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World Economic ForumAnnual Meeting 2011

Shared Norms for the New Reality

Davos-Klosters, Switzerland 26-30 January

The World Economic Forum is an independentinternational organization committed to improvingthe state of the world by engaging business,political, academic and other leaders of society toshape global, regional and industry agendas.

Incorporated as a not-for-profit foundation in1971 and headquartered in Geneva, Switzerland,the Forum is tied to no political, partisan ornational interests (www.weforum.org).

Preface page 3

Highlights and Outcomes page 4

Shared Norms for the New Reality page 12

Responding to the New Reality page 14

The Economic Outlook and Defining Policies for Inclusive Growth page 18

Supporting the G20 Agenda page 22

Building a Risk Response Network page 26

Acknowledgements page 30

Contents

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Additional programme highlights from the 41st AnnualMeeting of the World Economic Forum are accessible inmultiple forms on our website:www.weforum.org

Highlights, webcasts and summaries are at:http://wef.ch/davos

Hundreds of pictures from the Annual Meetingphotographed by Swiss-Image are available at:http://wef.ch/pix

World Economic Forum Annual Meeting 2011 | 3

The first Annual Meeting of the seconddecade of the 21st century openedamid an atmosphere of micro-optimism combined with macro-pessimism. Members of ourcommunities were looking out on aworld full of opportunity for themselvesand their networks. At the same time,when confronted with the challengesfacing the world – from the stress onwater, food and energy created by aballooning global population to thecomplexities of the post-crisis financialenvironment and the new realities ofthe post-globalization, post-privacy,post-digitization world – there was afeeling of being overwhelmed andburned out.

Nonetheless, throughout the Meeting,optimism was the dominant force. Thespirit of Davos always provides aplatform for unique interaction, but thisyear reinforced its position as theSummit of Summits. The AnnualMeeting provided an opportunity forleaders of the G20 nations to meet inan informal setting to open thediscussions that will be continuedunder the chairmanship of Francethrough 2011. The presence of manyEuropean leaders reinforcing theirsupport for the continent’s singlecurrency (see Euro Leadership, page10) calmed markets and providedconfidence that the politicalenvironment around the euro wouldprovide stability.

A background of civil unrest in Tunisiaand Egypt provided a poignantexample of the nature of the newreality. Events across the Middle Eastgraphically demonstrated thecomplexity, rapidity andinterconnectivity of the world today.Global youth is rising to the challengeof leadership in the 21st century usingnew technologies and ways ofcommunicating. New actors areemerging and influencing global eventsin unanticipated ways.

All these dimensions of the new realityrequire first and foremost a commonapproach: basic values and sharednorms to be turned into positive forcesdriving our future. It also requires anew sense of “global togetherness”.Events in the wider world as well asthe discussions in Davos served toreinforce the importance of theMeeting’s theme and sub-themes,each of which is explored in depth inthis report.

Importantly, the discussions underthese themes, the insight andconclusions that emerged from themunderline the unique nature of theWorld Economic Forum as a trulymultistakeholder institution. In thesecomplex and fast-moving times, theworld needs an institution that is ableto address global challenges in aninterdependent, proactive andcollaborative way, acting

independently, impartially andinternationally, and committed toimproving the state of the world. TheWorld Economic Forum acts as a trueglobal trustee, always beginning withthe long-term global public interest inmind and at heart, not the self-interestof any single stakeholder.

It is in that spirit that the Forumlaunched the Risk Response Network,a collaborative, networked entitydesigned to enable the world toprepare and respond to global risks, anew type of organization designed forthe new reality.

The Risk Response Network, as witheverything we do, will build on our fourstrategic pillars: Communities,Interaction, Insight and Impact. Theseprovide the Forum with a rigorous andunique framework and ensure thateverything we do throughout the yearachieves the excellence apparent atthe Annual Meeting.

The impact of Davos for 2011 is tobegin the year with active optimism,introducing new thinking, newconnections, new ideas and networksto build on the micro-opportunities tocontribute to the Forum’s mission toimprove the state of the world.

World Economic ForumAnnual Meeting 2011

Co-Chairs

Preface

Klaus SchwabExecutive Chairman, World Economic Forum

Paul Bulcke, Chief Executive Officer, Nestlé, Switzerland

Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank, India

Yorihiko Kojima, Chairman of the Board, Mitsubishi Corporation, Japan

Ellen Kullman, Chair of the Board and Chief Executive Officer, DuPont, USA

Jacob Wallenberg, Chairman, Investor, Sweden

Wei Jiafu, Group President and Chief Executive Officer, China Ocean Shipping Group Co., People's Republic of China


Inflection to Recovery

The world is at a turning point and dialogue among leadersfrom all sectors is imperative to forge a sustainable future,agreed the Co-Chairs of the World Economic Forum AnnualMeeting 2011.

“The new reality is an acceleration of globalization,” saidJacob Wallenberg, Chairman of Investor, Sweden. To keeppace with emerging challenges, “we need to see morecollaboration and dialogue between different stakeholders,which is what Davos is all about,” he added.

“We didn’t fall off the cliff, and there is growth worldwide,”said Paul Bulcke, Chief Executive Officer, Nestlé, Switzerland.

“The economy is on a clear track of recovery,” agreed WeiJiafu, Group President and Chief Executive Officer, ChinaOcean Shipping Group Co., People’s Republic of China.

Modernizing Russia

In his opening address, President Dmitry Medvedev of theRussian Federation referred to the difficulties facing Russia inbuilding the rule of law. Addressing overseas investors,Medvedev said decision-makers in Russia are not immune toordinary mistakes, but “major changes” are taking place,particularly in fighting corruption and modernizing thejudiciary. “Realistic attempts are being made to improve theinvestment climate in Russia. We have not yet achievedoutstanding results, but we have resolved to persevere. Weare learning and ready to receive constructive advice, but wedo not need lecturing,” he added.

Highlights and Outcomes

4 | World Economic Forum Annual Meeting 2011

Downside Risk

The “new normal” for the developed economies looks bleak,according to panellists in a debate hosted by Time magazine,which included Nouriel Roubini, Professor of Economics atNew York University; Sir Martin Sorrell, Chief Executive Officerof WPP; and Min Zhu, Special Adviser to the InternationalMonetary Fund. The panel predicted that growth in mostadvanced economies will remain below trend with outrightcontraction in parts, prospects hindered by a lack ofinternational cooperation on key issues and the ability of theUS to tackle its budget deficit – the “real gorilla in the room”.

Debt and Unemployment

The global economy faces many challenges, not least theburden of sovereign debt, concluded a panel in Davos, whichincluded McKinsey Managing Director Dominic Barton andJames Dimon, Chief Executive Officer of JPMorgan Chase.Population growth and rapid urbanization in the developingworld risk depleting natural resources. In the West, job lossesand wage deflation threaten social stability, as does thegrowing spectre of youth unemployment. Dimon said criticismof banks is misplaced. “There is good and bad in banking justas there is in the media sector.”

