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Technology spooks Davos

Davos is dominated by two revolutions – those involving green issues and technology.

Davos is dominated by two revolutions – those involving green issues and technology.

by
John Redwood

in Features

21.01.2020

The background papers and mood music from Davos is all about the two revolutions. The Davos organisers favour a stronger push for the green revolution, stating that “we're running out of time" to "save the planet". They want to slow down the technology revolution. They argue that "The breakneck speed and sheer scale of this round of technical change is something else -- it threatens the very definition of what it is to be human".

So, the stage was set for Donald Trump to take on the world establishment over how to respond to climate change, to highlight the growing rift between what the US is doing and what the EU is doing about fossil fuels and the oil-and-gas-based economy. The Davos leaders will have their way in many areas and will encourage each other to do more to promote their preferred ways of travel, domestic heating, industrial power and choice of diets. Meanwhile, China opens new coal mines and the US greatly expands its oil output.

The authors of the Davos conference are also setting out a comprehensive agenda to change companies and nation states.

The Davos script includes the following assertions:

  • Wealth inequality within many nations has soared, social mobility reversed and cohesion undermined.
  • There are fears new technology will make things worse.
  • If we leave it to the market, the 4th Industrial Revolution will usher in a long and damaging period of dislocation.

This invites participants to find regulations and taxes that will slow the adoption of the new technology services. It sets up disagreement with the large US technology corporations that have grown mightily on the back of consumer support for their new ways of letting us keep in touch, download information, hear the news, go shopping and watch movies. Mr Trump will not be impressed by this vein of analysis and advice. Other governments too may argue that the technology revolution has in some ways helped create new jobs, driving more prosperity and greater freedom and choices for individuals.

Counties must change too

Davos also has a message for nation states. It tells them we need to "move from geopolitics and international competition to a default of consummate global collaboration. Nations are going to have to change."

It is difficult to see the US and China buying into this vision, let alone Venezuela, Iran or North Korea. The conference will serve to highlight the impact of the twin revolutions on our lives and on the investment world. Work streams around Davos will press on with seeking to make companies cut their use of fossil fuels and promote green products. Mr Trump will return to the US keen to see the enterprise revolution in social media, online retail and services drive on, led by large US corporations.

Investors should note the disagreements and recognise that valuations of companies are going to be much affected by how they respond to the twin challenges of big technology changes and the need to go green.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

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