There was a young face sitting at the panel in one of the sessions at the UNEP Sustainable Consumption and Production in Asia conference. With no name in the conference agenda or on the table, there were no clues as to her identity. While everyone was still wondering who she was, she started her presentation on new models of microfinancing and capacity building for socio-eco-preneurs (innovative entrepreneurs who minimize or eliminate negative ecological and socio-cultural impacts when developing goods and services for profit). Given that the attendees were here for both practical and innovative solutions, Vrilly Rondonuwu, along with her three colleagues, Idda Mahbubah, Adie Nugroho and Airin Azizah did not fail to deliver as they represented Leadership for Environment and Development (LEAD) Indonesia to a captivated audience.
These young people’s main objective is to create a sustainable financing and capacity building model for Indonesia by involving multiple stakeholders, which include financial institutions, banks, corporations, and socio-eco-preneurs. Ultimately, they hope that their model, which considers the unique social and economic structure of Indonesia, can further promote economic development in a green and socially responsible way. It aims at helping socio-eco-preneurs, who can create positive impacts on both social and environmental aspects through their business, to get sufficient financing and capacity building assistance. It is also a framework that can create opportunities and benefits for all stakeholders – small socio-eco-preneurs get their support; banks and financial institutions get new groups of loyal customers; bigger corporations get a more socially responsible supply of inputs for their business; and capacity builders get new skills and experiences. By considering the benefits of different stakeholders, it is hoped that the whole framework can be sustainable and profitable for all stakeholders, as well as run independently and continuously.
Podcast: Student Reporter Adam Wong speaks with LEAD Indonesia
An example of a successful implementation was offered by way of a soybean socio-eco-prenuer, who can potentially become a supplier to a big corporation like Unilever. Unilever would then endorse the soybean farmer and agree to fully absorb all the agreed-upon products of the farmer. With the support of Unilever, the bank can raise the credit rating of the farmer, providing further financing opportunities. Capacity builders can also step in to provide consulting support for the socio-eco-preneur and help to ensure that they have reliable management and reasonable funding arrangements. By cooperating with financial institutions and big corporations, capacity builders can not only help the socio-eco-preneur and earn the service fee for themselves, but also gain knowledge and experience for themselves during the process. Thus, the cycle of socially and environmentally responsible economic growth is perpetuated.
The project is still in its early stages, and more improvement is needed to increase the model’s acceptability by all of the stakeholders involved. In the interview, the team explained the current stage, and the major challenges of the project: how to introduce a new collateral model and quantify intangible items. We also delved into how government institutions like the Indonesian Central Bank and different industries react to the framework.
Podcast: Discussing the challenges and potential of microfinance for developing countries
Like most micro financing projects, LEAD is attempting to address the collateral conundrum of the small- and medium-sized enterprises (SMEs). The collateral requirement in conventional models for financing usually refers to tangible assets, such as land and property. However, for most of the SMEs in developing countries, real assets are exactly what they lack, and as a result, loans are beyond their reach. The LEAD team therefore suggests the banks and governments to look at more innovative ways to find the collateral, which includes positive environmental impacts such as carbon credits emanating from the proposed project.
The concept of using carbon credits as collateral has become more popular in developed countries in recent years and there are already several articles discussing this idea. However, there is still a long and tough way for the LEAD team to make this new collateral model practical. For example, the pricing mechanism for intangibles like carbon credits is very complex and it requires well-established legislation and regulation. Moreover, the price can vary significantly since the carbon trading markets have not matured yet, on top of suffering from, as seen with the European Emissions Trading Scheme, incomplete information. All of this adds to the uncertainty and volatility when pricing carbon credits. Thus, it’s not very difficult to understand why the banks may not want to take the risk to accept these intangibles as collateral.
The good news is that the LEAD team has currently been receiving positive feedback from the Central Bank of Indonesia and their project is supported by Bank BNI, one of the most popular banks in the country for providing green banking services. In the near future, the team hopes to gain more feedback from regulators and the academic field in order to finalize their model.
It is definitely a big step taken by LEAD Indonesia and the project certainly seems to be heading in the right direction. Though microfinancing has been gaining in popularity over the last few decades, a successful model (and story to go along with it) can further boost the morale of investors looking at sustainable financing options. However, there remain significant challenges and risks that must be addressed for LEAD’s widespread success. How can we mitigate the potential risks that financiers must bear? Does the answer lie in the new and volatile carbon credits market or will there be other avenues for loan guarantees? This is the conversation that must be had going forward from this conference as we move beyond simply talking the talk and start walking the walk.
Feature image: Rice Fields in Bali. Source: Eric Bézine, Creative Commons License
The Open Forum panel on the Eurozone started with an expression of optimism and relief. Despite recent drawbacks, the Eurozone is out of the emergency room after years of trials and tribulations. While the recovery was still in doubt at the previous World Economic Forum, the illustrious panel of national ministers and think tank directors at WEF 2013 unanimously agreed with the aforementioned assessment. Though the latest report by the European Commission throws some doubt on this assessment, it is clear that the Eurozone has issues to tackle that are beyond the immediate economic collapse of some of its members. With some countries still in recession, an average unemployment rate of over 11%, and an increasing lack of popular support, it is clear that the status quo is unsustainable. Two questions then need answering now: where to go and how to get there?
From Fiscal Responsibility to Economic Growth
As the Eurozone is slowly and painfully dragging itself out of the sovereign debt crisis, European leaders have been criticised for the manner and speed with which austerity had been imposed on some countries such as Greece, Spain, and Italy. Along with other prominent economists, Joseph Stiglitz called the measures a ‘suicide pact‘, highlighting the potentially self-defeating nature of austerity. He warned that cuts in government spending equal demand shocks that could slump an economy back into recession and thus dry out revenues streams that are needed to repay sovereign debt. As the recession persists, a country is forced to borrow more to service its existing liabilities; this leads to an increase, not a decrease, in overall debt. The UK has turned out be an unfortunate example of this process. The coalition government’s austerity programme of 2010 contributed to the current threat of a triple dip recession, and even more recently, the loss of the country’s top credit rating.
Although there is a trade-off between austerity and economic growth in the short run, the relationship between the two has proven to be more complex. The simple fact that markets were increasingly unwilling to lend money to some governments in the Eurozone – as evidenced by surging yields on national bonds – made it abundantly clear that public spending could not continue as it had for the past two decades. In the absence of alternatives, and in order to withstand market pressure, states needed to develop a credible reputation for fiscal responsibility, and thus, in a very short period of time, balance their budgets and cut governmental spending.Brainstorming for Version 2.0. Source: Nikolaj Fischer, Student Reporter
Sometimes credibility and reputation matter even more than actual economic performance. Steven Vanackere, the Belgian Finance Minister, explained how in 2011 the interest rate for Belgian 10 year bonds surged to 5.8% because the government was perceived to be inactive and incapable of fiscal adjustment at a time when Belgium had to refinance €18 billion, or 3.5% of its GDP. Only after taking decisive action to curb the governmental budget, trust returned and yields dropped from 5.8% to 2.2%. It is important to note that the bond yields did not reflect economic fundamentals as Belgium’s economic performance had remained fairly constant during this time period. Fiscal responsibility is thus a precondition for national governments to borrow and invest under reasonable terms, whilst also being a way to lessen the dependency on financial markets. As remarked by Angel Gurria, the Secretary-General of the OECD, it also works as a shield against excessive financial punishment of economically weak members of the Eurozone.
Beyond The Crisis
As the crisis slowly blows itself out, the Eurozone will have to tackle an ambitious set of reforms. First, it will have to make sure that legislation governing the spending limits of countries can be enforced. This has been made more likely by the enactment of the European Fiscal Compact in March 2012, which defines minimum standards for national deficits and debt as well as penalties for the failure to meet them. In addition, the crisis has also demonstrated that national decisions will have to be increasingly analysed in their consequences for the EU as a whole. As the Spanish Finance Minister Luis De Guindos Jurado pointed out, Germany’s and France’s decision to breach the rules of European Fiscal Stability and Growth Pact made it effectively impossible to impose fiscal discipline on other countries, as they were in many ways “the anchors and referees of the European Union”.
Beyond fiscal responsibility, the success of the European recovery will depend on the Eurozone’s ability to generate real economic growth as a result of structural changes that enhance its global competitiveness. Robin Niblett, the Director of Chatham House, argued that this calls for reforms along several dimensions. It entails improving the environment of doing business, including developments in infrastructure, energy consumption, education, and labour laws. It entails improving the ease of doing business and thus, the rectification of corruption and the dismantling of large chunks of inefficient bureaucracy. And finally, it entails enlarging the scope of doing business, which implies an honest acknowledgement that only 20% of the service sector, which constitutes around 70% of European GDP, is open for competition.
Regaining competitiveness implies changing the structure of society itself in some countries. This would mean altering the relationship between the private and public sector, proceeding to a pan-European integration of the service sector and tackling demographic and unemployment challenges increasingly on a supranational level. Europe is, in this sense, as much about well-understood self-interest as it is about solidarity. Countries will continue to make their own policy choices but a deeper European integration will increase the spill-over effects of sovereign action. Spain profits from Italian fiscal responsibility and vice versa, as does Germany and the Eurozone as a whole.
Seen from the other side of the world, European countries have much more in common with each other than what sets them apart. Europe is united in its affinity for representative democracy, pluralism, and coalition type politics as well as its emphasis on the rule of law and the stability of its political systems. As the German Foreign Minister Guido Westerwelle remarked: “in an increasingly globalized world, where different value systems collide and compete, the Eurozone is each member’s best bet to preserve their cultural identities and their liberty.” The most accurate characterization of European relationships should thus neither be solidarity nor domination, but a sense of a common interest, common will, and maybe even a common destiny.
Feature image: Vittorio Grilli, Minister of Economy and Finance of Italy,World Economic Forum in Davos; Source: Nikolaj Fischer
Since its inception in 2005, the Huffington Post has grown to be the most visited news site in the U.S. Their story of rapid growth proves to be a classic success story in entrepreneurship and business development. In an era when anyone can call themselves a reporter, the Huffington Post has managed to develop a distinctive voice. Powered by social media and the ever-increasing number of blogs (over 180 million at the end of 2011), they successfully established themselves as the de facto “Internet newspaper.”
Being part of Student Reporter, a young and rapidly growing online journalism outlet, this is undoubtedly a topic of great interest to us. Having experienced tremendous development in 2012, and recently forging new, high-profile and high-value partnerships with the World Economic Forum and the Huffington Post, what can we learn from the Huffington Post in terms of scaling up our model?
Fellow Student Reporter Tim Lehmann and I sat down with the Huffington Post’s founder Ms. Arianna Huffington at The World Economic Forum in Davos, Switzerland. She was eager to talk to us about our growing venture. “I love the entrepreneurial spirit,” she said. In the middle of her busy day of events, meetings, and private sessions with other business leaders that Davos is famously known for, she told us about some key success factors which allowed her seven-year old outlet to become one of the most popular websites on the Internet.
Direct your scaling
The media landscape was very different when the Huffington Post launched back in 2005. Bloggers were only beginning to gain popularity and legitimacy, having been ridiculed by traditional journalists as “ideologically motivated amateurs inclined to spread lies and rumors.” Some claim the 2004 presidential election to be the turning point, with political blogs attracting more attention than mainstream media outlets. According to Ms. Huffington, the Huffington Post was launched as “a platform where the only thing that mattered in order to have access to it was quality.” Sounds like the perfect platform for the thousands of voices on the Internet waiting to be heard. So how did they actually manage such a platform?
In the beginning, they were rather unadventurous and even a bit on their toes. Wanting to “protect the platform from the worst aspects of the Internet,” they focused on developing comment moderators who played a critical role in nurturing and building the community of bloggers and readers. Today the comments are mostly moderated using algorithms, although there is still a place for good old-fashioned human moderators as well. Using an algorithm to provide automatic oversight over the commenting process is an example of a crucial technical tool for directional scaling, as this is a role commonly left solely in the hands of the editorial team.
Fluidity of content – “Bites at the apple”
Ms. Huffington attributed much of the Huffington Post’s initial success to two things: a vibrant collection of blogs and a very engaged community. By prioritizing the community of bloggers and readers, the Huffington Post developed one of its most recognizable and key characteristics today, namely content fluidity.
