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.
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.
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.
specific and sweeping knowledge of her emails?
Not so different than our CIA, NSA, FBI right now as all of our telecommunication companies are under their thumbs.
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.
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.
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.
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)
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.
Cybersecurity goes prime time at Davos
- 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. -
The World Economic Forum (WEF) has named cybersecurity one of the top five risks in the world. In its Global Risks 2011 report, the WEF’s Risk Response Network nominated cybersecurity alongside planetary risks posed by demography, resource scarcity, trepidation about globalization, and, of course, WMDs. This is heady stuff. Cybersecurity has officially gone prime time. This week in Davos, I’ll be moderating and contributing to panel sessions on this topic.
The timing could not be more ripe. Right now we are witnessing the convergence of multiple seismic risks to data integrity. Social networks capture and mine ever larger amounts of data about humans and companies, opting users into increasingly invasive data collection with little or no notice. Apps operating on social networks and smartphones continually pull data streams about friends, families, personal connections, contacts, geo-location, behavior, preferences, tastes, and health habits — even when these data streams are unrelated to the stated purpose of the applications.
We’ve seen search sites mine public data, semi-public data, purchased information that was supposedly private, and even scraped or stolen data, and aggregate them together for sale and resale on the open web, claiming cover of current law. To date, the Internet economy has been nearly perfectly stacked against individuals’ control over their data. The proliferation of deep digital information about every individual on earth, along with the correlated explosion of its easy and unwitting accessibility by third parties, poses a “personal WikiLeaks” threat to each of us.
That brings us to Julian Assange’s WikiLeaks, which is itself the subject of at least one session at Davos this year. Reviled by some and relished by others, WikiLeaks represents either “radical transparency” or “radical invasion,” depending on your point of view. A large and growing raft of self-described “whistleblower safe harbors” pervade the Web, enabling and encouraging publication of confidential information that is difficult to authenticate as true or false. I suppose I was nonplussed by the bulk of the content published on WikiLeaks about American foreign policy — I think it’s fairly awesome that the United States is secretly saying pretty much the same exact things it says publicly.
But many people can agree that, when it comes to difficult questions of diplomacy, the ultimate resolution may be greatly benefited by the comfort of each party to talk freely within itself or with others when behind closed doors. The brilliant sunlight of transparency may be just the medicine needed to remedy a public lie, as in the case of the Pentagon Papers, but it may also turn from “transparency” to murkier “invasion” when it comes to secrets of hard-won technical innovation such as an automaker’s hybrid engine code base or a nation-state’s schematic for a particularly nasty weapon.
Indeed, states and non-state actors alike are taking note of the evident power of cyber tools to advance their often alarming aims. Cyber-warfare and cyber-terrorism are now the single most efficient ways to damage sworn enemies. Just as the most enterprising criminal networks have decided to abandon old-fashioned thuggery in favor of more profitable cyber crimes such as VAT fraud and identity theft, states and terrorists have taken to the Internet to realize the maximum possible benefits of asymmetrical warfare. A few smart people can infiltrate financial systems, transportation networks, energy grids, and key commercial installations to steal information, seize control of operating systems, or shut down critical infrastructure. Software engineers are now, pound for pound, the most valuable weapons in a military arsenal.
It is heartening to see this sort of open organizing going on in the face of new and evolving global threats. Regarding the four categories of digital security which you name, in particular numbers 3) malware, and 4) exfiltration (a.k.a.cyberwarfare and cyber espionage), we would like to suggest that attention be paid to Voice-over Internet Protocol (VoIP) which we believe to be a serious but as yet unrecognized vector for future security risks of worldwide proportions. Internet telephony is exposed to all the risks of the Internet. As the usage of VoIP expands, one of its greatest risks is that those of malicious intent will not only be able to disrupt our Internet communications, they will be able to shut down our telephone communications as well, leaving us with no effective means of communications at all. If this were to happen, and it very well could, segments of our economy, indeed our whole country would be paralyzed. This worrisome possibility elevates VoIP to one of the most critical cyber-security threats, and a top level Homeland Security risk.
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.
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Resident Davos Expert
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Davos is networking, it’s where politicians can officially meet with their paymasters, it’s where wannabes and slimey fake businessmen run aroundtrying to sell themselves. And it’s full of something that rhymes with pull grit. The WEF does do some decent research, but it is a business enterprise, let us never forget that. The statistic I would like to see is how many jobs did those billionaires eliminate in the past 5 years.