Observations on WEF 2025

Geopolitics: In need of constructive optimism

Business leaders today see geopolitical tensions as the biggest risk to economic growth. However, according to McKinsey, they don’t believe this period of geopolitical distancing will last forever.
AI was the most prominent battleground in the rising geopolitical tensions. Corporates were vocal in their fears that nationalistic structures and restrictions on chips, data, cloud, and AI models could severely hamper progress in the coming decades for anyone operating globally.
Geopolitics and national energy policies will continue to impact AI development, given that compute is energy.

Chats with leaders are moving beyond questions about creating value with gen AI and toward conversations about how gen AI can “fundamentally transform the business.”
A new paradigm of AI architectures will emerge within the next five years, which takes things far beyond the capabilities of existing systems. The shelf life of the current paradigm, i.e. the large language models people currently use to do things like quickly generate images and text, is short.

Earlier this year, scientists confirmed that 2024 was the planet’s warmest year on record. The number of extreme weather events has increased five-fold in the past 50 years.
“How long will the energy transition take?” Leaders must move beyond the why to focus on how to reduce emissions, ensure affordable energy and materials, provide reliable and secure energy systems, and strengthen competitiveness for companies and countries.

In contrast to the US confidence, there was widespread concern at WEF 2025 about the continued weakness of large European economies, which are losing ground to the United States in productivity and technological innovation and to China in manufacturing competitiveness.
Many reflected that Europe needs a wake-up call on sclerotic regulation, yet few seemed to think that the crisis was yet big enough to mobilize sufficient near-term change.
Optimism from the biggest emerging economies such as India, Indonesia, South Africa, Brazil, and Nigeria was palpable at WEF 2025.
Soaring levels of global public debt was troubling economists across Davos. The world has accumulated about $100 trillion in public debt, but the higher interest rates make paying it off far more expensive.
Much of the debate also focused on how to continue taming the battle with inflation.
“Modern mercantilism” was a topic at Davos 2025, with tariffs as the most conspicuous example of this approach.
It is more likely that we end up with “surgical tariffs” rather than broad-based ones, but most companies are planning for a wide range of scenarios.

The transformation of jobs and labour markets was front of mind. 39% of our existing skill sets will be transformed or become outdated over the next five years.
Increasing discussion at Davos of the harms of ultra-processed foods, which gave hope that general health trends may be poised to turn a corner.
Throughout sessions, experts repeated the need to close gender gaps across health, politics and economics to empower women – and boost growth. For every dollar you invest in women’s health, there’s a three dollar return.
Societies’ age structures are inverting, and half the world’s major economies face shrinking workforces.