Compared to print media, one advantage of the digital, online platform is the ability for content to not only be created and published almost instantaneously, but also to be easily moved around and reorganized. To best serve the community of bloggers and readers, the Huffington Post allows sections and news pages to be developed more organically, instead of being restricted by traditional partitioning of content as in printed media and conventional journalism. Even though the major sections are fixed today, “Ad-hoc sections” can easily be generated through the use of tags, and news pages be made through automatic aggregation. “Anything that has more than 25 stories, an editor can decide to turn it into a big news page by automatically aggregating everything on the side from that topic,” Ms. Huffington explained. A story can also easily appear in several different sections of the website. In the end, as Ms. Huffington puts it, they are more what “bites at the apple,” luring the reader in readily.
Open to new ideas and trends
The inclusive, constructive, and open “spirit of Davos” has also fittingly been a trademark of the Huffington Post, with Mr. Klaus Schwab, the founder of the World Economic Forum, being one of the first people to approach Ms. Huffington when she first launched the outlet. “He’s very willing to look at new trends and integrate,” she said. Similarly (and lucky for us), the Huffington Post keeps true to their entrepreneurial passion by building new partnerships. “I love for us to build partnerships around everything interesting going on around in the world… it’s very, very crucial to our DNA,” said Ms. Huffington. Through partnerships with organizations such as TED and the Schwab Foundation, the Huffington Post is able to further their reach and collection of voices.
However, building partnerships is only one of the ways that the Huffington Post stays entrepreneurial and receptive to new trends. One of the key trends that Ms. Huffington noticed in Davos as a media leader is the convergence of the media industry: “The HuffPo is doing more and more regional reporting… and original reporting that won us a Pulitzer last year. The New York Times has more and more great stuff online, using blogs, social media, and etc.” Her belief in open reporting and the use of “[their] platform for wide distribution of good work” not only allows them to stay flexible but also true to their beginnings as an outlet for their community of bloggers and readers.
So what about Student Reporter?
Born out of a niche conference reporting project with the World Resources Forum less than two years ago, Student Reporter has since expanded to cover conferences around the globe. Although initially seamlessly integrated into the conference program, we are now facing our own set of challenges as we take on new projects and partnerships. One could even say that we are feeling our own growing pains. At mainstream and high-profile events that attract hundreds of journalists, we are forced to critically examine the media landscape and carve our own space.
Our vision as a global outlet – or “voice” – for this generation is admittedly ambitious, which is rather typical of the Millennial generation. With the emergence of networks for aspiring “young leaders under 30”, such as The Sandbox Network and now the WEF’s own Global Shapers program, this generation is really starting to form its own identity. At Davos, the Millennials were described as “desirous of making ‘something out of nothing’,” feeling “quite empowered and ‘enfranchised’ to bring about positive change in the world.” And characteristically, we are constantly trying to expand our impact through the growing number of topics and events we cover, and our expanding community of reporters.
Our take-home message from our meeting with Ms. Huffington on scaling up could aptly be summarized as follows: be directional, prioritize your impact (in her case, the community of bloggers and readers), and stay entrepreneurial. At Student Reporter, we will certainly be applying these as we scale up our venture to match our own ambitious vision and impact. As for our growing pains, we will let the hundreds of versions of this clichéd inspirational quote answer for us: it’s the journey that counts.
Feature image: Student Reporters at the World Economic Forum in Davos; Source: Nikolaj Fischer
In the restrooms of the Plaza Athénée in Bangkok, Thailand, where the UNEP Switch-Asia Conference on Sustainable Consumption and Production (SCP) took place in November 2012, I noticed I had two choices when it came to drying my hands: paper or cloth. I’ve often alternated between the two but at this time and place, it got me thinking – which one is the more resource heavy option? The paper towel is a single-use commodity, while the cloth towel can be reused after washing it. This experience raised the question of what if the hotel could just buy a product that promises to be good for the environment, whilst delivering the same function – a win-win situation, right?
That’s where the Green Public Procurement (GPP) plan comes into play. It is a SCP strategy that aims to utilize greener alternatives with regards to goods and services ranging from air conditioning systems and light bulbs to toilet paper and hospitality services. GPP also aims to create market incentives such as tax rebates and subsidies for companies to develop and adopt greener, more resource efficient technologies. Moreover, a government can grant tenders and awards to suppliers to ensure the eco-labeling of their products. An example of this is a 2009 pilot scheme in Zürich, Switzerland, where the police force purchased some 4000 environmentally-friendly shirts through a public tender. Certain conditions had to be met in order to be awarded the tender, such as only using 100% organic cotton in the production of the shirts as well as observing the Eco-Tex Standard 100 Class II set of criteria. By substituting organic for non-organic cotton, lower amounts of pesticides and mineral fertilisers ended being used. The success of the Zurich pilot means that more agencies are expected to follow suit.
Although green purchasing isn’t exactly a new idea, GPP implementation has gained more precedence in today’s political atmosphere due to an increased awareness of resource depletion and the need for sustainable development. Member States of the European Union (EU) were among the first to actively pave the way for GPP practices. The February 2012 EU27 report on GPP shows that there was still a significant increase in the implementation of GPP, despite not meeting the 50% target for sustainable procurement – an objective set by the EU to ensure that all member countries switch to greener products in accordance with the 19 common EU GPP criteria. The failure isn’t due to a lack of interest; rather, it is mainly because there isn’t always a straightforward process to include all of the criteria that cover items such as office IT equipment, transport, and mobile phones under the public procurement plan. For one thing, there are two types of criteria to measure by: “core criteria”, which is intended for suppliers to specify the major environmental impacts of the products and “comprehensive criteria” which is designed for the procurers to acquire the best available products in the market.
Needless to say, a government can only focus on a few high-priority areas as it would be prohibitively costly to fulfil all 19 common criteria. Additionally, the GPP policy doesn’t necessarily adopt the life cycle costing (LCC) approach which involves assessing the life cycle of a particular product from cradle to grave. A product bought under LCC principles would mean a more sustainable outcome. But here’s the deal-breaker: it would involve paying more (and as I mentioned, there’s not even enough to cover all 19 criteria) upfront. Besides the financial constraints in incorporating LCC into GPP, there is also a lack of understanding as well as technical capacity. Not only do procurers have to consider the entire cost of production in terms of the energy consumption and resources used, but much of today’s technology – like the microwave oven and washing machine – are not designed to be fully recycled when disposed of. These challenges are outlined thoroughly in this paper by the International Institute for Sustainable Development (IISD). LCC is value for money; perhaps the route forward then is for companies to first carry out LCC on some products, especially those that would create comparatively more environmental impact than others.
In Asia, Japan, China, and South Korea are leading the GPP charge with varying results. To overcome the aforementioned challenges of high cost and a lack of comprehensive knowledge about eco-labelling among stakeholders, especially policy makers, some sort of approach that allows integration of some universal standards while leaving room for improvisation as per a country’s capacity is needed. Developing Asian countries like Thailand, for example, came up with their five-year National GPP Plan back in January 2008. It aims to realise 100% green labeling in all government sectors, local authorities, and even educational institutions. The end-result would see Thailand becoming more aware of SCP issues amid a rapidly growing economy.
According to Dr Araya Nuntapotidech from the Ministry of Natural Resources and Environment in Thailand, the GPP concept is still an ongoing process. She added that governments are in a position to take the lead and slowly disseminate the idea to the private sector. Indeed, many GPP policies have outlined that the public sector makes up the largest procurers of goods and services, and so are expected to stimulate the production and innovation of green technology. When asked about the allocation of the budget for this ambitious plan, Dr Araya replied that the government of Thailand is ready to consider GPP as a national priority in accordance to the United Nations 10-Year of Framework of Programme on SCP. Admirable yes, but those sound like lofty goals considering Thailand’s rise as one of the top 10 consumers in Asia, not to mention the population that is increasingly emulating the high consumption rates of the West. This isn’t the only obstacle unique to developing Asia when it comes to GPP. When it comes to Malaysia, their issues include an absence of a national eco-labeling scheme, a need for capacity-building in green purchasing, and a lack of integration between government and private sectors. It goes without saying that unless developing Asia first addresses these issues with their governance, it will take a while before they can be on par with their European counterparts.
One of the biggest challenges when it comes to GPP is the lack of political support and insight because much of its success depends on strong financial backing. Dr Araya has stated that regional partnerships are imperative for the success of GPP as well to counteract any impending difficulties such as improper procurement due to an absence of a proper database and understanding for green purchasing. Developing countries like Thailand will have some ways to go before they can achieve a 100% success rate with GPP in five years but having the plan installed is better than nothing. In the meanwhile, maybe it’s ok to do without the paper towel and the hand towel every now and then.
The attraction of a Davos Open Forum session is obvious as the audience arrives much in advance to guarantee themselves a seat. Normally, we would enter the transformed swimming pool to find a neatly arranged row of chairs on the stage. The blue and white colored name tags are an early announcement of who will speak during the evening. But Thursday evening was different. Instead of chairs, we have a set of instruments and no label revealing the upcoming star of the evening. A rangy person, wrapped in a sack coat and with distinctive glasses appears on stage, followed by a group of musicians. “Good evening and welcome! My name is Chris Washburne and this is my band SYOTOS. We have come from New York City, to share our world with you tonight in a very unusual event.”
This scene could be from anywhere else except from the WEF in Davos. Although performing arts play an important role at the WEF, it is not common to have such a famous musician on the stage who combines art with an exercise in jazz, improvisation, and life lessons. Chris Washburne is one of those unique individuals who are able to connect effortlessly between art, personal life, and collaboration when working. Together with my fellow Student Reporter Akash Arasu, I had the chance to catch up with Mr. Washburne at a cafe a day before his gig. This being Davos during the WEF, this was by all accounts no mean feat. Most cafes are either overtaken by companies and therefore closed to the public, or overcrowded to the point that any sort of recorded interview would be unintelligible. Armed with only a few basic questions and no set shooting location, we started our talk with Chris, hoping that an artist – less strict than the general business leader – might forgive the less professional approach to the interview. We were wrong in our worries. True to his mantra of “winging it”, Chris actually appreciated our unstructured approach to the interview.
As Chris was talking about his learning from jazz, he explained that “one of the most basic components of jazz is for improvisations to lead to a kind of spontaneous creativity.” Jazz musicians sit together and start to play, as SYOTOS did that evening. The first thirty-seconds may follow the sheet music, but “what comes after, we have no idea what’s going to happen.” But according to Chris, “improvisation is probably one of the few universals that all human beings have.” Whatever we do, at some point, we always encounter new territory and have to think quickly and “If we couldn’t improvise, we would all be dead.”
So what does this have to do with the WEF and sustainability? Chris starts to draw connections and analogies between jazz, education, leadership, and collaboration. Education in our days, for example, is highly structured, removing the space for “discovery and being curios [and it] allows very little room for failure” – all skills that we need in a constantly changing world. Some of these students go on to become leaders and often fail to tackle complex global issues as their fear of failure makes able them unable to unlock their inherent ability of thinking on their feet. Being able to fail – and moving on from that failure – is a crucial treat that is unfortunately lost in European societies. Our current education system is not very helpful in solving this problem either. What we teach often lacks behind current issues and the transformation is a slow-moving process (see our post: Another Brick in the Wall – The Transformation of Management Education). Nevertheless, how we teach might be even more crucial, as Chris elaborated. Trapped in a cage of structure and goal-oriented learning, we lose our natural skill to improvise. As what we learn is outdated by the time we should apply it, so we need to at least be able to open the space for creativity and find solutions in environments that we are unprepared for.
In a similar way, when leaders sit together, as they do here in Davos, the mood is often described as one of stagnation and staying on course. The conference becomes a matter of listening rather than participating. Chris explains this with a short historical overview of jazz – the music born out of colonialism. As “there was a group of people that was silenced for many years”, what you end up seeing “in jazz improvisation is that everybody’s voice counts.” In contrast, what we observe, whether at Rio+20 or in Davos, is that participants often just reel off their prepared statements, shut their ears, and open them only at the reception cheering on the ‘lively’ discussion. There is this misconception of collaboration in many gatherings as everyone prioritizes talking over listening. In order to really find answers to our most urgent problems, we then have to carefully listen to all of the voices in order to truly collaborate. Or, in Chris’s words: “what happens in jazz, when you are collaborative and listen very intensely, is that the music is much better.”
While Davos is often criticized for empty words, Chris proves that he means to act on his words by inviting up to the stage the young Global Shaper whom he just met, Linda Briceño, for a final piece of true improvisation. Inspired by his ideas, we talked to other WEF participants about their experiences and we created a small collage of different perspectives on improvisation.