France's G20 Chair

Addressing the participants of the World Economic ForumAnnual Meeting 2011, President Nicolas Sarkozy of Franceframed his vision for the G20 by noting, “We are 11 years intothe 21st century, yet we are still functioning with the rules ofthe 20th century.” We have entered an age where it is evermore important to talk and listen to each other, to identify thecollective common interest and to find news ways of thinkingto help us build the future.

Over the past 18 months, at the brink of the precipice, therewas little choice behind the decisions made by the G20; it isnow time to keep cool heads as the decisions get tougher.The G20 must be productive, and its agenda will focus onthree major risks: sovereign debt, monetary and financialimbalance, and the impact of inflation on growth and thesoaring price of commodities.

When asked by Klaus Schwab, Founder and ExecutiveChairman of the World Economic Forum, whether the eurohas the capacity to survive, President Sarkozy said that, forthe 17 member countries, the euro is a magnificent symbol oflasting peace. There is a need to deepen and integrate thedefence of the euro and never turn away from it.

Eternal Vigilance

Federal Chancellor of Germany Angela Merkel warnedparticipants against complacency about the risks of a furtherfinancial crisis, saying that all the international mechanismsneeded to prevent another crash are not yet in place. “Canwe safely say that we can prevent further crises fromhappening? Do we have the necessary mechanisms in placeto ensure sustainable growth globally? We have laid down thegroundwork, but we are not there yet,” Merkel added.

Cameron’s Vision for Europe

Many problems Europe faces follow decisions governmentshave taken, alone or together, United Kingdom Prime MinisterDavid Cameron told participants. On the future of Europe, hesaid: “We are an open, trading continent. We have a proudrecord of invention. We’ve got advanced democratic values.But yes, we’ve got to recognize that Europe has to earn itsway. The world doesn’t owe us a living. So let’s make thechoice to do things differently, to fight for our prosperity.”

Cameron outlined his vision of a new direction for thecontinent: a risk-taking investment culture, a Europe-widepatent scheme, tougher stress tests, killing off sovereign debtand removing crushing regulation are a formula for growth.“Now is the time to go for a genuine single market,” he said,pointing to commitments from leaders across Europe to openand free market reform.

Sustainable Future

President Susilo Bambang Yudhoyono of Indonesia set outhis vision for “sustainable and balanced” growth in the 21stcentury. The 2011 ASEAN Chair told participants in a plenaryaddress that “the world is undergoing major shifts.” Heoutlined 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.He urged leaders to foster a “21st century globalism whichshould do away with dogmatism.”

6 | World Economic Forum Annual Meeting 2011 World Economic Forum Annual Meeting 2011 | 7

Building Bonds

Japan’s Prime Minister Naoto Kan told participants that it isessential to reconnect and forge new relationships. “Spirituallyand economically … it’s important for us to open ourselvesup to the rest of the world.” This is equally true on a domesticas well as an international scale, he said. Kan added that hehad come to Davos to discuss social inclusion and theconcept of human security. To him, building new bonds andopening up to the world are at the heart of that push. “Today,the world faces major changes that can be likened to atectonic shift, both in national security and in economicfields,” stated Kan. “I think we need to build new bondssuitable to the times and regions we are living in,” he said.

G2 Collaboration

The world’s largest economies need to collaborate to face thechallenges of the new reality, said US Treasury SecretaryTimothy Geithner, speaking at a plenary session. The effort isneeded to transform the post-war economic deal. With aview to the pivotal relationship between the US and China,Geithner described the interests on both sides as closely tiedin many ways.

On the 10th anniversary of China’s accession to the WorldTrade Organization, Chen Deming, Minister of Commerce,People's Republic of China reaffirmed his commitment to freetrade and reminded participants of the significance of China’srole in global trade.

Health for the 21st Century

“Chronic disease causes six out of every 10 deathsworldwide,” said Secretary-General Ban Ki-moon of theUnited Nations. It is no longer just a rich man’s problem;more than 80% of these deaths occur in developingcountries. However, only 3% of development assistance goesto chronic diseases. “To fix the priorities, we must place non-communicable disease high on the development agenda.”

Executives from the food and pharmaceutical industry –Richard Clark, Chairman of Merck, and Kendall Powell,Chairman and Chief Executive Officer of General Mills –committed to closer collaboration with government and non-governmental organizations.

One exciting development is in the field of telehealth andmobile medicine, where high mobile telephone penetration inthe developing world can be used for prevention and healthpromotion. “This is already happening for treatment ofdiabetes and detecting cardiac arrhythmia – it is not a pipedream”, said Paul E. Jacobs, Chairman and Chief ExecutiveOfficer, Qualcomm.

The Bill & Melinda Gates Foundation has added US$ 100million to the campaign to wipe out polio and a further US$60 million was pledged by United Kingdom Prime MinisterDavid Cameron, who committed to double his country’scurrent contribution to polio eradication. “This funding will seean extra 45 million children fully vaccinated against thedisease,” he said, urging other world leaders to finish the job,adding that the new funding is conditional on matchingcommitments and making vaccines routine in affectedcountries.

Social Contract

Governments and businesses should start revising their socialcontracts with their stakeholders in light of the new realities ofthe post-crisis world. “The new contract has to move beyondthe rulers and the ruled,” said Prime Minister Abhisit Vejjajivaof Thailand. “We’re all partners now.” The state should notintervene in the private sector, he declared, but should focusinstead on creating the conditions that would allowcompanies to create employment and make profits for theirshareholders.

Responsible Business

Business people should be sent back to school so they canbe re-educated to think beyond short-term profit-making,PepsiCo Chairman and Chief Executive Officer Indra Nooyisaid in a plenary session. Management success has beendefined narrowly as maximizing profits for shareholderswithout consideration of long-term goals such assustainability. The corporate mindset still regards adoptingsustainability as a matter of resolving conflicts or trade-offs.Nooyi declared, “We believe that short-term profits and long-term sustainability are not mutually exclusive.”

Hope for Haiti

The best way to help Haiti in its post-disaster recovery is tobuild back better. An IdeasLab session on Haiti at the WorldEconomic Forum Annual Meeting 2011 focused on five keypoints: meeting the essential need for pathogen-free water;supporting small and medium size enterprises and providingmicro-insurance to protect the poorest Haitians, particularlywomen; providing sustainable construction and skills trainingto ensure improved building standards and quality in future;employing mobile banking as a tool for financial inclusion; andjump-starting the Haitian economy through social business.The Forum also launched its new report Private SectorDevelopment in Haiti: Opportunities for Investment, JobCreation and Growth.

