Dialogues at Davos 2024

The 54th Annual Meeting of the World Economic Forum in Davos, under the theme "Rebuilding Trust", yet again proved to be a poised platform to focus on the fundamental principles driving trust, including transparency, consistency, and accountability. The event emphasized the need for global cooperation and shared solutions in a world undergoing critical challenges like climate change, geopolitical issues, and more. A recap on India’s stance at the global platform… 

Demonstrating proactive resilience amidst geopolitical tensions, increasing automation, and changing labour costs, was a key takeaway during a discussion on the ‘Supply Chains of the Future’, at the World Economic Forum Annual Meeting 2024, in Davos. In a world that is permanently changed following the global pandemic, along with growing instability due to international conflicts and supply chain disruptions, future-proofing the global supply chains is paramount.

According to Kathy Wengel, Executive Vice-President at Johnson & Johnson, some of the factors that must guide current global supply chain strategies include integrating proactive resilience, advancing its digital supply chain journey and sustainability practices, and establishing a robust ecosystem of partners. “It first starts with your customer; how are you building that supply chain and its capabilities to be able to meet those needs in the next few years? We look at the supply chain design not only through the lens of operational efficiency, but also the risks we are facing as a supply chain.”

Developing on the conversation of leveraging technology and skills, along with the core development of global standards, Tobias Meyer, CEO, DHL Group, elaborated, “Governments must build on existing strength and commit to doing no harm. We must focus the interventions on clear incentives – tax carbon, for instance, and get to simple rules that are reliable and that investments can be based on, while not creating additional risk for businesses with constantly changing regulations.”

Commenting on companies now being accountable for the whole supply chain in the EU, he also highlighted that this was an example of well-intended regulation, but we must be mindful of the geopolitical impact of extra-territorial reach. “The West constitutes 10% of the world’s population, not 90% - it cannot describe to the rest of the global supply chain how things need to be done.”

In another session, titled ‘TradeTech's Trillion-Dollar Promise’, the conversation moved towards how technology is not only revolutionising global commerce and investment, but also digitalizing the trade ecosystem, while holding the potential to increase trade by nearly $9 trillion by 2026 within the G7 alone.

But the benefits of technological advancements to the supply chain do not translate uniformly. Deemah Al-Yahya, Secretary-General, Digital Cooperation Organization (DCO), Saudi Arabia provided context to this issue, “The digital divide is increasing between countries. The need to expediate the digital transformation across the supply chain requires a lot of investment and support. We need to move from an egocentric approach to an ecocentric approach, which in turn will increase knowledge-sharing between countries.”

Vincent Clerc, CEO, A.P. Møller-Maersk, added, “Some of the challenges point to the global supply chain still being fragmented. There is no standard data interface and exchange between agencies in trade. There is a need for a multi-pronged effort here.”

India’s Presence at Davos

India's presence at WEF 2024 was inspired by the mantra ‘Engage, Experience, Invest’. Building on its successful G20 leadership, India championed the theme of ‘Vasudhaiva Kutumbakam’ – One Earth, One Family, One Future – acting as a unifying voice for the Global South.

An assessment of Davos 2024 by consulting firm McKinsey and Company stated, “India is transforming rapidly as one of the fastest growing large economies in the world. When it comes to technology, talent, healthcare, and other areas, its future in 2024—and beyond—is worth paying attention to.” These sentiments were echoed by industrialist Gautam Adani, who said in a LinkedIn post, “If the first major theme at WEF 24 was about rebuilding trust, the second was about the rise of India.”

India also made its presence felt in ways other than its economic potential. One of the ideas discussed at WEF this year was how investment in women’s health could boost the global economy by $1 trillion annually by 2040. According to the Press Information Bureau (PIB), “One of the key takeaways from the Forum meeting was the announcement of the launch of a Global Good Alliance for Gender Equity and Equality with the support and endorsement by WEF and Government of India. The idea of this alliance emerged from the G20 Leaders’ Declaration and India’s abiding commitment to the cause of women-led development as propounded by Prime Minister Shri Narendra Modi.”

The objective of this Alliance is to bring together global best practices, knowledge sharing and investments in the identified areas of women’s health, education, and enterprise,” the PIB said.