What participants and organizers of the World Economic Forum say about improvisation:
Jonathan Hsu, CEO of Recyclebank
“When you have three kids you realize that you don’t own your schedule at all. What you do is you live in the moment. You know, frankly, no matter how good or tough a day I have, when I come home my three girls don’t care. They just want to see me, and whatever I think I have to do goes out the door and then I will just spend time with them and realize what life is all about.”
David Aikman, Senior Director; Head of Young Global Leaders, Global Shapers and Schwab Foundation for Social Entrepreneurship
“The best approach to improvisation in today’s context is one of iteration. This is the way I think the world is going. It is this iterative model of creation where you are open to every feedback to make something better. If you stand around and wait to make the perfect plan or to launch the perfect business, you are never going to get anywhere, you are never going to accomplish anything, you are never going to make the world a better place and you are never going to fix any of these global challenges. We are not going to fix poverty, we are not going to fix climate issues, and we are not going to fix economic injustice by playing safe, by waiting until we have the perfect solutions. We have to get out there and see what sticks.”
Zanny Minton Beddoes, Economics Editor, The Economist
“This evening [during the Eurozone panel when an individual received the microphone and asked an inappropriate question]! There is no script there; you will have to figure out what to do. Journalism is always improvising, we never know anything… we never know nearly enough about things that we write about.”
Stephen Toope, President and Vice-Chancellor of the University of British Columbia
“I would only say that I think much of life is a form of improvisation. As much as we imagine that we are planning and setting ourselves up for certain opportunities, there is a high level of serendipity involved with what actually comes to one in life. I remember when I was being hired, I had this blinding moment. I was headhunted for this job but then when I was interviewed I realized that I had never managed a budget larger than 10 million dollars. I was going to be in an institution where my budget is about 2 billion dollars and thought to myself, wow, that’s a big shift. So how do I improvise out of that one? I think that the answer is that you try, as improvisers do, to draw on your technical training; you try to bring to mind all of those things that you’ve learned and then you try to analogize and say, ‘Okay, I have seen hints of this before. How do I play it out now in this different environment?’ and I think we all have to do that in life.”
Gilbert Probst, Managing Director and Dean, Leadership Office and Academic Affairs, World Economic Forum
“I think that I have to improvise all the time. I am still a Professor and you know that you have to prepare a class; on the other hand, I never work with slides so I try to improvise in the sense that I really have a lot of interactions with the students. I am constantly improvising – maybe more than I actually like since I am a management professor, so I really think things should be planned and structured, and I think about my objectives, structures, and plans. But then I go into classes, meet with my team and things don’t go that way and I improvise all the time and in a way, I love to improvise. I think again this is a question of balancing and I think we need both. If you are well-prepared, if you think about your objectives, and if you have a plan, you will feel comfortable. But life is not like this and you have to improvise all the time.”
Akash Arasu contributed to this article.
The World Economic Forum recently published a report that lists numerous emerging roles among organizations in civil society. This included watchdogs, advocates, service providers, experts, capacity builders, incubators, representatives, citizenship champions, solidarity supporters, and definers of standards. But ultimately, who actually reads these 60 page reports? Certainly, the moderator, panelists, and the audience of the Open Forum session on New Models for NGOs in the 21st Century were not among the readers. The result thus was a failure to provide an appropriate context for the discussion.
Throughout the session, it became apparent that both the moderator and the audience had a hard time reaching any conclusions based on the discussion. The moderator, Esther Dyson, a passionate and industry-changing entrepreneur and investor, almost gave up in the middle of the session, stating that “the conclusion of the panel could be that there are no single answers.” The session’s lack of clear direction and conclusion perhaps represents the main crux of the problems facing NGOs today – an outdated focus on old structures that should be replaced by visioning for new models.
As one of the session’s attendees pointed out, “the current language in the sector, such as accountability or the adoption of business practices, does not support the sector´s intentions.” Accountability, which dominated most of the discussion, is a protectionist and defensive tactic to improve trust. But trust seems to be the least of the problems facing NGOs. According to the recently published Edelman Trust Barometer, both the leaders and institutions of the NGO sector garner more trust than those operating as businesses and government organizations.
Then there is the evolving nature of NGOs themselves. The discussion was often mired in the old ways of thinking, as it never focused on the modern models upon which NGOs could be built. The confusion over the “old” and “new” versions of NGOs was apparent; long-standing Open Forum attendee Dr. Helmut Kaiser, a Zurich-based ethics professor, exemplified how deep the misunderstandings went. In an interview, Mr. Kaiser told me, “I missed a definition of NGOs. 80% or even more of the discussion was about profit orientated NGOs.”
For Mr. Kaiser, “the progressive forces of the sixties’ movements” coined his notions of NGOs. Words like “profits” and “hybrid NGOs” don’t sit well with such definitions and this too became a source of debate. At one point, panelist David Nabarrao, the “Special Representative of the UN Secretary-General for Food Security and Nutrition”, joined the discussion and argued, “I never feel comfortable in a discussion when somebody is saying there is no answer.” Eventually, the most contrarian panelist, Greenpeace’s Executive Director Kumi Naidoo, reminded us of the session´s headline, that “NGOs, as we currently exist, are not new models for the 21st century – we have run out of steam.” He describes the situation as “the ageing of the NGO sector.” Today’s era is unique in its trend of disruptive technologies, new tools-driven objectives of single purpose ventures (which can sometimes be labelled as “hybrid organizations”), and emerging social movements. These are the trends to which NGOs need to develop a response. Mr Nabarr believes that the necessary change will happen “not through big intergovernmental NGOs with lots of accountants who can show where everything is gone”, but through the actions of the “most humble and invisible agents for social change.” One need not look much further than the Arab Spring and new social movements for corroboration of his statement.
So where does panelist Amit Garg, a Silicon Valley entrepreneur, fit into this frame? A single purpose entrepreneur, he is driven to mobilize tools and solutions, and adapt different models, in the purpose of addressing a specific problem. His venture today applies big data technologies and social media crowd sourcing to address global health problems such as obesity. Despite his passion for his purpose and NGO, he barely got a word in during the session, as his single purpose venture was not a familiar territory in these NGO discussions.
But when interviewed before the panel started, Mr Garg had a lot of interesting insights, all of which need to be taken note of by the entire sector. Only recently, well-recognized sociologists wrote that the conjunction of poorly understood environments and ineffective technologies forces large NGOs to export high amounts of uncertainty to their “complex chain of subcontractors and affiliates whose activities they then struggle to manage and rationalize”. By complementing the methods and tools applied by conventional NGOs (such as capacity building or training) with cutting-edge Silicon Valley technological trends, Mr Garg seems to address this challenge quite successfully. “Non-profits and for profits are in the same continuum – a non-profit organization can still be very profitable… I believe you can do a tremendous amount of good and still make a lot of money,” he said.
In Twitter We Trust?
One emerging but hardly addressed topic in the session was the revival of social movements spurred by disruptive innovations that “may undermine the need for and importance of organized civil society. As people connect and mobilize spontaneously, key actors may question why we need institutionalized NGOs,” says Dhananjayan Sriskandarajah, secretary-general of CIVICUS, in the aforementioned report. People increasingly connect, and are connected, through disruptive social media technologies. Even Mr. Garg admits that “what [he does] today, [he] could not have done only five years ago.” Kenneth Roth, Executive Director of Human Rights Watch, defends his global organization, saying that, even though he embraces the new technologies, we should not be too distracted by what he dismisses as “the flavors of the month”.
On the contrary, someone from the same dynasty as Mr. Roth, Jim Leape, Director-General of World Wildlife Fund (WWF) confessed in an interview with me “that there is a lot we don’t know about how this space (new social movements and technologies) is going to evolve.” However, he argued, “there is still a role for large NGOs. We need to know how to catalyze movements that can be political or change movements, such as the sustainable consumer movements.”
One exemplary new social movement WWF experiments with is the Earth Hour project. On every third Saturday at 8:30 pm local time, WWF asks people around the world to switch off their lights for an hour. Through social media, traditional media and celebrity campaigns, WWF has reached 7000 cities in more than 150 countries, thereby not only saving energy consumption but foremost creating awareness for climate change.
Setting the Stage for NGO 2.0
Now, imagine how such an organization such as the WWF could look like in 2050 if you would establish it now and embody it within the current civil society zeitgeist? The effects these trends have on conventional NGOs can no longer be denied or ignored. As Mr Leape puts it, they need to understand these trends — the WWFs and Human Rights Watches of this world need to embrace the single, short-lived “flavored” means and objectives of single purpose ventures and new social movements, while embodying the broader long-term claims that serve structural change, such as protecting the environment and creating strong watchdog positions.
We don’t know it yet, but we should be excited about how we could envision a new WWF (or some other NGO) in 2050 and not be afraid of it with all the trust we put in them. Nevertheless as Jim Leape pointed out, there will always be on one hand, “the need to protect tiger reservations on the ground” and, on the other, for “political credibility and influence to shape the decisions that matter for sustainability”.
Feature Image: World Economic Forum Future of Civil Society Report; Source: World Economic Fourm.
“The economy, stupid,” was the quote hanging at President Bill Clinton’s Little Rock 1992 campaign headquarters. Although the quote has gone through many incarnations in the past decades, it really captured the zeitgeist for the President. Perhaps it has even captured every zeitgeist to ever have existed for every political candidate – this for the simple reason that the economy is something that affects each and every one of us.
When the electorate decided to vote for President Clinton based on his stance on the economy, what were they really voting for? For any political candidate to connect with their electorate, they have to find the lowest common denominator, and in terms of the economy, this invariably means jobs. Even more specifically, this usually means a job creation plan (as most people make their livelihood as economic agents by supplying labour).
But what if the notion of a job creation plan is in itself misleading? What I mean by this is that it is easy to create jobs in the short-run (through public works projects, tax incentives, etc.), but to prepare individuals for the jobs of tomorrow is an entirely different question, especially since we are not quite sure of what types of jobs will be needed or available in the future. The state of flux in the nature of work can render many politicians rather ineffectual in their efforts to counteract the prospect of future unemployment. Although the short-run unemployment problem is constantly addressed, the long term change in the nature of work – that is, the fact that certain jobs become obsolete due to the availability of technology – is often forgotten, and even ignored.
To get the idea going of how the nature of work is changing, let’s analyse this over the past few millennia. There have arguably been a few distinct forms of work in every major stage of humanity and each stage’s work has been replaced by a technologically more advanced form in the next period. The progression of humanity from its hunter-gatherer state till the Industrial Revolution follows Schumpeter’s creative destruction process as new innovations and better ideas thrived. Associated Press (AP) writer Bernard Condon gives a good run-through of this process. Whilst the Industrial Revolution has still provided menial labour a place in the economy, the current high-tech boom might prove to be less forgiving to low-skilled workers.
What epitomises the high-tech nature of work today is that instead of replacing one another, jobs are “being obliterated by technology,” as AP writers Paul Wiseman and Bernard Condon put it. In other words, low-end mechanical jobs can be emulated more cheaply by machines and hence, there is a reduction in the quantity of low-end jobs and a downward pressure on low-end wages. The argument that technology is destroying jobs is hardly new given that Luddites have been around for a good 200 years, and the counter-argument involving the lump of labour fallacy has existed for a good 100 years; but as with many arguments, this time it’s different. Messrs. Wiseman and Condon’s post provides a plethora of convincing evidence that the current shift in the nature of jobs is actually different from previous changes. Different in that previously, each successive technological stage created more new jobs than what it displaced, which might not be true any longer.
At the Open Forum Davos – the more accessible side-conference of the whole World Economic Forum (WEF) happening in Davos, Switzerland – one of the seven publicly accessible talks was about unemployment. Or perhaps more specifically, the discussion focussed mostly around the problem of matching people with the right jobs and that training programmes have to be in place in order to provide workers with the appropriate skills. Whilst the many frustrations that both the long-term unemployed and recently graduated face today were touched upon, the discussion on the changing nature of work was almost absent in its entirety.
One of the WEF attendees – Dr. Erik Brynjolfsson, professor at MIT’s Sloan School of Management – has provided some interesting insights on the temporal problems of unemployment through the many articles that he has written on the topic, in addition to co-authoring a book (with Dr. Andrew McAffee) titled “Race Against the Machine.” While the relevant take-home message can be read as excerpts from their book on The Atlantic, for the purposes of this post, the following graph summarises the argument best. It depicts which stratum of society in the U.S. has been reaping the benefits of development during the past 50 years.
