World Economic Forum Founder: This Is the Most Disruptive Moment in Human History - Klaus Schwab

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1:47We are losing a narrative which has guided humankind since its beginning. It's the narrative that you are here, you owe your existence also to prepare a better future. If you go back to the agricultural society, even to the beginnings during the whole time of the industrial society, there was this drive to create a better world for the future. Today, with all the crisis which we have, with the multitude of problems we are confronted with, I think we have become much more egocentric on an individual and also on a national way. And I think we have to think about how we recreate this narrative. Welcome to Open Book.

2:35I am your host, Anthony Scaramucci. Joining us today is Professor Klaus Schwab. He is the founder of the World Economic Forum. He's got a couple of books out, a couple of brilliant books, Thriving and Leading in the Intelligent Age, Longevity and Retirement in the Intelligent Age. Of course, we can learn a lot from the professor on both of these subjects. It's an honor to have you. You've spent your life bringing together leaders from business, politics, and science, sir, and civil society. But before we discuss the book, The Intelligent Age, tell us a little bit about your origin story and a little bit about the formation of the World Economic Forum, which has become this brilliant platform for leaders and diplomacy.

3:24And, you know, you're one of the people that generationally has furthered the peace process, sir. So let's talk about the origin. Let's talk about the idea that you came up with and why. No, I had, Anthony, I had a very good and fast development, professional development in my young ages as a professor. I was the youngest professor in Switzerland, but also in business and in public affairs. And I wrote the book, I was asked to write the book by the German Business Association on management and on the modern management and I was thinking about the purpose and I actually described for the first time what is called today's the stakeholder concept.

4:18And it was at a time when, of course, you had Milton Friedman presenting his views that the business of business is business. I felt no business has also social responsibility. So, I wrote the book, it was a success, and then I felt I should create a foundation to promote the stakeholder concept. And that was the origin of Davos. And of course, I never dreamt that out of an idea a very impactful organization would come out. So I'm very grateful for the support I had by so many of our partners and so on who embraced this philosophy. Klaus, a half a century ago, the world was deeply divided by ideology.

5:10You had the Cold War. You had the tension with China, Russia, the United States, Western powers in general. How were you able to thread that needle and bring these people together at that time? What were some of the thoughts that you had there? I think despite all the differences, there's always the need to exchange ideas, even if you are in a controversial situation. So, what I created was a platform which was based on open dialogue, but also on showing mutual respect. And that was the basic principle. It worked already in the Cold War time. Particularly, we played a big role in the reunification of Germany, in the integration of Eastern and Western Europe and so on, and also in other parts of the world.

6:08So that was the secret, to really provide a trusted platform for dialogue. You know, I've been to the – I was going back through my career. I originally got introduced to you by Michael Dell, who was on your board. Michael's one of my early investors, and I started going to the World Economic Forum in 2007. I've also came with you to China on more than one occasion. And I've never left the forum without learning something, meeting new friends, having a good time. Tell us a little bit about the editorial process. When you step back and think each year of the programming of something like this, what were some of the thoughts that drove the editorial decisions?

6:57No, you are right. Davos, I think, was successful because it was not just a platform, a transactional platform for business or for meeting government people. It always, in my opinion, had to serve as a compass, an intellectual compass and a moral compass. So, I spent a lot of time to figure out what the future will bring and to put it on the program of Davos. and we created also some new concepts like the concept of social entrepreneurship, the concept of public-private partnership, which was not very well known, or I take also this notion of the fourth industrial revolution, which I coined, where I said we have to prepare ourselves, and it was already 2016, for a completely new era where artificial intelligence terms of us or technologies will completely change our lives so so i and i've you know and i've directly benefited from that uh let's go to the book thriving and leading in an intelligent age it reflects decades of engagement with these leaders across a lot of different sections but once again mankind womankind we're at a crossroads again where we have human and artificial intelligence that's going to deeply impact the political world and the economic world.

8:27When you look at this now, what is your message? What is your synthesizing message for world leaders, both business and political? I think we have to go back 200 years. 200 years ago, we had the transition of the agricultural era into the industrial era. So, we suddenly had locomotives, we had electricity, and so on and so on. Now I would say the change which is happening now is as serious and as impactful as it was in the tradition from the agricultural to the industrial age. So I wanted to coin an expression for it. It's not just artificial intelligence, it's also quantum computing, it's life sciences and so on, which will completely change our lives.

