At the World Economic Forum Annual Meeting last week, several colleagues and I traveled to Davos, Switzerland to join more than 2,000 other delegates for speeches, discussions, meetings and other events surrounding the conference’s theme, “Reshaping the World.”
I left Davos thinking about three themes: two positive, one less so.
The first positive theme is undoubtedly the good mood of the attendees — the best since 2006. You’ve been hearing this from the members of our JLL delegation have shared throughout the week in Davos. The meeting was not preoccupied with a major financial or security issue to dampen the mood.
Growth is back, everywhere, and the combination of all this engenders a sense of calm confidence, and points to a good year to get back to growing businesses. Indeed you could catch enough passing conversations to know people were getting down to business, as deals were being floated and discussed.
The second positive is the general agreement that the wave of regulation of the world’s financial system is coming to an end. The frameworks are in place, and the details are being filled in. The positive from this is that banks can begin to focus fully on their job of financing new business and oiling growth, and we can all be more secure knowing that the regulations will protect us better (but not completely) from another meltdown.
The less-positive theme is the need for structural reform across many economies. I call it a theme because it came up repeatedly in discussions and presentations on many countries; Japan (Prime Minister Shinzo Abe committed to firing his third arrow in his speech), many Eurozone countries, India, Brazil, Argentina, U.S. tax and spending processes, and the European Union’s monetary and banking coordination.
The reforms vary hugely between countries, but they all involve tough work in removing or adjusting vested interests, acquired rights and established ways of doing things. These changes run into opposition really fast and don’t usually win votes. So politicians are reluctant to take them on, and that’s why they are not happening quickly, or in too many cases, not happening at all.