For once, Davos attendees had a good excuse for looking bleary-eyed in the morning. They weren’t at the Piano Bar, they were up at 3 a.m. watching Barack Obama's State of the Union address.
President Obama’s speech had the Congress Center buzzing before the first session. But it was a mixed reception. Though there was a lot of talk about his focus on job creation, there was also a palpable disappointment in what Obama focussed on from non-U.S. delegates.
There were big hopes for Obama’s foreign policy agenda, especially in Europe—illustrated by the award of Nobel Peace Prize. Now, to some here, it’s like the president is being forced back to domestic policy at the expense of the global agenda.
Also adding to the sense of isolation, US political representation is considered very thin at WEF this year. But there is still the firm sense that the US economy is crucial to the rest of the world’s recovery.
Guests on CNBC by and large agreed that the administration had to put the emphasis on jobs.
The balancing act that White House will have to do between the withdrawal of fiscal stimulus packages and how to boost job growth will shape the economic recovery, not just in the US, but globally, said Mark Spelman, head of global strategy at Accenture . (Watch the full interview here.)
The administration has made some progress on the jobs front, “a lot of it in technology so far, which is good,” Applied Materials CEO Michael Splinter said. (Watch the full interview here.)
“Now I think we are have to really be thinking about a much broader plan to establish manufacturing,” Splinter said. “Today, the Chinese are getting ahead of us in this area. I’d really like to see the US start to make progress.”
“When we see convenience-store traffic coming back, that’s when we should take great pride that all the policy action (on jobs) worked,” PepsiCo CEO Indra Nooyi told CNBC.
Entrepreneurs want to start hiring, but are wrestling with policy uncertainty in areas like health care, cap and trade, taxes and deficit reduction, Jim Turley, global chairman of Ernst & Young, said. (Watch the full interview here.)
In the U.S., hiring will likely kick in sometime this year, but “it is probably going to get worse before it gets better,” Harvard economics professor Ken Rogoff said.
“For the next two years we’re going to have high unemployment,” he added.
If the government can create an atmosphere that will prompt investment from small, medium and large companies that will drive job growth, Coca-Cola CEO Muhtar Kent noted.