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from The Great Debate UK:

A crisis of trust is at the heart of global uncertainty

By S. D. Shibulal, CEO of Infosys. The opinions expressed are his own.

During the first day at the World Economic Forum yesterday, we witnessed delegates arriving with two things on their minds -- how heavy the snowfall was and the realisation that new business models are needed to overcome global economic pressures. (It goes without saying that the mood at Davos hasn’t been helped by the IMF downgrading world growth targets). We all agree that we’re living in a volatile world and it cannot go ignored that there are many uncertainties we face, including currency volatility and high unemployment.

The euro zone crisis will undoubtedly be at the centre of the discussions concerning “uncertainty” but what the attending business leaders, governments and global organisations must understand and discuss, is what they can do together to put in place measures to transform and change, so we can better safeguard our future.

The discussions I had at Davos yesterday support my fundamental belief that corporations have a critical role to play in creating a future where opportunities are abundant and growth inclusive. Moreover, at the heart of the global macro-economic uncertainty is the crisis of trust. Leaders across businesses and governments alike need to work together to rebuild that trust. Creating jobs and fostering sustainable growth is the first step in this journey. While businesses will need to look at measures to manage their short term crises and be truly evolved, smart enterprises will have to balance their focus between “short term needs” and investing for “long term growth through innovation”. We must also recognise that the emerging  future is being shaped by global mega trends in business and society, along with changing demographic profiles.

In view of these trends and the events that led to the recent economic crisis, leaders have their work cut out. Balance the short term versus long term, create a frame of reference to drive growth and innovation, and envision and create a sustainable future. All the views that I shared above resonated strongly with the panel that debated the critical issue of “the role of the CEO” at the Infosys Lunch Panel discussion yesterday. The panel also concurred that talent, which will be at the centre of these strategies is in short supply. Organisations therefore, not only need to look at new hubs of talent but also at retraining and reskilling existing talent pools. Businesses increasingly need to work in partnership with governments and educational institutions to ensure the mobility of talent and the career development of generation Y so tomorrow’s workers are in line with business demand.  Finally, there was unanimous agreement that leadership by example, client centricity and healthy balance of choices are the need of the hour.

Image -- A visitor walks past WEF logos at the venue of the World Economic Forum (WEF) in Davos, January 26, 2012. REUTERS/Christian Hartmann

from Ryan McCarthy:

Davos dodges the future of capitalism

If you've come to Davos for answers, panels are not the place to start. An hour into the "TIME Davos Debate on Capitalism" there were, by my count, just two or three concrete proposals for creating jobs.

The panel included Bank of America CEO Brian Moynihan; Carlyle Group co-founder David Rubenstein; Ben Verwaayen, the CEO of Alcatel-Lucent; Raghuram Rajan, a renowned economist; and Sharran Burrows, the general secretary of the International Trade Union Confederation.

The focus of the panel wasn't quite "Is 20th century capitalism failing 21st century society?" Instead, it was most certainly about non-specific change at the margins. Rajan called for better worker training, Burrows wants corporations to invest a portion of their income into job creation and a VC audience member bemoaned the U.S. immigration policy and a lack of skilled workers. Despite a few exchanges between Burrows and Alcaltel's Verwaayen, there was almost nothing in the way of real debate.

Take the "too big to fail" banks, for example. When asked about the issue, Bank of America's Brian Moynihan claimed that his bank simply needed to be massive to serve an increasingly global economy:

It was unfortuante that Rajan, one of the most pointed critics of the "too big to fail" problem, didn't fight back on this. Bank of America, after all, grew to its current size thanks to an almost unprecedented series of domestic bank acquisitions. There was nothing inevitable about this acquisition binge (just ask Ken Lewis), just as there was nothing inevitable about Bank of America's disastrous Countrywide acquisition. These were capitalists decisions that had crucial consequences for the global economy, led to government bailouts and tarnished the name of, you guessed it, capitalism.

Moynihan's argument that his bank's size simply "comes from the economy" and "reflects its excess," to me, seems like the central argument we should be having about capitalism. In short: what parts of capitalism are socially useful?

from Ross Chainey:

Occupy WEF’s Davos message – “Don’t let them decide for you”

By Ryan McCarthy and Ross Chainey

In an empty, snow-covered parking lot about a mile outside of the center of the gathering of the world's elite, the Occupy Davos activists have set up a small camp of igloos and yurts. There are no badges or panels at this gathering - most of the day's work is focused on building (and re-building) the camp's series of tunnels and igloos. The handful of activists at the camp on Tuesday were upbeat, but realistic about their chances of changing the World Economic Forum's agenda.