Consider the trend presented in the above graph: as long as you have a completed university degree, you’ve been able to capture the lion’s share of the economic strides that have been made during the past 50 years. For the rest, they have either seen their wages stagnate or remain the same since the 1970s. What is most striking about the picture is not the development, but rather the direction that each of the trends is taking. The differing directions is the wage differential, and according to Race Against the Machine, it is primarily driven by the relative increase in the demand of skilled labour.
These wage developments relate to the displacement of low-end jobs by the fact that studies by David Autor, Lawrence Katz, and Alan Krueger, as well as Frank Levy and Richard Murnane, show that “the increase in the relative demand for skilled labour is closely correlated with advances in technology, particularly digital technologies,” as stated in Race Against the Machine. In the technical jargon of economics, this would be referred to a skill-biased technological change, as the more skilled are gaining more than the less skilled. With the previously mentioned trend, skilled labour will be even more important in the future, whilst ever-more sophisticated machines can replace larger swaths of low-skill workers, pushing the low-end line of work further into obscurity.
Two possible solutions to the aforementioned trend would be further education as well as expanding the service sector. The first would allow those with less education to gain back some of their lost share, and the second could ease the transition from non-service-sector jobs as there are still a myriad of jobs that we would rather trust to humans that could be expanded (e.g. healthcare and related services for the retiring baby boomers). Both of these solutions however lend themselves to several problems. Even if the economies in the developed countries end up focussing almost exclusively on services at some point in the future, technological development will not cease, and it will most likely eat up the less-skilled work in the service sector as well. As for education, one has to also consider individual aptitude levels instead of just considering aggregate education. Never-ending retraining and re-education programmes might not be the answer either, especially as they might become prohibitively long lasting as ever more advanced technologies require more schooling.
Continuing on the notion that education might not suit each and every individual, we can take this argument one step further and claim that an individual’s latent cognitive ability is correlated with his or her educational attainments. That is, perhaps it’s not the technical skills, but human ingenuity or cognitive ability that is lacking, something that cannot arguably be trained. With this in mind, it might become ever more difficult to try to assist low-skill workers to adjust to an environment where the need for high-skill workers is proportionally increasing. During previous periods of creative destruction, the main question has always been whether the pace of the workforce can be retrained and matched to the new jobs. During our current high-tech phase, this might be problematic as Messrs. Condon and Wiseman quote Peter Lindert – an economist at the University of California, Davis – that “the computer is more destructive than innovation in the Industrial Revolution because the pace at which it is upending industries makes it harder for people to adapt.”
With this in mind, I would like to posit that there might be an upper limit to mankind’s capacity (not the individual, but rather the aggregate capacity) that is evolving slower than what technology is developing – a perhaps more extreme form of the adaptation argument. The past 200 years has surely not shown this, but then again, there have still been plenty of menial Taylorist type jobs around. If the current technological improvements are starting to outpace human development and adaptation, then one can only imagine the situation as more and more high-skilled labour is required to make further technological strides.
A perhaps more pertinent question would be: what will the unemployment situation look like in the not too distant future? Could a 30% unemployment rate be reality? These questions are perhaps not relevant for a politician in the midst of a term or recent graduate out of a job; this does not, however, mean that they are not issues that should already be discussed today. If the discussion is not carried out in the political sphere, then perhaps the onus is on organisations such as the WEF to bring attention to the academics that have raised this point.
As far as solutions go, preventing technological change is hardly the answer. Change is a natural part of life but a deeper focus on addressing the needs of people as these changes occur might be needed. An economic system that considers the cyclical nature of an economy (i.e. my spending is your salary), that goes beyond GDP predictions should also be in the cards.
The WEF, where the average age of attendees is well above any of the Student Reporters, is not perhaps tackling the questions that are still going to be around when the current generation of leaders are gone. This is unfortunate, as the organisation is in a prime place to start the conversations that concern themselves with the longer term. H.G. Wells already explored a distant possible dystopia in the “Time Machine”, and whilst this still represents an unconceivable reality, it does serve as a stark reminder of the ramifications if we do not start considering and addressing the potential long-run change in the nature of work. The notion that the new normal might include a permanent underclass should be a terrifying enough scenario for anyone to kick-start the discussion sooner rather than later.
As we waited for the official inauguration of the 2013 Open Forum Davos, a quirky, but memorable-looking man placed a small flowerpot in my hands. The finely crafted hand-made bouquet was decorated with a tiny blinking centime (French term for one-cent coins), which symbolizes serendipity for the receiver. Looking as if he had just descended from the surrounding Alps, he asked me to present the gift to Dr. Gilbert Probst, a World Economic Forum (WEF) managing director and in charge of the Open Forum, after his speech.
He disappeared from the front row just as quickly as he had appeared, possibly being a shy soul. As I sat there puzzling over this man, a photographer whispered over my shoulder, “he comes every year to the Open Forum and gives flowers to the moderators.” On the fourth and final day of the Open Forum, I spoke with this unpretentious man – Urs Heinz – who turned out to be an influential man with a distinct voice. He has been engaged with the WEF since 1975, and in particular with its founder Klaus Schwab, recently described by Forbes Magazine as “indisputably the most powerful connector in the world.”
Mr. Heinz is known in French-speaking Switzerland under the phrase “La Foi de Monsieur Fleur”, or in English, “The Faith of Mr. Flower.” Indeed, although he seems to be a very ‘simple’ man among the sea of formal, grey, and pinstriped Davos Men, his remarkable honesty seemed to have made an impression on Mr. Schwab himself.
It began in 1975 when Mr. Heinz heard about this business meeting taking place in Davos. He reached out to Mr. Schwab (which might have been much easier back then compared to today) and asked him to invite a friend, Garth Hewitt, a musician and advocate for justice and peace, to perform at the meeting. “A friend of Cliff Richard,” he added, clearly familiar with the name-dropping game. Mr. Hewitt got his slot between lunch and dessert, and left with a handful of centimes in his pockets from the audience to further his purpose. Even today, grateful as he is, Mr. Heinz still prepares his bouquets for Mr. Schwab and even once brought one at the WEF headquarters in Cologny, on the outskirts of Geneva, Switzerland.
He is also full of suggestions, many that could be of great use to Dr. Probst’s team of organizers. In Mr. Heinz´s eyes, the Open Forum needs better female representation on the panels, the revival of the daily WEF newspaper (I suppose he meant a print version for those who are not regularly checking their smartphones), and a people’s festival with world musicians where the proceedings go toward fulfilling the Millennium Development Goals.
An advocate of peace and keeping the faith, Mr. Heinz believes that “we need to enjoy one another”, and what matters in the end are the basics of relationships and “not only religion.” It comes as no surprise then that the violent anti-capitalist protests against WEF in the late 90s were thus a source of major anxiety to him. Not only did he start sharing chocolate marshmallows with the protesters and soldiers, but he also gave roses to the girls, effectively “disarming those full of hate,” as he put it.
Driven by his anxiety, Mr. Heinz drafted a letter in 2001 with six or so provisions on how to achieve peace at the conference; he then copied it 20 times and gave it to the town leaders and Mr. Schwab. He suggested starting a public forum in order to address the concerns of the demonstrators. Two years later the WEF, in cooperation with the Swiss Evangelical Church, launched the first Open Forum Davos in 2003 (in 2002 the WEF was held in New York City). According to Dr. Probst, the Open Forum is the reason why protests have waned.
The church decided to end its engagement in 2011 due to the financial costs, says Mr. Heinz. (They are today represented on the advisory board.) Since then, Mr. Heinz laments over the fact that there have been fewer flowers and women on the panels – there were even two panels without a single woman this year. However, what surprised him this year was the performance of Chris Washburne´s Jazz Band during the session on Improvisation. A special highlight for him was the performance of the young lady, Linda Lee, who was invited at the last second to climb onto the stage with her trumpet to perform with the band (learn more about jazz and improvisation by watching the broadcasted educative and interactive session here).
Mr. Washburne´s performance seemed to have had such a strong impression on Mr. Heinz that he made a call for the revival of the earlier mentioned people’s festival. I believe that he would proudly partake in the WEF´s claim for “improving the state of the world”. This may be his own contribution to bettering the lives of others.
It seems that together, both Mr. Heinz and Mr. Schwab have successfully addressed the protests; the former by using flowers and the latter by setting up the Open Forum. Thank you for my centime, Monsieur Fleur. Let´s hope that Mr. Schwab listens to your call once again and that we will have a more well-balanced gender representation; not only on the panels in the Open Forum but also in the Annual Meeting, and lastly, a festival where talented musicians, and men and women like Mr. Heinz, celebrate with CEOs and heads of states.
What an interesting bouquet of people that would be.
Listen to the full conversation with Urs Heinz.
Feature Image: Urs Heinz and Business Angel Esther Dyson exchanging thoughts; Source: openforum.ch.
The sense of importance in the tiny village of Davos is hard to miss. If it isn’t a throng of bodyguards escorting Henry Kissinger back to his hotel, it’s the gymnastics that must be performed to get past barriers and the Swiss police to gain access to the Congress Centre where the main action of the World Economic Forum (WEF) Annual Meeting is taking place. The message is clear and it is loud – if you’re not one of the chosen, you are not welcome.
The Open Forum at the WEF is thus a refreshing change of pace. Meeting at the Swiss Alpine School some ten minutes’ walk away, this Forum runs parallel to that Forum with one crucial difference – you don’t need a personal invitation to attend. Currently at the helm are Dr Gilbert Probst, WEF Managing Director and Dean of the Leadership Office and Academic Affairs, and a team of dedicated young professionals. They work tirelessly to hammer together a programme that brings politicians, theologians, CEOs, entrepreneurs, and artists to a platform that can be reached by the “global public”. Whether a local resident or someone coming from half the world away, anyone is welcome to listen, participate, or generally observe on the proceedings.
Obviously, it’s unlikely that you’ll run into Messrs Merkel or Gates here. That isn’t to say that the Open Forum doesn’t come with its fair share of notables from all fields – this year included OECD Secretary-General Angel Guerria; German Foreign Affairs Minister Guido Westerwelle; Nestlé CEO Paul Bulcke; current President of the Swiss confederation Ueli Maurer; Special Representative of the UN Secretary-General for Food Security and Nutrition David Nabarro; and physicist Dr Lawrence Krauss.
The Open Forum, however, shouldn’t be seen as a substitute, but rather as a more progressive and accessible complement to the main event. To start with, let’s examine the session themes. While there is some crossover with the Annual Meeting, the seven sessions at the Open Forum are chosen keeping in mind the concerns of the 99 percent. Unemployment, austerity measures in Europe, and the relevance of religion in the 21st century weigh far more heavily on minds than some of the more amorphous topics at the WEF (e.g., experiencing mindful leadership). Then there are the attendees. Though there is a healthy smattering of WEF badge holders at the Forum sessions, the crowd here is removed by quite some degree from the bankers and consultants on the other side of the barrier. Suffice it to say that you wouldn’t normally find a man from Guatemala, who moved to Spain (via India) with his family, within the Congress Centre, questioning ministers on employment opportunities for the youth. Yet, it is such elements that help humanise the whole event, moving it away from the abstraction present at the Annual Meeting to the reality present at the Open Forum.
Nor is it an easy task for the panellists, who must connect with a mixed audience – entrepreneurs, locals, NGO representatives, and a few hecklers – in a way that engages them without alienating or patronising them on some pretty hefty subjects. To some extent, Oscar Wilde’s words – “if you want to tell people the truth, make them laugh, otherwise they’ll kill you” – express my feelings on this exercise rather well, and I don’t need to look much further beyond the Eurozone panel and its collection of ministerial figures for evidence. From a non-European’s point of view, if one were to rely solely on the media reports, it would seem as if the Eurozone is in imminent danger of breaking apart. Ministers and heads of state are frustrated, the public is tired of the word “austerity”, and the “will they, won’t they?” saga of possible exits has been analysed to death. But through a mixture of wit and humour (intentional or otherwise), the panellists present played with stereotypes and hard data to infuse a serious topic with some much-needed light heartedness. The message is clear – the Eurozone isn’t going to go anywhere. For even the most hardened cynic, the sight of ministers whose duty it is to tow Europe out of its river of fiscal debt making it obvious that they’re all in it together, despite their differences, did more to calm jittery nerves than a sudden upswing in the stock market.