Towards National Reconciliation

In a taped audio speech from her country, Aung San Suu Kyi,General Secretary of the National League for Democracy(NLD), called on world leaders gathered in Davos “to use theirparticular opportunities and skills as far as possible topromote national reconciliation, genuine democratization,human development and economic growth in Burma, that ourpeople may in turn be able make their own contributiontowards a safer, happier world.”

World Economic Forum Annual Meeting 2011 | 98 | World Economic Forum Annual Meeting 2011

New Energy

“Developing new sources of renewable energy is an amazingbusiness opportunity and key to achieving sustainableeconomic growth,” said Mexican President Felipe Calderónas he addressed a panel. Other panel members includedUnited Nations Secretary-General Ban Ki-moon, IndonesianPresident Susilo Bambang Yudhoyono and Bill Gates, Co-Chair of the Bill & Melinda Gates Foundation.

India Inclusive

Growing by nearly 9% a year, India has become a model ofan economy that is expanding rapidly within the context of anopen, democratic society. The biggest challenge for thecountry is to ensure that growth is inclusive.

While high-level agreements are necessary, businesses,governments and NGOs are also looking for pragmatic waysto contribute. This requires shared norms for processes andpractice, be it an ISO standard or a common plug for electriccars.

Vision for Agriculture

The World Economic Forum, together with a coalition ofbusiness, governments and farmers, launched an initiative,called a New Vision for Agriculture, to significantly increasefood production while conserving environmental resourcesand spurring economic growth. The governments ofTanzania, Vietnam and the US as well as 17 globalcompanies; international organizations and agriculturalleaders plan to accelerate sustainable agricultural growththrough market-based solutions. President Jakaya Kikwete ofTanzania launched a blueprint for public-private investment inhis country’s Southern Agricultural Growth Corridor,developed with support from the initiative. “Developing thiscorridor could triple regional production, generate US$ 1.2billion per year and lift 2 million people out of poverty,” hesaid. “My government is committed to realizing thisopportunity to generate sustainable growth in the region.”

Risk Response

The World Economic Forum launched the Risk ResponseNetwork (RRN) to bring together stakeholders on complex,interconnected global risks. The world has fundamentallychanged and this new reality calls for more foresight andcollective action. The network serves as a preparatory,analytical and highly practical framework for the globalcommunity to improve risk management through bringingtogether the most relevant global decision-makers with themost compelling insights and the most suitable tools andservices.

The network will addresses a raft of interrelated risks rangingfrom financial governance to cyber security and resourcescarcity. Uniquely placed to catalyse a collective response tothis new landscape, the World Economic Forum is launchingthe platform to better understand, manage and respond tothese complex and intertwined risks.

EuroLeadership

European leaders came to the Annual Meeting in Davos

with a message that was consistent, strong and clear:

the euro is not negotiable, it is not a fair weather project,

it is here to stay. The euro crisis was caused by

excessive debt, economic differences within Europe and

structural problems in the Eurozone, said leaders. The

answer is to address these issues, not waiver in

commitment to the currency. French President Nicolas

Sarkozy, German Federal Chancellor Angela Merkel,

Greek Prime Minister George A. Papandreou and United

Kingdom Prime Minister David Cameron each spoke

passionately about the their own national commitment to

a strong and consistently backed European currency,

supported by a broad range of European finance

ministers and Jean Claude Trichet, President of the

European Central Bank.

“Let me say this very clearly again. The euro isour currency. And it is much more than just acurrency. It is the embodiment of Europe today.Should the euro fail, Europe will fail. We aregoing to defend the euro.”

Angela MerkelFederal Chancellor of Germany

“Chancellor Merkel and I never – and listento me carefully here – never will turn ourbacks on the euro. We will never drop theeuro … The euro spells Europe. The euro isEurope.”

Nicolas SarkozyPresident of France


“We [in Greece] have been doing everything by the book.We’ve done what the recipe says. So why aren’t the marketsresponding?”

George A. PapandreouPrime Minister of Greece

“Let’s not short Europe, and let’s not short the Eurozone. We areheading in the same direction, we are consolidating. We areproducing significant reforms. And we’re determined to … takethe job where it was left unfinished.”

Christine LagardeMinister of Economy, Finance and Industry of France

“The euro delivered what had been asked of it, namely pricestability.”

Jean-Claude TrichetPresident, European Central Bank

“Will the Euro itself in any significant way – in its core – break up? …I think there is absolutely no possibility because of the huge benefitsthat we’ve had over 2009-2010 from having the Euro.”

Jacek RostowskiMinister of Finance of Poland

“We [in the United Kingdom] have a massive, strategic, nationalself-interest to see the Eurozone succeed. And … we need toreturn to some of those basic insights which were on theoriginal drawing board. That you can’t grow unless you do thedifficult homework of structural reform domestically. And youcan’t have a strong … currency union if the basic rules uponwhich it was established are not adhered to.”

Nick CleggDeputy Prime Minister of the United Kingdom



Shared Norms for the New Reality


Upbeat. Optimistic. Positive. Thesewere the words that described themood of participants gathering inDavos for the World Economic ForumAnnual Meeting 2011, despite acomplex and often troublingeconomic, social and governancelandscape around the globe.

Growth has returned to the globaleconomy, and leaders were beginning todiscern the shape of the new reality. Theywere not entirely uncomfortable with whatthey were discovering.

An often surprising level of economicoptimism was driven primarily by whatmight be termed survivor’s confidence. Inthe words of one Co-Chair: “We didn’t falloff the cliff, and there is growthworldwide.”

Emerging market economies, particularlyChina and India, are growing strongly andparts of the developed world – notably theUS and Germany – have also recovered,although not as resiliently. Manycorporations have seen profits rebound topre-crisis levels much earlier thanexpected. After a year of debt crises inEurope and mixed news about the qualityof the US recovery, the consensus wasthat the worst is over.

Yet, optimistic economic discussions wereset against the backdrop of violent unrestin Tunisia and Egypt. These protestsspread across the region enabled by arelentlessly connected world. Contagiouscivil unrest emphasized several underlyingthemes of the new reality: the importanceof inclusive growth and the political impactof disenfranchisement; the failure of globalgovernance frameworks; and the manifoldeffects of hyper-connectivity, socialnetworks and information overload ongovernance – corporate, national andglobal.

From the first session in the AnnualMeeting, the outlook for the globaleconomy was discussed in the context ofstark inequality in outlook and prospectswithin and between countries, and theimperative to find new paths to inclusivegrowth. Political upheavals in the MiddleEast underscored how urgent it is for theinternational community to focus onunemployment, particularly among youthand the long-term jobless – the losers ofglobalization. Addressing inequalities thathave been fully exposed by the globalrecession is the paramount post-crisischallenge for governments, business andcivil society around the globe.

These issues and their consequences areexacerbated by the new world ofinformation, social networks and hyper-connectivity. The glut of information is notonly driving transparency andcollaboration, but it is also causing a newwave of problems, centred on corporateand individual privacy, social upheaval,transparency, corruption and security. Thedisenfranchised are finding a voice, andtraditional economic, social and corporatenorms are being shaken by the radicaldisruption driven by global collaboration oflike-minded communities andcampaigners.