9:26So I feel similar to the transition we had 200 years ago, we have now a life-changing, system-changing transition from the industrial age to the intelligent age. And it will affect all aspects of political, economic, social, technological, and also environmental dimensions. I feel like this age of AI is not fully understood. And when I read your writing, I feel you have a good grasp on it. So tell me, in your opinion, Klaus, what is misunderstood about this evolution that's taking place right now? What concerns me most is, of course, we use now ancient AI to provide us with advice. And in many ways, we start to make our lives dependent on ancient AI.

10:26So, for example, you have now ancient AI which communicates with you, provides you with advice if you have serious mental problems. And what concerns me and what disturbs me, there's always a positive and a negative side, but ultimately, ultimately, what is behind the algorithm should reflect our human nature. and you have seen in the book, I insist again and again that actually we should use the evolution of the artificial intelligence as a reminder or as a wake-up call for what actually it means to be human. If human doesn't mean anymore to be intelligent, then we have to define humanity in different ways.

11:25It's in terms of empathy, it's in terms of love, and so on. So we have to make sure that when we create those agents, we integrate those dimensions so that the effect is a positive one and not a destructive one. Let me ask a follow-up question directly related to this, Klaus. The superintelligence is upon us. It's eminent. Is it five years from now or 10 years from now and of course describing super intelligence as being something exponential for these computers in terms of their ability to pick up information and to potentially end up controlling things. What do you say about that? What are your concerns there and how can we allay those concerns?

12:11We can avoid the negative aspects, which means to be dominated by the machine by building into the algorithm, into the machine learning process, into the data, the necessary protective measures. My big concerns at the moment is that we are not able to do so. The world, I put it into a broader context at this moment, is so absorbed by what we call a multi-crisis. And when we look around what are politicians doing, what are – to a certain extent also the leaders of companies and society – we are not sufficiently thinking anymore long-term. So my big fear is that we do not in time create the necessary protection against those new technologies.

13:17You've experienced this your entire life. You have allies and adversaries globally. We've got the good guys and the bad guys, Klaus. We both know that. There's a combination of them in our lives. How do you prevent the bad guys from doing nefarious things with AI? I think there's no, let's say, unfortunately, no recipe which is generally valid. But I have for me the notion of constructive optimism. That's one of my life principles, which means you have to believe that the future will be better than today, but then you also have to make sure that it is better than today. So you have to take a constructive attitude.

14:08But the problem is today everything is integrated into a system with many different dimensions, political, economic, social, and so on. So you need actually cooperation. You have to bring the different stakeholders together to determine those guidelines, those protective measures which we need. So dialogue, dialogue and dialogue related to the truth is not to let's say what we believe only. We have to first establish the truth, and then we have to have dialogue and to find the optimal solution, not in our individual interest, but in the interest of the collective. And here, Anthony, if I may add, my next book will actually be restoring truth and trust in the intelligent age.

15:10I think it's very important, and also the checks and balances that you describe are also usually important because we still have the power to control those things you exactly still still it's important because it awaits us slowly yeah exactly we don't want it we don't want it to get ahead of ourselves i want to i want to go to one of the central themes of the book which you described as a purpose-driven leadership and so So, you know, this is a fascinating question. I've always been dying to ask you this, and so I want to ask it to you now. What distinguishes leaders? You've met so many different leaders over the course of your career, class, political, business, civic, academic.

15:53You know right away when someone's a purpose-driven leader, when some person is a transactionalist. So what distinguishes these people, and what are some of the cues? I, of course, I have also taught leadership for 32 years at the university and have read tons of books about leadership. But for me, it comes down to a very simple concept, and I describe it in the following way. A true leader has soul, brain, heart, muscles, and nerves. So you may ask, what is it nonsense? No, the soul stands for purpose. And actually, purposing includes also a value-driven vision, how you want to shape the future.