Behind the closed doors of the Annual Meeting, the discussions hardly reach the world at large in anything but a highly filtered form. The Open Forum thus serves as the arm of the WEF that tries – and succeeds rather well – to ground the whole meeting to the real world. Of course, with room for only 300 people plus an overflow room, it can be argued that the Open Forum doesn’t really reach the “global public”. Beyond the inherent space and time limitations of the event (one can only ask so many questions within the allotted time), Davos is also not exactly the most accessible mountain town. But the Open Forum does go some distance in adding a degree of transparency to WEF. And given a world of social media and increasing connection, the available options of live streaming sessions, Twitter, and Facebook mean that the Open Forum is accessible to anyone who does want to get involved.
The Open Forum allows for a two way exchange. On one hand, many ideas being considered by the Davos elite become accessible to the rest of the world. On the other, it is hoped that some of the questions and concerns being raised by those who are affected most by the actions of these six-figured salaried men and women make it beyond the heavily policed barriers. Of course, there’s still room for a few topless protesters. Without them, Davos could never be complete.
We were invited by a local German-speaking newspaper to write an opinion piece, reflecting on our experience at the World Economic Forum. This is our contribution – Danke!
Dieser Artikel wurde in Zusammenarbeit mit Nikolaj Fischer verfasst.
Das Weltwirtschaftsforum (WEF) sollte vergangene Woche erneut Spiegelbild weltpolitischen Ausmaßes sein. Prominent eingespielte Gäste wie Angela Merkel spiegeln die Machtverschiebungen auf dem politischen Parkett Europas wieder. Zur Beruhigung der globalen Finanzmärkte singt der Chor europäischer Ministerpräsidenten im Einklang zu Frau Merkels orchestrierter fiskalpolitischer Disziplin. Guido Westerwelle, deutscher Außenminister, erinnert in Komödien-haften Englisch daran, dass man von China aus auf Europa blickt und nicht auf die Vielzahl europäischer Einzelstaaten. Das Fehlen politischer Entscheidungsträger aus den USA und der Chinesischen Volksrepublik wird allerdings als Rückgang der Einflusskraft des WEFs verstanden. Nimmt doch die Rolle Europas im Zuge geopolitischer Machtverschiebungen ab.
Insbesondere Mann (17% Frauenanteil) predigt die weltpolitische Bedeutungsverschiebung hin zu den aufstrebenden Ländern des Südens. Das WEF bemüht sich dem Investitionsklima zu Liebe Afrika in ein positives Licht zu rücken. Es ist nicht mehr nur die Rede von Entwicklungshilfe sondern von „De-Risking Africa“ oder „The Promise of Africa“. Ist doch der Anteil von Teilnehmern aus den Entwicklungs- und Schwellenländern stetig angewachsen. In den wohl gefüllten Konferenzsälen fällt allerdings schnell auf, dass der Weiße Mann an Präsenz überwiegt. Das Online Magazin Quartz gibt detailliert Auskunft über die Zusammensetzung der Teilnehmer.
Der wegen Spitzengehältern in der Presse angeprangert Novartis Konzern stellt seinen CEO Joseph Jimenez frei für eine vom WEF Medienteam leidenschaftlich veranstaltete Pressekonferenz. Gemeinsam mit Paul Kagame, dem Präsidenten Ruandas und dem weltberühmten Ökonomen Jeffrey Sachs stellt man in nur 15 Minuten das ambitionierte Projekt zur Ausbildung einer Million Krankheitsbekämpfern für Afrika vor. Einer der vielen Beiträge, die das WEF von seinen Teilnehmern einfordert, ganz nach dem Motto “den Zustand der Welt verbessern“.
Und die Schweiz? Die öffentliche Meinung präsentiert sich gewohnt ambivalent zwischen ‘Stolz’ und ‘Schande’. Doch mit der Weltbühne im eigenen Land fühlt sich die Schweiz wohl. Besonders wenn sie überall mitreden kann, sich von aktuellen Geschehnissen, wie die europäische Finanzkrise, jedoch nicht betroffen fühlen muss. Angetrabt mit der zweitgrößten Delegation von Regierungsvertretern, kann sie wichtige Kontakte pflegen, um den Ansturm der Globalisierungs-Kavallerie einzudämmen. Als schöner Werbeeffekt lesen wir zudem gerne die zahlreichen Einleitungssätze über verschneite Schweizer Berge in der internationalen Presse. Schlecht nur für das Image der Schweiz, dass der Davoser bis zu 5000 Franken für eine Woche Unterkunft nimmt, schreibt das Davoser Tagblatt. Michele Mischler von der Medienstelle des WEFs kündigt an, dass das WEF bereit ist, sich diesem „Davoser Phänomen“ zur Wehr zu setzen.
Global, verantwortlich und den Märkten zu Liebe, so kann man viele der geführten Debatten umschreiben. Ein Journalist des Wirtschaftsmagazins Trends für die Arabische Welt offenbarte uns, dass 80% der Gespräche hinter unseren Rücken und verschlossenen Türen ablaufen. Häufig ein Grund für die anhaltende, aber abnehmend manifeste Kritik gegenüber dem WEF, welches sich seit der Gründung des parallel stattfindenden Open Forums im stetigen Öffnungsprozess befindet, erklärt uns langjähriger Open Forum Besucher Urs Heinz.
Davos dient nicht nur als wichtige Plattform für die zahlreichen bilateralen und den jeweiligen Partnern dienlichen Treffen. Wir trafen uns beispielsweise mit Arianna Huffington, Gründerin der Huffington Post, um uns über unsere Partnerschaft persönlich auszutauschen. Die ambitionierte Vision des WEFs globale Probleme in „Multi-Stakeholder“ Partnerschaften zu lösen, verursacht aber offenkundig auch viel Gerede. Neu war jedoch die verstärkte Einbindung von Sozialunternehmern und jungen Teilnehmer sowie die erhebliche Mobilisierung durch soziale Medien wie Twitter. Unter dem Hashtag #wef wurden bis zu 40.000 Nachrichten täglich verbreitet, auch hier ein Zeichen zunehmender Transparenz, sagt Randall Krantz ehemaliger WEF Mitarbeiter und Umweltaktivist via Telefon aus dem Sabbatical im Bhutan.
Es liegt nun am WEF und den Medien diese Nachrichten aufzugreifen und die Verantwortlichen an ihren Aussagen zur Rechenschaft zu ziehen. Wir sind gespannt, ob wir bald von konkreten, innovativen Lösungsansätzen globalen Ausmaßes hören werden. Deutschland schießt beispielhaft bis zu einer Milliarde Euro in den bereits 2001 am WEF initiierten Globalen Fonds zur Bekämpfung von Aids, Tuberkulose und Malaria ein.
Sicher sind wir uns dessen aber nicht. Wie Pooran Desai, Sozialunternehmer und Gründer von Bioregional in den UK, uns in Davos sagte, die Macht und Fähigkeit zur Veränderung liegt nicht bei den Ministerpräsidenten und CEOs. Diese stehen den globalen Problemen oft hilflos gegenüber, begrenzt in ihren Handlungen durch Parteien, Gremien und Aktionärsinteressen zurück zu Hause. Herr Desai wünscht sich für die Zukunft mehr Sozialunternehmer am Forum, bei diesen sieht er die wirkliche Macht zur Lösung globaler Probleme.
Mit einem Team von sechs Studierenden aus Deutschland, Finnland, Indien, Kannada, und der Schweiz konnten wir als studentische Reporter das Geschehen am WEF vor Ort mitverfolgen. Viele Bilder aus den Medien und der öffentlichen Meinung sehen wir bestätigt, aber ebenso viele finden höchstens ein Nischendasein. Wenn Herr Desai recht behalten soll, so hoffen wir zukünftig nicht nur mehr Sozialunternehmer und Teilnehmer der jüngeren Generation am Forum anzutreffen, sondern auch mehr über sie zu lesen und zu hören, um deren Einfluss zu stärken. Eine Verantwortung, die Medien und Öffentlichkeit trotz häufig geschlossener Türen wahrnehmen können. Die deutsche TAZ ragt überraschend als Vorbild heraus.
At a Wall Street Journal conference in 2009, then White House Chief of Staff Rahm Emanuel stated that one should never let a crisis go to waste. In this sense, the 2008 financial crisis is just like any other crisis: a disaster and an opportunity. A disaster because it led to the destruction of $4 trillion worth of global assets, millions of people losing their livelihood, and bringing the whole economic system incredibly close to a cataclysmic meltdown. An opportunity in at least two ways: firstly, in its ability to showcase how the risk-taking nature of the financial system exposes society at large and secondly, in its ability to create pressure on the legislature to address these inherent risks.
The scope and reach of the crisis is reminiscent of the Great Depression – the single greatest economic calamity in recent economic history. Indeed, a closer look reveals that these two periods have more in common than the extent of economic catastrophe. They serve as wake-up calls for society to reconsider the systemic risk that it chooses to shoulder. The Great Depression led to the enactment of the Glass-Steagall Act in 1933 which was the US Congress’ attempt to separate commercial and investment banks. Subsequently, the US experienced one of the largest sustained periods of economic growth, a 60-year expansion of the middle class, the largest increase in productivity, and the largest increase in median income in the US.
Financial regulation is not the only and arguably, not the most important factor for this economic success. Workers moving from agricultural to industrial activities in cities, increased fiscal stimuli of the New Deal, and export opportunities to war-ridden Europe amongst other played a vital role in the economic expansion until the 70s (as did facilitated borrowing opportunities and rising private debt until the late 90s). The Glass-Steagall Act did not prevent this economic success and although the expansion could have been even bigger without it, it shows that the existence of strong financial regulation can in principle be consistent with effective economic expansion.
Yet the Glass-Steagall Act was repealed and replaced by the Gramm-Leach-Bliley Act in 1999 due to concerns over its efficiency and the ability of US banks to compete with other less regulated financial institutions. On the one hand, this allowed commercial banks to invest in financial products that were traditionally reserved for investment banks. On the other, it enabled financial institutions with commercial and investment banking divisions to channel funds between them. This led to an increasing interdependency between the two financial sectors and when the financial crisis deepened in 2008, the linkage was so strong that the security of ordinary people’s pensions and savings depended on the survival and bailouts of systematically important banks.
The problem with this narrative is that it lends itself to the simplistic belief that another financial crisis of this scale can be averted by once again separating retail and investment banking. This is misleading for two reasons. First, the degree of complexity of financial transactions has increased exponentially since 1933. Financial innovation has made the system more efficient in its ability to fund a range of projects that would otherwise go unfunded, but it also increased the complexity of financial transactions, which makes it difficult for current lawmakers to spell out how this separation should be practically implemented. The Glass-Steagall Act of 1933 was 32 pages long. The Dodd-Frank Act of 2010, Congress’ most recent attempt to accomplish the same task, spans 848 pages. Despite its length, many influential commentators and news outlets around the world have correctly pointed out the flaws in the practical details of the Dodd-Frank Act: its questionable call for the creation of even more bureaucracy and its probable failure to provide a more effective basis for pre-emptive financial regulation. But only very few questioned the legitimacy of the effort to reconsider the workings of the financial system and virtually nobody put forward a defence of the status quo until 2010.
Banks may have substantially affected the nature of the financial crisis, but they are neither the only shapers nor arguably the most central ones. Moreover, and despite of their public reputation, investment banks fulfil critical economic functions. They provide funding for vital and sometimes highly complex projects ranging from sustainable energy infrastructure to corporate financing and they lend credibility to governments by underwriting their debt, thus helping them to raise money at reasonable rates. By the end of 2011, Goldman Sachs had arranged $24 billion worth of financing for sustainability projects. They also announced a $40 billion initiative focusing on renewable energy. Until March 2012, Bank of America invested $20 billion in projects related to energy efficiency and environmental businesses. They also announced a further $50 billion worth of green investments last April following JP Morgan’s launch of a values-driven investment platform for customers in the same month.
The solar panels, hydro-electric power plants, and windmills that are being built due to these sustainability investment projects are partially a function of banks’ ability to allocate capital as efficiently as possible, which essentially implies bringing together investors and investment opportunities. The societal benefit of an efficient allocation of capital is substantial: investors earn higher returns on their investment, while their monies work to build new companies, infrastructure projects, and educational institutions. This in turn contributes to economic growth, job creation, and prosperity. Green investment in particular helps communities and companies to adapt to the changing realities of global warming and energy consumption.
