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00:00This is my kitchen table and also my filing system over much of the past three decades. I've been an investor the highest quality of mankind. I've often thought is private equity. And then I started interviewing. Oh I watch your interviews. Those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said fine. I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest Matt Miller ISE out right. Klaus Schwab is the entrepreneur the engineer the economist and the maestro who has organized the World Economic Forum over the past 50 years. And over 50 years it's been a place where the leaders of the world have gathered to talk about global issues. I've been a member of the World Economic Forum Board for a number of years and I've seen up close the extraordinary skills of Klaus Schwab. So Clowes let me ask you. In the end of January for the last 50 years or so the elites of the world the most famous business people the most famous heads of state gather in Davos to talk about various global issues this January. Is that going to be possible. Yes. We've come together again during so usually Davos week. But of course the real true form. It's so important to look at the agenda of 2021 and to shape see a trend. The odds are costs floats but civilian meeting is not enough. So we combine it with a meeting where our people are really physically we to meet again later in May. Hopefully vaccines and focus and testing we allow us to do so. Now last year President Trump spoke. And you've had Xi Jinping in recent years you've had Rodham and Putin president of France or the chancellor of Germany. Leaders from all over the world to get these leaders do you have to call them and say you're personally invited or do they call you and say I want to come. No. Usually his presence is the result of a long goal of friendship. In certain cases or at least relationship. Just look at I think a case. For example Mrs. Merkel and Chancellor Oh Mrs. Merkel at a time when there was a fall off the wall and wiser ways ability they recruit was really engaged and essential in chairman reunification because Chancellor Kohl and his East German counterpart met the first time in doubles and decided to go ahead with the unification but not some time. So while a young member from eastern Germany appointed to the cabinet as environmental minister and we made her a young global leader and she came regularly to dabbles and so out of let's say his first invitation I think a lot of participation has developed over the last year. And I could go on and on. Usually some people who are coming to Davos are part of this. What I would call Davos community of regulars. So all the famous people that have come to make speeches. Who was it that drew the biggest attention of all the people you had. I think it's difficult because it was always related to specific timing when someone came. For example when President Trump came he was the first year in the office. But for me the most important and also most memorable participant certainly was Nelson Mandela. So plus you've got a lot of prominent people coming business people government people. Do they call you some time and say my hotel is not adequate or I need more passes or one of the complaints. Or how do you shield yourself from all these complaints that people might make about they need a bigger hotel room or they need more entourage passes or something. Because most of my race. Most of those people I'm in touch are more on the intellectual basis on a political basis on a conceptual basis. So fortunately. Sorry don't always stay up to call me if sir. Such matters. But they called my stuff and really insist because Tbilisi's is a place for skiing as a hook that infrastructure is not like in a big city. But I think everybody over time now accepts what is important is the personal contact. See frank exchange of ideas. So you make certain sacrifices in terms of your personal conflict. Why did you pick Davos. There are many great cities in Switzerland. Why didn't you not do it in Geneva where you were living or why not some other resort in Switzerland. I want to apply to big city. I wanted to create a true global village where people meet on the streets. It's that once is a village Davos that's a necessary infrastructural in terms of hotels and also a great Congress house. So for those who haven't been there how do you get invited to go to Davos every year. Who gets to go. You have to be a decision maker is in politics or in business. But since if civil society I mean in addition we invite always young people of course the media scientists. So it's a to middle of global stakeholders which means of all walks of society. If somebody is watching you and says I never been invited to Davos I'd like to go. So I just send a letter to Klaus Schwab and say I'd like to come. I would be selected because I'm always curious about new people. And as an example I just constantly e-mail. I don't know where he has my email address from. From a young girl in 16 years old in India who has done extraordinary things to help her community in terms of practical approaches to deal with Siham. I have mental issues particularly with plastics. So we have a certain open house for everybody who has innovative spirit because we want to shape the future and let's not forget we can shape the future in a positive way. If you have also new innovative ideas now some people say what Davos is is for the elites. And every year when Davos occurs the end of January you get articles in newspapers saying this is where the elites are gathering. How do you respond that people say it's just for the elites of the world. Yes of course. All I see top decision makers are in Davos but it's only half of the tools you have. In addition many people not really well known particularly not known to the media. I