I don't know anyone in the data center crowd who makes the list of people who attend the World Economic Forum in Davos. 10 years ago I went with my team for a technical presentation at a computer conference in Davos. It was surrealistic in that a month later the place would have some of the top world power players in one place for WEF. Yet here we were wandering around in the small town of Davos, Switzerland.
What is WEF?
The World Economic Forum encourages businesses, governments and civil society to commit together to improving the state of the world. Our Strategic and Industry Partners are instrumental in helping stakeholders meet key challenges such as building sustained economic growth, mitigating global risks, promoting health for all, improving social welfare and fostering
Sounds really important and prestigious. What does it take to go? Well as the NYTimes reports, one is a lot of money.
A Hefty Price for Entry to DavosBY ANDREW ROSS SORKIN
Andrew Harrer/Bloomberg NewsThe town of Davos, Switzerland, an expensive place to go.
What’s the price tag to be a Davos Man?
Chief executives, government leaders and academics around the world are headed to Davos, Switzerland, for the World Economic Forum’s annual meeting this week — a heady power gathering that mixes business, politics and Champagne in the Swiss Alps. It is an event that draws a wide range of decision makers, from Jamie Dimon, the chief executive of JPMorgan Chase to Prime MinisterGeorge A. Papandreou of Greece to U2’s Bono, ostensibly to contemplate how to solve the world’s problems.
How much money?
And if you want to take an entourage, say, five people? Now you’re talking about the “Strategic Partner” level. The price tag: $527,000. (That’s just the annual membership entitling you to as many as five invitations. Each invitation is still $19,000 each, so if five people come, that’s $95,000, making the total $622,000.) This year, all “Strategic Partners” are required to invite at least one woman along as part of an effort to diversify the attendee list.
Why would you go? Networking.
Of course, much of the week is really about one thing: networking. As the “Black Swan” author Nassim N. Taleb described it to Tom Keene of Bloomberg Television, the event is “chasing successful people who want to be seen with other successful people. That’s the game.”
But is this really good networking or a bunch of egos?
Visiting scholar at the Carnegie Endowment for International Peace; author of "Superclass: The Global Power Elite and the World They Are Making"
To truly understand the enduring (if fading) appeal of the World Economic Forum, you have to go back to high school. One thing we learn in high school is that human beings, like wolves and fish and most other lower life forms, travel in packs. We also learn that there is a pecking order to those packs. And in every high school there is a group of cool kids who enhance their status simply by hanging out with one another. In my school, we hung out each morning along a certain wall in the front hall. (Yes, I was a cool kid in high school. Of a sort. The nerdy, artsy sort with an Isro.)
And if you think Davos is about anything other than status-seeking-behavior, then you have read too many of the press releases of the overly-earnest Swiss gnomes who put the meeting together. They describe themselves as being "committed to improving the state of the world." They do have a variety of bloviatapaloozas during the course of the event at which the improvement of the globe is debated. But, of course, most of the people there share a common background -- the emerging world, women and poor people are hugely under-represented. So you have to conclude that what they really mean is that they are committed to improving the state of those aspects of the world that are important to CEOs and politicians and the journalists who share the appetizers with them at the receptions in the Belvedere Hotel -- where the real work gets done in the small Alpine village that for a few days each year is the center of the trans-Atlantic establishment.
But watch the people at Davos and you see what's really up. It's not deal-making. That almost never happens there. It's networking, which is the professional way of saying: connecting with the kids who have it going on. The appeal, however, of the entire endeavor is fading for several reasons, all associated with the inadequacy of Davos as a networking forum. First, it's pretty uncool to hop on the corporate jet just to schmooze on a piste. Second, the cool kids of the 21st Century -- such as the Chinese -- are in short-supply (although the organizers are working like crazy to fix that). Finally, the event has grown so big, even the cool kids can't find each other in the mix. As Steve Case, founder of AOL, once told me while standing at the bar in the middle of the hubbub of the main conference center: "You always feel like you are in the wrong place in Davos, like there is some better meeting going on somewhere in one of the hotels that you really ought to be at. Like the real Davos is happening in secret somewhere."
Now doesn't that pretty much capture the way you felt in high school? Or is it just me? (I realize in retrospect that the haircut wasn't such a great idea.)
There are over a 1,000 private jets for the event. A record, and maybe the prestige is fading as things aren't working.
But all this spending may soon be going out of vogue. As one attendee, the author David Rothkopf, recently wrote on his blog, “The entire endeavor is fading for several reasons, all associated with the inadequacy of Davos as a networking forum.”
He explained, “As Steve Case, founder of AOL, once told me while standing at the bar in the middle of the hubbub of the main conference center: ‘You always feel like you are in the wrong place in Davos, like there is some better meeting going on somewhere in one of the hotels that you really ought to be at. Like the real Davos is happening in secret somewhere.’”
Could you imagine the carbon footprint of this event? WEF is a big business. $185 million in annual revenue.
All these embedded costs have helped make the World Economic Forum a big business — perhaps the biggest conference organizer in the world. According to its annual report, it brings in about $185 million in revenue and spends nearly all of it, with almost half of its costs going toward events and the other half on personnel.
Would you go to the WEF Davos event if you were invited? Could you justify the expense report?
As I told one technical friend who was contemplating the logic of buying a Porsche Turbo. You are looking at this all wrong. It is not about the cost benefit analysis - insurance, maintenance. There is a very simple question you need to ask. Does your ego fit the car? Is it too small? Or maybe too big. If your ego comfortably fits in the car you can justify the costs.
WEF works if it fits your ego.