The World Economic Forum is over and the small town of Davos has been returned to the skiers. Here are the top ten themes that emerged from the five-day event.
1. The state of the world is not good.
The theme of Davos was Rethink, Redesign, Rebuild, which may have sounded a bit grandiose to some people. I doubt many attendees think this now. The world clearly needs fixing.
Figures cited at the Forum show we're a long way from being out of the woods on the global recession. Jobs are and will continue to be a huge issue. It is estimated the unemployment in the word jumped by 50 million during the recession, and the working poor increased by 200 million.
But the financial meltdown and recession are arguably symptoms of a bigger systemic crisis and deep institutional failures. There is growing recognition that many of the organizations and institutions that have served us well for decades, even centuries, are no longer stable. Many of the pillars of economic and social life have come to the end of their life cycle. In 2009, the American auto industry -- the epitome of the industrial economy -- collapsed. The upheaval is now spreading to other sectors -- from the universities and science, to entertainment and media, to government and democracy. The continuing collapse of many newspapers in the United States is a storm warning.
Many other serious problems loom. Lack of access to fresh water is a catastrophe for humanity, as 2.8 billion (or 44%) of the world's population already live in high water stress areas, increasing to 3.9 billion by 2030. In a world of growing capacity, global poverty is getting worse. Ten children die of hunger every minute and a third of the world's population fester in slums. Almost everyone, especially the scientists at Davos is deeply troubled by climate change. We need to reinvent out energy grids, transportation systems and reindustrialize the planet. And we're running out of time.
As Bill Clinton said to a few of us at a cocktail party, "The world is too unequal, unstable, and unsustainable."
2. Everywhere there are new collaborative models emerging to solve global problems
Our systems of global cooperation are not rising to the many challenges we face. The global warming conference in Copenhagen has become a metaphor for failure.
I believe the Forum itself is an example of the global multi-stakeholder cooperation that is picking up where nation states and formal institutions left off.
The global humanitarian response to the Haitian earthquake is showing us what is possible. The 7.0 magnitude earthquake is not just a Caribbean crisis, but a world crisis. Millions of people and thousands of institutions have responded in non-traditional ways. They are donating their time, money, goods and services. Charitable organizations such as the Red Cross received donation of tens of millions of dollars within days by using new technologies such as texting, Twitter, Facebook and YouTube. Social media has become the pre-eminent tool to connect people around the world, and help empower people become active participants in relief efforts.
There are 100 million people on Facebook Causes -- the biggest application on Facebook. These are not just people talking to each other. They are now organizing activities in the physical world. I heard of dozens of examples at Davos.
3. There is a profound rethinking of the financial services industry and its role in society.
French President Nicolas Sarkozy put it well: "The banker's job is not to speculate, it is to analyse credit risk, assess the capacity of borrowers to repay their loans and finance growth of the economy. If financial capitalism went so wrong, it was, first and foremost, because many banks were no longer doing their job. Why take the risk of lending to entrepreneurs when it is so easy to earn money by speculating on the markets? Why lend only to those who can repay the loan when it is so easy to shift the risks off the balance sheet?"
The mood at Davos was widespread: Banks need to be reigned in, the sooner the better. US banking executives used to be the stars of Davos. Now they are a low-key, humble and dour looking group. Last year at Davos, everyone was in a degree of shock. This year, a better term would be "fed up." Fed up with banks that are "too big to fail," with government bailouts, with the human costs of this crisis and with an industry that basically got out of control. For some CEOs the crisis warrants a critical re-evaluation of market capitalism.
4. Executive pay, especially for bankers, needs fixing.
There was a very strong sentiment that the issue of exorbitant executive compensation needs to be corrected. The biggest targets of discussions were bankers and other architects of the financial crisis. Many heavily damaged their own firms, some to the point of bankruptcy, paralyzed the commercial credit market for tens of thousands of companies, and today are not able or willing to loan money to entrepreneurs. To set aside $billions for bonuses just after they had been bailed out by the government was viewed by almost everyone as unconscionable. Even those banks that didn't need a bailout cannot justify 8 digit compensation packages.
5. Sustainability is an idea whose time has come. Business is moving from talk to action.
As one executive put it: "It's no longer about the Green Economy; it's about the Economy." Sustainability is the central issue many businesses face.
A few short years ago, sustainability was buried in a company's PR department and it was primarily a matter of spin. But then governments began forcing certain reporting and behaviors, and the corporate issue became compliance. Then sustainability became a matter of competitiveness and cost reduction, by capturing efficiencies such as reducing waste and energy use. CEOs everywhere at Davos said we've now arrived at the point where sustainability must be integrated into the business strategy -- what is a business, and how it does it operate and relate to the rest of the world.
We'll see if they walk the talk.