just give you some examples. I invited Mrs. are home when she still was a member of parliament. We invited people like Mandela. I was one of the first visitors to see him when he came out of prison in 90. So I bought him 92 to Davos. It was remarkable historical event because it was the first time he came together with us at some time. President Clark. And it was demonstrations of apartheid as stopped in in South Africa. So was that many of those people young. Not very well known but social some people who shapes the future. Let's talk about your background first and how you came to create what's known as Davos. So where did you grow up. I grew up pretty near a middle sized town just north of Switzerland in Germany. And I actually experience still some holes of road wall to I remember how I was sitting with my teddy bear in our shelter. But we were actually fortunate because my father was working for a Swiss company and was also active for the International Red Cross. So we could cross the ball though at any time between Germany and France and Switzerland. And what struck me and what probably influenced my whole life was to costs a kind of line and artificial lines Waldo between Switzerland and Germany. And on the one side so was peace. I don't see as a side. So whilst the wall I think it was a very important element for me and a tribal to devote my life to dialogue to reconciliation to working to yes. Or in order to solve issues. And so you went to school then in Germany and and in high school in Germany. Yes I went to high school in Germany but son studied in Switzerland. I did at the same time a studies in mechanical engineering but at the same time I studied economics. And I concluded Bose is a master's degree of course and afterwords is a doctorate. And suddenly a fossil felt in order to do like having a year in business you have to go to a Harvard Business School. So I applied to Harvard Business School was accepted. But son I wrote to Harvard Business School and said look to Dean Baker. Look I have two doctorates I want to come to second you immediately. And he wrote back no way. So what happened afterwards. I found a school in ZA at sometime. We didn't have C Internet yet. It was a big catalog. I founded a center which was called Tower Center and today's the Kennedy School. And I discovered if you do it if you accept it it's a little center. Central Ukraine costs fetches every ruins a hobbled system. So that's what I did. Ike. Richard me with the Kennedy School went to all the classes of Harvard Business School. Second deal and suddenly I got an invitation from Dean Baker to have tea with him in this little president's house. And he said you are the first one who outfoxed our system from now on cos Richard's thing will only be possible for two courses offered two classes. But for me since here at Harvard it changed my life because I met also people like Henry Kissinger or John Kennedy's called Blaze and I became much more interested in political general economic societal problems. So after you've finished at Harvard you came back to Germany or Switzerland. I got a phone call from a famous Swiss industrialist Mr. Schmidt Hymie. And he told me look you have a Hollywood experience. I just welch to companies want 10000 people. Company is a nasal big industrial groups a salsa group which still exists. Why don't you come and you are responsible for some nurture. So I read through a hard school because I had to lay off people. But after two years let's say the chop was more or less finished. And I asked myself what to do now. And I got an all farms University of Junior right to do teaching. And I felt it was all the academic experience. I have accumulated business experience. I should spend one or two years teaching at the same time. I got an offer from a former chairman mushing building association. You have been. How would you have the business experience. Why don't you write a book for all members on modern management. So I sat down and ask myself what is actually the practice of a company and sets. When I came up with C stakeholder concept which means that A is not just an economic unit but a social organism and it has to serve all souls who depend on the company who have a stake in the company. Like so people working inside companies a community that is active in So Central's Subic let's say beginning actually of CWC idea because the WS idea is so stakeholder capitalism. So stakeholder responsibility. So you're back at the University of Geneva you're teaching economics. Is that what you're teaching. I was teaching actually leadership and corporate management. And my son as a professor of ISE I should say frankly a little bit bored. After all the previous experience I had witnessed his book Son I felt why not to create the platform where business leaders could meet so stakeholders which means political leaders but also outstanding voices of society. So I got I had made some savings and I got some money from my parents. And that's how I started see Dabo as a platform which is now call the World Economic Forum. And actually I incorporated it immediately as a not for profit foundation because I recognized if I wanted to attract governments it cannot be a for profit profit making venture. So. So had you made it a for profit venture you think it would not have become as big as it has become. No certainly not because now we have the trust of everybody because people know we are serving a purpose and we are not serving our own interests. What year was it that you had your first conference. It was 1971 and several. Four hundred forty four people. And I actually I I hired one employee because I needed some experience in in how to handle a confluence. So that's how I met my wife. She was my first hit and my first collaborator. So you've now been married for how many years. Next year it will