Every year in late January, global leaders in business, politics, academia and other fields get together in Switzerland to discuss the various challenges faced by the world.
This annual meeting of the World Economic Forum, dubbed Davos after the Swiss resort at which it is held, is in its 43rd year and continues to grab the media spotlight for the insights it gives into the global economy.
Over 2,500 participants from more than 100 countries will attend Davos, which is being held from Jan. 23 to 27. Russian Prime Minister Dmitri Medvedev, British Prime Minister David Cameron, German Chancellor Angela Merkel, Italian Prime Minister Mario Monti and other leaders from some 50 countries will address the invitee-only audience.
Toshiba Corp. Chairman Atsutoshi Nishida is one of the six co-chairs of the forum, whose theme this year is “Resilient Dynamism.”
“In my interpretation, ‘resilient’ means the ability to maintain sustainable growth in a non-emergency time and to deal with crises in emergencies. ‘Dynamism’ means the attitude to move forward in an ever-globalizing world economy, instead of being satisfied with keeping your current position,” Nishida said in an interview with The Japan Times before heading to Davos.
“The speed of change in society is really fast in the 21st century, and uncertainty in the economy has deepened. In such a time, resilient dynamism is an essential quality for countries as well as companies because it is a driving force for innovation and productivity,” he said.
In the 20th century, companies and countries needed only to grow, but in the 21st century, they need to maintain sustainable growth and deal with limitations such as resource shortages, Nishida said.
Davos is composed of many sessions of seminars and symposiums. Under the Resilient Dynamism theme, the sessions are built on the following three pillars: Leading through Adversity, Restoring Economic Dynamism and Strengthening Societal Resilience.
As the chairman of a maker of power plants, semiconductors and other electronic devices and equipment, Nishida also said the forum’s theme matches the current economic and social environment because there are many risks and uncertainties to deal with, which will take resilient dynamism to resolve.
“Unexpected incidents like the Great East Japan Earthquake are inevitable. And there are many risks and so many challenges we have to overcome,” he said.
In addition to preparing for unexpected incidents, the world needs to tackle issues such as the economic crisis in connection with the European sovereign debt risks, global warming, cyber-attacks and aging populations in developed countries along with population spikes in developing ones, Nishida said.
Nishida also said he wants to make contributions to Davos by providing solutions on various global challenges from the viewpoint of the private sector. Considering Toshiba’s business portfolio, he hopes to offer solutions on green energy, environmental technology and health-related technology, he added.
Nishida, who has attended Davos twice in the past, is impressed with the quality of Davos attendees, he said. “They have the passion to overcome global challenges and commit themselves to what they say,” he said.
On the Japanese economy, Nishida said the largest trap Japan has fallen into is deflation, and getting out of this deflationary spiral should be Japan’s main agenda.
The new administration led by Prime Minister Shinzo Abe is “facing the problem very seriously and trying to find a way to spend government money efficiently to lead to economic revival,” Nishida said.
“If Japan overcomes deflation under the new administration, that would be a historic accomplishment in that Japan provides the world with a great economic prescription,” he said.
Nishida also hopes Abe’s administration will carry out specific measures to revitalize the Japanese economy. It is working on coming up with the measures in June, in which it identifies what business sectors the government will promote as a driving force.
The government, no matter who was prime minister, has failed to carry out similar measures in the past, Nishida said, adding that some of the most important business sectors for Japan are green energy, medical services and elderly care.
He also hopes Abe’s administration will move forward on forming trade alliances with other countries, including entering negotiations on joining the Trans-Pacific Partnership.
In order to revitalize the Japanese economy, not only Japanese companies but also foreign companies must want to invest in Japan, but foreign direct investment in Japan is much lower than in other countries, he said.
To increase FDI, Japan should lower corporate taxes, which are “extremely high,” he said. Other risk factors are high electricity rates and the instability of the electricity supply, he added.
Also, Nishida said Japan needs to understand developing countries’ demand and create products and services they will find valuable because it is hard to imagine Japanese domestic demand will grow. Exporting social infrastructure such as the “smart community” idea is a good example in which Japan has global potential, he added.
A smart community is a neighborhood network of houses, buildings and other social infrastructures that optimize energy consumption.
“Many countries are experimenting with smart communities, but none of them has solid foundations in the business of smart community. Japan has an edge and thus a chance,” he said.
While Nishida expressed his admiration of the quality of the sessions and attendees at Davos, he is dissatisfied with Japan’s low-level presence.
“Davos discusses a very wide range of subjects, and I want to see a Japanese speaker in every subject,” said Nishida, who is planning to attend five sessions. “The government should try to arrange that.”
Nonetheless, a record 90 Japanese participants will attend the Davos conference this year, of which about a dozen are speakers.
Nishida expressed a certain amount of understanding about Prime Minister Abe not being one of the leaders who will address attendees at some seminar sessions because he just assumed his post last month.
“I would like him to do his work well this year and present his achievements to the world next year,” Nishida said.
Nishida, however, also mentioned the fact that Japanese leaders change too often, and it looks bad to foreigners that the same prime ministers cannot attend annual international meetings two years in a row.
“Attending Davos just one year is not enough. Attending every year will actually earn respect and understanding from the world,” he said.
He also said it is essential to speak English at Davos to have direct interaction with panelists and the audience. Government officials at the ministerial level usually speak English at Davos, while some prime ministers and presidents use interpreters, he added.
A remarkable aspect of this year’s Davos is that leaders from Arab countries will discuss the situations in their country two years after the start of the Arab Spring. Also, the top decision makers from North Africa will outline their reform plans and shed light on the political, economic and social transitions in their respective countries. Among the leaders are the prime ministers of Lebanon, Libya, Tunisia, Morocco and Egypt, the king of Jordan, the Palestinian prime minister and the president of Israel.
Among the other leading public figures who will participate in this year’s forum are U.N. Secretary General Ban Ki-moon; former U.N. Secretary General Kofi Annan; Mario Draghi, the president of the European Central Bank; Angel Gurria, secretary general of the Organization for Economic Cooperation and Development (OECD); World Bank President Jim Yong Kim; International Monetary Fund Managing Director Christine Lagarde; and John McCain, a U.S. senator from Arizona.
The World Economic Forum was founded in 1971 by Klaus Schwab, a German-born business professor at the University of Geneva in Switzerland.