Never have governments, organizationsand individuals been more exposed – thesocial Web and real-time, completeinformation is shining a light on theexternalities arising from corporate andgovernmental activities. The answer, asimplied by the Annual Meeting’s theme, isthe development and dissemination ofshared norms of behaviour acrossorganizations, disciplines and arenas.

The consensus of participants is that thenew reality demands a new type of leader– he or she needs to possess not onlytraditional leadership qualities – firm, smart,directed – but also must becompassionate, understanding,empathetic, open and transparent. Thisnew kind of leadership is to be exercised ina world of ever multiplying challenge,characterized by trends such as theshifting of economic and political powerfrom West to East; a burgeoning globalpopulation expected to hit some 9.1 billionby 2050, putting immense pressure on thewater-food-energy-nexus nexus thatprovides humanity with its sustenance;ageing populations in the developedcountries; new digitally driven behavioursamong increasingly confident, well-educated, yet disenchanted, youthpopulations; and the agglomeration ofcomplex, interconnected risks thatcombine to create crises that areincreasingly severe and global inconsequence.

Leaders and organizations in this newreality need to be both global in theiroutlook and pragmatic in their approach tofinding and implementing solutions. Thereis growing recognition that workablesolutions to 21st century problems will notnecessarily be grand designs, conceivedon a global scale, but practical innovationsthat work in villages, towns, cities andregions, scaled up or adapted to differentsituations. Participants spent a great deal

of time in Davos finding and cultivatingthese real solutions and relatively lessdiscussing the adequacy and design ofglobal governance frameworks.

The only certainty is that crises willcontinue to spark. Against the backdrop ofthe new reality, as leaders work together todevelop shared norms, the WorldEconomic Forum has launched a newnetwork designed to create a more resilientworld to help turn the best ideas andinsights into policies and action: the RiskResponse Network (RRN). Building on itsexisting insight generation and networks,such as the Global Agenda Councils, theCentre for Global Competitiveness and theGlobal Risks report, the RRN is a platformto provide the most relevant globaldecision-makers with the most compellinginsights and the most suitable tools andservices. It is intended to build on theForum’s unique position between the worldof dialogue/insight and the world of action.

The new reality is a new world of risk.Globalization, shifting demographics,rapidly accelerating technological change,increased connectivity, economicuncertainty, a growing multiplicity of actorsand shifting power structures combine tomake operating in this worldunprecedentedly complex and challengingfor corporations, institutions and countriesalike. Yet, leaders brought with thempreparedness and willingness to engage ina complex future, and it is thispreparedness that provided the fuel for theoptimism which drove the Meeting.

“One has to take into accountnot just injustice within acountry or between countries,but for mankind in its entirety.”

Micheline Calmy-Rey, President of the

Swiss Confederation and Federal Councillor of

Foreign Affairs of the Swiss Confederation

Voter engagement is falling in mature democracies

85%

80

75

70

1970 1975 1980 1985 20001990 2004 2005

EIU “fulldemocracies”

* The EIU's Index of Democracy 2008 identified 30 countries as "full democracies",with the highest relative scores in five measures of political freedom and participation.

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Source: Economist Intelligence Unit Index of Democracy 2008; Institute for Democracy and Electoral Assistance


Responding to the New Reality

“It is not enough to have one’sown freedom. You have torespect the freedoms of others.This is the principle which istrue for relations betweendemocratic states.”

Dimitry Medvedev, President of the Russian

Federation

• The new reality is born of a hyper-connected world with multiple power centres,characterized by volatility and high-speed change.

• Disruptive demographic trends such as an ageing and growing population,coupled with changing social behaviours of the millennial generation are exertinggrowing pressure on governance.

• A sustainability imperative has emerged, caused by growing social and corporateawareness of scarcity in commodities and natural resources.

• New social and environmental demands (governance) on, and expectations (fromsociety) of, business exist.

Today, people live in a connectedworld, buzzing with information andconversation. Driven by advances infixed networks in the developed worldand mobile networks in developingcountries, there is a global surge incontent production, broad-basedcommunity building and collaboration.

Confidentiality is no longer a given;transparency assures accountability andresponsibility, and can be demanded byempowered digital communities. In theworld of WikiLeaks, organizations mustconsider not what information they shouldmake public, but what small amount ofdata should be protected.

As a truly disruptive technology, socialmedia is enabling innovation and change inunimaginable ways. The social Web drivescollaboration that leads to understandingand innovation, but also to strategic andsocial disruption – as demonstrated inTunisia’s “Jasmine Revolution”.

Almost since their inception, socialplatforms have been used for immediatesocial good – they have played a part forsome years in disaster relief mobilizationand analysis – now the collaborativeconsumption they facilitate is mobilizingcar-sharing schemes and micro-companies in the developed anddeveloping worlds, as well as drivingvisions of “horizontal democracy” andenabling direct action for citizens on issuessuch as corruption. Networks aredelivering power to the citizen and thecustomer. This power of the groundswellbrings with it leadership and managementissues.

Hyper-connectivity also brings otherchallenges – convergence of technologieshas led to a glut of unfiltered, real-timeinformation; cognitive abilities arechanging, with shorter attention spansamong young people; and issues aboundon personal and corporate privacy.

Participants discussed the impact of theWikiLeaks furore in many sessions in theAnnual Meeting. Information distributionand availability make organizational andgovernmental transparency a necessity, ifnot an inevitability. And, transparencyraises issues of security, data mining,digital corruption and cyber-crime on ascale previously unimaginable.

Disruptive Demographic Trends

Under-25s now make up more than 50%of the population in non-OECD countries.Digital technologies are providing themwith a new world, while cultural, social andfamily norms are shifting. Social networkingerodes hierarchies and encouragescollaboration, so the young are demandingtransparency and equity, and rejectingtraditional responsibilities.

The “Net Generation” is characterized asconfident, tech-savvy, team-oriented anddriven to succeed but less sensitive tosocial cues – in short, a potentialnightmare to manage. This younggeneration can be a challenge, but youngpeople’s ability to innovate in response tonew opportunities is a boon for


organizations. To truly harness what thisempowered youth can deliver, there needsto be a concrete corporate response –develop creative workspaces, introduceflexible hours, reward career paths thatinvolve constant growth and sell the visionand values of the company while re-evaluating corporate priorities.

As ever, the world is not equal. Whilebillions – young and old – are connectedon micro and macro levels, the digitallydisenfranchised still make up 70% of theworld’s population. Internet access throughthe personal computer has connected thedeveloped world, but for the developingworld connectivity comes from mobiletechnologies.

An Ageing Population

Countering this swelling of youth is thelooming impact of the ageing globalpopulation. The main challenge is not theageing population, but the risk of a failureto adapt to it and a failure to recognize theaggregated value of older people.

