Opinion

Cities in the spotlight: Takeaways from Davos 2025

Jan 27, 2025

Cities and how they interact with innovation and sustainability were key themes at Davos 2025 Image: ©World Economic Forum/Pascal Bitz

Jeff Merritt

Head of Centre for Urban Transformation; Member of the Executive Committee, World Economic Forum

This article is part of: World Economic Forum Annual Meeting

The spirit of Davos remains strong, emboldened by a growing set of global challenges and the pressing need to put aside political differences to get things done.
Innovation and creative thinking are thriving, with cities providing a testbed for experimentation and action.
Global CEOs and government leaders are embracing new opportunities for good growth, while also adapting business-as-usual to accommodate a rapidly changing geopolitical context and new social, economic and environmental risks.

In the lead-up to the World Economic Forum's Annual Meeting in Davos this year, tension filled the air. You couldn’t help but feel uneasy and concerned about the state of our fragile planet. Wildfires raged in Los Angeles, missiles rained from the sky in Russia and Ukraine, a humanitarian crisis worsened in Gaza and Sudan. And, of course, lest we forget, a defiant President Trump was taking office in the United States with a mission to shake things up.

As I leave Davos, the heaviness remains – but it feels different, more manageable. There’s an extra spring in my step, bolstered by the unwavering determination of global CEOs and government leaders to forge a brighter future, and a shared recognition that we have a powerful tool waiting for us at home: our cities.

Here are my top takeaways from Davos 2025, which explain why I feel hopeful about the year ahead.

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1. Innovation thrives under pressure

When times are good, we tend to keep innovators at an arm’s distance; we often refer to them as 'disruptors.' Those days are gone. Start-ups and outside-the-box thinking took centre stage in Davos this year as leaders sought our bold solutions for a growing set of global challenges. With national governments struggling to build viable political coalitions and more than 80% of innovations originating in metro regions, we’re entering a new era for cities.

Business and public sector leaders announced the launch of Yes/Cities, a shared commitment to accelerate investments in urban innovation ecosystems with the goal of providing direct support to more than 1,000 innovators by 2030 and helping scale their game-changing solutions across 50+ cities in the next five years.
Prime Minister Tshering Tobgay of Bhutan called on members of the Davos Baukultur Alliance to help co-design the city of the future, with a focus on how mindfulness, happiness and creativity can engender more inclusive economic prosperity. Meanwhile, CEOs from the real estate, engineering and construction, materials and design industries are under pressure to find new efficiencies and think differently to address a growing housing shortage and failing infrastructure.
A new Blueprint for Intelligent Economies was released outlining practical steps for inclusive AI adoption, focusing on innovation, collaboration and ethical government. More than 30 official sessions in Davos looked at how industries are embracing technological advancements to unlock new opportunities.
Resilience remains a top priority for business and government with extreme weather on the rise. The City of Rio de Janeiro announced a new collaboration with the World Economic Forum to help accelerate urban transformation, government innovation and climate adaptation through global partnerships and local action.

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'Rebuilding Trust' at Davos 2025

2. Amid political headwinds, the business case for sustainability stands firm

A few years back, it wouldn’t be uncommon to see dozens of billboards on the Promenade in Davos proudly touting the benefits of ESG (environmental, social and governance) principles as a bedrock of corporate strategy. In 2025, we’ve swapped acronyms and AI now dominates, but the business community isn’t dropping its commitment to climate action.

Leading companies across retail, e-commerce, mobility and logistics announced new commitments and a shared ambition for more sustainable and efficient urban deliveries, while working with governments to embrace new solutions and models that benefit consumers, couriers, companies and cities.
The transition to a nature-positive economy could unlock an additional $10 trillion in annual business opportunities and create 395 million new jobs by 2030. To mobilize financing for the transition, members of the Global Commission on Nature-Positive Cities released a new strategy blueprint in Davos.
CEOs of automotive, transport and mobility companies declared: “the future is electric,” while rallying around the need for greater investment in EV charging infrastructure and increased collaboration to bolster supply chains.

3. Economic growth may be slowing, but new opportunities abound

56% of economists that were surveyed in the latest Chief Economists Outlook are expecting economic conditions to weaken in the year ahead. Leaders in Davos appear determined to prove them wrong.

Egypt announced the launch of a Future of Growth Accelerator to foster innovative, inclusive, sustainable and resilient economic growth in the country. In parallel, Saudi Arabia rolled out a new action plan that aims to unlock and scale new markets that contribute to economic transformation, net-zero transition and the development of cognitive cities in the Kingdom.
Taylor Swift was not in Davos, but the business community has taken note of her recent successes. Generation Z was a key topic of conversation, as was the growing popularity of live events and the experience economy.
Travel and tourism, which employs more than 330 million people globally, has quickly bounced back to pre-COVID levels and is posed for significant growth in the coming years. To sustain its growth, leading companies and global experts outlined a vision to reimagine the sector as a transformative force for good.
Visitor to resident ratios could more than double in the most popular cities, highlighting the need to ensure clear benefits for local communities, the preservation of cultural heritage and the protection of nature ecosystems. Government leaders debated new approaches to advance a new model for good growth.

To learn more about how the World Economic Forum is helping transform cities and local economies, visit http://www.weforum.org/cities.

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