16:46That's the soul. But then you need the brain, you need intelligence, and today you need particularly systemic intelligence to bring all the ends together. And then you have to have the heart. Today, you need empathy. You have to be respected, not only to be respected, people have to feel a connection with the leader. Finally, you need muscles because you have to translate your vision and your purpose into action. And ultimately, you need nerves. You need good nerves. You need resilience. And for me, what is important, a true leader, he may not excel in each of those, but he needs each of those dimensions.

17:35We have a tendency usually to see someone who excels in one of those five dimensions and then to be very impressed. But my experience of life is, there is no leader which doesn't incorporate at least a significant level in each of those five dimensions. You know, it's such a good statement. It does tie into the other book, which I want to ask you about as well, which is the longevity and retirement in an intelligent age. And I will say this, Klaus, you're a role model of mine because I feel like your best days are ahead of you, Klaus. I mean, you're as vibrant and as energetic as ever before. And so tell me what the secret is.

18:21The secret, I think, is always to be curious and to have a positive attitude towards life. You know, Anthony, like everybody, I also went through some challenges in my life. And I have now the principle, never lose time with something which is negative. because it doesn't help you. So I think that's the foremost secret. And of course, to have, to some extent, a disciplined life. Of course, I like my wine, and I like from time to time a whiskey. But in principle, I know you like wines, but the general attitude is to have a certain life discipline. Yeah, I mean, there's no question. I mean, one of our personal stories together, which I'm going to share here on our podcast, is that when President Trump was elected to the presidency, you actually reached out to me and I brought you over to Trump Tower to meet him.

19:29I think it was the first time you had the opportunity to meet him. And of course, now he's a frequent attender to the World Economic Forum. We'll be coming again this year. And I had an unceremonious firing from there. But like you, I took things in stride. So give some life coaching here, Klaus, for people that go through ups and downs in their lives. What do they need to do to maintain that positivity? I think what is important if you are in such a situation, not to spend too much time on what worries you, so to find immediately another challenge. And for me, whenever I was in such a situation, I started to write a new book.

20:19So my present energy in writing, let's say, several books in a relatively short time comes from two angles. First, it helps me to overcome challenges which I may have had. And second, I think we speak a lot about artificial intelligence, about the intelligent age, and we do it relatively in a abstract way. So, what I want to do with this series now, looking at retirement, then I have another book in preparation looking at universities in the intelligent age. What I want to do is to provide general people with a practical knowledge how they can master this transition into a completely different world.

21:16Makes sense. I'm a big admirer of Warren Buffett turning 95. I'm an admirer of yours. uh only 87 so you're only 87 you're you're right you're my mom's age klaus and she's as she's as sharp as you klaus trust me she's she's still my boss klaus okay so so my my my question to you though uh is a little bit of a different angle uh because you have to continue to learn There's a neuroplasticity about you. And so how do you, what do you recommend to people in terms of their reading, in terms of their interaction with others? I mean, you've done such a great job of this over your life. So impart some wisdom here.

22:03No, I think today with artificial intelligence, you can satisfy your curiosity much faster. So, if I compare myself with five years ago or ten years ago, I'm much more than sitting behind my desktop or my iPad and looking at issues which I didn't understand in my life. And now I get them explained in a very convincing and reasonable way, and I find it fascinating. I learn about things I never would have thought of to become not a specialist, but just take for example the issue of retirement. I had to look at the financial issues. I did not know about any medical aspect of longevity, so I had to do a lot of research, and I did it all via artificial intelligence.

23:10And I learned a lot. And that's great satisfaction, because you feel when you get older you don't diminish your knowledge level, but you increase your knowledge level. And that's maybe also the hope for the future, because artificial intelligence might provide us with the means to really individually and collectively to enter a new age of creativity. I would nearly call it a new renaissance. Yeah. Yeah. And listen, I mean, and that's our hope. And that's also the all of that innovation will lead to great economic progress and hopefully economic abundance. But, you know, in my reading of your work, there's a clear moral thread.

23:56And I'm going to make a statement and either agree or disagree. But I feel like you're saying to us progress must be inclusive. It must be ethical. It must be humane. And you've dedicated a lifetime to this sort of cooperation. So the question, sir, is what worries you most about this global moment and the time that we're living in? I think that we are losing a narrative which has guided humankind since its beginning. It's the narrative that you are here and you owe your existence also to prepare a better future. If you go back to the agricultural society, even to the beginnings during the whole time of the industrial society, there was this drive to create a better world for the future.

