60 Minutes: Behind the Scenes at Davos
It's hard to tell which way the economy is heading: unemployment eased a bit but now the Dow is off several hundred points. If you'd like to meet the people who are supposed to repair the state of the world or give a piece of your mind to the bankers who helped get us into the mess, we can tell you where to find a lot of them, all in one place.
It's a tiny town folded into the Swiss Alps called Davos, a village where you could bump into Bill Clinton, Bill Gates, the head of Google and the queen of Jordan waiting in line in a coffee shop.
This year marks the 40th anniversary of what may be the most important meeting on Earth, the World Economic Forum. A lot of reporters cover the forum but few get inside.
Last month, "60 Minutes" and correspondent Scott Pelley were given the kind of access that is usually reserved for kings and captains of industry.
Opinion: One Economist's View of Davos
Web Extra: The Davos Glance
Web Extra: Camp Billionaire
Web Extra: Google & Davos
Web Extra: Defending Davos
The world economy is traveling a dark and troubled stretch. But if there's light at the end of the tunnel, you might see it first in Davos. It is the scene of the world's summit meeting, five days, each January, when 2,500 capitalists, globalists, and futurists discuss the fate of Earth's other seven billion inhabitants.
Within minutes you'll run into billionaire financier George Soros, Nobel Peace Prize winner Elie Wiesel, computer tycoon Michael Dell and Her Majesty Queen Rania al-Abdullah of Jordan.
"I was down in the lobby of the hotel last night and I noticed that you were talking to President Clinton and while you two were talking, Bill Gates walked by. I mean it's that kind of place," Pelley remarked to Queen Rania.
"Well, it is and I find that a lot of work gets done in corridors, in the lobbies of the hotels and in the elevators. You just bump into people; we're all stuck together in this place and a lot can get done when you see people from all walks of life," the queen replied.
Asked why it is important, she replied, "Because you have a high concentration of some of the best minds in business, technology, politics, all together in one destination, far away from everything else."
At 5,000 feet, Davos is Europe's highest town and arguably its best ski resort. But the 800-year-old village has only 13,000 residents, one road in and out, and no airport. It's a tight fit as skiers make way for the high security capital of capitalism.
"What is this your Super Bowl?" Pelley asked Martin Wolf, a columnist for the Financial Times of London.
"Yes, yes absolutely, it's the place where everybody that I ever want to meet in over a whole year is gathered together," he replied.
Wolf delights in watching the high and mighty squeezed into Davos.
"There aren't enough tables in restaurants, there aren't enough hotel rooms," Pelley remarked.
"Oh, that's part of the thrill. It is the only place where these really powerful people are made to be very inconvenienced, just about the only place in the world that really rich, really powerful men, mostly men, a few women, can actually behave like normal people," Wolf replied.
"We were here a few days before the forum started and it looked like they were setting up for a rock concert. What goes into this?" Pelley asked.
"Just the program, all the lunches and dinners and hotels, travel programs, security, which is obviously a nightmare. I mean they brought together everyone in the world that the terrorists would want to kill. It is an enormous organizational project," Wolf explained.
They suffer the indignities to attend the seminars of the World Economic Forum -
more than 150 expert talks - on things including financial risk regulation, viruses, U.S.-China relations, and the global economic outlook, plus, rural poverty and life on other planets. At the last minute the forum this year pushed the world's greatest disaster, the Haiti earthquake, to the top of the list.
We ran into Bill Clinton, who flew 10,000 miles roundtrip just to spend a day pitching his Haiti relief campaign. His message to the forum?
"Every person at this forum should ask themselves what they can do and whether they, particularly the business leaders, will they join the business people we have already put together in building a future and we're gonna try to help do it," the former president told Pelley.
"It is worth it to come all this way to be at this meeting?" Pelley asked.
"Absolutely, well, it is if some of them come across, I think so this is where a lot of the people are with the expertise, the capacity, the desire, and the money to make a difference there," President Clinton replied.
He was in Davos because this is where the money is. The business of Davos is business.
"What do billionaires talk about behind closed doors?" Pelley asked Sir Martin Sorrell.
"I wouldn't know, I'm not a billionaire," Sorrell replied.
Maybe not a billionaire, but Sorrell did assemble the world's largest advertising agency, WPP, with 140,000 employees.
"Why is this worth it to you?" Pelley asked.
"To be brutally frank about it, we have a large number of our clients here and a large number of people who are not our clients so from, to use that terrible phrase, from a 'networking point of view,' it is a little like, if I can put it like this, 'shooting fish in a barrel,'" Sorrell explained.
And exotic fish at that - Davos is invitation-only. Corporate memberships cost from $30,000 to $500,000; and then it's $18,000 each for the coveted white badges that grant entry and are worn like jewelry.
"You know, I've noticed that there's something that I like to call the 'Davos glance.' When you meet someone they do not look you in the eye. They look you in the chest," Pelley remarked.
"Well, no. They look you in the eye first, then they look down at your chest. The other thing, they just look over your shoulder for the next one," Sorrell replied.
They are looking to see who else is coming into the room.
