WEF member: ‘A very strong willingness exists to achieve inclusive growth’

The WEF's Martina Larkin named Italy as one of the countries most engaged in pursuing a new growth model. [World Economic Forum]

Inclusive growth became a dominant topic at this year’s World Economic Forum (17-20 January). Martina Larkin, the head of Europe and Eurasia for the Forum, admitted there is no “obvious model” for it.

Martina Larkin is the Head of Europe and Eurasia for the World Economic Forum and is a member of the Executive Committee of the World Economic Forum Geneva.

She spoke with euractiv.com’s Jorge Valero.

What results would you highlight from this year’s Davos gathering?

For the first time ever in Davos, we had voices representing so-called populist parties from across Europe. That was a contested issue in the run up to Davos, but it showed that the forum is a platform for all different voices and it is willing to have a global dialogue on issues that are in people’s mind today.

Davos admits to globalisation's failures, falls short of solutions

The World Economic Forum concluded its four-day gathering by calling for more inclusive growth to face growing populism and the backlash against globalisation

Who was there from these parties?

Carla Ruocco, a member of the governing body of M5S; Timo Soini, the leader of the Finns Party; and Adam Holloway, of the British Conservative Party. We also had British Prime Minister Theresa May. It was important to have her opinion, her perspective on how she sees the role of the UK in the future. We also had an interesting neighbourhood lunch that brought together countries like Serbia, Croatia… with the EU Commissioner for Neighborhood Policy, Johannes Hahn. We had a very amicable discussion so, from a geopolitical perspective, that was a small breakthrough.

What private panel discussions would you pick?

We had an action-oriented agenda. We had 30 CEOs committed to two key initiatives: digital Europe, to build an innovation network across Europe to really drive the digital agenda in the continent. The other initiative was on the future of skills and jobs in Europe. This initiative would try to help close the skill gap. The goal is to hire 1 million people by providing them with the right skills in the view of the fourth industrial revolution and the changes happening with the technological shift.

There was a lot of talk about the need for inclusive growth. But it seemed that the consensus on how to achieve it was not clear. Would you agree?

This is an issue we were discussing for the last six months. We have an ongoing project and we will publish a paper in February or early March, together with the European Investment Bank (EIB) and the Bruegel think tank (Brussels). The paper is about how to achieve competitiveness and inclusiveness at the same time. Clearly, at a European level, there is not the strategy that would help to achieve this growth yet. Theresa May has called for it because she said that the ‘brexit’ was a rebellion against inequality. Of course, Britain is one of the most unequal countries in Europe. While people are starting to talk about it there is not yet a total obvious model to deal with it. But there is huge pressure on political leaders but also on business leaders, and the willingness in them to find out how we could do this. We could expect solutions. It would not happen next week, but we are in the positive direction. They cannot afford not to act on this.

Davos warns ‘squeezed’ middle class needs attention

Threatened by unemployment and stagnant wages, the middle class is increasingly feeling the pinch and falling prey to populism, as shown in recent elections and the Brexit vote, international and business leaders in Davos warned.

Once the elections pass in France or Germany, and the social pressure decreases, do you believe that leaders will be still interested in fighting inequality?

From our conversations, my understanding is that this is not a temporary challenge. The decline of the middle class is not going to go away. It is a long-term problem that political leaders have to deal with. But also business leaders, because their source of consumption is going away. What we have seen is a very strong willingness from both the CEOs but also the policy-makers and political leaders to find solutions beyond the elections this year.

Pre-Davos report calls for reforming capitalism to survive global backlash

The World Economic Forum study warns that democracy is in “deeper crisis” and urges for more inclusive growth amid the growing inequalities fuelled by technological disruption.

Who is most committed to this new agenda?

We see Italy as one of the countries really committed to re-think growth. Britain is also being also one of the driving forces. Of course, the Nordic countries are strong on inclusive growth. Little by little, other countries in Europe are also starting to see this as beneficial to them. Among the CEOs, the majority of them want their consumption to increase. So they believe this discussion about inclusive growth is very pertinent and they are engaged to it.

Consumption is also linked to the wages CEOs pay. Did anybody say the private sector’s wages should also increase?

There has not been a specific conversation on wages. There have been some discussions in the forum about the minimum wage or the universal basic income.

Further Reading

World Economic Forum

PWC

Background

For the World Economic Forum, "Responsive and Responsible Leadership" requires recognising that frustration and discontent are increasing in segments of society that are not experiencing economic development and social progress. Their situation will only become more uncertain with the onset of the Fourth Industrial Revolution and its impact on future employment.

The organisation adds that "Responsive and Responsible Leadership" entails a deeper commitment to inclusive development and equitable growth, both nationally and globally. It also involves working rapidly to close generational divides by exercising shared stewardship of those systems that are critical to our prosperity.

"In the end, leaders from all walks of life at the Annual Meeting 2017 must be ready to react credibly and responsibly to societal and global concerns that have been neglected for too long," the forum stated.

World Economic Forum: Full coverage from Davos

Between 17 and 20 January, the Swiss mountain village of Davos hosted the World Economic Forum. After a hugely tumultuous year,  EURACTIV.com was on-site to provide all the latest developments.

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