I worked at the World Economic Forum in Geneva from January 2009 until 2012, and I will never forget the febrile mood of my first Davos in January 2009, just a few months after the collapse of Lehman Brothers. I don’t mean the personal sense of ‘new kid on the block’ trepidation that I was experiencing, although that was certainly palpable. No, what I recall was a deep-seated feeling of fear and foreboding among the participants. Nobody knew where the global economy was going. It looked like it might fall off a cliff. And many of the people in Davos that year were also weighed down by a sense of personal responsibility, for these were the very bankers, politicians and business leaders whom many were accusing of having crashed the global financial system. They knew that the eyes of the world were on them, waiting impatiently for answers …
What I witnessed over the next few days was unforgettable. There was a wholehearted commitment from all sides to tackle the crisis, and Gordon Brown in particular led the charge – demonstrating precisely the prime ministerial courage and leadership qualities that have been sadly lacking from the British government, since 2010.
Fast-forward seven years, and there are worrying signs that the global economy is once again heading into choppy waters. Austerity fetishism across much of the developed world has combined with slackening growth in China and political chaos in the Middle East to produce stock market contractions all over the world, with £53bn being wiped off the value of the FTSE 100 in a matter of hours.
It is difficult to believe that the global economy is potentially once again heading for the rocks, just over seven years since Davos 2009, but we never seem to learn from our mistakes. Take the example of the United Kingdom: surely the crash of 2008 should have taught us that our first priority should be to rebalance our economy away from a dangerous overreliance on financial services and consumer-driven debt, towards the rebuilding of our manufacturing base and export-oriented industries? But in fact successive governments since 2010 have done exactly the opposite, leaving us in the midst of a productivity crisis, and with the worst trade deficit in history.
Up in the Swiss Alps this year the World Economic Forum is once again trying to help participants to make sense of the risks, challenges and opportunities that they are facing, and to rediscover the spirit of Davos 2009. The theme of Davos this year is the Fourth Industrial Revolution, an industrial revolution that will be characterised by new forms of renewable energy and the exponential outward expansion of technological innovations, driven by the internet.
It is this fusion of new forms of energy and communication that drive industrial revolutions, powering society-wide changes, creating jobs and raising living standards. The key for business leaders and politicians, both at Davos and beyond, is to ensure this Industrial revolution is powered by sustainable growth, and by the creation of quality jobs.
The ‘Fourth Industrial Revolution’ offers Labour a golden opportunity to define and own the agenda. We must set out in the clearest terms how we will harness this revolution, and turn it into a new kind of growth that is based on a comprehensive industrial strategy and a modern manufacturing renaissance.
The plight of the British steel industry is a case study in what happens when you choose laissez-faire dogma over social market pragmatism. The tragic loss of 750 jobs at the Port Talbot steelworks in my constituency was entirely preventable. For years the UK steel industry has been urging the government to act on the distorting effect of heavily subsidised Chinese steel being dumped on the British market, but the government did not listen, and as a result we see the steel industry on its knees.
The story of the British steel industry is a story of a failure of government to partner with industry. The supposedly pro-business Conservative party has demonstrated that it is more interested in cosying up to Beijing than it is in standing up for British manufacturing.
During my time at the World Economic Forum I met many business leaders who understood to need to do things differently. Some needed the wake-up call of the 2008 crisis to remind them of the link between high standards of responsibility and long-term commercial performance, but most see that sustainability is good for the bottom line: that environmentally friendly supply chains are more cost-effective; that more socially progressive management strategies create happier workforces; and happier workforces are invariably more productive.
Labour is the party of business, but not business as usual; and it is with this in mind that we should look to Davos as an opportunity to identify those progressive business leaders with whom we can engage – as partners for a new kind of growth.