What Davos Told Us About Today’s Global Economy

Davos underscored the increasing uncertainty shaping the global economic landscape. What are the implications for the Welsh economy and the strategic challenges facing businesses in 2026?

Signals from the global economy

Each January, political leaders, business executives, and policymakers gather in the Swiss Alps for the annual meeting of the World Economic Forum in Davos. First convened in 1971, the Forum has become a focal point for global economic and political discussion. This year’s meeting took place against a backdrop of heightened geopolitical tension, fragile economic growth and accelerating technological change.

The World Economic Forum is often criticised as an elite talking shop, captured by the idea of “Davos Man”: a global class perceived to be detached from everyday economic realities. Those criticisms are not without merit. Yet dismissing the event entirely would be a mistake. Its value lies less in formal outcomes and more in the signals it sends. When political leaders, investors and chief executives converge around a shared set of concerns, it often indicates where policy attention and investment priorities may move next. For a small economy such as Wales, understanding those signals matters.

Uncertainty as the defining theme

While the official programme covered expected themes such as artificial intelligence, energy systems, skills and sustainability, the dominant message emerging from keynote speeches and panel discussions was more fundamental: uncertainty.

Senior figures repeatedly highlighted the difficulty of navigating a global environment that feels increasingly unpredictable. In the days leading up to and during Davos, political leaders and businesses were forced to digest renewed tariff threats from the United States, speculation over territorial ambitions in Greenland, abrupt changes in policy direction, and the emergence of loosely defined institutional initiatives, such as a “Board of Peace”. The pace and volatility of events prompted a recurring question: how should businesses plan investment and strategy when the rules governing trade, regulation and international cooperation appear to be shifting in real time?

That sense of unease was captured most clearly by Canada’s Prime Minister, Mark Carney, who warned that the global system is undergoing a “rupture, not a transition”. Long-standing assumptions that underpinned the rules-based international order, including stable alliances, predictable trade relations and effective multilateral institutions, are weakening. In their place, business leaders are increasingly confronting an environment shaped by populism, protectionism, and a more explicit form of economic nationalism.

The implications of this shift were widely discussed. Supply chains are already being reshaped as tariffs and national security concerns disrupt traded goods. Financial markets may not remain immune, given the historical tendency for trade disputes to spill over into investment decisions and capital movements. Consumer behaviour is also changing, with growing evidence that domestic brands are increasingly trusted over foreign ones. At the same time, governments are becoming more interventionist, framing greater state involvement in markets as both economically protective and politically necessary.

Yet Davos was not defined solely by pessimism. Several contributors cautioned against focusing only on downside risks. The US economy continues to attract significant investment despite political turbulence, and advances in artificial intelligence, infrastructure and energy systems are creating new commercial opportunities. For businesses, the challenge is not choosing between optimism and caution but learning to operate across a wider and less predictable range of possible futures.

Positioning the Welsh economy in an uncertain world

For the Welsh economy, the messages from Davos point less to specific policy prescriptions and more to how businesses and institutions position themselves in an environment shaped by uncertainty.

Adaptability is becoming a core economic asset. Welsh businesses cannot insulate themselves entirely from geopolitical shocks, but they can reduce vulnerability by broadening market exposure, strengthening supply chain resilience and avoiding excessive dependence on any single trading framework or policy regime.

Technology also features centrally. Artificial intelligence and digital adoption are no longer abstract discussions confined to international forums. They are becoming core determinants of productivity and competitiveness. For the Welsh economy, the priority is ensuring that existing firms have the skills, infrastructure and organisational capability to adopt new technologies effectively and at scale.

Skills and workforce flexibility are closely linked to this challenge. As economic disruption accelerates, the ability to retrain workers and redeploy skills will shape how countries respond to shocks and sustain employment. This places increasing importance on coordination between employers, education providers and government, particularly in an economy such as Wales where regional and sectoral dynamics matter.

Energy and sustainability remain part of the picture. Wales has recognised strengths in renewable energy and advanced manufacturing, both of which are increasingly shaped by decarbonisation requirements and changes to energy systems. Converting those strengths into lasting economic advantage will require consistent policy, planning capability and sustained investment in supply chains, rather than ambition alone.

Davos 2026 did not provide a roadmap for Wales, and it was never going to. What it did provide was a clear reminder that the global economic environment is becoming less predictable and more politically charged. For Welsh businesses, the task in 2026 is not to wait for certainty that may never fully materialise, but to build resilience, diversify risk and remain alert to both threats and opportunities.

In a world marked by rupture rather than transition, those that can adapt most effectively, technologically, organisationally and strategically, will be best placed to navigate what comes next.