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.
Is there an alternative to growth as we know it? Can future economic growth be tied to improved environmental outcomes? Andrew McAfee and Tim Jackson discussing this topic.
Martin Brudermüller, Prof. Kishore Mahbubani, Christian Sewing and Thorsten Slok explore the historical change of the global economic and political environment.
Born and raised in Zambia, Natasha Mwansa advocates for the health and well-being of young people, particularly against child marriage. As a journalist she gathers and shares information on women and girls' rights and tracks stakeholder progress.
watch the interview Mandeep Rai - "Values define the ambitions we set, the choices we make, and the relationships we chose"
Authentic values are critical for any company to develop common culture and to adhere to its principles. But how do we get there? Watch Jörg Eigendorf's interview with the banker, economist and journalist Mandeep Rai after her journey across 101 countries.
Today’s episode of “Davos Daily” provides insights and food for thought on secular stagnation and environmental change. In this Deutsche Bank podcast, Torsten Slok and Sebastian Krämer-Bach discuss “the limits of growth” and the implications for ecologically-friendly businesses.
**PIC IS NOT CONFORM**
Jim Reid, Global Head of Thematic Research & Credit Research, talk with Sebastian Krämer-Bach about the Deutsche Bank study “We need to talk about (sustainable) growth …” which summarises topics that we address in conversations in Davos.
In an era of growing inequality and accelerating climate change, Lord Nicholas Stern and Ólafur Ragnar Grímsson discuss the opportunities presented by the UN Sustainable Development Goals to deliver a new economic model founded on sustainable and equitable growth.
Paul Achleitner, Deutsche Bank Chairman of the Supervisory Board, took part to the WEF in Davos since 1993. What is his take away this year? “The sustainability discussion was very helpful and it opened up new opportunities – particularly for Deutsche Bank.”
In today’s Daily Davos, Torsten Slok and Sebastian Krämer-Bach discuss the reasons behind rising inequality and its implications on global growth – while both experience the busy meeting atmosphere in the famous Belvedere Hotel.
**PIC IS NOT CONFORM**
watch the session Session 5: 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. 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 Larry Fink, BlackRock – “Climate change will be a major change on how we all do business”
Interview with Larry Fink, founder, Chairman and Chief Executive Officer of BlackRock; and Jörg Eigendorf, Deutsche Bank, about sustainable growth: “Our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors.”
On their last day in Davos, Torsten Slok and Sebastian Krämer-Bach reflect on 3 days interaction with partners and clients and discuss about the future of work and the impact of automation.
**PIC IS NOT CONFORM**
In this session, Nobel laureate Prof. Robert J. Shiller, Yale University; Sven Afhüppe, chief editor of Handelsblatt; and Christian Sewing, CEO of Deutsche Bank discuss how narratives can drive economic growth, and what our role could be in developing and driving these narratives.
Gerald Podobnik, Chief Financial Officer of the Corporate Bank, about Deutsche Bank’s responsibilities and what the industry needs to move forward with sustainability
In today’s daily Davos, Torsten Slok and Sebastian Krämer-Bach discuss the impact of narratives for economists and the chances in digitalization.
**PIC IS NOT CONFORM**
The former President of Iceland, Ólafur Ragnar Grímsson, talks with Jörg Eigendorf, Deutsche Bank, about China, international relationships and growth in the face of climate change.
Rupert Howes is the Chief Executive of the Marine Stewardship Council (MSC). This organization's mission is to contribute to the health of the world’s oceans by recognizing and rewarding sustainable fishing practices. Jörg Eigendorf, Deutsche Bank, talks with him about the impact of growth on our oceans.
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
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
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.
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.
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
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.
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
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
Larry Fink is Founder, Chairman and Chief Executive Officer of BlackRock, Inc.
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.
Deutsche Bank Research on growth
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.
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.
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.