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from Davos Notebook:

What is the Davos optimism based on? – Strategy head

Mark Spelman, Global Head of Strategy at Accenture, stopped by the Davos town library (our WEF headquarters) to talk about what he believes have been the key developing themes at this year’s meeting.

In this first video, Spelman talks about key growth trends and the reasons behind the sense of ‘cautious optimism’ at Davos 2011.

“If 2010 was really about stability in the global economy, I think 2011 is all about the pace of global recovery,” he says.

“Optimism here is to a certain extent trumping pessimism. But the key question is, what’s this optimism based on?”

In this next video, Spelman analyses the underlying mood of confidence at Davos and how to balance the focus on growth and innovation with cost and complexity.

“No-one wants to take hold of more growth opportunities whilst at the same time fundamentally increasing the cost space. What we’re beginning to see is a new era of both growth but increased competition,” he says.

from Davos Notebook:

China and the future of the Internet

- Michael Fertik is the founder and CEO of Reputation.com, an online privacy and reputation management company. He is a member of the World Economic Forum Agenda Council on Internet Security and recipient of the WEF Technology Pioneer 2011 Award. The opinions expressed are his own. -

China's Internet is, in fact, the world’s largest intranet. This is not news to anyone who follows technology in the Middle Kingdom. The Chinese government doesn't make any real attempt to hide its complete control over what happens behind the Great Firewall. The regime is open about its intent to ensure what it calls "harmony," which more or less means that it will squelch civil debate that moves beyond a certain pitch or further than a few degrees off the median line. As China's power grows online and offline, these patterns, taken together with the Chinese government's technical sophistication, will be of fundamental importance to the overlap between digital freedom and privacy.

The Chinese play hard. They mean to keep their intranet secure and the integrity of their "harmonious" public web discourse intact. They do not hesitate to use their considerable technical prowess to spy on machines that are operated on their network.  As a friend of mine in U.S. intelligence circles says without hesitation, "If you go to China, there is a 100 percent chance that your equipment will be compromised." Earlier this week here at the World Economic Forum (WEF) in Davos, I met a successful civil activist who routinely visits China for her work, and she casually reported a recent office visit from Chinese state security services who evinced specific and sweeping knowledge of her emails, calendar, and other information she keeps exclusively on her computer.

Astonishingly, despite its stated objectives of harmony and control, the Chinese have allowed or even encouraged an exploding Internet economy in their country. Of course, the user-generated web -- comprised of online publishing tools, self-propelled video sites, and social media tools -- is a potential powder keg for a government that cherishes conformity in its national conversation. But the Chinese government has adapted skillfully to the risks. They still sometimes resort to simple shutdown of antagonistic URLs. But their methods have become much more nuanced and powerful in recent years. They have effectively co-opted the power of user-generated content and distribution publication for their own interests.

Leaders of Chinese online media and commerce companies, including ones that have already gone public or filed for IPO in the U.S., have been fairly open about their relationships with their government. They describe the regime's remarkably frank point of view: we want you to succeed, but not at the expense of harmony. In practice, that means that, if you play ball with Beijing's running rules -- if, for example, you remove user-generated content that criticizes the government's response to an earthquake -- you can survive and even become a billionaire. If not, you'd better move to the U.S. and try your business model again.

China is similarly aggressive in the rapidly emerging field of cyber warfare. A WEF person close to the issue told me that the IRS sustains thousands of cyber attack attempts every year from Chinese computers. This is a common topic among American government and business officials. I'm guessing that it's similar in other Western countries. So far, the Chinese have taken cyber war more seriously than the rest of us.

At the WEF, China's command-and-control regime is the elephant in many rooms. Participants see the situation clearly. They talk candidly about the challenges to shared values of privacy and freedom posed by the Chinese government's approach to the Internet, as well as the emerging power of Chinese cyber-warfare tools. At the same time, the economic potential of doing business in and with China can be overwhelmingly alluring. How do you take a stand against the dragon when it will also buy a billion units of anything you can send it? It's a hard question, and a sense of fear, opportunity, and optimism pervade discussions about China.

from Davos Notebook:

Energy policy is key at Davos

-- Laurens de Vries and Emile Chappin are researchers at Delft University of Technology. Much of their research is funded by the Next Generation Infrastructures Foundation. The opinions expressed are their own. --

One of the key issues being debated at this year’s World Economic forum is energy policy, particularly how we best make the transition to clean energies of the future to mitigate global warming.

Nuclear power, like energies of the future -- wind, solar, carbon capture -- must rely on government subsidies to be economically viable. This is true of virtually all alternatives to fossil fuels, which is a consequence of the fact that the social costs of the pollution that they cause is not included in the price people pay for them.

