As you may have noticed in the news this week, there’s a lot of anxiety building over the possibility of a global slide into trade protectionism.  With stimulus packages sprouting up in more and more countries, there’s an increasing fear that state leaders will include clauses to protect domestic industries.  This can take a number of forms, whether it be raising import tariffs, subsidizing national companies, providing incentives for companies that “buy local” at the expense of imports… the list goes on. 

Essentially, anything that gives an advantage to national companies at the expense of non-national companies is trade-distorting, and thus a protectionist measure.  But during a global recession, it’s very difficult to avoid these actions.  For a simple example, take the auto bailout.  In North America, we assume that the auto industry is “too big to fail”.  But in giving a bailout to GM, Ford and Chrysler, we’re distorting trade - at the expense of German, British and Japanese auto companies.  Naturally, this issue has already been raised.

Continue reading…

I’m attending the World Economic Forum in Davos, Switzerland. The founder and executive chairman of the Forum, Klaus Schwab, gave a brief but powerful opening address about the challenges confronting our world.  “People have labelled [the economic] crisis as the worst ever and in many other catastrophic terms. Here we do not want to hear about such statements again, even if they are true. We want to concentrate on how we can move out of this crisis and how we can shape the post-crisis world in a constructive manner…. Gathered here are many of the world’s most influential leaders. We cannot sidestep our responsibility to work together to rebuild shattered economies and institutions.”

He outlined five objectives for the Forum.  I’ve summarized them below but I encourage everyone to read the full speech, which is a quick read.

First, we will support governments, and particularly the G20, in their efforts to address the systemic risks in the financial systems to stabilize and relaunch the economy. We have worked together with the respective governments to make sure that all relevant issues are integrated into our discussions and that we can create here - midway between the G20 Summits in Washington last November and in London next April - a true global multistakeholder partnership supporting bold but necessary actions and policy changes.

The second objective for our Meeting is to make sure that we look at our world in a holistic, systemic way. The financial and economic crisis is not the only issue that needs a global multistakeholder response.

The third objective of this Annual Meeting is to start a year-long process to help design the systems and institutions that the world needs to really cooperate and to confront global challenges in a much more proactive way.

The fourth objective of this Annual Meeting is to better shape the ethical value base for business, highlighting a clear differentiation between industrial and service companies that provide true value to society and those that make money through paper transactions and speculation. Profit is a major driver of business, but it is clear that it cannot be profit at all costs and that self-indulgence cannot replace reasonable competitive remuneration.

The fifth and final objective of this Annual Meeting is to reconstruct the global economy. Yes, we are in the midst of an enormous challenge but we are also at the threshold of many promising breakthrough technologies, as the strong presence of our Technology Pioneers demonstrates. Today, a great opportunity exists to generate a new wave of economic growth based on technologies, products and services directly meeting societal needs in eco-efficiency, in healthcare, in transportation, in people empowerment and many more.

I’m enjoying blogging from Davos. But a colleague here, Robert Scoble, is taking blogging to a whole new level. You may remember “the Scobleizer” — his blog as an employee of Microsoft. He was sometimes critical of his own employer — but his following was so huge (and perhaps for other reasons) Microsoft never fired him.

So I’m standing here in a foyer in Davos talking to some people and Robert walks up, points his little Nokia phone PDA towards us and starts doing a live video interview. He points the camera at my badge, then at me asking for comments on a topic and then goes out to his live audience who ask questions or comments on the interview. In the TV world this is called doing a “double ender” but it normally take a few million dollars of equipment and a team with a truck to execute. But here’s Scoble being a one man mobile television station using a cell phone! Actually it’s better than a TV show because it’s interactive.

I’m reminded of my November speech to the Canadian broadcasting industry that broadcasting won’t be “broad and it won’t be casting.”

Combating corruption in business and government is a problem around the world, and a number of sessions here deal with the issue. I was looking around for a particular session in a hotel when a World Economic Forum guide asked me if I needed assistance. I said: “I’m looking for corruption.” Her reply: “Just go straight ahead and you’re bound to find it, because corruption is everywhere.”

