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What can you expect from Davos this year?

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A leader’s guide to the Davos 2025 agenda

Leading Off

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Leading Off

Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

The World Economic Forum’s annual meeting in Switzerland, also known as Davos, will convene the world’s leading decision-makers next week to discuss the most pressing issues of today—and tomorrow. From exponential technology growth to geopolitical uncertainty to sustainability, there’s certainly a lot to cover as leaders explore the future of business and society. This year’s program will incorporate these and other topics in focusing on five interconnected priorities: reimagining growth, industries in the intelligent age, investing in people, safeguarding the planet, and rebuilding trust. This week, we will preview the topics that will be top of mind at this pivotal gathering.
An image linking to the web page “Building AI trust: The key role of explainability” on McKinsey.com.

Companies are investing heavily in software, tools, and platforms powered by AI, hoping to generate value from the technology’s potential to unleash massive productivity growth. But their enthusiasm is tempered by worries about inaccuracy and other AI-related risks—meaning that organizations need to build trust in their AI systems to capture the full potential value. “After all, if customers or employees lack trust in the outputs of AI systems, they won’t use them,” note McKinsey’s Carlo Giovine and Roger Roberts and their coauthors. Leaders should evaluate the benefits and costs of investments in enhanced AI explainability, an emerging approach that helps organizations understand the inner workings of AI-powered systems and monitor the objectivity and accuracy of their outputs. “This is an essential step as AI initiatives make the difficult journey from early use case deployments to scaled, enterprise-wide adoption,” the authors say.

75%
An image linking to the web page “Procurement’s sustainable (r)evolution” on McKinsey.com.

Organizations often struggle with balancing sustainability and profitability, especially with rapidly changing market conditions and the growing complexity of global supply chains. The long-term solution is to embrace the circular economy, Dominique Lebigot, chief purchasing officer of LVMH Wines and Spirits, says in an interview with McKinsey senior partner Mauro Erriquez. Corporate procurement leaders can play a major role in establishing this new economy by developing an ecosystem of suppliers that are committed to waste reduction and economic efficiency. “We have to put our collective intelligence into organizing the circular economy—selling services and functions, not products, and then recycling, reusing, and reintroducing those products,” Lebigot says. “It’s the only way to optimize and get a return on investment for manufactured products as soon as possible—limit extraction, and then reduce the overall cost.”
An image linking to the web page “Young Global Leaders on Davos 2025” on McKinsey.com.

The priority themes for Davos 2025 are not the only critical issues that deserve attention, according to members of the World Economic Forum’s Young Global Leaders. McKinsey asked past and current members of the group—which includes professionals in business, media, nongovernmental organizations, and not-for-profit organizations—to share challenges that should also be discussed at Davos. And they didn’t hold back, citing the value of science and medicine, autonomous warfare, and women’s health, among other priorities. For example, Mina Al-Oraibi, editor in chief of The National newspaper in the United Arab Emirates, says: “We need a commitment from public and private sector leaders to respect international law and find ways to stop its violation. If leaders in various fields cannot agree on the basic rights of the most vulnerable, particularly those in conflict, they cannot claim to live up to their responsibilities in improving the state of the world.” Take some time to read more from these leaders about the challenges shaping our world.

Lead by adapting to the intelligent age.

— Edited by Eric Quiñones, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 02:05 - 13 Jan 2025