Adaptation means supporting,accommodating and empowering olderpeople – through technology in the homeand the workplace, flatter pay structures,rethinking the concept of retirement (apost-industrialization anathema incountries such as China and Japan) andadvances in medicine and healthy livingprogrammes. Altering society’s view ofageing will propagate opportunities for“demographic alchemy”, ensuring that theskills and knowledge of the elderly are

leveraged for the benefit of society as awhole.

A New Model for Leadership

In the face of these changes, there are twocore imperatives for today’s leaders:creating and managing a response tied tothe notion of the humanity of business,coupled with practising truly enlightenedmanagement. Both are a challenge for theconventional leader in a world wheredecisions made correctly today can failtomorrow, and connectivity brings with it ashift from considered decision-making toreal-time management.

Today’s leader must recognize that achanging world necessitates changes incorporate structure and governance – the“humanity of business” must besystemized; there is a need for“compassionate capitalism” thatrecognizes shared value and alignsbusiness progress with that of society.Leaders must translate social values intoaccepted norms and migrate them intoconcrete organizational solutions – theyneed to lead from the front, todemonstrate and embody the values.

As well as this top-down imperative, thereis concurrent bottom-up pressure forleaders to collaborate and consult, drivenby social media and crowdsourcing.

Humanity must take its rightful place inbusiness across cultures, with leadersembracing the softer skills of managementsuch as mindful leadership, true empathy,optimism and selflessness, along with apassion for collaboration – facilitated, as itis, by the networked world.

A Sustainability Imperative

Shared norms on managing the world’sresources are still frustratingly slow toemerge. UN Secretary-General Ban Ki-moon told participants that a revolution isurgently needed in thinking and policy tobring about sustainable growth, protectresources and raise living standards.Those individuals will eventually want thetrappings of everyday life and the world isnot able to sustain them.

Many consumers do not believe thatresource conservation can wait forlegislative impetus, and they are puttingpressure on organizations to innovate.Ground-up pressure from consumers –rather than legislation or protocols – isbecoming a forceful reality. In response,some corporations are choosing to partnerwith NGOs or raise the bar on theirsustainability credentials; many areintegrating sustainability more holistically

into supply chains. However they achieveit, today’s business leaders need to deliverconcrete, transparent solutions to buildingsustainable enterprise.

In today’s hyper-connected world, it is notenough for organizations to act responsibly– they need to be seen to act responsiblyand to measure and report on theirperformance.

Global opinion: Capitalism's flaws need addressing

100%

80

60

40

20

0

Germ

any

Japan US UK

Fran

ce

Global

(27 co

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Indon

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China

India

Brazil

Mex

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Russia

16%

75%

3%

8%

66%

9%

25%

53%

13%

13%

57%

19%

6%

47%

43%

51%

8%

66%

9%

11%

58%

18%

13%

34%

23%

8%

43%

35%

2%

40%

38%

6%

47%

43%

23%

11%

Attitude towards free market capitalism

Capitalism......worksbest as is

...hasaddressableproblems

...is fatallyflawedP

erce

ntag

e o

f re

spo

nden

tsIt works well and increased regulation will make it less efficientIt has problems that can be addressed through regulation and reformIt is fatally flawed and a different economic system is needed

Note: White spaces represent "DK/NA", "Not sure" and "Depends"

Source: BBC GlobeScan/PIPA (November 2009)

Broadband access is only going one way

Fixe

d b

road

ban

d s

ubsc

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ers

(per

100

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bita

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25

20

15

10

5

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2005 2010E2009200820072006

Developing

World

Developed

Source: ITU (2010)

“There is population growth,and there is the ageingpopulation. We will get older,less healthy and not necessarilyricher. So we need to take intoconsideration how we deal withthose things."

Michelle Bachelet, Undersecretary-General,

United Nations Women (UN Women), New York


unemployment, and some of the moreindebted European countries. While therewere fears about the consequences ofmounting debt, there were also worriesthat prematurely abandoning deficitspending could choke off the recovery andlead to stagnation and low growth, similarto that of Japan in recent decades.

The challenges facing the developed anddeveloping countries are markedlydifferent. The richer countries, particularlythe US and in the EU, have significantunemployment problems and are facingmountainous debts. The emerging world isfaced with real inflation problems and foodsecurity issues. By 2050, the globalpopulation will grow to a projected 9.1billion people, and demand for agriculturalproducts is expected to double. In theintervening years, the agri-food system willface increasing constraints and volatilitydriven by resource scarcity and climatechange.

Emerging Concerns

Meanwhile, there were concerns that largecapital inflows to emerging markets couldlead to asset bubbles and inflation. Therewere also spirited debates on thepersistent imbalances in the global

economy that were among the root causesof the financial crisis. China and otherhigh-saving economies in Asia continue toaccumulate the mounting debt of high-consuming countries in the West,particularly the US. While there wasgeneral agreement that China needs tomanage an appreciation of its currency,there was no consensus on how the USand China, the world’s biggest debtor andcreditor, respectively, can cooperate torebalance their economies and howquickly they can do so. This promptedwarnings of a “currency war”, which couldlead to protectionism and trade friction.

The longer-term outlook for the globaleconomy and the extent of the danger ofanother global crisis erupting clearlydepend in large measure on howsuccessful the US and China are inrestructuring their economies. The US hasto secure its post-industrial future byreducing its high debt-to-GDP ratio and itsreliance on deficit spending, bringing downunemployment and investing in educationto strengthen its human resourcescapacity. For its part, China must continueits shift from an export-led to aconsumption-driven economy. It too has toinvest in education to ensure that it cansustain high growth over the long term.

The Economic Outlook andDefining Policies for Inclusive Growth

“There is a potential risk for theworld to go back to the ‘oldnormal’, which was before 2007-2008 – emerging markets keepexporting, advanced economieskeep importing, imbalancesremain . . . This is the [biggest] risk for theemerging economies, becausethey have been successfullytransferring their model from anexport-dependent model to adomestic [model].”

Min Zhu, Special Adviser, International

Monetary Fund, Washington DC; Member of the

World Economic Forum Foundation Board

• The outlook for the global economy this year is generally benign, though significantdownside risks exist, including mounting debt and persistent high unemployment.

• The multi-speed world economy makes multilateral collaboration to addresschallenges such as global economic imbalances and climate change more difficult.

• Tackling inequality is the paramount challenge for all stakeholders in bothdeveloping and developed economies.

• A new social contract has to emerge in which governments, business and citizenswork together to create shared value. Citizens can no longer be entitledbystanders.

What was markedly different in thediscussions on the global economy atthe World Economic Forum AnnualMeeting 2011 from the year beforewas the greater optimism amongparticipants in the strength of thepost-crisis recovery. Dynamic Asianeconomies, particularly China andIndia, and other emerging markets aresurging, while some developedcountries – notably the US andGermany – have also rebounded,though not as robustly. In addition, formany corporations, the recovery hasbeen stronger than expected, withprofits returning to pre-crisis levels.

