Davos, Switzerland, becomes the temporary capital of the planet this time of the year as world leaders converge to tackle pressing global economic and policy questions at the Annual Meeting of the World Economic Forum (WEF). It is much more than a simple get-together of global leaders from many fields in a Swiss ski resort. The Annual Meeting provides a rethinking of systems and exploration of strategies and solutions that have positive transformational implications.
This year over 2,500 leaders from business, government and civil society were in Davos for the 41st World Economic Forum Annual Meeting. The theme of the five-day meeting was “Shared Norms for the New Reality“. Participants focused on defining the new reality facing the globe and discussed which shared norms are needed for improving global cooperation in a new era.“The shifts of political and economic power from West to East and from North to South, as well as the speed of technological innovation, have created a completely new reality. Global systems and decision models can no longer cope with the speed and complexity of all these changes,” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.
I think it is important to listen and understand the key messages from Davos as the business and policy agenda for 2011 / 12 and beyond is shaped up there and it does affect us directly and indirectly. So here we go, my hand picked, consolidated key messages and themes from Davos.
- The World Economic Forum launches the Risk Response Network – The world has fundamentally changed and this new reality calls for more foresight and collective action to address a broad range of global risks. The network will address concerns about widening economic inequalities and failed global governance systems underpinning a raft of other interrelated risks ranging from financial governance to cyber-security and resource scarcity.
- The new reality is an acceleration of globalization – As the economic centre of gravity has shifted east and a dual-speed economy sees high rates of growth in emerging countries and relatively low rates in developed countries, the economic re-balancing presents opportunities and challenges best met through a shared interest in improving the state of the world.
- The “new normal” for growth – Growth in most advanced economies will remain below trend with outright contraction in parts, prospects hindered by lack of international cooperation on key issues and an ability of the US to tackle its budget deficit – the “real gorilla in the room”.
- Vision for “sustainable and balanced” growth in the 21st Century – Should be based on three new realities: the rise of emerging economies; the imperative for peace and security; and climate change which underscores the need for a new low-carbon economy. (Reference:Susilo Bambang Yudhoyono, President of Indonesia)
- The cause of social business – Draw a line between “selfish business” that maximizes profit and “social business” that focuses on other benefits such as development. The two can coexist, but sharing norms and dreams means pushing a new image of humanity. (Reference: Muhammad Yunus, Managing Director of the Grameen Bank)
- Don’t think only about short-term profits – Management success has been defined so narrowly to mean maximizing profits for shareholders without consideration of long-term goals such as sustainability. “We believe that short-term profits and long-term sustainability are not mutually exclusive.” (Reference:PepsiCo Chairman and CEO Indra Nooyi)
- Post-Crisis Reality Requires New Social Contract – Governments and businesses should start revising their social contracts with their stakeholders in the light of the new realities of the post-crisis world. “The new contract has to move beyond the rulers and the ruled”. (Reference:Prime Minister Abhisit Vejjajiva of Thailand)
- Collaborate for a new deal – The world’s largest economies need to collaborate in order to face the challenges of the new reality. The effort is needed to transform the post-war economic deal. With a view to the pivotal relationship between the US and China with interests on both sides as closely tied in many ways. (Reference:US Treasury Secretary Timothy Geithner)
- Europe Needs a Change of Direction – Risk-taking investment culture, a Europe-wide patent sche
me, tougher stress tests, killing off sovereign debt and removing crushing regulation are a formula for growth. “Now is the time to go for a genuine Single Market.” (Reference:David Cameron, Prime Minister, UK)
- India’s inclusive growth imperative – Growing by nearly 9% a year, India has become a model of an economy that is expanding rapidly within the context of an open, democratic society. The biggest challenge for the country is to ensure that growth is inclusive. “Examples like China have shown us that, as growth takes place, poverty comes down substantially.” (Reference:Chanda Kochhar, Managing Director and CEO of ICICI Bank of India)
- Creating Shared Norms: The Century’s Leadership Challenge – Set against the context of the global financial crisis, social tensions and civil unrest, there is unanimous agreement that change is essential. A recurrent theme during the World Economic Forum Annual Meeting 2011 was that we “have to move beyond the old paradigm of how these problems are solved.” While high-level agreements are necessary, businesses, governments and NGOs are also looking for pragmatic ways to contribute, and that requires shared norms for processes and practice, be it an ISO standard or a common plug for electric cars.
All references, quotes directly from the WEF website – http://www.weforum.org/