As a result, governments deploy specific policies to foster renewables, nuclear energy and/or carbon capture. More often than not, these policies are made independently from each other, and are subject to frequent change. However, this lack of coherence and stability is harmful to the very goals that these policies are aimed to achieve: •       Last month, the UK Government announced the biggest shake-up of the electricity market since privatisation 20 years ago.  The so-called ‘renewables obligation’, which has helped the country develop one of the world’s largest offshore wind industries, will be replaced in a move that is predicted to cause at least short-term investor uncertainty.

•       The German opposition, the SPD, have called for a referendum to block Angela Merkel’s decision to extend the lifespan of Germany’s nuclear power plants. The policy, which may yet be blocked in the upper house of the German parliament, the Bundesrat, would bring €6.4bn a year to the energy companies, part of which would be re-distributed to renewable technologies.

•       The Netherlands Government has recently reduced the country’s own target from 20percent to the EU target of 14percent renewable energy in 2020 and is in the middle of changing its renewable energy policy for the fourth time in twelve years, changing its financing and the technologies supported.

•       The Spanish government is cutting renewable energy subsidies drastically, wreaking havoc on the formerly blossoming Spanish renewable energy industry.

from Davos Notebook:

A golden opportunity for a new trading system

By Mari Pangestu, who is the Trade Minister of Indonesia. The opinions expressed are her own.

The world continues to face great uncertainties. Global recovery has been uneven, unemployment high and current account imbalances have led to continued tension including the use of currencies and other mercantilist policies for protectionist purposes. And we have yet to conclude the Doha Round of World Trade Organization Negotiations. So what do trade policymakers have to do to face this situation and ensure trade continues to contribute to growth and development?

For Indonesia, trade has recovered to higher than pre-crisis 2008 levels and in line with the higher growth in emerging economies. Like other East Asian economies, Indonesia is increasingly integrated with the region, clearly indicating that East Asia is a growing market with the rise of its population, middle class and purchasing power.

Increased integration within East Asia has taken place because of growth, the unilateral opening up of trade and investment, and more recently the various regional and bilateral free-trade agreements (FTAs). The regional agreements include the Association of Southeast Asian Nations (ASEAN) Economic Community by 2015, as well as FTAs between ASEAN with China, Japan, Korea, India, Australia and New Zealand. Is this an alternative to the multilateral trading system?

The answer is no. As the Chair of ASEAN and East Asia this year, Indonesia’s vision is not that of an insular Asian bloc -- but for an ASEAN community in a global community of nations. This means that as Asia grows economically, Asian nations will and should do their part to increase growth and demand, develop regional agreements that are open and become model agreements for others. The various regional agreements should not overlap like a noodle bowl.

It also means individual countries and regions need to do their part to become building blocks and contribute to global governance. Indonesia and others in Asia benefited from an open and fair trading system, so they will continue to prioritize the completion of the Doha Development Round in 2011.

from Davos Notebook:

The deepest fear of the Davos Man

This is part of a series written by Anya Schiffrin, author of “Bad News,” and the wife of Nobel Prize Winner Joseph Stiglitz. The opinions expressed are her own.

Shoes ...

The deepest fear of the Davos Man is not fear of failure or of giving a boring speech but of falling. Not falling from the heights of being at the greatest confab of businessmen the world has ever known but of slipping on the ice that forms when the winter sun meets the piles of snow that line the streets of this Alpine resort.

An undignified tumble is, of course, highly humiliating and so it’s rarely talked about. No one admits to slipping but a highly unscientific poll conducted by me shows that nearly everyone admits to seeing someone else take a tumble at one time or another.

A friend reports that last year he saw someone roll down the driveway of the renowned Steigenberger Belvedere hotel right into the traffic of the main Promenade. Broken arms and sprained ankles have also been reported but the worst story I ever heard came from a highly placed Davos Wife who told me that one of her friends, the wife of an important Dutch Rabbi, had to be medivaced out a few years back after she was injured walking down the street.

Apparently this loyal wife still comes every year but no longer leaves her hotel room. If they ever give gold watches to Davos Wives she surely deserves one.

from Davos Notebook:

Talking with Davos youth… all five of them

Youth isn't a group that is closely associated with the World Economic Forum in Davos. There was much discussion before the meeting of the gender quota imposed by the WEF to try to increase the number of female participants, but there are just five teenagers at Davos this year, all of them from the Global Changemakers network.