The confidence of participants wasremarkably strong. After a year of debtcrises in Europe and mixed news aboutthe quality of the US recovery, theconsensus was that the worst is now over.

Yet, by no means was there irrationalexuberance or triumphal breast-beating.Participants were well aware of theimmediate and longer-term risks to theglobal economy. These include thecontinuing weakness of several developedeconomies including the US, particularlywith its gaping deficit and near 10%

Two speed global growth

Forecast GDP growth, 2011 <0% 0-5% >5% No data

Source: IMF World Economic Outlook (October 2010); PwC forecasts (January 2011)


Global unemployment: A structural issue

2011F20062001 2004 20052000 20032002 2007 2008 2009 2010E

Forecast

Latin AmericaNorth America

Asia-Pacific

MENA

Une

mp

loym

ent

rate

14%

12

10

8

6

4

2

0

EuropeAfrica

Note: Data not available for all countries. Africa aggregate includes 7 nations; Asia excludes India and rural China.

Source: IMF World Economic Outlook (October 2010)


While the US and China must logicallywork together to balance their economies,with China’s growth at around 10% andUS unemployment at about the same rate,cooperation is politically difficult.Presidential elections in the US and theexpected political transition in China nextyear are further limiting options. In a multi-speed global economy, collaboration ismuch harder, as the G20 has shown sincethe global recovery began. Yet, stalemateand policy paralysis are not options. Theperiod for debating the redesign of globalgovernance is over. The times demandaction through practical, not necessarilyglobal, solutions.

Inclusive Growth

From the first session, the outlook for theglobal economy was discussed in thecontext of the need for inclusive growth.Political upheavals in Tunisia and Egypt,which framed the Annual Meeting,underscored how urgently the internationalcommunity must focus on unemployment,particularly among young people and thelong-term jobless – the losers ofglobalization.

Addressing inequalities that have been fullyexposed by the global recession is theparamount post-crisis challenge forgovernments, business and civil society inboth developing and developedeconomies. Failure to ensure equality ofopportunity and fairness will result in socialand political instability. Consider theuniversity graduates who did all the rightthings, got educated and yet did not findjobs. Consider the women who are deniedaccess to schooling or not given the sameopportunities in the workplace as men.

Consider too the “cluster bombs” thatcould be set off as the global populationincreases by some 2.2 billion over the nextfour decades. Nearly all the 60 countrieswith annual population growth rates of 2%or more are low-income and middle-income economies. Rising expectationsabout living standards cannot be met ifnations do not collaborate to manage theplanet’s finite resources sustainably andresponsibly.

To secure inclusive growth will requireprogress on a wide range of fronts, fromclimate change to corruption, from thegender gap to access to education andhealthcare. At a time when capitalism anddemocracy are under fire for failing toaddress inequalities, what is needed is anew social contract based on mutuallysupportive and beneficial relationshipsbetween government, business andsociety at large, working together to createshared value.

Governments must focus on creatingopportunities. The state not only has topromote the conditions for prosperity inthe economy and deal with the mostdisadvantaged in society but must alsoensure that investment is made ineducation and skills development, healthand other essential services. Nordiccountries, for example, have shown howstrong social services provided by thepublic sector can enhance the flexibility ofthe labour market by making it easier tohire and fire people. In the end, growth willbe enabled by creating social mobilitythroughout society based on a levelplaying field for all, and ensuring thosewho have the ability to create wealth fortheir societies are able to do so.

“I call Cancun a big step for thecommunity of nations. Butunfortunately, it’s also at thesame time a very small step forthe planet.”

Christiana Figueres, Executive Secretary,

United Nations Framework Convention on

Climate Change (UNFCCC), Bonn

Emerging markets: Driving growth

2013F2012F20062003 2004 20052000 2001 2002 2007 20092008 2010F 2011F

Forecast

All emergingand developing

South Asia

World

GD

P g

row

th, m

arke

t ex

chan

ge

rate

s

10%

8

6

4

0

-2

Sub-SaharanAfrica

2013F2012F20062003 2004 20052000 2001 2002 2007 20092008 2010F 2011F

Source: IMF World Economic Outlook (October 2010)


Supporting the G20 Agenda

“Now that we feel that the crisisis not something that dominatesthe headlines every day, we runthe very real risk that – alsoamong members of the G20 –there is perhaps less of aneffort, less of a sense ofurgency. And that, I think, isexactly the danger. We need towork against this.”

Angela Merkel, Federal Chancellor of

Germany

• The G20 was instrumental in averting worldwide depression at the height of thecrisis.

• Some analysts see a world of “G-Zero”, meaning disarray in global governancewhere there is no leadership. Such a world could lead to a crippling wave ofprotectionism.

• Consistency in regulations, tax systems and tariffs along with greater transparencyare essential for a level playing field.

• The G20 can coordinate an international agreement to get the mix of marketregulation and entrepreneurial flexibility right for economic expansion. It is the onlygame in town.

In the months following the financialcrisis, the G20 was filled withenthusiasm for engaging in urgentlyneeded structural reform. There wasgeneral recognition that once aworldwide banking crisis had beenaverted, currency exchange rateimbalances needed to be correctedand a long list of structural reformsneeded to be put in place.

Despite the best intentions, it did nothappen. A precipitous drop in the bondmarket shifted the focus to austerityprogrammes and attention on theenormous deficits created by the stimulusprogrammes. The shift in emphasis led tocontradictory objectives: the financeministers and central bank governors fromthe 19 countries and the European Unionthat make up the G20 wanted to continueto stimulate economic growth and totackle the glaring trade imbalances anddangerously high levels of unemploymentin certain countries but, at the same time,growing panic over skyrocketing deficitsand an accompanying infatuation withausterity threatened to slow the recoverythat the stimulus packages were intendedto support.

The effect of these conflicting objectives,as played out in the G20, was indecision,verging on paralysis.

Now What?

Throughout the World Economic ForumAnnual Meeting 2011 in Davos, there wasgeneral acknowledgement of the G20’srole in averting a worldwide depression atthe height of the crisis, but also a lack ofclarity about the group’s future and openlyexpressed doubts about its ability todeliver.

One of the new buzzwords proclaimedprovocatively at this year’s Annual Meetingwas “G-Zero”, the suggestion that disarrayin global governance is creating a newworld in which there effectively is noleadership at all.

The danger in allowing that situation tocontinue is that without an effective meansof coordination, the world could easily slipinto a new crippling wave of protectionism.That scenario, pushed to the extreme,could easily result in a worldwiderecession, or worse, the depression thatthe G20’s earlier efforts had managed to

OECD countries have built debt mountains

Cha

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Icel

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Debt >100% of GDP in 2010

Note: Total OECD is a weighted average.

