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Why Trump and populism are bursting the Davos bubble

Responsive and Responsible Leadership, that's the theme of this year's World Economic Forum meeting in Davos next week. Amid all the political carnage of 2016 from Washington to Westminster, this actually seems to be quite a timely headline. Especially when compared to some of the spectacularly missed opportunities to put the biggest global issues at the heart of the Alpine conflab over the past few years.

Now as important as tackling the Fourth Industrial Revolution was last January, in hindsight, it was nowhere near the key problem for the world's most influential policymakers, businessmen and academics to have as the big theme.

As it turned out, last year was all about the voice of the people, or vox populi, and the smashing of the complacency surrounding political bubbles from the Westminster village to Capitol Hill. Elsewhere, Italy's Matteo Renzi also felt the full force of an angry mood among voters. Across the globe, people have decided they just wanted to "stick it to the man." No matter what or who was up for election, the populous just wanted to upset the apple cart to throw off a feeling of impotency.


A supporter wearing a hat with the Trump campaign slogan, "Make America Great Again."
Keith Bedford | The Boston Globe | Getty Images
A supporter wearing a hat with the Trump campaign slogan, "Make America Great Again."

This year, promises more of the same with huge political battles to be waged in France, Germany, Italy, Greece, to name but a few. Od them, the French political battle looks the scariest for the European "establishment" with Marine Le Pen looming large in the presidential election. The "experts" and pollsters once again say the Front National candidate just can't win but didn't they say that about Trump and Farage as well? Although, as a sidebar, I note Le Parisien has taken the eminently sensible approach of banning polls from its pages, due, no doubt, to the fact that the opinion survey companies were appallingly bad at their job last year. How many Michael Fish moments, as Mr Haldane of the Bank of England put it, will that industry take in 2017?

Once again, amid all this political uproar, the Davos headline theme, Responsible and Responsive Leadership, has never been more needed. Bearing in mind the Davos get-together coincides with the presidential inauguration in Washington there is no doubt that President Donald Trump's impact will be top of agenda no matter what the WEF organizers want to talk about.

For instance, I am involved in several energy-related panels and debates, in addition to anchoring SquawkBox Europe in the mornings, and it seems clear that the Trump's impact on energy policy will be the most important X factor for 2017, an impact which could have more long-term ramifications for energy mixes than the shorter term oscillations created by OPEC and its producer cohorts.

Then-Prime Minister Matteo Renzi speaks after the Italian referendum on constitutional reforms, Palazzo Chigi, Dec. 5, 2016, Rome.
Getty Images
Then-Prime Minister Matteo Renzi speaks after the Italian referendum on constitutional reforms, Palazzo Chigi, Dec. 5, 2016, Rome.

Everywhere you look, Trump's leadership credentials and eventual policies, once they are fleshed out beyond 140 characters, will be under scrutiny. But rather than the elite of Davos sneering at his populism and hoping it will be business as usual, surely this time around the root causes of the status quo being rejected by angry electorates need to be addressed?

Those looking in at the Davos bubble will need more than just lip service and a bland "corporate and social responsibility" whitewash. Let's face it, if the cosy world of politics can be uprooted so unceremoniously and so brutally who is to say that the C-Suite won't be next?


Stephen Sedgwick co-anchors CNBC's flagship program "Squawk Box Europe" and is also CNBC's OPEC reporter. You can follow him on Twitter @steve_sedgwick.

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