With all the discussion of the world’s problems at Davos, one can get a little discouraged. Right now I’m sitting in a session and I’m feeling positively uplifted. Inspired really. It’s a panel of 6 kids aged 17 - 20 who were selected by the British Council. The British Council has created a global network of 54 young people who have been defining what needs to be done to the world to make it possible for them to be successful and solve the many problems that previous generations have created.

The panelists were extraordinary. These 6 were all natural leaders and as activists for social change, all educated, connected and multi-lingual are completely atypical of their peers. But they are part of a global generation and values are more reflective of their generation than not. ( I speak from some experience having just interviewed 11,000 youth in 10 countries of a New Paradigm research project on “the Net Generation.” )

The panel was co-moderated by Actor Emma Thompson, who told me before the session that I should get ready for some uplifting discussion.

A young woman from Sri Lanka working to eliminate poverty and with other has created a network of youth activists. “You must be the difference you want to see in the world.” She describes how the 54 people in the British Council network all view the world the same way. She’s on to something. My research indicates that youth today have very common views about many things, regardless of nationality. This is arguably the first generation ever of which that could be said. She told a story of a 5 year old who watched her mother being gang raped and suffered major trauma. After much counselling she is now doing OK.

A young woman the USA notes “In the US we spend $21 billion every year on ice cream. But it would only take $10 billion to put every child in the world into primary school.” In high school she raised enough money to create a school in Sierra Leone. She told an amazing story of a 5th grader, who was involved in raising funds to build a school.

A 19 year old from Cape Town leads an anti-racism and human rights campaign among young people.

The panelist from Scotland fights against prejudice towards gay people. He once talked to a 16 year old male prostitute in Glasgow and asked him where he gets condoms from. His reply: “what do I need condoms for, I can’t get pregnant.” Lad was amazed that the education system had failed. Prostitute is now working in a community center educating gays about this issue.

A 17 year old male from China told a story of growing up in rural China. Every spring there were sand storms in his village and he coughed for months. He now has a project where young people are planting 365 trees per day. When referred by a questioner as “the future” he replies “True, but we don’t want to be the future only — we want to make a difference today.” He’s got a new view of peer pressure. He says we think about peers in a negative way but peering can be the opposite. We can have peer inspiration where young people can work together as peers to make great things can happen.

A young man from Argentina is organizing a campaign against poverty, raising awareness on the importance of every kid getting an education. Among his projects, has set up a library in Buenos Aires.

Emma Thomson asked the panel — what do you want older leaders to do? One panelist worried that as populations age, governments will do what old people want, and not what the young want. Why not youth parliaments and other creative initiatives like regional and global forums to engage young people. Another panellist suggests a World youth forum. Invite some older leaders but they would be the minority. And then listen to what the young people say: “Use your ears rather than them being decorations.”

As far as I’m concerned these are the 6 most important people attending Davos.

For some time I’ve been concerned about a nightmare scenario whereby the Jihadists get control of the government in Pakistan.  Surveys show that many, even a majority of the Pakistan population is sympathetic to fundamentalists.  If this situation persists it’s possible, maybe even inevitable that through a revolution, coup, or via an election they get control of the state.

But according to Pakistan’s president, Pervez Musharraf, there is nothing to fear.  Pakistani nukes are controlled using state of the art protocols, processes and technologies.  This could never occur.

So he’s kind of curious: “Why does the world insist on calling this an Islamic bomb? There is no Hindu bomb or Jew bomb or Buddhist Bomb or Christian Bomb. This I do not understand. And the man on the street in Pakistan does not understand.”

Well he’s got one thing right.  Google “Islamic bomb” and it’s the clear winner in Google hits.

