However, he said a fundamental problem is that the latest economic recovery is a "jobless growth," â¿¿ where any early improvement in the economy is yet to be felt in the broader job market.

More socially minded entrepreneurship will be needed and young workers entering the job market will need to focus on gaining talents and skills that are most in demand, such as new technology and science, Schwab.

"We need new ways of thinking. It's not the traditional employment which will solve the issue," he said. "I think we have too many sociologists, psychiatrists around, and not enough engineers and scientific people."

Speaking on the same day as President Barack Obama's second-term public inauguration, Schwab said he hopes the world's biggest economic and military power will become more assertive on the world stage.

"What the world expects is that someone, if there's a major crisis, takes the lead, and I'm really hopeful that the United States, with the second mandate, will assume its responsibility as the strongest power," he said.

Asked about Google's cancellation of its annual invitation-only Friday night party, which has been the hottest ticket among celebrities and elites at Davos in recent years, Schwab described it as a sign of the times.

"I think the world is in a very serious situation and the annual meeting is a very serious event. We are not a fun event. We want to improve the state of the world â¿¿ the world is not in a good shape at the moment," he said. "So I think it's really logical that we concentrate much more on substance."

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