A separation of retail and investment banking essentially reduces the pool of capital that could be used to finance some of these projects, which decreases the overall efficiency of the financial and by extension also the economic system. However, this is not necessarily a bad thing because every piece of regulation must be considered by its effect on the efficiency and the stability of the system as a whole. It is likely that a lower efficiency would lead to slower economic growth and a slower rate of adaptation in our energy consumption. Although in itself not desirable, it may be a necessary price to pay in order to prevent a situation in which substantial risk-taking behaviour is encouraged, because some key actors being too big to fail do not face the down-side of this risk. On the other hand, we might argue against the background of frighteningly high levels of unemployment and a feeble economic recovery that we should not sacrifice growth for the sake of more resilience.
It is also worth noting the ambiguities in the use of the term ‘economic efficiency’. In a paper on financial stability in Iceland published in 2006, Frederic Mishkin, former member of the Board of Governors of the Federal Reserve System, described the country’s financial system as efficient due to its contribution to the economic growth. Although the Icelandic economy grew at an average of about 5.4% between 2003 and 2007 following bank deregulation in 2001, the financial system collapsed and led to the bankruptcy of the whole country in the wake of the financial crisis in 2007. This led economic thought leaders such as former chief economist of the IMF Rahuram Rajan to question whether such a system can be accurately referred to as ‘efficient’. Despite this, the second and most fundamental problem in the financial sector seems to be the trade-off between efficiency and resilience. Financial sectors in Ireland, Iceland, the UK, the US, Germany etc., have contributed to the growth of their respective economies for a sustained period of time, but they have also made them more vulnerable to economic shocks and thus exposed society at large to increased liabilities.
Few challenges fit so well with this year’s focus at the World Economic Forum as the nature of the financial system. The instability is an obvious problem; however, it is usually a long and arduous path from stating a problem to finding a solution, especially with a topic that combines so much complexity with vested interest. As some of the most capable minds of the world convene to tackle this issue, the debate should drop its exclusive focus on efficiency and explore the possibility of an economy that is less efficient but more stable and resilient. The result of this inquiry may well be that given the current economic turbulence, we simply cannot afford the efficiency trade-off, but if so, this should be conceded openly and honestly in full recognition of the fact that the degree of economic volatility in our economic system has not changed. The world expects answers and results; it is hoped the global leaders at Davos can provide us with some.
- (Feature quote) A systems-level approach was taken to identify ecological risks and resilience at the Earth’s Tipping Points session.
- Again, resilience, especially for and about people, was the key theme for the Designing Smart Cities session.
- Panelists at the Scaling Social Innovation session focused on the importance of effective financing models and cross-sectoral partnerships for scaling up.
- Similarly, the session Catalysing Markets through Philanthropy highlighted this need for impact growth, and provided a more technical discussion on the how, with a broader application of beyond social entrepreneurs.
- The Global Development Outlook with high-profile Davos regulars reviewed the progress of MDGs and outlook on a post-2015 world. Paul Polman, CEO of Unilever, highlighted the need for “equitable growth within planetary boundaries”.
- The price of inequality was discussed in An Insight, An Idea with Joseph E. Stiglitz.
- In the session, Mega Sporting Events: In Whose Interest?, panelists including the Swiss president Uerli Maurer answered concerns about the environmental impact of these events, and discussed the opportunities in community and social development.
- Trombonist and Columbia University professor Chris Washburne demonstrated improvisation with a special jazz performance, and talked about the importance of leadership in organisations (especially in business organisations).
- A report in partnership with Accenture was released: Engaging Tomorrow’s Consumer.
- “Splitting the bill on climate change” by Thomas Kerr, Director, World Economic Forum.
- “Is it time to turn out the street lights?” by Frans van Houten, CEO of Royal Philips Electronics.
- “Let’s talk beyond Davos” by Niall Dunne, Chief Sustainability Officer of BT and WEF Young Global Leader.
- “Planting the seeds of a bio economy” by Feike Sijbesma, Executive Officer and Chairman of the Managing Board, Royal DSM, and Steen Riisgaard, President and Chief Executive Officer of Novozymes.
- Davos call for $14trn ‘greening’ of global economy, The Independent
- Davos 2013: Building blocks for a sustainable future?, GreenBiz (by Aron Cramer, CEO of Business for Social Responsibility)
- On climate change:
- Leaders join to discuss climate change at Davos 2013, Guardian Sustainable Business
- Joseph Stiglitz and the World Economic Forum: Making the Connection Between Climate Change and Economics, The Huffington Post
- Make climate change a priority, Washington Post (by Jim Yong Kim, President of World Bank)
- World leaders emitted 2.5 million kilograms of CO2 getting to Davos, Grist.org
- The Global Energy Context session discussed the dramatic macroeconomic effects of the rise of shale gas in the US, as well as how “markets are quietly achieving both growth and environmental improvements.”
- Panelists from China’s Growth Context positively noted that “for the first time, consumption is leading the economic recovery [instead of investment-driven growth]” with no mentions of environmental consequences.
- Pricing of natural resources and cost of extraction dominated the discussions at the session on Natural Resource Context. The session also highlighted advantages of open data and data exchange standards for resource management.
- (Featured quote) Kumi Naidoo, Executive Director of Greenpeace International, spoke about campaigning, climate change, China, and leadership, at An Insight, An Idea: Transformational Approach for Addressing Climate Change.
- The Open Forum commenced today with the first panel, NGOs: New Models for the 21st Century, which focused mostly on accountability.
- Talks at the evening session, Unemployed or Unemployable?, focused on jobs for green economy and training to mobilise the youth.
- In the facing of increasingly frequent shocks such as political unrest and natural disasters, Building Resilience in Supply Chains lays a blueprint to advise companies.
- Other previous reports leading up to Davos include:
- Outlook on the Global Agenda 2013, highlighting environmental concerns, such as climate change adaptation and natural resource scarcity, as among the most urgent challenges today.
- The Global Risks Report 2013, analyzing them in the context of economic and environmental resilience, the report shows that we are “more at risk as persistent economic weakness saps our ability to tackle environmental challenges.”
- “Growing spinach in a skyscraper” by Frans van Houten, the Chief Executive Officer of Royal Philips Electronics, on Forum:Blog.
- “It’s the economy, stupid” by Pooran Desai, Co-founder, BioRegional and International Director, One Planet Communities, United Kingdom, on Forum:Blog.
- Ideas @Davos: Biofuels of the future with Kristala Prather, Associate Professor of Chemical Engineering at the Massachusetts Institute of Technology (MIT).
- “How do you measure happiness?” by Paul Dolan, Professor of Behavioural Science, Department of Social Policy, London School of Economics, on Forum:Blog.
- Davos 2013: why food and resource security will be on the agenda, Guardian Sustainable Business (by Dominic Waughray, World Economic Forum Head of Environmental Initiatives)
- Davos man thrives while rest of us pay for his excess, Guardian Sustainable Business
- The Climate Change Endgame, The New York Times
- Davos pitch for dynamism rams into end-of-growth debate, Bloomberg
At every gathering of the World Economic Forum, the term “Davos Man” comes alive across the mediasphere and leaves a bad taste in the mouth of many. Perhaps now would be a good time as any to define it. Coined by political scientist Samuel P. Huntington, the term Davos Man was meant to refer to members of the global elite who view themselves as completely international. They have no need for the term “nationality” and feel that governments are merely shadows of time past to be used as facilitators in their global operations. Originally meant to identify the high level attendees of the World Economic Forum in Davos, the term has become synonymous with unscrupulous bankers, Wall Street big-shots and anyone with a fat paycheck and large clout in a high profile position.
The media naturally jumps at the chance to exacerbate populist sentiment. Whether labelling the Davos man as a disassociated member in an apathetic society or merely a business magnate making money while the rest of the world toils in the wake of his mistakes. I would propose a re-examination of the label and redefine it, in terms of one that contextually fits better in the world we’re living in and heading towards.
The first objection I would like to bring up is that you don’t need to be a rich man to be a Davos Man, not that it hurts. Take, for example, Kofi Annan. A man embedded in the economic system, he is not someone you would associate with extreme wealth. Yet Mr. Annan epitomises the Davos Man in that he transcends national borders more than most people. He is a wanted man in many an elite circle if not for his extensive knowledge, for the attractive network he brings with him. Wealth does not a Davos Man make.
The second objection would be the idea of being part of the business elite. Hate him or love him, Bono would like to be known as an altruist and philanthropist (genuine or not) that I won’t get into. A veteran of the forum, Bono’s rock star status and charismatic personality means that he is a man who can get to most people and make them listen. He has been known to bring world leaders together and organise concerts and charities with phenomenal success. Bono wields power few of the richest men can dream of. Bono could get away with murder and still organize another Live Aid. The Davos Man spans across sectors as he does nationalities.
The last objection would be the concept of self-interest. There are plenty of social entrepreneurs and global shapers who flock to Davos without looking to climb their respective career ladders. On the contrary, they are here to further ideas and causes which they deem beneficial to their respective societies. People like Sal Khan (Khan Academy) and Daphne Koller (Coursera) are here on behalf oftheir causes, causes perhaps bigger than themselves.
I can understand if these come off as exceptions to the rule, but a word limit allows only so many names to be listed. There are of course those who embody the more traditional definition of the Davos Man: Dominic Barton (CEO of McKinsey) and Alex Weber (Chairman of UBS), striding the halls of the Congress Centre. Their numbers are however being diluted with the neo-Davos Man.
The neo-Davos man is like his predecessor, a world citizen. Boundaries and nationalities are less important to him, not because of a vested interest but rather it is instead a global consciousness that drives him to be more than the sum of his predecessors. He is a forward looking player who wants to shape the world. There are Davos men – and women – who shape the world for the better and there are also those that shape it for the worse. They come from the public sector, private sector, non-governmental organisations and academia. They are educators, innovators, corporate business magnates and social entrepreneurs – and they’re not exclusive to the World Economic Forum. The Davos Man has evolved, and so should the definitions and mysticisms that surround him.
Feature image source: www.wallpaperup.com
Today, one day before the World Economic Forum (WEF) Annual Meeting commences here in the secluded Swiss mountain town of Davos, 29 selected social entrepreneurs are already meeting to imagine what the social enterprise sector will look like in 2030 before mingling during the rest of the week with over 2,500 other participants. The inclusion of social entrepreneurs as a unique WEF “community” is a relatively recent development, as they were not formally included until the WEF founded a new organization in 1998 – the Schwab Foundation for Social Entrepreneurship. Since then, there has been increasingly more integration of selected social entrepreneurs into the Annual Meeting sessions. But why is it important to include social entrepreneurs at Davos? What do they add that others cannot?
Social entrepreneurs bring scalable solutions to today’s greatest challenges – some of which have been highlighted by the WEF Global Risks Report as the most likely and impact-loaded over the next ten years. Five of the most likely risks – namely, severe income disparity, chronic fiscal imbalances, rising greenhouse gas emissions, water supply crises, and mismanagement of population aging – are in everyone’s interests to be resolved. Unfortunately, other stakeholders such as businesses and non-governmental organizations (NGOs) are limited in their ability to address them. Traditional NGOs are financially limited by the amount of grant capital available, and can be subject to vast losses of funding overnight through governmental budget cuts. Businesses on the other hand usually have access to capital, although they’re constrained by their responsibility to act in the interest of their shareholders; and often it isn’t even a business’ core competency to solve societal problems. Thus, one could argue that social enterprises have a competitive edge over businesses and NGOs. Their focus on finding scalable solutions to societal problems form a unique business modeling perspective. Some NGOs, such as the World Wildlife Foundation, have managed to upscale their organization by developing an umbrella of locally driven, but globally interlinked branches. This year the WEF labels the social entrepreneurs as the “Architects of Resilient Dynamism”.
The Schwab Foundation Social Entrepreneurs participating at the WEF this week are addressing some of these challenges identified through the following business models:
- Philip Wilson of Ecofiltro, a Guatemalan-based organization, is addressing the water supply crises by selling affordable water filters through a monthly-payment plan, thus providing increased access to clean drinking water. Ecofiltro generates 95% of its own revenue, ensuring a minimum reliance on donors.
- Felipe Vergara of Lumni is reducing income disparity by enabling young people from low-income families to pursue an education. Lumni facilitates human capital contracts, whereby graduates pay back a percentage of their income after graduation. In most cases, the income differential for attending a university more than offsets these payments, representing a win-win solution for both the investor and the student. On average, students’ incomes have increased by roughly 150%, and investors have received an average of 11.4% return on their investment.
- Renat Heuberger, co-founder and CEO at South Pole Carbon is reducing greenhouse gas emissions through facilitating the financing of over 250 carbon-reduction projects worldwide. Founded in 2006, South Pole Carbon already has an annual budget of USD 28.6 million and employs over 100 people.