I attended the Update 2008: Progress on Climate Change session that was chaired by Yvo De Boer — Executive Secretary of the United Nations Framework Convention on climate change. He painted a very dangerous picture: Climate change is a serious problem that has fairly short term implications, and little is in place to avoid this situation. De Boer noted that the International Energy Agency’s World Energy Outlook projects that by 2030, 60 percent of all energy demand will be fuelled by coal, while over 40 percent of the demand growth will come from India and China alone. Within the next 20 years more Chinese people will migrate to cities that don’t yet exist than currently exist in all of Europe. He says: Yes we’re on the verge of a recession — but that should cause us to be bold on climate change not conservative. When you’re broke you need to save and be efficient.

Had a good discussion with Scott Brison, former Canadian Minister of Public Works and Government Services and a big campaigner on the environment. He noted that a few years ago CEOs at Davos were climate change deniers. Today they are evangelicals because they see the business opportunity here. Businesses are ahead of governments on this — market forces are causing them to change. Business leaders clamouring to get into the environmental sessions because they have a responsibility to shareholders to get ready for a carbon constrained economy.

Ideas being discussed include every product will have a price on carbon that reflects the carbon input in production and transportation — and for certain products like cars, or food, the lifecycle costs of carbon too. Apples grown in Costa Rica will have a bigger foot print than in Ontario. California is talking about putting a carbon tariff on imports. If there is going to be a price on carbon, the companies and countries that act on carbon reduction will have competitive advantage. Those who don’t act now will be left in the dust.

I agree with position that we should be greening our tax system in Canada — taxing carbon and using that revenue to reducing personal and business income taxes. We can shift revenue sources away from personal and business taxes. Give people more disposable income. We also need to be world leaders in the cleantech industries itself — bringing the three E’s together Energy, Environment and the Economy.

Continue reading…

Consumer broadband volumes are going 40 percent per year. This isn’t going to decline. Voice minutes of use (predominately wireless) are growing 10 percent per year, driven largely by young people — the net generation. Everything from cars to doors are becoming networked. The conclusion? There will be fluctuations in stock prices, but this train has left the station.

Davos buzzword: Worldsourcing.

Outsourcing was about finding the lowest cost to do something. Worldsourcing is about finding he best capability.

Personally I never liked the word outsourcing. Cisco built a networked business model (business web as I’ve been calling it for a decade) and therewas nothing “in” to outsource in the first place. This has always been about your strategy for orchestrating capability not about labour arbitrage. So now we’ve got another buzzword to describe it.

Davos Switzerland — I’m reminded what a huge logistic challenge it is to bring a couple of thousand of the world’s leaders to a small town in the Swiss Alps — get them to sessions, feed, house and protect them. Walking to the registration area Ana (my wife) and I note a parking lot with about 30 tractor trailers that have brought stuff to the event. There are hundreds (or more) staff working the event. The information technology keeps getting better as every attendee can access the program, venues, events, other attendees through the web, including a cool little application that runs from your mobile device.

Not to mention the security. The beautiful snow covered mountain countryside is dotted with Swiss army and police personnel carrying automatic weapons and the environs surrounding the congress center is separated by barb wire fences, security cameras, and very competent looking (and friendly) security people. Not just the congress center but some hotels have metal detector systems that would surpass any airport and everywhere are non-obtrusive police cars, personnel carriers and observant people. If you’re a bad guy, don’t even think about trying to penetrate this place.

The only event today was the opening cocktail party where we had a number of very interesting discussions. One of most insightful for me was with with Samuel DiPiazza the CEO of PricewaterhouseCoopers. PWC has big section of the Belvedere Hotel with vaulted ceilings and architectural coves that is used only for Davos. The theme today seemed to be counterposed forces or ideas — the dialectic if you will. “Controlling versus Letting Go” (a huge issue for those thinking about the theme of Davos this year — collaborative innovation). “Push versus Pull” (every marketing manager is struggling with that one.) Evolution versus Creation. PWC has been a leader in the next generation of reporting — they call it Value Reporting — where the financial report is about al lot more than earnings and financial information. XBRL and the Web 2.0 are poised to transform reporting where the focus will not just be on compliance but on transparency. I wonder if PWC could finally cash in on their leadership position in this area. More important, next-generation reporting could help companies be better understood by their stakeholders, including shareholders, not to mention bring some transparency to financial markets and in doing so possibly avoid crises such as the one we are currently experiencing.