Carmine Di Sibio, Global Chairman and CEO, EY, was quoted as saying, “Almost everyone I talked to is very bullish in terms of India,” at the World Economic Forum in Davos, Switzerland. Referring to a recent EY report projecting India's long-term GDP at $26 trillion by 2047, Di Sibio added, "When I talk to our clients from India, they say we should do better than that. We should do better than what we came out with. So, lots of tailwinds with India, in terms of obviously the demographics but also the opportunity to take on some of the supply chains away from China. We are seeing some of that. So, there's some real opportunities, and assuming nothing goes wrong, your political system in the long term."

PwC Global Chairman, Bob Moritz, shared insights at the World Economic Forum in Davos, highlighting a shift towards optimism among CEOs globally. According to Moritz, India stands out as a beacon of confidence among CEOs. The survey focused on potential investment destinations beyond CEOs' home countries, and India emerged as a prominent choice.

Moritz identified three key opportunities that are capturing global CEOs' attention: the rise of the Indian consumer market, supply chain prospects, and India's potential to serve the global market more expansively.

‘Can India seize its moment?’ That was the focus of a key sessions at Davos 2024. The bigger question? How can it maintain its momentum around economic resistance to global headwinds and overcome structural challenges to emerge as one of the world’s pre-eminent economies?

Its actions this year, as it approaches the crucial general elections, could lay the groundwork for the country to 'become the world's third-largest economy in the next five years', wrote Sriram Gutta, Head, India and Deputy Head, South Asia at the World Economic Forum. It's also an opportunity to set an example of 'inclusive, sustainable economic growth, digital development and climate action.'

On the BRICS expansion

The expanding BRICS club of nations is calling for a united stand of emerging and developing countries, but a crucial question remains - how will it forge consensus among its diverse members and contribute to the reshaping of the global geopolitical and economic landscape?

Smriti Zubin Irani, Minister of Women and Child Development, views BRICS as a ‘platform of consensus’ with India playing a pivotal role as ‘one of the bridges between the Global North and the Global South.’ “The celebration at BRICS about our mission, courtesy of ISRO (the space agency of India), when we landed on the dark side of the moon was not a celebration limited to India alone,” she says. “The cooperation in space technology is something that has been written about.”

As for achieving consensus, she states: “If the agenda is growth, if the agenda is inclusion, if the agenda is servicing global aspirations, then India is well positioned to be a bridge, no matter the conversation or geography... because irrespective of how fractured or fragmented the world seems today, I proudly say as an Indian, that we can help become the democratic glue that brings everybody together.”

On clean energy transition

In the face of escalating climate-related concerns, India plays a key leadership role in the global fight against climate change. The growing population and rising energy demand call for a delicate balance between economic advancement and ecological responsibility. “We are facing multiple crises. And for a country like India, which now has the largest population in the world, it requires a transition to sustainability without jeopardizing or undermining the need to deliver basic welfare to a large and growing population,” says Hardeep Singh Puri, Minister of Petroleum and Natural Gas and Housing & Urban Affairs.

“If you look at the global scenario today, India's consumption is growing three times the global average. In the next 20 years or so, India will account for 25% of the world's energy demand.”

For India to achieve net-zero emissions by 2070 as planned, it needs to pursue non-traditional methods for energy generation. Alongside a concerted push for Green Hydrogen and biofuels, the country has launched the International Solar Alliance and proposed a global grid for renewables. It ranks 67 out of 120 countries on the Forum’s Energy Transition Index (ETI) 2023, showcasing steady improvements across the three dimensions of the energy triangle over the past decade: equitable, sustainable and secure.

India also emerged relatively less affected by the recent energy crisis, finds the report, largely due to the low share of natural gas in power generation and increased use of existing generation capacities.

But can developing economies like India follow the same pace of change as developed countries? In a ‘Transforming Energy Demand’ session, Dr. Anish Shah, the Group CEO and Managing Director at Mahindra Group, said developing nations could ‘actually create a better set of outcomes’.