Source: OECD Economic Outlook No 88 (Dec 2010)


avoid. At the very least, the new emphasison austerity promises to slow growth andincrease the difficulty of securing structuralreform.

A more cynical suggestion is that the mostrealistic rearrangement of power is likely tobe a de facto G2, in which the US andChina divide up the world in a newsuperpower rivalry. But the G2 is asproblematic as the G-Zero approach.China and the US are hardly alone indetermining the new geopoliticalequilibrium. France, the United Kingdomand Russia are formidable nuclear powers.India, Pakistan, Israel and, eventually, Iranare emerging nuclear powers. Europe mayappear to be internally divided, but theEurozone now represents a market of 331million highly educated and relativelywealthy consumers.

The sheer size and economic power of theEuropean Union makes it a formidableforce in setting standards for the rest ofthe world. The bottom line is that, at leastin economic terms, the new direction forglobal politics is likely to be one ofmultipolar, geopolitical alliances rather thansuperpower rivalry.

The Only Game in Town

The G20 was created in 1999, asrecognition that the ongoing transfer ofeconomic power to emerging markets hadcreated a new reality which meant thateffective economic coordination needed tobe expanded beyond the OECD countries.The last decade has confirmed this. Yet,the G20 is an imperfect body for dealingwith complex global issues.

Much of the frustration with the G20comes from misplaced expectations thatthe group can act as a kind of globalgovernment, imposing a universal set ofpolicies that will make the world workbetter. That is not likely to happen anytimesoon. Instead, the G20’s main value is toact as a global discussion group thatenables the major economic players tounderstand the impact of various issues oneach country.

Imperfect as it is, there was a strongfeeling at the Annual Meeting this year thatthe G20 is the only game in town. In oneof the 2011 discussions dealing with theimportance of the G20, a panellist asked inexasperation: “What else do we have?Does anyone really want to go back to theG8?”

In today’s globalized marketplace, evensmall and medium-sized enterprisesincreasingly depend on exporting to globalmarkets. For the global economy to moveforward, consistency in regulations, taxsystems and tariffs, and greatertransparency are essential to create thelevel playing field that is a prerequisite fordeveloping effective business strategies.The world needs a body that caneffectively make this happen.

A number of panellists noted that a largeproportion of those companies thatsurvived the crisis are leaner and in bettershape than they were before. Many aresitting on large reserves of cash but arehesitant to invest in their own expansionand job creation because of uncertaintyabout the regulatory landscape of thefuture. Lack of clarity is hamperingeconomic expansion and the creation ofnew jobs. As the head of a leading USinvestment bank put it, the internationalregulatory framework, in spite of Basel III,is now so complex that no one can reallyunderstand it. A concern forcefullypresented on a number of panels in Davosis the fear that over-regulation could leadto a flight of capital towards a shadowmarket of hedge funds and other riskyoperations that might be even moredifficult to control. An internationalagreement is needed to get the mix ofmarket regulation and entrepreneurialflexibility exactly right. That calls foreffective coordination and, again, the G20is the organization to take this lead.

Emerging markets are claiming their share of investment

100%

75

50

25

0

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re o

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I inf

low

s(U

S$

mill

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rate

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2000 2001 2002 2006 20072004 20082005 20092003

US

EU

Selectemergingmarkets*

China

* Argentina, Brazil, India, Indonesia, Korea, Nigeria, Russia, South Africa and Vietnam

Source: UNCTAD (2010)

China and the middle east dominate sovereign investment

United Arab Emirates

Norway

Saudi Arabia

Singapore

Kuwait

Russia

Others

China

Source: IFSL (2010)

“Our first priority must be to killoff the spectre of massivesovereign debts. Those whoargue that dealing with ourdeficit and promoting growthare somehow alternatives arewrong. You cannot put off thefirst in order to promote thesecond.”

David Cameron, Prime Minister of the United

Kingdom


Building a Risk Response Network

Emerging markets account for the bulkof energy demand growth

Source: IEA World Energy Outlook 2010

Pri

mar

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of o

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15

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01980

Note: 2030 data assumes no changes to current policies

2030F2008

OECD

Non-OECD

The 2011 global risks landscape is ascrowded as ever, with a dizzying arrayof risks and opportunities.

Several new risk realities stand out.

First, there is heightened recognition thatglobal risks, like the world, are now tightlyinterconnected and shocks become globalmuch quicker than in the past. This“globalization of risk” ran like a red threadthrough discussions in the Annual Meeting.Risks, like manufactured goods, can nolonger be labelled simply “Made in Japan”or “Made in USA”. They are “Made in theWorld”.

Second, the price of acceleratedglobalization – revealed by the financialcrisis and ensuing recession – is a volatileand vulnerable world with little capacity todeal with further shocks.

Third, while sudden shocks can have hugeimpact, the biggest challenges facing theworld today are from slow failures or“creeping” risks – to the environment, thefood-water-energy nexus, global health,social inequality, resource scarcity andnuclear proliferation. Long-time horizonsand the slow-moving nature of many ofthese risks over decades mean that theyare often vastly underestimated. Withcontinuing population growth, rising energydemand and the growing impact of climatechange, the water-food-energy nexus israpidly becoming a cardinal concern forthe world.

Finally, technology is central to thechanging risk landscape. Today’s hyper-connectivity through billions of hand-helddevices was unimaginable just five yearsago. A series of shock waves – from theStuxnet virus, Trojans and WikiLeaks to therole of social media in political instability –show that the Internet is no longer a

“virtual” world. It is heavily enmeshed aspart of the real world, diffusing power andamplifying the worst-case and best-casescenarios.

Amid this sober assessment, participantswere urged not to forget the upsidesurprises – so called “white swans” – suchas the reunification of Germany and thedismantling of apartheid in South Africa in1990, as well as the green revolution and

triumphs of the technology revolution.Such positive shocks will be a key featureof the new reality.

Global Governance Gap

One of the defining features of the newreality is global interdependency. It isimpossible for any stakeholder to addressmajor challenges in isolation. At the sametime, as discussion on the G20 and globalgovernance made clear, there is nocentralized watchdog, agency or authorityto collectively respond to risk; coordinationis typically ad hoc and fragmented.

The transition to a multipolar world iscomplicating matters. Power is shifting notonly to the emerging world (away from theWest) but also to global, non-governmentalorganizations and transnationalcorporations with widely divergentinterests. It is a paradox: conditions thatmake improved global risk response so

• The new risks landscape is typified by tightly interconnected sets of shocks whichare truly global, even if their impacts differ at the local level. The world isincreasingly volatile and vulnerable while being less risk-resilient.

• The rise of a multipolar world exacerbates the shortcomings of existingcooperation mechanisms and the ability to respond collectively to risk in theabsence of a centralized agency.