The Occupy Davos movement, members said, had no real coordination with the protests going on in the U.S., though a few activists came from other areas of Europe and the U.S. The group's organizers expected 60 or so activists to join the group later in the week when the World Economic Forum kicks off. For its part, the WEF has allowed the protesters to stay on site, and even brought in supplies.

We spoke with the Occupy Davos activists about what brought them here, what they hope to achieve - and whether anyone at the glittering WEF gathering is listening.

Ryan McCarthy talks to Occupy WEF's Florian Sieber.

from Anthony De Rosa:

The Davos Rookie

I'm going to level with you. I have little more than a vague idea of what I've gotten myself into here. An assembly of heads of state, titans of industry, the cliched 1%. I feel a bit like a fish out of water. What on earth is someone like me going to do among these power brokers?

I've got questions, for sure. What, if anything, has been accomplished as a result of the World Economic Forum since its inception? Going by Mohamed El-Erian's assessment, it seems not much. I don't say this out of malice. It seems like a well-intentioned idea to bring together people who have the power to effect change in the world. Nobody is expecting them to solve the euro zone crisis over the course of a week, but have they seized that opportunity because of coming here? I arrive with an open mind but a skeptical pair of eyes.

Are there examples we can point to where a Davos meeting led to the brokering of some improvement in the world? Perhaps we may never know. Many meetings here happen behind closed doors, out of the sight of nosy press like me.

It's far easier today than ever before for people to tap into what is occuring in nearly any part of the world, directly from the people living there, without the filter of media or government. It's easier for the people within those same places to communicate and organize among themselves. People who were previously unseen and unheard now have a voice. It's a very disruptive development for gatekeepers. Some may even be wondering if they really hold as much power as they think.

The upheaval in the Middle East and North Africa over the last year has proven, once more, that leaders are only as in control as the people they govern allow them to be. That may sound a bit hyperbolic, as things are still very much in flux, but few predicted how far the citizens of these countries have already come, how many leaders would fall, and with potentially more on the way.

Maybe that's the lesson those at the WEF should heed: to consider listening a bit harder not just to their fellow attendees, but to the people they've left behind.

from Mohamed El-Erian:

Davos at a distance

I’ve never been to Davos, despite attempts by many over the years to persuade me to go. Don’t get me wrong. I understand that it is a special event for many people, and for many reasons. It is anchored by wide-ranging and engaging agendas, and participants get to mingle with a global cornucopia of important people. It is also the place to see and be seen for heads of state, politicians, academics, thought-leaders, media pundits, CEOs, and movie stars.

The annual meeting of the World Economic Forum in that intimate setting remains one of the year’s hottest tickets, but its organizers want their event to be much more than what it currently is—a big, prestigious talk-shop. They want it to influence policy at the national, regional, and global levels.

Yet, over the years, and in the context of an increasingly unsettled and uncertain world, Davos has not had much impact.

I get a range of responses when I ask attendees why so few, if any, of the interesting discussions that have taken place in those beautiful Swiss Alps have led to change that improves the lives of most people.

Some say the strength of the typical Davos agenda is also a weakness. The topics are overly ambitious. In trying to cover too much for too many, breadth trumps depth.

Others cite the inherent difficulty of distilling the opinions of such a varied group of people into specific action points. This is never an easy endeavor, and it becomes a virtually impossible one when it involves so much wealth and so many egos.

Then there are those who believe that too much time is spent arguing about what has happened—especially when things have gone horribly wrong—and too little time is devoted to what lies around the next corner, and the one after that.

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:

Davos and the never-ending Doha round

This year’s World Economic Forum offers not one but two meetings of trade ministers on the never-ending Doha round. Besides the traditional Saturday lunch hosted by Switzerland on Saturday, this year featuring 26 ministers plus WTO chief Pascal Lamy, the EU is holding a dinner on Friday for the G7 – that’s the trade G7: Australia, Brazil, China, EU, India, Japan and USA.

The meetings may attract some interest as this year is seeing a renewed push to conclude the Doha round, now in its 10th year, after leaders of the G20 (that’s the financial G20 not the trade G20) said 2011 was a window of opportunity.

For those who think this might join a long list of missed deadlines, I offer this story from Jean-Pierre Lehmanne, founder of

The Evian Group at the IMD business school in Lausanne:

Barack Obama has an appointment with God and asks Him, "when will the US deficit be reduced". God replies, "Not in your lifetime", and Obama begins to cry.

Angela Merkel meets with God and asks Him, "when will the Euro zone be sturdy". God replies, "Not in your lifetime", and Merkel begins to cry.

Hu Jintao goes to see God (yes!!) and asks Him, "when will the province of Taiwan be reunited with the fatherland". God replies, "Not in your lifetime", and Hu begins to cry.

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.