But what value do the social entrepreneurs themselves see in attending the WEF? To find out, I talked to Renat Heuberger, co-Schwab Foundation Entrepreneur of the Year for Switzerland in 2011. Although a former co-founder of a non-profit organization called myclimate, Heuberger is quick to extol the virtues of adopting a corporate structure akin to that of a for-profit business. By imitating for-profits’ legal and operating structures, Heuberger argues, it becomes easier to upscale an organization, and in the process also upscale the impact of the organization. As an individual who also knows about the failures of social entrepreneurship, Heuberger understands the need for scaling up within social entrepreneurship, and thus, he is someone who is also eager to talk about possible business expansions into other environmental areas such as biodiversity and water.
Heuberger travels to Davos for the same reasons as other entrepreneurs: to do business. From convincing traditional investors of the commercial value of investing in social businesses to meeting other specialists within the climate change field, the networking benefits seem endless. Other social entrepreneurs have highlighted the importance of endorsements from the leaders at WEF events, the opportunity to meet people that can challenge your ideas, and the ability to make strategic contacts. According to the SCALERS model for scaling social enterprises, developed by faculty at Duke University, these types of opportunities in lobbying, alliance building, and communication are invaluable for social enterprises wanting to upscale their enterprises, as well as their impacts.
The social entrepreneurs aren’t the only ones to benefit though. Traditional businesses also benefit from having their socially-focused counterparts present, as social enterprises can help them capitalize on emerging trends when other businesses haven’t even acquired the necessary expertise yet. For example, the credit card provider Cornèrcard has partnered with South Pole Carbon to target the growing sector of sustainability-minded consumers through the “climate neutral credit card”, which automatically offsets the carbon emissions of purchases. Sometimes social entrepreneurs are providing solutions to problems that businesses aren’t even aware of. For example, South Pole Carbon is using its carbon data expertise to help investors avoid the burden of too much unburnable carbon within a portfolio, by providing greenhouse gas data for all of the listed companies through an app available on Bloomberg Terminals.
Ultimately, social entrepreneurs are at the WEF because they provide innovative, scalable solutions to some of the most pressing global challenges. Whether the enterprise is in improving the skills of the workforce or ensuring the health of rural populations, it is in everyone’s interest that social entrepreneurs succeed in their goals, and that is why they are at the same meeting as world leaders.
Perhaps the organizers of the summit should consider increasing the number of participating social entrepreneurs in the years to come. Resilient dynamism is not designed by only a few architects, but rather by the many architects.
Harriet Jackson works for the strategy firm Impact Economy and is a guest writer for Student Reporter.
Keeping true to Swiss clichés, the World Economic Forum (WEF) press meeting in Geneva last Wednesday started just as the clocks struck eleven o’clock. The rows around me were already remarkably filled with members of international media even though there were still some days to go until the Annual Meeting. Just like with skiing, it’s always worth to follow the early birds to find the good snow. As a well-known glamorous alpine winter chat stuffed with a smorgasbord of who’s who from across industries, sectors and disciplines, Davos is a natural magnet for media. The call rarely goes unanswered as there also are many other reasons to climb up to Davos, some elaborated by my fellow reporter Aishwarya Nair. But there is still the lingering question of why we, Student Reporters, would be jumping onto an already crowded boat. Call us academic junkies, but rule out skiing as our main driver.
Profiling WEF: Does it fit for Student Reporter?
Student Reporter is an emerging young media initiative writing about sustainable business and economics. In order to not get lost in the online media jungle, we focus on conferences, a scene where we believe to encounter a highly concentrated micro cosmoses of exchanging new ideas in one spot. With this as our main focus and a natural appetite for high-profile events, it seems to be a logical step trying to get involved with WEF. Indeed, with his very first words at the press meeting, Klaus Schwab, underlined the reasons for Davos’ success: Davos is the most comprehensive, most interdisciplinary, action-oriented gathering to produce food for thought.
What sets Student Reporter apart from many other mainstream media outlets is, most importantly, our background as active and young university members, and the project-based set-up where each team defines its objectives and direction according to the event and setting. Flying true to the spirit of academics everywhere, we are always interested to soak in new ideas and join the latest discussion. However, to avoid smart-alecky philosophical discussions in the ivory tower, we try to observe mainstream meetings, picking up ideas from the sessions, and reflect on them, possibly making connections to related concepts and applying them to a broader audience. The WEF provides a broad field of such ideas and discussions.
Nor are specific issue conferences, such as the World Resources Forum which we cover on a regular basis, our only focus, but also single complex conferences such as Rio+20. Again, this is what makes Davos special. As a conference, it is a unique combination of the complexity of a single global conference enriched with the potential for an ongoing coverage of these type of events, and therefore complements our portfolio perfectly.
A space of our own
Nikolaj Fischer / Student Reporter
But a good reason to go does not make it yet a good match. Moreover, there are already a plethora of journalists around, already jamming the news channels with reports from Davos. However, we do create our unique space, perceiving the world from a younger generation’s perspective. Therein lies our greatest value.
Listening to the Q&A session at the end of the press meeting, there were simplified two types of questions reverberating through the room – regional and global. Regional agents, who focussed on geographically specific issues, such as why Russia is in the spotlight this year or what is happening with Brazil’s low growth. The big global media leaders like Bloomberg or Reuters went for the high-level questions instead, such as what are the signs of the fatigue of globalism. Both fulfill a necessary function but often fail to escape the work routine to take a different angle since professional journalism is often framed by gridlocked rules and predefined approaches how to perceive the world.
Though an armada of journalists are still on the way, our activities are a nice complement to the teeming mass of regional reporters and the word’s media leaders. Without the intention to push any media outlet into a midlife crisis, we’re here to fill in the gap that is the lack of the younger generation’s perspective. Less restricted by established patterns and approaches, we hope to bring our contribution to this sort of media landscape at the WEF.
Despite its very public appearance and the open collaboration with media, Davos is still very much a private meeting, which often means strict restrictions in access. However, for us, the WEF breaks new ground by cooperating with a student media initiative, beneficial to their larger involvement with civil society. This collaboration gives us the chance to cover the Open Forum, media work and civil society engagement.
While the attractiveness of the Annual Meeting cannot be denied, the Open Forum has to be analysed from a different perspective. Started as a parallel forum with a smaller participatory audience of mostly local residents of Davos, the Open Forum today successfully functions as bridge between the closed sessions of the WEF and the public. As Gilbert Probst, Managing Director, confirms: “You have about 30 percent of our [Annual Meeting] participants who go there … we don’t have to run after speakers like ten years ago or five years ago but now actually a lot of our speakers asked, ‘Can I be on the panel?’.” The Open Forum stands also for the broader direction of the WEF as an organisation in the interest of the global public.
Comparing the WEF main programme with the Open Forum is like a top-down view from the mountain – they are on a different level. The Open Forum is made for the global public, and therefore is much more down-to-earth and accessible without lacking content and relevance. It hits the pulse of current questions we are facing these days. In order to frame the context of these Forum sessions, we will also cover the civil society, the Davos community and media. A brief look into the line-up of the Open Forum tells us that we will encounter some of the following questions: Is there a need for a new way to head for NGOs or are they better off with improvising Jazz skills? Is there solidarity or domination in the Eurozone and is it really the fat invoice caused by obesity? And are mega sport events just a copycat of Caesars bread and circuses or a new religion’s church or at the end just a temporary roof for all the unemployed?
Climbing up Davos with six Student Reporters of various expertise and focii, we do have the capacity to cover several aspects of the Open Forum. This allows us the opportunity to immerse ourselves in the atmostphere and get a closer look before we dive into topic-specific discussions in our diverse team. The capacity of several international academics working together on one event is unique and enhances the Open Forum’s objective to serve the global public.
Being a curious Student Reporter, Davos is definitely a conference worth a closer look at. We are the only student media organization invited by WEF media team. And being less dependent on celebrity hunting to increase our circulation, our focused coverage of the Open Forum and its participants is the chance to bring the public dialogue and the unique Davos atmosphere down from the its altitude in the Alps closer to the rest of the world. As the photographer in me would tell you: it doesn’t matter what subject you shoot – a slightly different angle can change the whole picture.
Nikolaj Fischer / Student Reporter
The world’s political and economic elite are gearing up to make the pilgrimage to the World Economic Forum next week. From warnings and criticisms to tongue-in-cheek guides to crashing parties, the sleepy ski resort of Davos is back for its annual outing in the news. For many, it’s just another “important” event, full of people “chasing successful people who want to be seen chasing other successful people”. So why bother – literally and metaphorically – to make the long trek up?
The real importance of Davos doesn’t lie in its 81-page preliminary Global Risks report, which covers everything from austerity to the discovery of alien life. It’s not in the Twitterati exploding with excitement and/or anger or the igloo encampments of Occupy Davos. It’s not even about the (heartbreaking?) news that Google is cancelling its infamous Friday-night party this year.
Where the value truly presents itself is its ability to cut through chatter at the global level. Much like a point action plan, it identifies the few key topics that the world should focus its attention on, if only for the next 12-odd months. Last year’s conference, for example, brought the spotlight on the criticality of the food-water-energy nexus and how it relates to growth and social stability. As a result, practically every major organisation and interest group had some sort of report or conference on offer on the topic and that is a good thing. The general acceptance of the fact that we need to maintain our natural capital stocks to survive is wonderful and ground breaking but to effect real change, a piecemeal approach is futile. “The real impact of rethinking the value of nature and incorporating that new thinking into investment, development, and policy decisions will come as entire industries see the necessity, from a business perspective, of viewing nature in a fundamentally different light,” wrote Mark Tercek, president and CEO of The Nature Conservancy, of last year’s proceedings. That promise of focus is what the World Economic Forum, the celebrity of conferences, plates up for its consortium of global rock stars in return for the hefty attendance fee.
When it comes down to the bottom line, there are enough things competing for attention that it’s easy to get overwhelmed. When it’s not the ongoing global financial crisis, it’s the political gridlock in the United States or the growing exasperation within the Eurozone. If politics isn’t your cup of tea, there’s always the knowledge that greenhouse gas emissions aren’t slowing down fast enough to limit global warming to 2′C. Or that extreme weather events like the droughts, floods and superstorms of last year will soon become the norm rather than the exception. In fact, reading the list of “game-changers” that appear in WEF’s 2013 Global Risks Report is much like running through the endings of disaster movies.
Perhaps then there is reason that the sessions this year will take place under the banner of “Resilient Dynamism”. It’s a term catchy enough to resonate while simultaneously leaving it open to interpretation. Allowing for a bit of artistic license, to be resilient is to be dynamic; to be able to withstand shocks yet still be able to adapt to changes. But for a hyper-connected world such as ours, resilience becomes especially important. Whether it is a single-point vulnerability that triggers a domino effect toppling critical information infrastructure, geopolitical threats or irreversible loss of biodiversity, we will be affected regardless of where we live or how much is in our wallets.
To prepare for this gamut of risk demands resilience, be it physical or mental. To find the courage to take the necessary steps, however, could be interpreted as dynamism. The ability to match bold vision with bold actions will be much needed in the coming years and all hands – government, business, and scientific – will have to be on deck and working together. Dynamic leadership will be instrumental in building the required resilience. In a tired and beaten down world, these could, in part, be the subliminal messages that we’re already seeing from Davos.
What you shouldn’t expect from Davos are actual decisions. Rather, expect a better knowledge of the playing field for the year to come, complete with its political and economic potholes, and who could be your phone-a-friend.
“Goodbye sustainability, hello resilience,” recently wrote Andrew Zolli, co-author with Ann Marie Healy of Resilience: Why Things Bounce Back.
Resilience, as defined in their book, is “the capacity of a system, enterprise, or a person to maintain its core purpose and integrity in the face of dramatically changed circumstances” – an ideal attribute of any system especially in the face of unexpected events, such as the recent natural disasters, or more subtle disturbances that have systemic consequences. The rising frequency of extreme weather events and natural disasters has, in fact, prioritized resilience on the climate change agenda. It’s driven by economic incentives, social benefits, and the sentiment that, frankly, we don’t seem to have any other choice.
However, with climate change and other environmental issues finally breaking into the headlines of US mainstream media, is it really time for the sustainability advocates, whom Zolli seem to associate with “old-school environmentalist and social activists”, to give up?
Resilience, they argue, is a strategy to deal with “unforeseen [disruptions], blooming amid the thicket of overlapping social, political, economic, technological, and environmental systems that govern our lives.” Had such a strategy been in place in Mexico City, the sudden spike in corn prices - “a potential humanitarian and political crisis” as described by the book – due to the shutting down of 2,900 oil rigs more than 500 miles away two years prior, wouldn’t have had the reverberating effects that escalated into a food crisis.
