Introduction
As the World Economic Forum convened in Davos under the theme “A Spirit of Dialogue,” the United States has taken control of Venezuela’s oil infrastructure and established an American administration over the country’s oil reserves “for an indefinite period,” according to President Donald Trump. Simultaneously, the U.S. is threatening European countries with demands over Greenland, creating an incongruity between the Forum’s call for dialogue and the U.S.’s unilateral aggression.
Historical Context and Relevance
While the forms of U.S. intervention in Latin America are evolving, the seizure of Venezuela’s oil infrastructure mirrors past resource appropriations. As attendees in Davos discuss the nuances of stakeholder capitalism, traditional extractivism and power politics once again dominate.
In 2019, Dutch historian Rutger Bregman succinctly dissected the Davos spectacle: “Taxes, taxes, taxes. The rest is a lie.” With these few words, he exposed the gap between rhetoric and reality, between the discourse of shared prosperity and the practice of wealth concentration.
The Need for a New Approach to Value Creation
Beyond tax payments, it’s crucial to analyze value creation—not just redistribution but predistribution. The latter refers to restructuring the creation and distribution of value from the outset, demanding new social contracts with specific conditions and accountability mechanisms. This necessitates organizing modern industrial strategy around missions: specific, measurable objectives addressing social challenges while fostering innovation and investment across all sectors.
Growth is not a mission but the outcome of investing in real-world solutions. A mission to decarbonize the economy, for instance, would transform energy, transportation, food systems, and digital technology simultaneously. A “health for all” mission could enhance health indicators through innovation across various fields, including biological sciences.
This requires leadership, trust, and attention to detail. Public-private innovation initiatives must be structured to prevent the privatization of public research funding outcomes (e.g., overly broad and restrictive patents, excessive licensing fees) and prohibit exorbitant pricing that disregards the origin of value.
Case Studies: Successes and Failures
The UK serves as a clear example of mismanaging public-private partnerships. The labor government, with its “openly pro-business” stance, risks repeating costly mistakes. Consider the growing control U.S.-based data and analytics firm Palantir has over UK public services during the pandemic, offering its services to the NHS for free (later compared to a magazine trial subscription) and now holding contracts worth over 443 million USD.
The Swiss army rejected a seven-year Palantir deal due to data intelligence access risks and dependence on Palantir experts limiting their crisis response capabilities. Despite tripling UK spending on Palantir since 2022, the defense ministry admitted switching providers would necessitate reconstructing the entire data architecture, incurring significant costs. To avoid being locked into a single provider or facing uncontrolled cost increases, public-private contracts should include clauses for state capability development.
Another unfortunate example is UK water supply and sanitation company Thames Water, left with 2 billion GBP debt by Australian asset manager Macquarie while being used as a profit source. The prominence of firms like Blackstone and Macquarie in UK infrastructure financing reveals a clear pattern of risk socialization, private gains, and essential services subjected to financial engineering.
Though the recent announcement on public incentives for offshore wind energy generation under the Clean Industry Bonus program (with conditions for investing in British supply chains) suggests learning from past mistakes, only time will tell if the clauses are robust enough to prevent parasitic acts.
Conditions for Effective Public-Private Partnerships
For public-private partnerships to be effective, they must include conditions ensuring public value generation in exchange for public support. The U.S. CHIPS and Science Act tied corporate support to stock buyback limits, workforce development investments, and childcare services. Germany’s public bank KfW links favorable loan conditions to decarbonization targets.
Chile’s lithium strategy ensures mining companies invest in value-added activities within the country and adhere to sustainability standards, with the state retaining a significant portion of benefits.
These are not measures against businesses but reciprocal frameworks designed to align private incentives with public goals. When the UK supported Oxford/AstraZeneca’s vaccine development with 65.5 million GBP, it conditioned the company not to profit during the pandemic—a genuine partnership with shared risks, rewards, and purpose.
Implementation Matters
Developing state capabilities requires resisting the temptation to outsource crucial functions to consultants. It demands coordination among ministries, significant agreements with workers and businesses, and investing in public officials’ abilities for designing, implementing, and adapting tools—from public procurement to public digital infrastructure.
Sweden’s innovation agency Vinnova exemplifies this approach, using public school meal procurement of “healthy, sustainable, tasty, and affordable” foods as a tool for transforming the entire food system. Vinnova brings together government bodies, municipalities, and private sector actors from various sectors around shared goals in health, sustainability, and local development.
Conclusion: Davos’ Double Standard
This week, Davos will present its usual promises on stakeholder capitalism, purpose-driven businesses, and sustainable development. However, without concrete mechanisms (binding conditions, accountability frameworks, and equitable risk-sharing models) to distinguish true value creators from rent seekers, it remains mere theater.
As another chapter unfolds in Latin America’s long history of extractivism, Davos attendees should question whether they’re building genuine partnerships or sophisticated extraction mechanisms. The answer seems clear as tech titans pledge allegiance to Trump (e.g., Mark Zuckerberg’s decision to end Facebook data verification and Jeff Bezos’ undermining of the Washington Post’s editorial independence for unrestricted platform use) while oil executives casually discuss dividing Venezuela’s reserves, with Trump promising “total security” for exploiting a nation in chaos.
In the absence of effective traditional multilateral institutions, we need voluntary coalitions creating new global governance frameworks. Countries committed to sustainable development should collaborate on consensus-building mechanisms and state capability development for green growth.
This entails transitioning from voluntary pledges to binding agreements on technology transfer, green finance, and shared innovation frameworks—the building blocks of a new economic order serving people and the planet.
Dialogue’s true spirit means nothing without fundamental value creation transformation. Authentic reciprocity demands new contracts reflecting a more symbiotic public-private relationship with effective conditions and equitable risk-reward sharing. Otherwise, we’ll merely repeat past errors.
About the Authors
Mariana Mazzucato is Professor of Innovation and Public Value at University College London and the author of “The Big Con: How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments and Warps Our Economies” (Penguin Press, 2023).
Rainer Kattel is Deputy Director and Lecturer in Innovation and Public Purpose at the Institute of Innovation and Public Purpose at UCL.
Copyright: Project Syndicate, 1995 – 2026
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