Context:

  • The annual meeting of the World Economic Forum is scheduled from January 15 to 19 in Davos, Switzerland.

About World Economic Forum:

  • It was founded by German professor Klaus Schwab.
  • He founded it in 1971 which was originally known as the European Management Forum.
  • WEF introduced the concept of “stakeholder capitalism.”
  • Stakeholder capitalism is a form of capitalism in which companies do not only optimize short-term profits for shareholders but also seek long term value creation, by taking into account the needs of all their stakeholders, and society at large.
  • The World Economic Forum is largely funded by its partnering corporations.
  • These funding corporations are generally global enterprises with annual turnover greater than $5 billion.
  • The WEF also publishes global rankings and indices such as the Global Competitiveness Report and also the Global Gender Gap Report.

Meetings and relevance of them:

  • Initially, Professor Schwab focused on the meetings that how European firms could catch up with US management practices.
  • But after certain events like the collapse of the Bretton Woods fixed exchange rate mechanism and the Arab-Israeli War, the Annual Meeting expanded its focus from management to economic and social issues.
  • After two years, the organisation introduced a system of membership for ‘the 1,000 leading companies of the world’.
  • The European Management Forum was the first non-governmental institution to initiate a partnership with China’s economic development commissions in 1979.
  • Davos brings together nearly 3,000 participants (including paying members and selected invitees), among whom are investors, business leaders, political leaders, economists, celebrities and journalists, for up to about five days to discuss global issues across 500 sessions.
  • Thus, it has become a forum for various stakeholders to meet and discuss global and regional socio-economic issues.