US recession, AI, Chinese economy

After a week of speaking with business leaders and government officials at the conference, here are some lessons learned from Davos.

Overwhelmingly, economists and business executives have privately said that they do not expect the United States to enter a recession in 2024. The possibility that the Fed may cut interest rates in the coming months, combined with rising consumer confidence, is leading to optimism about the health of the economy (barring another major policy move). Geopolitical crisis.

Given its global importance, the Middle East crisis received surprisingly little attention from breakout sessions and corporate events scheduled for Davos. Perhaps there are few obvious solutions, or, as several conference attendees suggested, many people’s reluctance to speak out about the Gaza conflict is to provoke others or cause a rhetorical flare-up. Maybe because it’s possible.

Others cited this as a possible reason why so few U.S. executives have spoken out, even privately, about the potential dangers of President Donald Trump’s re-election. Staying cautious may not be courageous, but it’s good for business.

As Andrew Ross Sorkin pointed out in the New York Times, some noted the conspicuous lack of conversation about the rise of global anti-Semitism at the conference.

At last year’s Davos, discussions about cryptocurrencies dominated the panels. This year, AI has taken over the role of the cool kid in town.

Up and down Davos’ main street, the Promenade, dozens of companies were advertising their AI products. Technology leaders, bank executives, and even musicians like Wyclef Jean and will.i.am have waxed poetic about the potential of AI. Willi.i.am also promoted his upcoming SiriusXM radio show featuring co-hosts from AI.

When it comes to AI, the tone of the panel discussions and cocktail conversations about this technology was decidedly optimistic rather than dystopian. Even OpenAI CEO Sam Altman, who had previously joined the chorus of voices warning that AI could lead to the extinction of humanity, said within the week that AI “will change the world.” is much smaller than we all think.”

Altman was referring to artificial general intelligence (AGI). This technology is broadly defined as an AI system that can perform tasks equivalent to or better than humans.

This could ease tensions among workers after a significant year for unions. According to employment platform Indeed.com, about 20% of all job postings are considered “highly exposed” to his AGI.

Despite significant advances in AI in recent years, job postings are still above pre-pandemic levels in most countries, according to Recruit Holdings, the parent company of Indeed and company review site Glassdoor. Altman said his thoughts on AGI have changed. Although he once thought robots would replace humans, he is now impressed by how companies are using AGI as a tool to supplement human work.

Chinese Premier Li Qiang told a Davos audience on Wednesday that China’s GDP growth rate in 2023 will be 5.2%, slower than pre-pandemic growth. The country is fighting a semiconductor trade war with the United States, is losing foreign direct investment, and has just been overtaken in population by India. There are major concerns in China about how to support growth as the US seeks to isolate China.

Ian Bremer, president and founder of Eurasia Group, said in an interview that this may have led Lee to publicly reveal the numbers to an international crowd seeking investment opportunities.

“China faces very serious structural economic challenges,” Bremer said. “A lot of companies in the Western world aren’t investing as much as they used to, and they certainly aren’t thinking about their growth strategies in the same way.”

“But even 3%, 4% growth in China is still quite meaningful for many companies attending this year’s World Economic Forum,” Bremer added. “I think what’s interesting about China’s growth slowdown is the fact that it’s not just a six-month sharp change. This is an ongoing challenge and China is actually reaching out to the private sector more constructively. It makes you feel like you need it.”

Several long-time Davos attendees commented on how the city’s infrastructure can no longer barely contain the popular conference. Shuttles and Ubers transporting people from one place to another were busy at all hours of the day. Demand for hotel rooms is so high that their prices exceed the cost threshold approved by Swiss government officials.

They also noted that with all the satellite events being held around the World Economic Forum, they spent far less time at the main event venue, the Congress Center, than in past years.

Perhaps generative AI could start building new roads and accommodation to accommodate the increased traffic.