The "A-listers" this year included 28 heads of state, and about a thousand CEOs, all lining up to see one man, a little-known German business professor who started the forum back in 1971.
Professor Klaus Schwab greets presidents and rock stars but, as we tried to catch up with him, Schwab said titles don't matter at his forum.
"You have to send your ego home and you re-find it when you come back," Schwab said.
"But not here," Pelley remarked.
"Not here," Schwab agreed.
After 40 years Schwab is still head of the non-profit foundation that stages the forum.
His forum works like nothing else, in part because it isn't formal or official. It turns out people who can't be seen together in public can meet in Davos.
In 1989, North and South Korea spoke for the first time at Davos. When the Berlin Wall fell, German unity started at Davos. And in 1992, Nelson Mandela and F.W. de Klerk began the conversation that ended Apartheid.
Queen Rania of Jordan told us warring factions in the Middle East meet in Davos when no world power can push them together.
"An Arab and an Israeli could run into each other in the hallway of this hotel," Pelley pointed out.
"Absolutely, absolutely and not feel they have to pander to the media or to be politically correct. But they can actually deal with the core issues at hand and God knows we need all the help we can get with the Middle East peace process, because, at the moment, it's still a deadly stalemate and people are beginning to lose hope," the queen explained.
Her Majesty knows strategic territory when she sees it. She has been coming to Davos for six years.
"You're a bit of a pro when it comes to working Davos. Tell me how that happens," Pelley asked.
"A lot of the work is done just sitting in the cafeteria in the congress hall, just seeing people pass by and discussing things," Queen Rania replied. "I enjoy hanging out in the cafeteria. I'm going to do it this afternoon, actually it's fun."
And sure enough that's where we found her, promoting her project - building classrooms for the 72 million kids in the world who have no school. The woman to the queen's right was Melinda Gates, the richest woman on Earth. Imagine what that conversation is like.
Klaus Schwab told Pelley that Davos is where Melinda's husband, Bill Gates, met the World Health Organization and got the idea to give away billions for immunizations.
"They became aware of the need to act particularly in this field. Scott, I have to rush down to [introduce the] Korean President," Schwab said, before rushing off.
How did Schwab pull this together?
"Well I think he had the vision, I mean like everything in life, he had a strong vision," Sorrell told Pelley.
"But he didn't exactly pull this together with the force of his charisma," Pelley remarked, referring to the professor's low-key manner.
"I think that's a little bit unfair!" Sorrell replied, laughing.
"You know what I mean," Pelley said.
"If he'd been a larger-than-life character or personality, which is the sort of thing you are getting at, maybe he wouldn't have been able to do this," Sorrell pointed out.
It turns out there are two sides to Davos - one you see and one you don't. After hours and behind the windows, there are hundreds of private parties where deals are done. We got a look behind the door at a dinner hosted by the executive recruiting firm Heidrick & Struggles.
Davos makes a point of inviting new companies with bright ideas. And this table paired investors with Alan Barton, who has a new way to make building materials out of old tires.
"When you leave here, what are you going to have that you didn't have before?" Pelley asked.
"Plenty more contacts, people you can work with, people you can call, people who have been through the same challenges and might have solved the problems that you're trying to solve," Barton explained.
One of the biggest connections Klaus Schwab ever made was when he first invited a little company with a silly name. Eric Schmidt is chief executive of Google.
"Davos is the one place where all of the pieces of the tech industry assemble. All the telecommunications, all the hardware, all the software. And remember, we all need each other. We never meet anywhere else in the world," Schmidt explained.
"When Google was in its infancy, was Davos important to its growth?" Pelley asked.
"Davos matters to companies at a certain scale. As a small company you get your product, you have a local market, no problem. There's a point at which you need to be able to reach globally. There's a point at which you need to be able to talk to all the other companies. At Davos you can do that. And that was very helpful at the time for us," Schmidt replied.
"It's an accelerant if you will, when you come here to the global stage," Pelley remarked.
"Yes, it's an accelerant. Absolutely," Schmidt agreed.
Schmidt said the coolest thing that has happened to him at Davos was the "Audi Challenge."
One of the few diversions set up for the week is a race track.
"It's all very serious business but there's one thing about being in the room with some of the leading experts in the world…it can be pretty dull," Pelley said, while taking a car for a spin on the wintery track. "So some of the CEOs come out here to the Audi test track to drive insanely on the ice. The Audi people say the CEOs can clear their minds."
But this year no one wanted to be seen having fun given the spin out of the world economy. The talk in a closed-door meeting was about clamping down on the world's banks. Bank regulation was a major theme that wouldn't have drawn much of a crowd a couple of years back.
"Two years ago, there were economists here at Davos who predicted the great economic crisis that we found ourselves in. But it doesn't seem like anybody was listening then," Pelley said to Klaus Schwab.
"It's a little bit like in church. The person who gives the sermon on Sunday, you cannot keep responsible for what the church-goers do on Monday," Schwab said.
Schwab's sermon on the mount is meant to bring social conscience to the pursuit of money; his disciples come to the mountaintop because the world is constantly changing and there may be no better place to make a deal.
Produced by Michael Karzis