Davos 2023: What will replace western-led globalisation?

All eyes on European Commission President Ursula von der Leyen ahead of World Economic Forum's first major address

Beta V.1.0 - Powered by automated translation

As delegates started to settle in to Davos 2023 for the start of the annual meeting of the World Economic Forum, the regular question about the future of globalisation re-emerged.

There is no doubt that the forum is a product of a post-Second World War, western-led system that grew after the end of the Cold War.

However, the impact of Covid-19, US-China competition and sanctions on Russia after the Ukraine war means that system is effectively over.

With India having four times the number of participants as France at this year’s meeting and with sessions dedicated to addressing global population growth, Brazil’s emerging role and transformation in the UAE, Saudi Arabia and beyond, the shift is clear.

One European participant asked in a closed session what will replace the "western-led system of globalisation".

Globalisation as it was at the start of the century is no longer relevant. The question that will be addressed this week is what the next system will resemble.

All eyes will be on Ursula von der Leyen, the European Commission President, who will deliver the first major address to this year's WEF on Tuesday morning, followed by Liu He, the Chinese Vice Premier.

The tone that these two leaders set for the week’s meetings will be of major importance in terms of navigating geopolitical fragmentation, while the US is largely represented by trade representatives and senators.

Technology continues to be a key marker of the success of globalisation. Uber, Zoom and international banks have a heavy presence in Davos and they are instrumental in allowing participants from the world over to seamlessly plug and play upon arrival.

However, with escalated tensions between the US and China, and the ramifications of international sanctions on Russia, there is a threat of that level of globalisation breaking down.

Most multinational companies are concerned that if global systems are decoupled, their operations will be affected and will either have to split activities or give up on one of the two top global economies.

The World Economic Forum is hoping to build bridges that avoid such a scenario — and has dedicated several sessions on China and global co-operation. It is hoping to build bridges in the physical world and in the metaverse.

One new development at this year’s meeting is an alliance of 70 companies and international organisations, creating a space representing a “Global Collaboration Village” to bring people together in the metaverse.

Participants can build their avatar and “attend Davos” in the digital realm. While the experiment is garnering attention, it cannot change the reality of geopolitical competition and tension, with a backdrop of reduced purchasing power globally.

How current global systems will help countries and societies navigate these challenges will set the stage for rebuilding the global order. Being so emblematic of globalisation, this is the ideal forum to start coming up with answers.

Updated: January 17, 2023, 6:59 AM