Sustainability on the other hand, according to Zolli, is “the idea that with the right mix of incentives, technology substitutions and social change, humanity might finally achieve a lasting equilibrium with our planet, and with one another.” Comparing the two, “where sustainability aims to put the world back into balance, resilience looks for ways to manage an imbalanced world.”
However, talk to any business that has successfully incorporated sustainability into their core practices, and they will use the terms interchangeably. (A thought experiment: listen to any of the CEO interviews from Corp2020, a network of corporations leading the vision for a green economy, and you can easily replace the word “sustainability” with “resilience”). Leaders in this field tackle sustainability challenges through responsible procurement and supply chain management, risk management, responsible investing, just to name a few, not only because it is better for the planet, but in order to “future-proof” their organisations.
So how can the two terms be used so interchangeably? The heart of sustainability is about systems. In E.F. Schumacher’s seminal book, Small is Beautiful, he explains that the problem in our society is that “the modern industrial system, with all its intellectual sophistication, consumes the very basis on which it has been erected.” To use the language of systems, he explains a critical flaw in the boundaries and assumptions made. Along this line of a systems view emerged the concept of resilience, which “arguably, the sustainability of living systems—including humans—within the changing Earth system will depend on,” according to Professor Joseph Fiksel who directs the Center for Resilience at Ohio State University. In the end, isn’t learning how to manage an imbalanced world the first step towards equilibrium? Sustainable development in this unprecedented, more complex and uncertain world will “require resilience at many levels, including human communities and economic enterprises.”
The recent revival of resilience due to black swans, natural disasters, and other unexpected events, does bring into light weaknesses in today’s sustainability regime. Sustainability has become a political notion of tradeoffs among environmental, social and economic systems, with questioning of the term itself, and urban planners criticizing “sustainable” and LEED-certified buildings of Lower Manhattan for not being able to weather Superstorm Sandy.
Most critically, it brings into light that sustainability today has evolved to focus on “loadings”, instead of consequences on the system. Many companies today are lauded for being zero-waste, carbon-neutral, and energy efficient. But efficiency and emissions, which are the main focii of most industrial ecology tools today, give rise to problems like Jevon’s Paradox, a mismatch in awareness of true systemic effects and the individual user’s false concept of environmental-friendliness. Today’s concept of sustainability and the “green” practices that it has given rise to, have “focused mainly on reducing unsustainability rather than strengthening sustainability’s systemic underpinnings.”
In addition, resilience is a desirable characteristic of any system whether you are a sustainability advocate or not. Next week at Davos, the World Economic Forum Annual Meeting will convene over 2,000 business and world leaders under the theme “Resilient Dynamism.” Resilience has become synonymous with responsible leadership and foresight, and the discussion that this theme has generated in a wide variety of sectors already shows that it reaches beyond the typical sustainability audience.
Thus, resilience forces us to look back at our system (“it exists in a constant disequilibrium — trying, failing, adapting, learning and evolving in endless cycles”), and like some of the sustainability leaders in business (and some policymakers, too), it puts us back on the path that we started from, by tackling issues in a systems approach.
So, Mr. Zolli, don’t forget about sustainability yet, we are adapting, too.
Language is an interesting device. It helps us communicate with each other, share our ideas, thoughts, feelings. Yet, more often than not, all of the above get lost in a morass of misinterpretations and misunderstandings. The concept of sustainability isn’t safe from this either.
It’s easy to overuse the S-word these days. The website Ad Age for instance picked sustainability as the “jargoniest” jargon words of the year 2010. As everyone scrambles to be part of the green bandwagon, we’re running the risk where the word sustainability becomes a cliché with vague or no real content. The latest National Geographic global consumer Greendex demonstrates quite well the general misperceptions of consumers about sustainability. Most respondents of the survey believed that only a small proportion – two out of ten individuals – constitute as green consumers, yet over half of the respondents identified themselves as part of the “niche” green consumer group.
The road to hell is often paved with good intentions and the above would be a textbook example of just that. Even if we want to do our best to live sustainably (because it’s “the thing” to do), we have difficulty in identifying the lifestyle choices that being green entails, partially because there is so much information saturating the market that we just don’t know what (or who) to believe. So often, in our efforts to be good earth citizens, we become victims to greenwashing instead. Think about it yourself – how often have you bought a product covered in Möbius strips, happy dolphins and percentages promising high post-consumer content, and given yourself a mental pat on the back?
Research carried out among American citizens described the above mismatch of consumer actions and intentions as the “green gap”. The good news is that according to the same paper, even the infamously wasteful American nation’s green intentions could be transformed into sustainable action through inspiring and engaging communication strategies. The question then becomes: what are these strategies and how can one inspire change through communication? A number of speakers tried to answer the question at the workshop on awareness-raising at the European Resources Forum 2012 in Berlin.
Morten Jastrup, senior analyst at Copenhaguen-based Sustainia opened his presentation in Berlin by saying: “I was interested to hear about the workshop called “When will they start listening to us?” thinking to myself: “Well, maybe when we start speaking the language they understand, they will start listening!”
So if it comes down to it, what would this common language sound like? What would be its foundations? We combine here what we’ve learnt at the European Resources Forum with our own suggestions to come up with some basic building blocks of the language of sustainability.
1. Quality of life should be the focus of sustainability discussions.
Mr. Jastrup opened the panel discussion with a S. Exupéry quote: ”If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”
That is, instead of asking people to save the environment, one should inspire them to change their lifestyle by making the link obvious. Sustainability so far has mainly been a technical, science-based prescription for people to “do good” for the planet. Unfortunately, little has been said on how sustainability affects our health, free time and emotional well-being. First and foremost, sustainability should mean healthier air and food, more quality time and happiness to individuals. Instead of asking “Do you care for the planet?”, campaigns ought to put the question “Do you want to have tastier, healthier food/more quality time/more experiences with your family/enduring goods/cleaner air/etc?”.
As Mr Jastrup explained, “I think sometimes people get fed up with sustainability and words like green and climate and so on. (…) So maybe we should not talk so much about greenhouse gases and CO2 but talk about how we create quality of life. We know what people want: they want health, they want time with their children and they want to live in a rather secure world. That’s actually sustainability.”
However, aspiring to sustainable lives is not enough in itself. People need to be able to afford and identify the alternatives that let them lead sustainable lives.
2. This is why sustainability should have a practical and simple language that presents accessible solutions to all.
Putting too much emphasis on threats, risks and other factors that are associated with fear, guilt and mere altruism is proven to be counterproductive. Naysaying is not going to get us far either: psychology research shows that individuals are only motivated to act if they see hope for change.
Marilyn Mehlmann, General Secretary of Global Action Plan International, who has a background in psychology, also called for a more reality-based approach and no more scaremongering. “People do not really want to destroy the planet, so I don’t agree with those who think that we need to change our values. Instead, we should build new habits that allow us to live our values.”
Mr Jastrup was also talking about the importance of a “new type of communication” that identifies accessible solutions for everyone and reaches out to those who do not react to the doom and gloom message conveyed about sustainability. “A big pillar of our work is about identifying and making people aware about sustainable solutions that are already out there,” he answered when asked about practical examples. As he explained, Sustainia collects practical green solutions from all around the globe with the potential of being used by many people in a publication called Sustainia 100.
3. Last but not least, sustainability should be a fun and cool message.
“Resource efficiency is a terribly boring message,” pointed out Marilyn Mehlmann, adding that sustainability is communicated very often in a boring and impersonal way to the public.
Interactive social media presence and great visual appeal are two elements that could make the public discussions more fun. They certainly distinguish Sustainia from the more orthodox preachers of sustainability. Mr Jastrup explained: “Some people say that we try to make sustainability sexy. I’m not too sure about that but if people see what we do like this – it’s fine by me.” The site of Sustainia definitely proves that looks actually matter with its eye-catching design and bright colors that let us visualize our sustainable future.
Of course, playing the celebrity card is another great way to catch the eye of the public. The organization’s flagship initiative is the award ceremony for the most innovative idea of the Sustainia 100 where Arnold Schwarzenegger was presenting this October along with EU Commissioner Connie Hedegaard.
As Mr Jastrup put it, “It is this sort of thing – like creating an Oscar show for sustainability –where we believe that there is a potential for people to say, ‘Well, this is fun! Sustainability is something that I would like to associate myself and my company with because it is not doom and gloom. It is actually a way I can live, feel better about myself and get better solutions for the problems I experience daily and be sustainable.’”
So one thing we learnt is that more information on sustainability does not mean more awareness and a larger shift towards green consumption. Sustainability has to become the Zeitgeist by being desirable, achievable and trendy.
The challenge arises from the fact that in many cases, we still approach sustainability in the spirit of the pioneering 1987 Brundtland-definition (“development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.)
In other words, we present it as a vague, diluted, restrictive concept that lacks a practical dimension.
For this reason, “green” information campaigns have divergent outcomes: sometimes higher awareness, in other cases greenwashing, confusion and even more conception barriers. Only if sustainability is an attractive message, explained to people as the accessible option to live a healthier and more balanced life, can behaviour change become possible.
Once again, business is taking the lead in re-thinking the word of sustainability. They are digging deeper into behavior change research and experimenting with interactive consumer programs. SC Johnson launched for instance an extensive behaviour change program this summer shortly after Unilever’s success with the Five Levers of Change and the introduction of NikeFuel to those who love being tracked and challenged. It is time for policy-makers to see the light and follow in their footsteps.
In short, sustainability has to be reinvented as a cool message, otherwise we will see no behaviour change.
This article is based on an interview with Morten Jastrup from Sustainia.
Year 2012 was incredibly exciting for Student Reporter. We reported from around the world, from the favelas of Rio de Janeiro to the Kasbah of the Middle East. As we traveled to these locations, we critically reflected on our own carbon emissions, and met a participant who even traveled by train from Leeds, England to Beijing, China to save his own emissions! We interviewed each other, Nobel Prize winners, social entrepreneurs, environmental advocates, and professors, just to name a few.
To summarize this past year, the below infographic shows some key highlights.
The top five most read posts this year were:
The Girl Who Silenced the World for Five Minutes
At Rio+20, reporter Sunnie Toelle wrote about Severn Cullis-Suzuki, who, in 1992, addressed the UN at the first Rio Earth Summit with a speech that silenced an entire plenary session, giving her the nickname as “the girl who silenced the world for five minutes”. Watch the video of her famous speech then, and today, with the same argument that she had 20 years ago: “The strongest moral imperative that we have to act and change is our children.”
The Birth of the Chinese Social Entrepreneur
In preparation for the World Resources Forum in Beijing, reporter Nora Locskai interviewed Livia Macedo from MakeSense Shanghai on the emergence of social entrepreneurship in China, the world’s second biggest economy. Read about how MakeSense, a network of social entrepreneurs, navigate the unique opportunities and challenges in China and help innovate solutions to social and environmental problems.
Calculating Your Water Footprint: Raising Awareness Through Technology
With the amount of information that is available to consumers today, it is no wonder that, with just a few clicks, we can find out the water footprint of common household products. For instance, “you might be surprised to learn that the production of a pair of cotton jeans consumes 1,800 gallons of water.” From the World Water Forum, reporter Lindsay Shafer presented us an overview of online tools to raise awareness of this issue – and yes, there is an app (or three) for that.
Sustainability and Profit: From Trade-Off to Essence
Reporter Wladimir Nikoluk argues for the business case for sustainability in the face of changing economic paradigms. How does sustainability fit into core profit-making business practices today? Should we keep following Milton Friedman’s manifesto that the social responsibility of a firm is to maximize profit for its shareholders? Read why sustainability “is becoming the essence of profit-making itself and the only competitive advantage that provides a solid foundation for a long run sustainable development.”
David Zetland is Brash, Outspoken and Unapologetic… and He’s Usually Right.
David Zetland, a water economist and author, was one of the most interesting and controversial figures at the World Water Forum, and featured by reporter Michael McCullough. Read the colorful and insightful feature and listen to the podcast as Zetland as he enthusiastically and dynamically argues for water rights through individual decision-making and market mechanisms, making any third party governance “an insidious maneuver…holding society hostage by preventing a fair and equitable system for access to and acquisition of water.”
What do you think? If you are one of our readers, what was your favorite post ? If you are an alumni reporter, what were your favorite experiences from this year? Use the comment box below to share your thoughts!