be 50 years. David 50 years. OK so I have a big party at Davos to celebrate the fiftieth wedding anniversary. No we are more let's say a private family. I think we will do it. We married in a very little church in Mountain Valley which can out let's say give room to walls and probably 20 30 people. So we will go back simply to a church. If if Kuwait allows us to do so what is it you're most proud of having created over that 50 year period of time. It's a gathering place or a network of community. What is it that makes you most proud of what you've done. I'm personally very proud. Maybe as an academic said stakeholder capitalism is now broadly accepted. What was it that propelled Davos as we're calling it now our World Economic Forum to go from a four hundred and forty four person event to a global phenomenon. What was it that actually changed things that made it so popular and so important to people to attend. I think if I look over the last 50 years it is see a conviction that some big issues in the world need to call up about TIF approach. Business has to interact with government leaders. But also if you want to plan long term you have to know how customers feel how a young generation feels. What experts are thinking so double as it became a place where you really could absorb what's the future will bring you. I think intellectual or contextual intelligence as I would to know what's going on not only now that what will happen in the future to to connect the dots became more and more important for business leaders when they looked at their long term strategies over the years the 50 years or so have there been one or two or three events that have happened at Davos where a global leader of one country met with a global leader of another country and actually as a result a peace agreement broke out or something like that happened is that happened very much. It happens for example the very critical moment 30 years ago we prevented probably a war between Turkey and Greece even if unfortunately we didn't. So I mean one city. We will see only platform for many deals. Which part. Israeli leadership and the Arab leadership to ghazal in Davos. As you know David we try always to be a platform of good services. I would even say insists this pests this tradition because like Switzerland's the World Economic Forum is independent impartial and non-political. So many people that build organizations like yours has been over 50 years now. They want them to continue forever. What do you hope will happen subsequent to your not being the executive chair. Will it continue or can it not continue without you. I have built a very strong governance structure not only with Sebold of trustees but also is a managing Walter. So Form is now an organization which has offices around the world in China Tokyo the twice. And also we have all of Central Falls of false industrial pollution in San Francisco. I think so many capable people and if something happened to me I think Spirit would survive. What is it you're most proud of. Having created over the 50 year period of time it's a gathering place or a network of our community. What is it that makes you most proud of what you've done. I think there are many many examples where we took the initiative for we will find did a solution. I'm presently very proud. Maybe as an academic said stakeholder capitalism is now broadly accepted and has been even in Zico warned a crisis shown speaking your ball more robust a model for the business compared to one company which is only aiming at short term profits per class. Now when you call somebody any head of state in the world or you email anybody does it take more than five minutes or two minutes or a minute for you to get a call back. Because you know everybody knows everybody wants to talk to you. How hard is it for you to get anybody on the phone. I assume not too hard. I would say it's not too hot but certainly an octave is in a minute. Sometimes it takes a week. That certainly most people see. I have met I lead a poverty allowance of gold we exception of the last pope. I try to take out of all those meetings. So very best. And David if I may. When you meet. So. People you ask yourself what is actually what what what makes a leader today. I have a very simple definition. It takes brains so heart and muscles. Now Spain stands for professionalism. You have to know what you are dealing with. See. So stands for having a compass with gifts the directory maybe a vision. It's your values. And so heart is for passion. You have to be passionate about what you are doing. And so muscles is for being able to implement your ideas your wish and to translate your values. And I have to say when I look around in the world all the leaders I have met. So actually only a few who respond to all four criteria. But again some person who is outstanding. The best role model is certainly Nelson Mandela. Well I may just conclude by saying I've met a lot of great leaders as well. But I would also say one that I know who has brains so heart and muscle is Klaus Schwab. So congratulations on what you have done Clowes. I hope you're very proud of what you built. And I look forward to seeing you not too long from now. Thank you very much David.

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The David Rubenstein Show: WEF Chairman Klaus Schwab

Klaus Schwab, founder and executive chairman of the World Economic Forum, describes how he created the most high-profile gathering of global leaders more than fifty years ago and what he hopes his legacy will be. He appears on the latest episode of "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded on Nov. 17, 2020. After this recording, it was decided that the World Economic Forums' next annual meeting will be held in Singapore in May 2021. (Source: Bloomberg)

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