Out of the networking orgy that is the World Economic Forum (WEF) has emerged the Davos Manifesto 2020: ‘The Universal Purpose of a Company in the Fourth Industrial Revolution’. Unfortunately, the document is likely to fall short in its objective to improve the state of the world, writes Adrian Ely.
It’s the 49th anniversary of the World Economic Forum (originally founded in 1971 by Klaus Schwab as the European Management Forum) and world leaders of many kinds are gathering in Davos. In the run-up to its 50th year, the organisation has released a manifesto.
In this “manifesto for a better kind of capitalism,” Schwab calls for stakeholder capitalism, which – in contrast to shareholder capitalism and state capitalism – “offers the best opportunity to tackle today’s environmental and social challenges”.
Ten years ago the STEPS Centre and its international partners produced our own manifesto, based on a series of background papers, seminars and international roundtables. This marked the 40th anniversary of the ‘Sussex Manifesto’ — a document which our colleagues had originally produced for the United Nations in 1970. With a focus on science, technology and innovation, both the Sussex processes adopted an internationalist approach that prioritised societal challenges. The same could be said for the WEF’s ‘universal’ approach. But I think Schwab and his colleagues could learn a lot from our collective experience.
The focus of the Davos Manifesto 2020 is ‘the company’. Responsibility is put on ‘the company’ – with its limited liability, and its intrinsic strategic motivation to evade regulatory control – to voluntarily bring about change. Apart from a single mention of government and civil society in the last section of the Davos Manifesto, there is little consideration of the mechanisms needed to incentivise or enforce such responsibility.
In contrast, the STEPS ‘New Manifesto’ saw democratic government and civil society as key to bringing about social change. We put forward an agenda that empowered civil society, not only in terms of innovation, but also ensuring accountability.
This approach goes beyond the demand for companies to communicate transparently about the “adverse implications or negative externalities” of products and services, or performance being measured on the basis of “environmental, social and good governance objectives” (i.e. looking back to the past). It brings democratic accountability to future activities too.
Our Manifesto called for an emphasis on the directions of innovation – ‘what is innovation for?’, ‘which kinds of innovation, along which pathways?’ and ‘towards what goals?’ – as a matter for legitimate democratic engagement and challenge. As such, it focussed on the future rather than the past.
challenges for Research & development
Why is this important? Because today, technology and innovation are still not aligned to societal needs.
Fossil fuel companies’ R&D budgets for exploration dwarf their budgets for the shift to renewables. Digital platforms invest more in how to capture customers’ data and attention, than in how to protect them against misinformation. Medical research focuses too much on expensive treatments for existing conditions, rather than preventing their future prevalence. In our Manifesto, we saw central roles for both government and civil society in challenging this situation.
In 2010 we suggested that “in all countries benchmark criteria, relating to the priorities of poverty alleviation, social justice and environmental sustainability, are set and so become the basis of indicators for monitoring innovation systems.” This pre-dated the Sustainable Development Goals, which go some way towards doing that. But ‘growth’ and ‘competitiveness’ remain the central focus, and few countries are really adopting these kinds of criteria for science, technology and innovation (notwithstanding the efforts of the Transformative Innovation Policy Consortium, the UKRI/UNDP STRINGS project and other initiatives).
According to the Davos Manifesto, a company “continuously expands the frontiers of knowledge, innovation and technology to improve people’s well-being”. How do we know whether this is the case? The Global Reporting Initiative (GRI) and others are making strides in corporate sustainability reporting, and an increasing number of stock exchanges require these forms of performance monitoring. But reporting on R&D investment (whilst potentially commercially confidential) remains embryonic. Instead, the STEPS Centre Manifesto suggested that firms (and other organisations) would be required to report on research and development expenditures in relation to criteria relating to future directions of innovation, with such data open to public scrutiny.
There is much work to be done in developing systems for doing this, but painfully little progress or consensus. Ten years after we raised the idea, the notion of reporting on R&D expenditure according to specific criteria seems somewhat clunky. But opportunities exist for more open forms of science and technology to evolve into transparent innovation systems in which all R&D investments are amenable to scrutiny, holding firms and governments accountable and defusing international tensions around technological dominance.
There is actually a lot in the Davos Manifesto that I welcome; much that – if implemented – could help to ensure that innovation benefits all of us. But documents like manifestos are nothing in the absence of action. How will the WEF help to ensure the “universal purpose of a company in the fourth industrial revolution” becomes reality? Will companies that fail to live up to the manifesto be unwelcome at Davos in years to come?
Manifestos are political documents. It’s not clear how the Davos Manifesto was put together, but for us it was the process of learning as much as the output that was important (much of this presented in the form of a ‘multimedia manifesto’). It will be interesting to see what comes of the latest contribution from Davos, and how the Manifesto can be used to promote learning within and beyond the WEF. Personally, I’m not holding my breath.
This blogpost was written by Adrian Ely and does not necessarily reflect the views of the other individuals or organisations who participated in the STEPS ‘New Manifesto’ project.