“If we look at renewable energy, India is putting in 600 gigawatts (GW) of renewable energy by 2030,” he says. “The beauty there is that the cost of solar energy in India is far lower than traditional energy… emerging countries are going to, in some ways, show the way and rewrite the rules in terms of how energy can be used.” But he cautions against relying on a silver bullet and instead focusing on solutions for the long term.

A skilled workforce, public-private collaboration in innovation, and investment in research and development in low-carbon technologies are necessary to enable India’s energy transition, as detailed in the Fostering Effective Energy Transition 2023 report.

On responsible use of AI

AI has been a hot topic of discussion at the Meeting, with leaders highlighting its great potential but emphasizing the need for governance. António Guterres, the Secretary-General of the United Nations, called for enhanced efforts around AI governance while the United Kingdom's Chancellor of the Exchequer, Jeremy Hunt, called for 'light touch' regulation and global collaboration on AI.

The Indian delegation promoted responsible behavior regarding AI, insisting on convergence or a consensus on watermarking AI products ‘so that nations at large have a balanced approach towards emerging technologies’, as expressed by Smriti Irani during a session.

Arvind Krishna, Chairman & CEO, IBM, said, “Artificial intelligence (AI) will be equal or even bigger than the steam engine revolution and India is going be to at the forefront of AI deployment. Given the scale of India’s data sets, it will be remarkably useful. I must applaud the Indian Government’s in initiatives in AI and building AI centres of excellence. AI is going to be a global force for good. We are a firm believer that India will be massive beneficiary of AI. Workforce that is going to deploy AI will come from India.”

For Debjani Ghosh, President, National Association of Software and Services Companies (NASSCOM) in India, trust and inclusion are crucial to building AI scalability. “And that's where the world will benefit by looking at India and what we are doing with technology,” she says. But we cannot do it without talent that is inclined digitally, she added, referring to India's 'biggest differentiator' with the young population. "We can build in them the basics of responsible use of technology because we are building technology to solve problems."

On sustaining the growth momentum

India's economy showed robust growth over the past year, IMF stated as it concluded its Article IV Consultation with India in December. “Growth is expected to remain strong, supported by macroeconomic and financial stability. Real GDP is projected to grow 6.3 per cent in FY2023/24 and FY2024/25.”

"With a 95% confidence interval, we can all assess that India will be growing at 6 to 8% for the whole of next decade… with a moderate inflation of 4 to 6%," stressed Ashwini Vaishnaw, Minister of Railways, Communications; and Electronics and Information Technology.

“Continued broad-based policy initiatives and structural changes focused on inclusive growth, sustained revival in domestic consumption demand, and rapid adoption of new and emerging technologies to enhance productivity will be critical,” highlighted Sriram. “Additionally, India must continue to engage in multilateral forums to address global issues such as health crises, economic disparities and geopolitical tensions.” Reskilling and upskilling will also play a crucial role in ensuring India’s demographics will benefit its growth story, which will require "broad labour market reforms and human development measures".

Leaders echoing positive outlook

Dr. Anish Shah, Group Chief Executive Officer and Managing Director, Mahindra Group, emphasized a significant change in perception over the years. Shah noted increased optimism about India as a long-term market and a supply chain hub. The focus has shifted from viewing India as an alternative to China to recognizing it as a standalone hub with unique opportunities. The question now is not whether to invest in India but how to make it work for long-term success. In the times to come, India will be seen as a torchbearer not just for progress on national climate goals, but also for how government-business collaboration played a pivotal role in getting there.”

Roshni Nadar Malhotra, Chairperson, HCLTech, echoed the sentiment, noting cautious optimism in the market. She highlighted a shift in perception, with India being seen not just as a hub for IT services but as a strategic location for investment. The growth in private organizations and industry activities is contributing to this positive outlook.

During an interview, Gita Gopinath, Deputy Managing Director, International Monetary Fund, was quoted as saying, “India continues to be among the fastest-growing major economies in the world, and we expect that to continue into 2024. So that's a very positive story. India will continue to be amongst the fastest-growing economies in the world in 2024, backed by two significant pillars of progress. Two big areas of progress have been physical infrastructure, roads, ports, airports and so on, but also digital infrastructure. I think both have been areas of remarkable progress, and that is beneficial to all parts of society, and not just the very rich.”