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Davos09: Starting Open Bank

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At the end of my Davos week, I finally saw tiny notes of hope - faint LEDs at the end of a long tunnel - and they came not from the business, government, and journalistic leaders here but instead from technologists, entrepreneurs, and educators.

I ran a session in mass innovation in which we charged groups to pick an industry and bring the benefits of open collaboration to find an opportunity or repair a problem. One group took on the toughest assignment they could today: banking.

They proposed the Open Bank. It would feature radical transparency: full disclosure of performance and compensation. The group decided that a banker should not sell a product unless he could pass a test about it. They even decided that there had to be a means to confirm that customers understood what they were buying. They proposed collective risk assessment, creating a means for its constituents to select and perhaps vote on investments. They explored how to offer transparency on each product and customers' performance with them so that you could compare your returns with fellow customers. And they argued that bankers should be compensated on profit. It wouldn't be an easy business to run; being answerable is hard. I said later that its slogan should be, "the only bank you can trust." That is what would make it successful. When I asked, most in the room said they would be such a bank's customers; many said they'd work for it; almost everyone said they'd invest in it.

Mind you, this thinking didn't come from a bunch of crazy, webby, gum-flapping bloggers and academicians (like me). It came from the sort of business machers who come to Davos. But there wasn't a banker among them. That was the point of the exercise: to look at an industry from the outside and see new opportunities and needs. Bankers are in fortress mode; they won't do that.

Later that day, at one of the still-lavish closing parties, I said to a top banking executive what I'd said earlier in this space about the week in Davos: that the leadership here had to take responsibility for their failure. He sneered at me. There's no need for that, he said. He will be the last to open up, the last to change.

But back at the workshop I was leading, the three dozen machers who came mainly from investment, technology, and education said something different: The stakeholder is taking control. That stakeholder had to be informed. And that requires transparency.

It was under those rules that they reimagined retail, education, and government.

The day before, I went to a session on educating entrepreneurs with Cisco's John Chambers, Intel's Craig Barrett, and other leaders in worldwide movements to train the people who will start businesses and create jobs and true value, in large economies and small. They recited statistics about the value that comes from giving young people the tools to start businesses. They argued passionately that we must change education to enable such creation. Then I hung out with fellow blogger Robert Scoble, who has been arguing that the way out of our mess is to start a million companies. And I went to Yossi Vardi's annual sabbath breakfast with Israeli President Shimon Peres, who made a forceful argument that the future will be secured with investment in technology (including biotechnology) and education (which he as much as said was the next thing to come after the internet wave).

But instead, the governments that are flexing their muscles here to announce that they are now in charge are giving trillions of dollars to the incumbents, to people like that sneering banker. And he and his peers here in Davos are, as I said in my earlier posts from here, are circling their wagons, refusing to take responsibility, and change.

We should, instead, be investing our money in entrepreneurs and technologists, the people who will change old industries, reimagining them under new rules with new people - us, in the long run - in charge. I leave Davos thinking that more often than not, we need to look at replacing rather than just repairing these broken institutions. Entrepreneurs and educators do that.

We are bailing out the past. Instead, we must bail out the future.