In fact, every conversation begins with the meltdown of the financial markets. What a mess to punctuate the start of the conference tomorrow. It’s big on the minds of CEOs and central banks who are attending the events. There are a number of sessions tomorrow that are addressing the uncertainties of the global economy and what can be done to fix it.

I’m doing a session tomorrow on online communities and how social networking is becoming social production. There will be many leaders of the digital revolution participating so it should be a good discussion.

DAVOS, SWITZERLAND — As it has done for more than three decades, this week’s annual meeting of the World Economic Forum (WEF) in Davos will bring together leaders from around the world in business, government, academia, civil society and the media to discuss world affairs. This year’s theme is the Power of Collaborative Innovation. For five days delegates will talk, brainstorm and forge alliances to tackle top issues on the global agenda, such as climate change, income disparity or the credit crunch stemming from the U.S. subprime mortgage debacle.As always, the Davos meeting is not designed to achieve an all-encompassing statement of beliefs, such as we see at G8 summits. Rather, Davos brings together leaders from around the world who would otherwise not meet. Bono can talk to Bill Gates, who in turn may talk to Tony Blair, PepsiCo CEO Indra Nooyi, Harvard business professor Michael Porter or Condoleezza Rice. Delegates find issues of common interest and form new relationships that will help one another achieve their goals.

Attendees are not permitted to bring staff of any kind - the only guests are spouses. Accommodation is modest as CEOs of global 100 corporations find themselves staying in three-star hotels in this small, overcrowded skiing town. But the intellectual stimulation and initiatives that are catalyzed are worth it. From my experience, many of the best discussions are in small meetings, hallway conversations, over dinner or in the bar. My wife, Ana, and I have found that we often learn as much from the spouses, who tend to be very thoughtful people.

In response to critics who say Davos is elitist, since 2003 the Forum has collaborated with the Federation of Swiss Protestant Churches to run a parallel Open Forum for the general public. It offers a venue for an open debate on globalization and its consequences.

Davos organizers also invited citizens around the world to respond via YouTube to The Davos Question. “What one thing do you think countries, companies or individuals should do to make the world a better place in 2008?” The most popular responses will be played at Davos, and leaders around the world will record their reactions to the suggestions. The WEF also has numerous other programs around the world that engage people from all walks of society throughout the year.

In materials distributed prior to the meeting, conference organizers lament the “leadership vacuums” that are evident on a wide array of critical issues. “Complexity, competing interests and scarce resources remain the greatest obstacles to progress on the global agenda in the absence of greater leadership and global stewardship … a paradox has emerged in our networked world where knowledge is ubiquitous and change is rapid, but the absence of a common vision and agenda ensures that the status quo will be maintained with respect to major global challenges.”

This year’s theme of collaboration is a topic that I’ve been working on for many years. Last year, Anthony Williams and I published Wikinomics: How Mass Collaboration Changes Everything. The book looks at how developments in digital technologies (particularly the Internet), demographics, business and society enable new paradigms in collaboration in the global economy. Firms, governments, educational institutions, civil society and others can now orchestrate capability, innovate and create value in new ways. No institution in society will remain unchanged.

I’m delighted with the theme for Davos 2008 because I believe collaborative innovation is the path to solutions for many of the vexing problems facing our shrinking planet. Take global warning. Mark Twain is famously quoted as saying “Everyone talks about the weather but no one does anything about it.” Now that’s changing.

Rather than discuss climate change in isolation, delegates will explore the interrelations between the climate crisis and extreme poverty and see if there are solutions common to both. How should international efforts to eliminate poverty and to solve the climate crisis be co-ordinated to improve the chances for success in both efforts?