Global Risks

Does Davos always get things wrong?

Forum foresight ... Christine Lagarde warned against inequality at the World Economic Forum Annual Meeting in 2013

Oliver Cann
Our Impact
What's the World Economic Forum doing to accelerate action on Global Risks?
The Big Picture
Explore and monitor how Global Risks is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Global Risks

Kenneth Rogoff may have been joking when he said that the conventional wisdom of Davos participants is always wrong, but even so it provides an opportunity to consider whether this is indeed the case, and if so why. It’s why we devoted a session to it this year.

First, the facts. It’s true that neither a Donald Trump victory nor an UK exit from the EU were regarded back in January with much degree of certainty. But participants weren’t alone in calling the seismic political events of 2016 incorrectly.

One of the reasons, argues Molly Crocket, Associate Professor of Experiential Psychology at the University of Oxford, is that forecasters tend to have a bias towards the material world over emotion when making forecasts. “People often underestimate how powerful a motive expressing one’s world view is: predictions often instead focus on economic self-interest because this is more tangible and easier to measure.”

The answer, says Philip Tetlock, a Professor at the Wharton School at University of Pennsylvania, is to move towards more evidence-based forecasting in the future. But don’t hold your breath: “Any experts would be very hard-pressed to beat a simple extrapolation algorithm. Predicting change is the great challenge and this is where most systems fail,” says Tetlock.

If predicting change is so difficult, some of the forecasts by the Forum or its constituents might not be so wide of the mark after all. Christine Lagarde of the International Monetary Fund reminded a TV audience today that she warned the world of the dangers of inequality back in 2013. Even further back, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, wrote in 1996 of a mounting backlash against globalization, while in 2012 the Forum’s Global Risks Report identified severe income disparity as the most likely risk to face the world in the next 10 years.

A year later, we called out another trend that was well beyond the horizon: massive digital misinformation – or digital wildfires as we called them at the time – warning of the challenge presented by the misuse of an open and easily accessible information system.

Tetlock is optimistic that, over time, systems will be built that are better able to predict change. Even so, both he and Crockett agree that the best way to prevent the anger that contributed to political change is to tackle its causes: feelings of inequality, anxiety and of being ignored.

Watch the Forecasting Failure session at Davos 2017 here

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Global RisksGlobal CooperationEquity, Diversity and Inclusion
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

G7 Summit talking points: From Ukraine and Gaza to the impact of AI

David Elliott

June 18, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum