I’m at the final plenary session at the World Economic Forum Global Agenda Councils meeting in Dubai. In the last two WEF events I’ve attended, I’ve heard rumblings that were predictive of crises and trends to come; that’s what happen when you bring together the world’s machers and thinkers, as happens in Davos. Two years ago, the rumble I heard was about rising food prices. One year ago, it was about the need for global financial regulation.
Now some may say — as someone from OECD (Organization for Economic Cooperation and Development) did here — that WEF, or its members, have been more a part of the problem than the solution. I don’t know about that. At least we can say that WEF has not been equipped to act quickly enough to forestall those crisis in food and credit. So it seems that this meeting is an attempt to respond to that, to set agendas more than spot them.
Today’s meeting began, of course, with a report from a cluster of councils on finance. Suzanne Nora Johnson of Carnegie issued a strong statement.
“The outlook for the global economy is the worst that many of us have seen in our lives,” she said. “There is no country, there is no industry that will be completely immune…. The current crisis is rooted in global macroeconomic imbalances. We are in this together.” This, she said, was “a problem of risk management. No one did a good job.” There was excessive risk taking and leverage. In that, she included not only the industry and governments but media and households. “It has undermined the perceived advantage of open capital markets and at the extreme has even questioned the value of capitalism today.”
The groups endorsed two short-term responses: First, “everyone who is engaged in this crisis has to have a seat at the table. There has to be a global, coordinated response both in crisis management and in the ongoing regulation of our markets.” Second, “the intense government responses to date must continue… with much better communications and transparency of government objectives.”
More the intermediate and long terms, the groups proposed:
* “Building the capacity and capability of our regulatory authorities both in national and international forums.”
* Many government improvements in the private sector need to continue.”
* Greater linkages between macroeconomic policies and regulators.”
* “Transparency of information is not enough. There needs to be more synthesis and analysis in the aggregate.” (And, no, I don’t know what that means.)
* “The rules of engagement of government in private sector need to be defined.” There is a
* “Continued investment in the private sector … in the emerging markets./”
* “The underserved need to be engaged.” Though there is a need for government intervention, she said,
Some other themes from other groups:
* Networks. We are not only more connected through the economy, environment, and security but we now have the means to connect — the internet — to create and innovate and make decisions. Telephony is be a bridge to greater connectedness as it links with the internet. By the end of 2010, Paul Twomey of ICANN pointed out, 5 billion people will have mobile phones and more and more they will have internet access. The global governance group called for a Marshall Plan to bridge the digital divide.
* The need for global governance (not global government, they were careful to point out). The governance group argued that world trade works because of global governance but finance is broken because it does not. They said that this will require some relinquishment of sovereignty.
* Capitalism isn’t broken “It would be sheer folly to allow our faith in the system to be shaken by the financial crisis,” said the economic development group. That was a majority opinion, I’d say, though not unanimous, as one comment from the floor revealed.
* Mobility. The governance group said that problems cross borders without passports but we expect solutions to move with passports. The economic development group urged a “global system of global migration” but admitted that with unemployment soaring, it’s not the time to push this; they suggested instead working it out quietly (that’s not very transparent).
* Changing demographics. The economic development group said that with life expectancy extended by two decades and with a huge growth of the older demographic, retirement laws should be changed. That, too, they suggested is not best taken on while employment is rising.
* The environment and sustainability group — which called for “a fundamental reboot” in 2009 — said that the crisis in fuel, finance, and food were “just canaries in the coal mine. They are early warning signs that the system is not sustainable.” Of course, environment was on many tongues, but I didn’t hear much new about the agenda except continued efforts to communicate urgency.
* Involving more stakeholders as also on many minds with more calls for including more people. That is a permanent challenge for WEF.
* Freedom of speech. Too little was said about that except whispers about taking on the topic in a nation that does not value and protect speech. At least someone from the entertainment group — yes, frivolous entertainment — said that freedom of speech is essential so people will be able to tell their stories and understand each other better. Amen. I wish that had come as a strong statement from the internet and media groups as well. Show biz shamed us.
* The group on society and values said it in their way, reminding the group of “the moral imperative to develop the promise of every human being.” That, of course, also touches on poverty discrimination, and education.
* The power of data and information is implicit in calls for transparency but the potential is greater than that, requiring systems to gain value from data. The health group talked about that and how “data is a public good and should be in the public domain.”
* Moving beyond data and information — which is where too many think the value of the internet stops — Don Tapscott made a good appeal for baking openness and involvement into finance (why not open-source risk management algorithms?) and government (the internet enables a national brainstorming).
* An unspoken theme I saw through the three days here was control: those who had it losing it and not knowing what to do, not understanding that — according to Jarvis’ First Law — today, when you give up control, you win. That, to me, is the fundamental change occurring here. I am in the midst of those who control and they must learn, according to David Weinberger’s Corolary, that there is an inverse relationship between control and trust.
* Crises are an opportunity for change.
Some people in the room, me among them, thought we are devoting, though understandably, too much attention to fear, risk, failure, regulation, and control. Some believe — in the end, most, I hope — that innovation and creation and invention are the real cures and the real means for growth and I hope we concentrate on them. WEF head Klaus Schwab does address the theme in his closing: “entrepreneurship in the global public interest.”
There’s more, of course. Now we’re getting to the point of people standing up to say we’ve forgotten their issue. That could go on forever.
I’ll write later about my own group on the future of the internet and about impressions of Dubai.