A scenic, snowy image of Davos, Switzerland.
Davos, Switzerland

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Strategy: Understanding the External Environment

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Using Japanese Values to Thrive in Global Business

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Turnaround Leadership: The Differences Between Japan and the West

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Conflict Management

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Marketing: Reaching Your Target

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Logic Tree

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Discussions at this year’s World Economic Forum (WEF) centered on two major topics: climate change and stakeholder capitalism.

Microsoft announced that it will go carbon negative by 2030. BlackRock, the world’s largest investment management company, declared that it will begin investing in environmental, social, and corporate governance (ESG).

I was pleased to find this trend, as the spirit of ESG was promoted by Hiromichi Mizuno of Japan’s Government Pension Investment Fund (GPIF), and stakeholder capitalism is seen in a Japanese concept known as sanpo yoshi, or “three-way satisfaction,” which dates to the Edo Period (1603–1868). According to this concept, effective capitalism has a three-pronged benefit for the customer, the seller, and society. Perhaps the rise of interest in ESG is a sign of Japan’s positive impact on this year’s WEF, despite few Japanese speakers actually on stage.

Aside from this general trend in panel discussions, I came away from my week in the Swiss Alps with five takeaways.

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1) We have to be more serious about tackling climate change.

Greta Thunberg’s speech saw a strong young woman scolding global adult leaders. She demanded all participants of WEF “immediately and completely divest from fossil fuels.” She then insisted that “…unlike you, my generation will not give up without a fight.”

Greta Thunberg speaking at the 2020 World Economic Forum

Sadly, the panel that followed this rousing youngster’s speech fell short of actionable takeaways. Instead, the panelists seemed to be divided into the following categories:

・Alarmists who offered no solutions of their own, but wasted no time scolding others for failing to take action
・ Responsibility-dodgers who blamed others (“The US fails to do XYZ…”), then followed up with lists of reasons for why they themselves couldn’t take action
・ Those finding satisfaction by committing to measures only within their own companies
・ Advisors who propose solutions with no plausible, concrete steps to actually implement them

The most frustrating thing was a lack of discussion on nuclear power. If CO2 is the issue, there should be more advocates for nuclear power—the most realistic solution for the reduction of CO2. Panelists, unfortunately, deflected this issue with fleeting dismissals (“I don’t understand the technology”) or excuses (“There is a problem with nuclear waste”).

Though private companies throughout the conference were eager to highlight how they planned to tackle climate change internally, it was a pity there wasn’t much discussion on how to move forward with an international framework for reducing CO2.

In short, we need to be more serious about tackling climate change.

2) We need stronger global leaders.

President Trump attended this year’s WEF, but made few comments to contribute to the international community. Instead, he focused on his domestic achievements, as if the speech were addressed to an American audience, rather than an assembly of global leaders. Much of his time was spent meeting with leaders of top global companies seeking investment in the US. All things for Trump remain “America First.”

US President Donald Trump delivering his Special Address at the 2020 World Economic Forum

Meanwhile, UK Prime Minister Boris Johnson reportedly advised all of his ministers not to attend the WEF this year and its “champagne with billionaires.”

It was sad to see the globalism, free trade, and multinational framework that drives the WEF so disrespected by the current leadership of both the US and UK. (Though it was at least good that President Trump showed up in Davos.)

But what about other countries?

China sent the seventh-highest ranking official of its government, but little came out of his attendance. German Chancellor Angela Merkel attended the conference, but with little time remaining to her tenure, many saw hers as a lame duck presence.

President Macron did not attend at all, but remained in France to focus on domestic affairs. Likewise, neither Japan’s Prime Minister nor any member of the Cabinet attended, as the Diet was in session.

It’s a shame that no country is currently able to step forward and lead the world. I cannot stress enough how absolutely vital it is that Prime Minister Abe and the Ministers from Japan attend from next year. Japan needs to take a bigger role in the international community, which is in desperate need of strong global leaders.

