INTERVIEW
The World Economic Forum may be returning to its long-standing ritual of meeting in Davos, Switzerland, in January, but—even as the pandemic ebbs—this is still a time of remarkable upheaval. WEF founder Klaus Schwab sat down in New York City with TIME’s editor-in-chief Edward Felsenthal to discuss what’s ahead for Davos and the global economy.
A couple of times when we’ve had these conversations, I’ve asked you about what the impact of a real economic downturn might be on the tension between stakeholders and shareholders. And here we are, with the economy facing some real headwinds. Do you see any retreat from the movement toward stakeholder capitalism? I think it’s the wrong approach, from the beginning on, to create a choice between shareholder capitalism vs. stakeholder capitalism. The company is not just an economic unit: it’s a social organism, which has to play its role inside society. This generation expects from a company not just to serve shareholders, but to take care of people and the planet. The company who keeps this in mind will have much better talent in the future and will have much higher attractivity with its customers.
But there is some tension. You can’t fully take care of your people if you’re laying off 13,000 workers. No, in your practical decisions as a CEO, you have to make compromises. At a certain moment, the balance may shift more to the short term—which is to emphasize, let’s say, the profitability of the company. And other times it may shift more to the long term.
There aren’t many people in the world who talk regularly to as many CEOs and world leaders as you do. What are you hearing and feeling about the economic outlook for ’23?
I wouldn’t relate it only to ’23. We are in a restructuring of the global economy. When you have a restructuring in a company, you write off the costs on your balance sheet, and shareholders are suffering and sometimes employees have to go. But when you have a restructuring of an economy, it bites into the purchasing power of the people. We should not look at the global economy with a crisis mindset and a short-term approach. We have to manage in a strategic way this transformation period, which may last three, four, five years and will be socially very painful.
You made the unprecedented decision last year to ban Russia from Davos. We immediately followed the global sanction policies, so we froze all our relationships with Russia.
And that con
