 months ago. A year ago here, we were really concerned about the euro crisis, the US fiscal cliff. With all the policy actions, much has calmed down now, but we’ve got to be very careful. "

Bain partners heard a similar sense of cautious optimism from the political leaders and company executives with whom they met. "There was no talk of recession," noted one Bain partner. "Everyone is listing the three big projects they have just initiated." Jacek Poswiata, the head of Bain’s Warsaw office, also described the "increasingly positive mood."

Still, say Bain partners, that mood was not enough to entirely dispel lingering concerns about the future of the Eurozone, even though its political leaders were swift to reaffirm their commitment to leading the bloc to recovery. Christine Lagarde, managing director of the International Monetary Fund, summarized the fragility of economic recovery when she called 2013 "a make or break year," adding, "We avoided the collapse in 2012. We need to guard against the relapse in 2013." That sentiment was echoed by JPMorgan Chase CEO Jamie Dimon, who warned, "If we do everything right, we will get out of this. If we don’t, this could last another 10 years."

Participants generally acknowledged the progress that the Eurozone has made, particularly in select countries like Ireland, noted Henrik Naujoks, regional head of Bain’s EMEA Financial practice and Young Global Leader alumni. But, he remarked, risk factors such as a lack of growth measures and high unemployment rates remain.

Lagarde called on governments to continue to manage deleveraging in mature economies, pursue structural reforms in the Eurozone and complete reforms in the financial services sector. Paul Meehan, Bain’s regional managing director for Asia-Pacific, said he was "impressed by the energy and drive of the European political leaders." After his discussions with European leaders, Olivier Marchal, Bain’s regional managing director for EMEA, urged his colleagues "not to discount Europe. It is certainly still at the heart of the storm, but we should not underestimate the extent of structural reforms going on, nor the increased alignment around what needs to be done."

The pillars of a recovery

orit-gadiesh-wef-leading-through-adversity-99x93Bain partners also participated in the many discussions about how to turn ‘fragile recovery’ into a reality. In a TIME magazine/CNNMoney panel discussion "Leading through Adversity," Orit Gadiesh attributed the reluctance of many business leaders to act to the lack of differentiation between ‘uncertainty’ and ‘unfamiliarity.’ Orit argued that leaders can plan for some certainties—such as an aging population, low interest rates in an environment of abundant capital, and a shortage of skilled workers. She urged leaders to distinguish between what is truly ‘uncertain’ and what is simply ‘unfamiliar, ’ noting that leaders can research the latter and learn new skills and management approaches for handling it. "Not moving because things are unfamiliar is really a crime," she declared.

Orit was joined on the panel by Cisco CEO John Chambers, Wal-mart CEO Mike Duke, Mahindra chairman Anand Mahindra and renowned Harvard Business School professor Clayton Christensen. The five held a lively discussion of innovation as a pillar of growth. Chambers noted that both business and government leaders must overcome fear of innovation and failure, while Orit added that innovation was not just about good ideas, but the ability to commercialize them.

Christensen urged companies to invest in innovations that create growth even if the payback might take longer. Bain partner Olivier Marchal described this and other comments as signaling a changing view towards leadership in what the IMF’s Lagarde described as "the antechamber of a new global economy." Marchal noted that this theme—that successful leaders avoid becoming obsessed with short-term metrics—was repeated many times at the Forum, including Cisco’s Chambers calling for a longer-horizon view of five to seven years and Italian Prime Minister Mario Monti saying "Leadership is the opposite of short-termism."

Employment was a common theme at the Forum. "Everyone was talking about jobs," said Bain’s Mark Gottfredson. Gottfredson himself had just unveiled a study that provided concrete suggestions on how to stimulate growth and create jobs by removing supply chain barriers. Pascal Lamy, director-general of the World Trade Organization, praised the study, describing supply chain barriers as "the thickness of the border," and applauding Bain, the World Bank and the World Economic Forum for moving the thinking forward.

John Smith noted that youth unemployment has emerged as a particularly critical issue in both the developed and developing worlds. It not only represents an economic and social challenge, but also has broader security implications. This has been most clearly shown in the Middle East, but also has real potential to become a destabilizing factor in some parts of Europe.

Another significant topic was the role of emerging markets in the global recovery. China, in particular, was in the spotlight for the items on its reform agenda, which includes addressing environmental issues, ensuring sustained economic growth and strengthening the social safety net. "There was a lot of openness to the real challenges of the structural changes that lie ahead [for China]," noted Bain’s Paul Meehan, "and that instilled some confidence that China is going to continue to be very thoughtful in addressing its issues in a practical way." In addition to the rest of the BRIC nations, Jacek Poswiata noted that new players like Nigeria and and other African countries were starting to capture more attention.

UK Prime Minister David Cameron’s speech also prompted many discussions about how decisions made within national boundaries affect the global economy. "It’s important to understand how politicians and regulators think," Bain’s Naujoks told a Bloomberg reporter. "Government and regulators have become more critical in affecting corporate strategies."

Sector-specific issues

Paul Meehan observed that the financial services sector still suffered from brand and PR issues, and needed to manage that more proactively, judging from "the beating that bankers took at the CNBC session," where IMF officials and hedge fund managers criticized banks for their lack of transparency. Meehan noted that Bain’s point of view on customer advocacy provides a highly relevant blueprint for the sector to earn back customer and stakeholder trust. (Read Bain’s recent report on Customer Loyalty in Retail Banking.)

Participants also discussed big data and social media, including the increasing ability to handle huge volumes of information and the potential ramifications of its usage. "Most companies are far from ready to make sense of it all," observed the BBC. While some discussion focused on the disruption that social media can cause in business, the most interesting discussion centered on the potential of social media to disrupt government, as citizens renegotiate their social contract with governments.

In the closing moments of the annual gathering, as the world’s political and business elite were heading home after a week of intense discussions, they were urged by the IMF’s Lagarde "not to relax." She was echoed by Angel Gurría, the secretary general of the Organization for Economic Cooperation and Development, who said, "Let’s fight complacency with everything we've got, let’s continue with the reform process so we can consolidate this hesitant recovery."

Media
Read more about Bain's experts and research from Davos as featured in the international media on emerging global business trends.