• Is growth an illusion?

    World Economic Forum

For the 50th time, from January 21 until 24, the powerful from politics and economy meet in the Swiss Alps. Davos 2020 brings together 3,000 participants from around the world, and aim to give concrete meaning to “stakeholder capitalism”, assist governments and international institutions in tracking progress towards the Paris Agreement and the Sustainable Development Goals, and facilitate discussions on technology and trade governance.

Deutsche Bank is also present at the World Economic Forum (WEF) and is addressing a number of socio-political issues. Under the title “Is Growth an Illusion?” we host our own programme and discuss on this question in Davos with masterminds, leading politicians and internationally renowned experts from various fields. One of the key issues is the matching of goals between growth and climate-friendly action, which Deutsche Bank Research has also addressed in a recent study.

The mission of the annual WEF in Davos – to improve the state of the world – has always been a difficult one. By 2020, the challenges facing humanity have not diminished.

Speakers and sessions

Growth regions – the places to be

During the last decade, China has begun to rival the US as a global economic power. In line with its Made in China 2025 programme, it has grown from a low-cost producer of consumer goods to a sophisticated global competitor in most of the major tech-intensive industries. It is also securing its regional influence through its ambitious Belt and Road programme.

This session explores this historical change of the global economic and political environment and the challenges and opportunities it represents to German and European corporations. 

watch the interview “Asia is forecast to generate some 60% of global growth by 2030, with two-thirds of this coming from China. We have to be involved in this.”

Watch the interview with Martin Brudermüller, Chairman of the Board of Executive Directors and Chief Technology Officer (CTO), BASF SE

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watch the interview “A major geopolitical contest between US and China is both inevitable and avoidable. As usual, the Chinese will be patient. They believe that time is on their side. They may be proven right.”

Watch the interview with Prof. Kishore Mahbubani, Distinguished Fellow at the National University of Singapore’s Asia Research Institute and a former President of the UN Security Council

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Qualitative growth – is sustainability and growth an illusion?

Growth has been a huge positive force for human development, but over the last 50 years the side-effects have increased to a dangerous level for the planet and society. Debt is at record highs, inequality is fuelling extreme politics and the damage we are doing to our environment may be impossible to reverse.

Is there an alternative to growth as we know it? Can we bypass a lengthy industrialisation process and move to a technology and services-led economy with manufacturing processes made less carbon-intensive? Can future economic growth be tied to improved environmental outcomes?

watch the interview “History shows us that there is no problem associated with growth – including global warming – that we cannot solve. There's every good reason to be pro-growth, and no good reason to be against it.”

Andrew McAfee is the Co-Founder and Co-Director of the Initiative on the Digital Economy and a Principal Research Scientist at the MIT Sloan School of Management.

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watch the interview “Our growth fetish has hindered ecological innovation, reinforced inequality and exacerbated financial instability. Prosperity itself is being undone by this allegiance to growth at all costs.”

Tim Jackson is Director of the Centre for the Understanding of Sustainable Prosperity (CUSP), and Professor of Sustainable Development at the University of Surrey in the UK.

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Tackling climate change and driving growth

The Grantham Research Institute on Climate Change and the Environment was established by the London School of Economics and Political Science in 2008 to create a world-leading research centre. It brings together international expertise on economics, finance, geography, the environment, international development and political economy.
In an era of growing inequality and accelerating climate change, Lord Stern will discuss the changing role of business and the opportunities presented by the UN Sustainable Development Goals to deliver a new economic model founded on sustainable and equitable growth.“

watch the interview “The commitment of young people to tackle climate change is our hope for the future and we have a duty to respond to their call for strong and urgent action.”

Watch the interview with Lord Nicholas Stern, Chairman of the Grantham Research Institute on Climate Change and the Environment

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Growth narratives – exploring the impact of storytelling on future growth

The stories people tell about economic confidence or panic have a significant effect on economic outcomes – whether in relation to market trends such as housing booms, abstract ideas such as the American dream or disruptive technologies such as Bitcoin. Ideas can "go viral" whether they are true or false – transmitted by word of mouth, by journalists and increasingly by social media. In doing so, they drive our decision-making and ultimately the economy.

In this session, Nobel laureate Prof. Robert J. Shiller, Sven Afhüppe and Christian Sewing discuss how narratives can drive economic growth, and what our role could be in developing and driving these narratives.

watch the interview “Europe needs another revival of the ‘One Europe‘ narrative, to encourage trust and hope, which might then be self-actualizing and a boost to economic growth.”

Watch the interview with Robert J. Shiller, Sterling Professor of Economics, Department of Economics & Cowles Foundation for Research in Economics, Yale University, and Professor of Finance and Fellow at the International Center for Finance, Yale School of Management.

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watch the interview “If Europe wants to have a voice and be taken seriously a new narrative is required that extends beyond peacekeeping.”

Watch the interview with Sven Afhüppe, chief editor of the business and financial newspaper Handelsblatt

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Un/sustainable growth – What can we do to avoid the point of no return?

Damage to the environment is more likely to be irreversible if tipping points are reached. In the eyes of many scientists, such points are close, if not already past.

Companies are urgently being asked to integrate sustainability principles into their businesses and some are starting to do so – for example, by developing green products, motivating their employees to save energy and reducing levels of waste.

Such activities can help to capture value through growth and return on capital, but are they enough? What do we and our companies need to change, if the environmental tipping points are to be avoided? And can sustainability in itself become a growth driver?

watch the interview “We can be a systemic force for good – and sustainability itself can become a new driver of growth and prosperity.”

Watch the interview with Werner Baumann, CEO of Bayer AG

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watch the interview “If we don’t have a fair and just solution, we’re not going to have a solution”

Larry Fink is Founder, Chairman and Chief Executive Officer of BlackRock, Inc.

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watch the interview “We are rapidly leaving the familiar Holocene climate behind us. Ignoring the danger would be more than foolish.”

Watch the interview with Stefan Rahmstorf, Professor of Physics of the Oceans at Potsdam University and head of the Earth System Analysis department of the Potsdam Institute for Climate Impact Research in Germany.

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Deutsche Bank Research on growth

more The trade-offs – a price worth paying?

There is no question that climate change is one of the biggest and most tangible challenges the world has ever faced. And there is no question that coordinated global action is urgently needed.

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more The negative side effects of growth over the last 50 years

Although growth has undeniably been a positive force in so many areas over the last 200-plus years, the side effects have often been ignored. In this section we address three key side effects – debt, inequality, and the environment.

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more Growth has transformed our lives relative to our forefathers

Our modern era of economic growth is historically exceptional. There is simply no other period in history that has seen sustained growth at the rates seen since the first Industrial Revolution.

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more Past the tipping point with customers and stockmarkets

Companies drag their heels on addressing climate change because many managers believe that for the planet to win, profits must fall. Others believe the issue is not as relevant for their customers.

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more Cryptocurrencies as the 21st century cash?

But crypotocurrencies have always been additions, rather than substitutes to the global inventory of money. What could change that in the years to come?

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more The on demand life

A decade from now, a family are going through their morning routine. Breakfast has just been delivered from the dark kitchen around the corner, the ironed clothes are due in ten minutes.

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more India‘s promise

These fears are overblown. In fact, the Indian economy is likely to grow two and a half times to $7tn by 2030, from about $3tn today. That could make it the world’s third largest economy.

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more Chinas consumer decade

The Chinese economy has been driven by a key theme in each of the last few decades. Exports was the theme for the 2000s. China started that decade as a WTO outsider and grew to become the world’s biggest exporter by the end of it.

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