• The World Economic Forum launched the Risk Response Network (RRN) at itsAnnual Meeting 2011.

• The RRN will serve as a preparatory, analytical and practical network to betterunderstand, manage and respond to the new risk landscape.

Population pressure means water stress

Source: FAO Aquastat (2009)

Water stress,2008(1,000-1,700m3 water/capita)

Water scarcity,2008(<1,000m3 water/capita)

W2(1m

W2(<m


“We haven’t really created aconceptual framework or takensolid action to prove that we dohave shared norms. And theproof of this is the failure toreach an agreement on theDoha Round … to reach a dealon climate change, when in factthese should be commonobjectives for all countries.”

Abhisit Vejjajiva, Prime Minister of Thailand

Natural and man made catastrophes are increasing

0

50

100

150

200

250

300

1970 1975 1980 1985 1990 1995 2000 2005

Man-made disasters Natural catastrophes

Source: Swiss Re Sigma, World iInsurance in 2009, January 2011

crucial – conflicting incentives and differingnorms and values – are also the ones thatmake the realization of a coordinatedresponse so difficult and messy.

The complexity of these issues isoutpacing the ability of internationalorganizations and national governments tocope. The result has been a series ofglobal governance failures: stalling of UNclimate change negotiations, inability tomanage global macroeconomicimbalances, the incomplete DohaDevelopment Round and challenges toframeworks designed to combat nuclearproliferation.

Set against the context of the globalfinancial crisis, social tensions and civil

unrest, there was unanimous agreementthat new models and norms ofengagement are required, well beyondtweaking the current system. The existinginstitutions and structures of globalgovernance were designed for a differentworld; they were not built for the newreality.

Building a 21st CenturyResponse to Risk

Systems of the 20th century are failing tomanage 21st century risks. What isneeded is a new mechanism to collectivelyrespond to interconnected, global risks –bringing government, industry, civil societyand academia to the same table. To meetthis pressing need, the World Economic

Forum launched the Risk ResponseNetwork (RRN) at the Annual Meeting2011. The RRN will link:

• The most relevant global decision-makers– Through a new and unique

community of Risk Officers fromtop corporations, governments andinternational regulating bodies

• The most compelling insights– Drawn from the World Economic

Forum’s own knowledge captureand insights, including the GlobalAgenda Councils and a network ofthe world’s top universities andprivate sector content providers

• The most suitable tools andservices– By developing proprietary, custom-

designed risk analytics and riskmanagement processes to enabledecision-makers not only to betterunderstand key risks in depth andin context, but also to respond tothem proactively in times of crisis

Its function is as an early warning andresponse system, helping to close the“knowledge-action” gap inherent in riskmitigation. The RRN will also help identifyand seize opportunities for innovation andgrowth. Its focus: fix the future rather thanrepair the past.

Forward-looking governance must bolsterthe willingness of governments, businessand civil society alike to make toughchoices and manage the challengesahead. Above all, the RRN needs to helpthe international community look beyondartificial classifications of states, institutionsand organizations towards a set ofcommon standards and values.

Adequately responding to these sharedrisks will determine whether the comingcentury will be humanity’s best, or its last.

“Over time, that model is arecipe for a natural disaster. It isa global suicide pact. For mostof the last century, economicgrowth was fuelled by theabundance of natural resources.We mined our way to growth; weburned our way to prosperity.We believed in consumptionwithout consequences.”

Ban Ki-moon, Secretary-General, United

Nations, New York


Acknowledgements

The World Economic Forum would like to thank its Strategic Partners for their valuable support.

ABBAbraaj CapitalAccel PartnersAccentureAdobe Systems IncorporatedAetnaAgilityAlcatel-LucentAlcoaApax PartnersArcelorMittalAUDI AGBahrain Economic Development BoardBahrain Mumtalakat Holding CompanyBain & CompanyBank of America Barclays PLCBasic ElementBill & Melinda Gates FoundationBombardierBooz & CompanyThe Boston Consulting GroupBPBTBurda MediaCA TechnologiesChevronCisco CitiClayton, Dubilier & RiceClifford ChanceThe Coca-Cola CompanyCredit SuisseDeloitteDeutsche BankDeutsche Post DHLDo�u� GroupThe Dow Chemical CompanyDubai HoldingDuPontErnst & YoungEskomFluor CorporationGDF SUEZGE/NBC UniversalGoldman SachsGoogleHanwha Group

HCL TechnologiesHeidrick & StrugglesHewlett-Packard CompanyHSBCHuawei TechnologiesIHS Infosys TechnologiesIntel CorporationInvestor ABJPMorgan Chase & Co.KPMGKraft FoodsKudelski GroupLenovoMahindra SatyamManpowerMarsh & McLennan Companies (M&MC)McKinsey & CompanyMerckMETRO GroupMicrosoft CorporationMitsubishi CorporationMorgan StanleyThe NASDAQ OMX GroupNational Bank of KuwaitNestléNews CorporationNIKENomura HoldingsNovartisNYSE EuronextThe Olayan GroupOmnicom GroupPepsiCoPrudentialPublicis GroupePwCReliance IndustriesRenault-Nissan AllianceRoland Berger Strategy ConsultantsSaudi Basic Industries Corporation (SABIC)SberbankSiemensSK GroupStandard Chartered BankSwiss International Air LinesSwiss ReSystem Capital Management

Thomson ReutersTroika Dialog GroupUBSUnileverVimpelComVisa Inc.Vision 3Volkswagen AGVTB BankWiproWPPZurich Financial Services


Contributors

Programme: Lee Howell, Managing Director, Centre for Global Events

The programme team: Anne-Sophie Duprat, Antonio Calvosa, Begona Martinez, Emma Loades,Eva Trujillo-Herrera, Jaclyn Asuncion, Jessica Dyllick, Johanna Dousse, Mireille Bertolini, Natalie Hendro, Nathalie Chalmers,Nicolas Ruble, Rebecca Ivey, Sebastian Buckup, Stéphanie Nassenstein-Zacchi, Tiffany West and Xiuying Zhang

Event Direction: Nadine Bonard, Associate Director, Events

Report Writers: William Dowell, Gay Flashman, Alejandro Reyes, Gareth Shepherd

Report Editors: Michael Hanley, Editorial DirectorNancy Tranchet, Associate Director, EditingDirshaye Abate, Editor, Special Projects

Design and Layout: Kamal Kimaoui, Associate Director, Head of Production and Design

Photography: swiss-image.ch and Richard Kalvar/Magnum

Special thanks to PwC for their help in preparing data and statistics for the World Economic Forum Annual Meeting.

The majority of sessions held at the Annual Meeting are available in summary form at:http://www.weforum.org/events/world-economic-forum-annual-meeting-2011/index.htm

The views expressed in this publication do not necessarily

reflect those of the World Economic Forum.

World Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212, Fax: +41 (0)22 786 2744E-mail: [email protected], www.weforum.org

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