I caught up with one of them, 18-year-old Trevor Dougherty, who wrote this post for us prior to the start of this year's Davos,  to hear how his first WEF annual meeting is going. We will hopefully hear from the other four 'changemakers' before the end of the conference.

from Davos Notebook:

Tablets take over the world, one Davos at a time

This time last year, the online team here in Davos broke off from its coverage of the WEF for an hour or so to follow another Reuters live event - the unveiling of Apple's iPad.

Back then, there were many gaps in our knowledge of what the iPad could do. We didn't even know what it would be called.

What a difference a year makes. Now the device, and other tablet computers, is on show everywhere, especially among the gathering of the global elite in Davos. Reuters technology correspondent Kenneth Li wrote yesterday in this article that: "Those discussing the "Shared Norms for the New Reality" in Davos this week need only look around them to see one such 'reality': low-cost smart devices are sweeping away clunky old computers throughout the political and business world."

Kenneth also tweeted this yesterday: "Davos is ugly with iPads. One CEO tried to hide his from me. Shameful!"

One Davos participant not hiding his tablet from view is Russian President Dmitry Medvedev (an avid user of Twitter). Here's a great picture of him going over the text of his opening address to this year's WEF meeting in Davos, delivered yesterday evening.

(Picture taken January 26, 2011. REUTERS/Dmitry Astakhov/RIA Novosti/Kremlin)

from Davos Notebook:

Table for Two at Davos

The meal you had last night at the Congress Hall of the World Economic Forum in Davos may have been “Table for Two” certified.

Table for Two (TFT) is a Japanese non-profit organisation which aims to “transfer calories” from the rich world to the poor. It teams up with corporate and university canteens, serving low calorie, nutritionally balanced meals. A 20 yen (around 25 U.S. cents) charge – roughly the cost of one school meal in least developed countries --  is added to the price of these meals to feed people in need.

“You can distribute wealth and calories in one meal,” Kumi Fujisawa, TFT executive and co-founder of think tank SophiaBank, told Reuters on the sidelines of the Davos forum.

Fujisawa says many meals in Davos will be TFT branded and Japanese Prime Minister Naoto Kan, who will be in Davos for a flying visit later this week, will also tuck into a TFT meal.

Since its launch in 2007, more than 630 millon meals were served.

from Davos Notebook:

The Rise of Robo Sapiens

There are a few sessions at this year’s World Economic Forum that discuss the future but the fully-subscribed session on “The Rise of Robo Sapiens” on Saturday gives a glimpse on how artificial intelligence is reshaping our lives.

Panelist of that session, Gil Weinberg, professor of music technology at Georgia Institute of Technology, is here to present his project on “Shimon” – a $100,000 robot that “listens like human being but improvises like a machine”.

“The robot can play classical or jazz or whatever. It will push music forward”, Weinberg told Reuters.

Why is a robotic musician relevant to the world’s CEOs and politicians attending Davos?

“We have more machines and new technologies and it’s important humans and machines both interact,” he says.

from Davos Notebook:

Shared norms, soccer pundits and dealing with the ‘New Reality’

-- Mark Kobayashi-Hillary is the author of several books, including ‘Who Moved my Job?’ and ‘Global Services: Moving to a Level Playing Field’. The opinions expressed are his own. --

And so the World Economic Forum (WEF) in Davos is underway once again. The theme this year is Shared Norms for the New Reality, which according to the WEF is: “…reflecting the fact that we live in a world that is becoming increasingly complex and interconnected but also experiencing an erosion of common values and principles.”

I think that means life is moving faster so we need to step back and review some basic principles, because some are struggling to keep up. At least that’s what I understand it to mean.

But, disregarding the headline purpose of the conference, the really interesting story I am noticing as the WEF gets underway is that partners – or sponsors in more direct language – have been asked to bring at least one woman in their delegation. In 2010, just 16% of attendees in Davos were women and the WEF wants to see that figure going up.

But this is a club for presidents and company executives and fewer than 3 percent of the Fortune Global 500 chief executives are women and less than 20 of the world's presidents or prime ministers are female. It’s no wonder that Davos is overrun with men in unimaginative dark suits sheltering from the cold.

The WEF has been around for forty years now and this is the first time any serious effort has gone into forcing the companies who attend to favour their female employees for a place in the conference delegation. Some might argue that creating female-only quotas for a business conference is the tail wagging the dog, but organisations often need some incentive to change and break free of the sexism all around us in daily life.

This week, Britain has been gripped by the controversial recording of sexist remarks by two football pundits, Richard Keys and Andy Gray. Keys and Gray made disparaging off-air comments on Sky TV about a female match official, questioning her ability to understand the game based solely on her gender and scoffed at remarks by former Birmingham City FC Managing Director, Karren Brady, that the game is sexist.