Davos: Perspectives on how the world works

Just about this time two years ago I was faced with the proverbial fork in the road. A week or so prior I had received an invitation to Geneva to present my work on governance and democracy to the leadership of the World Economic Forum. Days later I was having lunch with the Founder, received kudos on my research and had a rather attractive job offer in front me that included an invite to Davos. And yet I turned it down.

I did so for many reasons. However, chief amongst them was a fundamental philosophical and ontological disconnect between how they and I saw the world and how it could be transformed. I had spent several days listening to people who were supposed to become my peers and superiors talk about the world as they saw it, one replete with technological advance and burgeoning economic opportunities for those who caught up with contemporary trends.

And yet, I asked, what about economic history, and the fact that the past 5 centuries or so of development has followed a very different model? Or what about the political-economy of trade, and how it systematically discriminates against developing country efforts to industrialize? And what about us, in real terms, the richest society on earth, one that enjoys an unparalleled lifestyle of safety and comfort, how did we get where we did, and could the pie grow forever larger to accommodate others? I quickly realized that such questions weren’t of much interest to those around me, that instead technology was the key to opening up the world to all. And while there are truths in the latter belief, ignoring economic and political realities make for a rather different understanding.

I’m reminded of this today, two years later, as I read blog posts from participants in this year’s Davos event. This one particularly struck me: “I come representing youth from low income communities around the world, who when given the chance to learn the basics of business, through a highly experiential curriculum- begin to think like entrepreneurs and translate street smarts to biz smarts.”

The first part of the sentence aside, what raised my ire was the ignorance this statement shows about how the developing world works. For entrepreneurship is the lifeblood of developing world economies, a fact anyone would know within minutes of arriving in Nairobi, Dhaka or Rio. As Ha-Joon Chang notes in his most recent book, “people are far more entrepreneurial in the developing countries than in the developed countries…. The ratio of people working as one-person entrepreneurs (is) 66.9 per cent in Ghana, 75.4 per cent in Bangladesh and a staggering 88.7 per cent in Benin. In contrast, only 12.8 per cent of the non-agricultural workforce in developed countries is self-employed.”

What developing countries need is not more entrepreneurship, rather its strong institutions and frameworks for participation in the global economy that will allow entrepreneurs to grow one-person operations into enterprises  that provide employment, income security and act, alongside strong institutions, as the infrastructure for societal advance.

My pessimistic take on such perspectives aside, Davos attracts some of, if not the, most  successful and brightest minds around. But success doesn’t translate from one environment to another easily. If it did then 50 years of development projects and aid should have solved global poverty. It hasn’t because each situation requires a unique diagnosis that itself requires an understanding of both historical and contemporary context.

Davos may be the foremost gathering of those who want to change the world, but they’ll only succeed if they take a step back to understand how it really works and what went into making it work, let alone being cognizant of the sacrifices that may be necessary of the world’s richest.