6. The world needs better governments.
Some governments in Central America and Africa are just holding on and many are dysfunctional. But governability is becoming an issue for G20 countries as well. One leader said the US is on the brink of being "ungovernable." One Chinese executive responded thusly when asked to defend his country's lack of democracy: "So we should adopt the American system where lobbyists run everything and nothing happens?"
Democracy was still seen as an unstoppable force, but in many regions of the world it is becoming stalled, and in some cases losing ground. Basic democratic institutions are at risk and in danger of failing partly due to the economic crisis in poor countries. The best predictor of democratic survival is per capita income. In some countries portions of the government have been captured by interest groups. Other non-democratic countries are proving competitively stable and economically healthy. And the current economic crisis shows that national governments and domestic regulation are inadequate to deal with the challenges of the global economy. There is also danger of protectionism and isolationism.
7. It turns out the internet DOES change everything
The much-discredited phrase from the dotcom period is not just geek speak. The Internet and Social Networks were central to many of the discussions here. The digital age seems to be coming of age. I participated with CEOs of most of the important social networks in a session called The Power of Social Networks. It got a lot of buzz at Davos. A few minutes into it the session we solicited questions from Facebook. 6,000 questions appeared in first 2 minutes.
The growing consensus is that new business models are emerging in every industry and throughout society. I've argued that social networking is becoming social production and that a new mode of production is emerging - changing not only how we make software or encyclopedias but physical goods like motorcycles.
Most leaders love that a web company - Google -- is taking on China. The circumstantial evidence that the China-based hacking of Google was conducted by authorities looking for information about activists was the straw that broke the camel's back. Talking to Google execs, I'm convinced they not going to back down.
8. Girls, women and gender. A sea change is underway.
There was lots of buzz about women's emerging purchasing power, known as the Power of the Purse. The expected worldwide increase of women's income by 2013 is $5.1 trillion, which is greater than China's expected growth of $3 trillion for the same period.
Deep interest in the so-called Girl Effect, i.e., investing in girls offers the biggest ROI in the developing world. In African countries, female illiteracy is almost a third higher than that of men. But every year of schooling increases a girl's future earnings by 20 percent. And by earning more and influencing how dollars are spent, women would acquire a stronger voice in all aspects of their lives.
Although women are becoming stronger financially, they are still very weak politically. Countries should be more aggressive in finding female candidates for public office, and look outside the regular channels. But increased financial and political power brings responsibility. Woman could be key in refocusing our political and economic efforts away from consumerism.
9. We need new measures of progress
There is growing agreement that GDPs and GNPs are flawed tools for measuring the health of country, and we should instead emphasize the idea of Gross National Well-Being or something similar. Just as some companies have moved to "triple-bottom line" reporting for their impact on society, many economists argue that GDPs and GNPs measure activities that are detrimental to society and ignore activities that are beneficial.
A pandemic will increase drug sales and visits to doctors, thereby driving up GNP. Volunteer work or work in the home is not recognized as contributing to GNP.
There is no lack of research and creativity on this issue, as some governments and academics have developed a wide array of yardsticks to more accurately capture how well and healthily a country is growing. The key now is to have these new tools recognized as legitimate and encourage their widespread adoption.
10. A new big idea. The Global Commons.
Like a park in a village, we need new global parks in the global village. Some of the global commons areas are well-recognized, such as our atmosphere, oceans and space, but there are less obvious areas that exist, or should be created, such as know-how concerning sustainability
Conventional wisdom says you should control and protect proprietary resources and innovations -- especially intellectual property -- through patents, copyright and trademarks. If someone infringes your IP, summon the lawyers out to do battle. That's often the wrong approach. Contributing to "the commons" is not altruism; it's the best way to build vibrant business ecosystems that harness a shared foundation of technology and knowledge to accelerate growth and innovation.
A good private sector example is when more than a dozen pharmaceutical firms abandoned their proprietary R&D projects to support open collaborations such as the SNP (single nucleotide polymorphisms) Consortium and the Alliance for Cellular Signaling. Both projects aggregate genetic information culled from biomedical research in publicly accessible databases. They also use their shared infrastructures to harness resources and insights from the for-profit and not-for-profit research worlds. These efforts are speeding the industry toward fundamental breakthroughs in molecular biology - breakthroughs that promise an era of personalized medicine and treatments for intractable disorders. Nobody gives up their potential patent rights over new end products, and by sharing some basic intellectual property the companies bring products to market more quickly.
One overarching theme at the conference is the confidence that young people have such great potential. Obviously, we have a lot of work ahead of us if we don't want to pass on a deeply damaged planet to our children. At the final session at Davos, we heard from six inspiring young people on stage on their hopes and ambitions. There were more than a few tears in the audience.
Don Tapscott, is the author of 13 books, Chairman of the think tank nGenera Insight and is an Adjunct Professor of the Rotman School of Management at the University of Toronto. Twitter: @dtapscott
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