The World Economic Forum may be returning to its long-standing ritual in Davos, Switzerland in January, but this is still a remarkable time of upheaval for Klaus Schwab, the founder of WEF, as he sits down with Edward Felsenthal, the chief editor of TIME, to discuss Davos and the global economy in New York City.

Do you see any retreat from the stakeholder movement toward capitalism? We are facing some real headwinds in the economy here, and there might be tension between shareholders and stakeholders regarding the impact of a real economic downturn. I’ve had these conversations a couple of times when we’ve had these discussions.

The company will gain greater appeal among its clientele and will attract superior individuals in the future who bear this in consideration. This generation anticipates more than just serving shareholders; they expect companies to prioritize the well-being of both people and the environment. The company is a social entity that must fulfill its role within society; it is not merely an economic entity. I believe that pitting shareholder capitalism against stakeholder capitalism is an incorrect approach from the very start.

However, there is some strain. You cannot adequately provide for your employees if you are terminating the employment of 13,000 workers.

No, as a practical CEO, you have to make compromises in your decisions. Emphasizing the company’s profitability, let’s say that the shift to the short term may result in more frequent changes, while the shift to the long term may occur at certain moments of balance.

‘What are your thoughts and perceptions on the economic outlook? Many leaders and CEOs around the world frequently engage in discussions about this topic, and there are numerous individuals in the world who are not aware of it.’

It may be socially painful to manage this strategic transformation in the last three, four, or five years. We should not look at the global economy with a short-term approach and crisis mindset. When you have a restructuring of the economy, it affects the purchasing power of people. Sometimes, employees have to go through suffering, and shareholders and costs need to be written off on the company’s balance sheet during a restructuring. I wouldn’t only relate to the global economy’s restructuring.

You made the extraordinary decision last year to exclude Russia from Davos.

We promptly adhered to the worldwide sanction measures, thus suspending all our connections with Russia.

And does that continue?

That continues.

During my first time at Davos, I had the opportunity to connect with the world of cryptocurrency, particularly during the collapse of FTX and the broader challenges that occurred over the past four or five months.

It is now imperative for us to ensure that traditional systems are integrated with congruent crypto at the very least. I’m not surprised about what has happened with crypto, so it remains to be seen. It is even more challenging to create necessary boundaries and comprehend the significance of certain new developments, which can be very difficult for political institutions. The fact is that technological development is so fast and complex, making it increasingly difficult. However, I have always been a big fan of the World Economic Forum’s engagement in the development of new crypto technologies.

Currently, you are working on integrating the World Economic Forum into the metaverse.

In Davos, we will engage in an immersive encounter – and merge it with a virtual three-dimensional chamber. Initially, with your avatars, merely gathering around a table is the ability to convene in a virtual three-dimensional chamber. Each person provided me with a distinct response, and it became evident to me: it is the ability to convene in a virtual three-dimensional chamber. Consequently, I inquired with numerous individuals, What does it truly signify? I grew intrigued by what [the metaverse] is and whether it could have an impact, similar to what occurred with crypto when Meta altered its name, a year ago.

I feel that this could be a game changer in global collaboration. Benioff Marc, the co-owner of TIME and the CEO and chair of Salesforce, is a partner in our Village. We have created a community of 70 members whom we call Partners Village, who support us. We can work together on a sustained basis, without the need for physical meetings, which makes it more efficient. This is important because it allows us to convene the most knowledgeable and relevant people, and promotes global collaboration. Next summer, we will inaugurate the Global Collaboration Village, where we will showcase what we call the Village.

What brings you hope in this difficult period?

We have the ability to handle change. However, ultimately, change is occurring. It’s an unfavorable one. The current situation we find ourselves in is not the most dire of all times. Both groups, fundamentally, possess identical lives, but individuals with an optimistic outlook experience a considerably more joyful existence. I simply recall my mentor Shimon Peres, who once elucidated in Davos the distinction between optimists and pessimists: even if I lean towards pessimism, I am eternally an optimist.

This interview has been modified to ensure brevity and comprehensibility.