Tech groups dominate Davos but focus shifts from giants to unicorns
The technology sector is set to maintain its dominance at the World Economic Forum this year. But while the Big Tech consumer giants have been the main focus in the past, this may be the year of the unicorn.
Technology is still where much of the action is in Davos, and the tech companies will still be occupying the best venues on the promenade — a good indicator of who dominates.
The large public companies will divide their time between acknowledging controversies over a range of issues, from privacy infringements to antitrust violations, and participating in the WEF’s “Tech for Good” content, say analysts, (with delegates expecting to hear much about how fintech can help the unbanked and what cloud computing is doing for small business, along with individual corporate announcements such as Microsoft’s 30-year plan to become carbon negative).
They will also face pressure from regulators such as Rohit Chopra, US federal trade commissioner, who will headline a session covering antitrust issues on Wednesday, and European Commission president Ursula von der Leyen, who is in Davos and talking about the need to curb the power of Silicon Valley giants such as Google and Facebook.
But the WEF has also invited an unusually large number of the biggest private technology companies, some of them business-to-business groups rather than consumer brands. This reflects a turning point in the technology sector, where money has become more concentrated in private hands.
“You can think of it in terms of ‘before SoftBank’ and ‘after SoftBank’,” said Christian Lanng, chief executive and chairman of Tradeshift, a Silicon Valley-based supply chain platform. Mr Lanng was referring to the Japanese conglomerate that suffered billions of dollars in writedowns after bidding up valuations of companies such as Uber and WeWork.
“There’s going to be a lot more focus on value over growth and seeing who is actually profitable,” said Mr Lanng. “I think you’ll see more suits and ties on the promenade and fewer hoodies.”
Davos attendees will also see large tech and telecoms companies, which in the past often kept to themselves with private events and bilateral meetings, engaging with a broad group of stakeholders around topics such as digital taxation and cryptocurrency.
Financial regulators, tech companies, big banks and officials from the Bank for International Settlements will also be meeting to discuss the future of digital payments and how to move towards a cryptocurrency future not dominated by a single large company such as Facebook or a surveillance state such as China.
Other sessions will focus on the future of digital trade. Under lobbying pressure from the industry, the US has allowed loopholes like section 230 of the Communications Decency Act, which excludes platform companies from most liability for user-generated content, to be included in its newly signed trade deal with Canada and Mexico, and is pushing for them to be included in any new transatlantic agreement.
On Thursday, companies including PayPal, Visa, UPS and Ericsson, plus global labour leaders, regulators and trade and development ministers, will convene to discuss how to shape the rules for digital trade and ensure it does not become a zero-sum game that exacerbates existing problems or increases corporate concentration.
Worries about the regional fracturing of 5G standards and privacy policies are also on the agenda. This is leading to what many experts believe will be a “splinternet”, dominated by the US and China, with Europe under pressure to choose sides on whose equipment and digital standards it will adopt.
The antitrust debate will also be to the fore in Davos, in a new way. Big Tech has so far been quite successful at positioning regulation as the enemy of innovation, say analysts.
But there is growing pressure from economists, politicians, businesses and labour leaders who believe that corporate concentration itself is hindering innovation and job creation.
The power of the platform companies and whether it should be curbed by antitrust action will be the topic of a high-profile session on Wednesday that will include the FTC’s Mr Chopra, who believes that regulation is not the enemy of innovation but quite the opposite.
As he puts it: “Strong antitrust enforcement with a focus on structural remedies has been proven over the course of US history to lead to a boom in advancements in communities and technology.”
It has been more than 20 years since the Microsoft antitrust case, which many experts believe created the space for companies such as Google to be born and grow.
While analysts say it is unlikely that today’s technology behemoths will be broken up in 2020 — antitrust cases take years — the conversation at Davos is likely to signal who will, and will not, occupy the best real estate on the promenade in years ahead.