3) We’re seeing more diversity as trust shifts to individuals.

On the bright side, there were clear notes of increased diversity this year in Davos. Not only Thunberg, but a host of other teenagers leant their voices to panels on a range of global issues.

The number of women in attendance, as well, didn’t just increase, but came up front and center. This included the Managing Director of IMF, the CEO of Nasdaq, the President of IBM, the Representative of the European Commission, the Editor-in-Chief of Nature, and the thirty-four-year-old Prime Minister of Finland.

The 26th annual Crystal Awards, which honor “leading artists whose leadership has inspired inclusive and sustainable change,” went to three women and an African American man.

Perhaps in tandem with this embracing of diverse individuals, public trust is reportedly seeing a shift away from institutions. According to the 2020 Edelman Trust Barometer, “none of the four societal institutions that the study measures—government, business, NGOs, and media—is trusted.” However, trust in friends, bosses, neighbors, and other people found in smaller social circles seems to be solidifying.

GLOBIS President Yoshito Hori (second from right) at a private event during the 2020 World Economic Forum

Word-of-mouth, whether in person or through SNS, is more trusted than the information coming out of traditional media organizations. In other words, power is moving from a centralized authority into the hands of individuals collaborating to share information.

4) We need a global framework to solve global issues.

In his speech on how to survive the 21st century, historian Yuval Noah Harari shared wise words:

“Leaders like the US president tell us that there is an inherent contradiction between nationalism and globalism … but this is a dangerous mistake … In the 21st century, in order to protect the safety and the future of your compatriots, you must cooperate with foreigners … Good nationalists must be good globalists.”

Israeli historian Yuval Noah Harari speaking at the 2020 World Economic Forum

He also likened the US turn from globally minded leadership to living in a broken house: even if each country cleans its own room, the house itself remains broken and will surely, ultimately, collapse.

If the US, the world’s greatest superpower, falls to unilateralism, it will no longer be equipped to lead the world. The international community will then be forced to seek alliances laterally, through cooperation among small- and medium-sized countries.

In light of this, I expect to see a framework develop between Europe and Japan. Europe (with the exception of the UK) has developed strong ties within itself and is historically accustomed to multinational—rather than unilateral—decision making. If a partnership should develop between Japan and Europe, this could create a global network for collective decision making on issues such as climate change, digital taxation, and digital currency.

5) We should work hand-in-hand with the World Economic Forum to improve the state of the world.

As with conferences past, this fiftieth conference in Davos sought to fulfill the mission of the World Economic Forum, bringing together “people from all walks of life who have the drive and the influence to make positive change.”

Every year, Davos welcomes top leaders in politics, NGOs, academia, media, and religion to this conference. If such a group cannot find solutions to the world’s most difficult problems, who can?

Professor Klaus Schwab, who launched the WEF fifty years ago, wasn’t just bringing people together, but trying to improve the state of the world.

Klaus Schwab and his wife, Hilde Scwab, with Yoshito Hori at Japan Night during the 2020 Economic Forum

I recall a meeting of Japanese delegates with Prof. Schwab at the 2007 “Summer Davos” in China.

“The WEF is very important,” I said to him, “and it has so much power to change the world. Now there’s Summer Davos in China and the India Economic Summit…but there’s no WEF event in Japan. Why not? Can you create one in Japan, as well?”

Prof. Schwab politely laid out the reasons why there had not been any major WEF events in Japan, but then added, “Perhaps you should be the one to create such a conference.”

These words planted the seed for the G1 Summit, which was held for the first time just two years later in Fukushima. For the past 11 years, the annual G1 Summit has been holding multi-stakeholder meetings with the aim of creating a better Japan. And with every passing year, we make a little more progress toward that goal.

We will be hosting the 10th annual G1 Globalーa conference conducted in Englishーon October 11th, 2020.

I consider it my duty, as a participant of the WEF for thirteen years and counting, to use my drive and influence to improve the state of the world from Japan.

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