In January every year, people from the business and science world, along with NGOs and politicians, gather for the World Economic Forum in Davos, Switzerland, to discuss the state of the world.
Mastering the 4th Industrial Revolution was the main theme of this year’s meeting. Skanska President Johan Karlström and CFO Peter Wallin both attended a number of different seminars. Here, they share some of their impressions.
"The motto for the WEF is ‘Committed to improving the state of the World’ and my conviction that we in the business world have an important role to play in this venture was definitely strengthened,” says Johan Karlström.
"I attended a great number of seminars and the strongest and lasting impressions relate to the hardships refugees experience in their search for a safe haven; the importance of integration and social media to reach out to young people with good alternatives to terrorism, nationalism and extremism.
PPP fulfill needs
"Another take was that public private partnerships will become increasingly important in fulfilling societal needs going forward – the LaGuardia Airport extension was pointed out as a positive example.
"I have taken part in this event for the past nine years. It is very rewarding because of the wide range of information you get. The WEF is all about open discussions, sharing views and listening – it is not about making declarations or statements. The overall goal is to increase the understanding of today’s problems and encourage all good forces for the improvement of our societies.”
"The integration of people in our societies was discussed in several seminars. Exclusion, uncertainty and poverty nurture feelings of hopelessness and lack of belonging. This in turn creates tension and makes young people, in particular, open to ideas and influences from extreme and violent movements. Internet and social media are very powerful tools. To be able to reach young people we must be much better at communicating. Especially in social media.
The importance of inclusion
"Both business and public decision-makers must work to promote the inclusion, integration and well-being of people who for some reason are in a less privileged position – ethnic minorities, the unemployed, those with insufficient education – and thus face difficulties finding a job and a career.
The main theme at WEF 2016 was Mastering the 4th Industrial Revolution – what opportunities and challenges digitization and Internet, robotics and artificial intelligence will bring.
"Often we discuss this in terms of efficiency and productivity but however important this is, we must not forget to utilize new technology to reach the young and marginalized people.
New tools against corruption
"On this note, I also want to mention the PACI session (Partnership Against Corruption Initiative of which Skanska was a co-founder some years ago). New technology has become a strong weapon in the struggle against corruption. In several countries, there are apps and websites where ordinary people can post information about unethical behavior, for example bribery. How they had to pay or were asked to pay to get medical treatment, a job or education. It’s a really powerful tool when people say ‘We don’t want bribes, or corruption.’ This drives transparency forward!”
In his speech, the U.S. Vice President Joe Biden, one of the keynote speakers, mainly focused on what the 4th Industrial Revolution will bring but he also pointed out the need for investments in basic societal services such as water, sewage and transportation.
LaGuardia – the PPP example
"It was encouraging for us at Skanska that he spent a good deal of his time talking about LaGuardia Airport which currently doesn’t meet the standard of an international airport. He pointed out the massive investment being made to give a world class city (i.e. New York) a world class airport and he encouraged the auditorium of decision-makers to forge public-private partnerships to counterbalance lack of (public) investment power.
"Skanska was not mentioned, but it is still encouraging to know that what we do is wanted, needed and important. It also means that what we do will be in the focus of the media and the public. Again, this highlights the importance of doing the right thing and communicating.” A day in the life of a refugee "Although, I attended a great number of seminars and speeches what touched me the most I think was ‘A day in the life of a refugee’. It was a reality show where we got hands-on experience of what it is like to be in the middle of an armed conflict, being pushed around by armed militia, frightened by explosions and shootings, very loud and frightening, put in a refugee camp without possessions or means to take care of ourselves. It was very realistic and scary, people were crying. Many of the ones who conducted the exercise had a background as refugees themselves. It gave us a deeper understanding of what it is like trying to save your life.
"Naturally, also a lot of attention was focused on how the EU is affected by this and other critical issues such as the Euro crisis, Brexit, separatist and nationalist governments. Can the EU survive the strain of all this?
Some years ago green was the big thing. Today green is considered a commodity, a given, as part of a wider sustainability agenda.
"I got the opportunity to talk to a number of decision-makers about our sustainability efforts and to influence them to adopt a wider sustainability perspective including health and safety, sound ethics, diversity and inclusion. Investors said they will now look for these things when they consider their placements. I am happy to be a market maker and to plant the seeds of a wider sustainability approach among investors and clients.”
What is on the financial agenda?
We asked Skanska CFO Peter Wallin what is on the agenda in the financial world.
"I think this meeting confirmed that the 4th Industrial Revolution is really happening. What we considered as science fiction and utopia some years back is now becoming real.
"We see innovations, we see new types of businesses, new streams of money and we have to accept and adopt new ways of working and thinking.
Benefitting from smartphones "New technology will definitely help improve the world. More people will be able to benefit from goods and services that become available via smartphones, sometimes using symbols that make them easy to use for all, including illiterate persons.
"However, we must also be aware of the threats. What happens to people who become redundant in the digitization processes? Several speakers here in Davos asked how we can create new job opportunities and also pointed to the fact that the middle-class is eroded of its financial strength. This is worrying since the middle class used to be a guarantee for both consumption and political stability.
How to measure the shared economy
"The new economy also puts new demands on our systems for measuring and analysis. How do we measure and follow economic development? The shared economy such as Uber and AirBnB reveals that our old systems are inadequate. Public income from taxes is affected by the shared economy. The GDP measurement covers investments, import, export, etc., but is not designed to measure the value of new services and businesses that don’t employ or invest like traditional businesses.
And yet we have to understand what’s going on, what the macroeconomic trends are.”
"Traditional economic patterns are changing, we have growth but no inflation; and low or negative interest rates have not boosted inflation or investments.
Adopt to changes
"Our industry is not at the forefront of the technology development, but we are increasingly under its influence and have to be on our toes and adopt to changes in the market.
"For sure, new opportunities will arise for us such as the outsourcing of international companies’ back-office services to Central Europe. The new economy will move and change even faster. I think we have to be more flexible and become more oriented toward providing service to clients that are fast-moving.
We can do more
"We can become a facilitator for our clients. But we have to be better in our market making and tell them what we can do to make them successful. Going forward I am convinced that we can do more to offer innovative solutions, new financial solutions, PPP, etc.
"I am glad that we are well-positioned to match two strong trends that were highlighted by several speakers in Davos; to be successful we must be much better at recruiting and including more diverse colleagues. I am really proud that our strong focus on values is not only correct in its own right, but also from a wider perspective in society – we meet the increasingly high demands of sound ethics and transparency,” Peter concludes.