24:56Today, with all the crisis which we have, with the multitude of problems we are confronted with, I think we have become much more egocentric on an individual and also on a national way. That makes international cooperation so much more difficult, by the way. And I think we have to think about how we recreate this narrative. And here I have to say I'm quite optimistic. I have created also what I call this Global Shapers Community, a special foundation which has now over 10 ,000 young leaders in its community and in over 500 cities around the world. And every time I'm traveling and I meet those young leaders, I'm going out and I'm impressed.

25:54We are today in a situation where we have to learn much more from the young. And I give you an example. If I have a problem with my technical devices, I'm not going anymore to a specialist. I go to my grandson and he has a solution, let's say, real time. time. So my message is let's believe into the future, but in order to believe into the future we have to keep in mind the collective. We are always part of a community. We are not alone. And if we want to prosper, we have to take into account that the other people around us prosper also. I know it's a platitude and it's a common place to say, but there are many practical steps you can take in order to make this objective a reality.

26:58I agree. And so let's take this new generation, Klaus, that you and I are not a part of. Let's take the generation that has been born after the millennium turned. So the year 2000, these people are now 25. What's the message for these young people? When we look at the future of those young people, I always think of my grandson, which was, of course, born after 2000. And if I take the life expectancy and I take some assumptions which seem to be very valid, he will still be alive when we enter the 22nd century. So a long time from now. So, we have to create a future keeping in mind how will actually this future look like.

28:06And here, of course, technology comes in again, because what we are seeing now is this fourth revolution, or I call it the intelligent age. I think, and it's not only artificial intelligence, it's all the other dimensions. And I come back to my belief, it may be dreamier. We have to make sure that as we used in a certain way the Industrial Revolution to bring billions of people out of poverty, that was the positive effect. of course there were negative effects. So we have to think how can we use this technological revolution to create even an uplifting again for humankind. And here the young people can play a big role, but we have to integrate them already now into this process.

29:05You know, I think it beautifully stated, you know, I feel like globalism, Klaus, I feel like globalism has gotten a bad name. I feel like people have used the internet and they've used propaganda to hurt the cause of globalism. But when you step back and look at a globalizing society, we have lifted billions of people out of poverty. And we've also helped to, what you've dedicated your whole life to, we've helped to bring people together and to not dehumanize each other. And so when we're in each other's presence, We realize how much more we have in common with each other as opposed to what we have against each other from a tribal perspective.

29:51And so I applaud you for doing that and the dedication that you've had with this cause throughout your life. So we're at the end of this podcast. So what my producer and I did is we took five words, Klaus. And I'm going to say the word, and then I would like you to come up with one or two sentences. It's sort of a raw shot test of your work. Okay, you ready? Yes. Okay. And so the first word, I'm going to say the word leadership, and you think of what? Leadership is stewardship. And stewardship for what? For nature and the other human beings. Okay. I say the word longevity. And what do you think of?

30:37a reasonable conducting of your life peace say the word peace to honor mutual respect and to sit together and to find the common ground okay this is uh your life's work here this uh the fourth word is three words world economic forum i say those three words I say the WEF, you say what? It's a necessity for the modern world to have a platform where all stakeholders of global society could meet. It's so true, Klaus, but you were the visionary for that. You were the one that got that in place over half a century ago. Okay, this is the last word, and I'm going to give you the last word. It's actually two words.

31:33I say Klaus Schwab, you say what? I would say hopefully—you embarrass me with this question. I would say it should be more than a legacy. It should be a compass, a moral—and maybe I'm not modest enough here— But it should be a moral and intellectual compass for the future. Well, listen, I put you on the spot there because that's how I see you. And the title of these two books, it's the Intelligent Age series, but the title of these two books are Thriving and Leading in an Intelligent Age, Longevity and Retirement in an Intelligent Age. They're both written by Professor Klaus Schwab, who's the founder of the World Economic Forum and so many other things.

32:32and somebody I consider a friend. And I'm very grateful to you for the relationship that you and I have had over the years. And I've learned a lot from you and from the forum. And so thank you so much for joining us on Open Book here today. Thank you, Anthony. You were always also a role model of a very engaged person in our activities.

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