Posted by: Stephen Roach, Chairman, Morgan Stanley Asia

It’s hard to keep a good optimist down. And they didn’t stay down for long. Over the course of this year’s World Economic Forum, there was a distinct mood change. As I read the Davos crowd, the sentiment seemed to shift from despair on Wednesday to guarded optimism by Friday.

I have to confess that I don’t always trust myself as an objective barometer in reading the collective mindset at such a large gathering. So I checked out my assessment with a few trustworthy and objective observers, and they corroborated my observation.

As one of the kick-off speakers on Wednesday, I guess I played a role in setting a rather dour tone at the beginning of this year’s events. For a few hours, I encountered no pushback whatsoever from those passing in the halls. But then the crowd started to get more aggressive in challenging my case.

The main reason behind this mood swing was trust in the Authorities. The combination of a shockingly aggressive Fed easing, together with quick US congressional agreement on a $150 billion fiscal stimulus package, left the Davos crowd feeling that not all was lost on prospects for the US economy after all. Suddenly, the recession call that seemed so convincing on Wednesday seemed less likely on Friday.  And if the US is able to skirt a downturn, went the argument, then the global decoupling debate was suddenly irrelevant.

I was quick to counter. Arresting the recessionary dynamic now under way in the US is not like stopping a washing machine in mid-cycle, I argued.

Continue reading "You can’t keep a good optimist down" »

Posted by Fred Krupp, President, Environmental Defense

As Davos wraps up and I process the hundreds of conversations I’ve had while here, it is again clear that environmental issues are not just about the environment.  These issues touch all of us and are connected to all aspects of business, our daily lives and our future. While I have believed this for many years, it is good to see how this realization has deeply penetrated Davos this week. 

I thought it made sense to use my final blog post to point out several promising examples of what is being done:

• private equity firms investigating how environmental metrics can be applied to their portfolio companies
• IT consulting firms applying their understanding of software and logistics to create remarkably efficient delivery of clean water
• communications companies using their sophisticated knowledge of networks to improve the energy savings in electric grids greatly reducing emissions. 

Continue reading "How IT and private equity can save the planet" »

Posted by: Bill Amelio, President and CEO, Lenovo

The IT Governors Meeting represents the equivalent of my industry’s "all-star" game: it’s the one event during the year that brings together in a closed-door, roll-up-your-shirtsleeves session, nearly every major player shaping our digital future.

Bill Gates, who co-chaired this year’s meeting with France Telecom’s Didier Lombard, kicked off the discussion over lunch offering up his vision for the "second digital decade," which he said will bring with it the critical challenge of connecting people by focusing on the customer and "IT ease of use."

On top of his list of user-centric improvements is the user interface - replacing the mouse and keyboard with touch screens, voice commands and empowering devices to respond smartly to other sensory or environmental cues. This will help deliver what Gates calls the "high-definition experience everywhere," where images are rendered when and where they’re needed in a form that best suits the users or viewers desired experience, ranging from life-sized video games projected on living room walls to interactive 3D social networking environments.

Continue reading "The second digital decade" »

Posted by: Douglas Alexander, UK Minister for International Development

I - and even more so my wife - have always regarded it as more than just a little incongrous that I was once the UK Minister for Fashion. But the World Food Programme ‘Feed 1′ bag I have just been handed by Josette Sheeran, the WFP’s impressive Executive Director, has apparently been dubbed this season’s fashion must have by French Vogue. Of course, I knew that…

The bag represents a very important issue and another Davos ‘takeaway’ (no pun intended - it’s just a bit of Davos jargon that everyone seems to use here) for me. Hunger and malnutrition - especially in light of rising food prices - have been frequently discussed. The World Bank President, Bob Zoellick, has raised it as a priority a number of times in his appearances this week, for example. He does so for good reason. While there has been some progress on having the number of people who suffer from hunger between 1990 and 2015, it has not been fast enough. This is especially true in Africa.

Continue reading "Food: a takeaway message" »

Posted by: Howard Davies, Director, London School of Economics

The plenary session on the economy on Saturday morning attracted a standing-room only crowd. The atmosphere was nervous. Strauss-Khan from the IMF was cautious, neither optimistic nor pessimistic on the surface, but commending the proposals for a fiscal stimulus in the US, an unusual posture for the Fund, as Larry Summers pointed out.

Then Chidambaram, the Indian finance minister, poured oil, arguing that Indian growth would remain robust, fuelled by investment and consumer spending. Watanabe told us that Japan would do fine this year, at 2% growth or so. And Christine Lagarde, for France, was bullish for Europe. So that’s all right then? Not quite.

John Thain, the fireman sent in to Merrill’s, lowered the tone considerably. There is more trouble to come in the US mortgage market. The credit contraction is spreading around the world, and there are many more losses within the financial system to be revealed. Larry Summers agreed. The position in financial markets remains very serious.

The Fed has been right to act quickly. A fiscal stimulus in the US is absolutely essential, as are measures to stem foreclosures in the housing market. Even with all this action, the prospect is gloomy. The US balance of payments deficit needs to shrink, which implies shrinking surpluses elsewhere, which in turn means that there has to be an impact on growth, even in India and China. So much for decoupling.

So will there be a recession in the US, and will the impact be felt in Europe and beyond? On this showing,  the ayes have it on question 1, and seem to be getting the better of the argument on question 2. A depressing conclusion.

(See also posts from Stephen Roach, Ken Rogoff)

Posted by: Kris Gopalakrishnan, CEO, Infosys Technologies

On the Saturday here at Davos, I sense an Indian flavor in the atmosphere. Maybe because it’s Republic Day in India. Or because everyone here is still talking about the India-themed dinner they enjoyed on Friday.

Yesterday Intel’s Craig Barrett spoke about how companies and countries can use technology for competitive advantage. The discussion then went on to India, how it has created an optimistic environment, and how Indian companies are now the challengers – they are going multinational, they are globally recognized, and they are leading global M&As.

But before we pat our own backs, let’s not forget Israel.

Continue reading "India, Israel and lessons on innovation" »

Posted by: Douglas Alexander, UK Minister for International Development

Pulling myself out of the bed this morning there was much to ponder. Last night’s (Red) reception was quite an event. Tony Blair, Bono, Bill Gates and (Red) co-founder Bobby Shriver (or Arnie’s brother-in-law as he himself says he is now known) all spoke. Bill Gates even complained that the U2 backstage parties he’d been to were not debauched enough. Not what I was expecting to hear when I turned up.

But it is the proposition at the heart of (Red) that I found most intriguing. By working with recognisable brands, (Red) if offering consumers the opportunity to purchase products that give something back. Since its launch 2 years ago (Red) has generated $58 million for the Global Fund to Fight Aids, TB and Malaria. This money is being spent in Africa, particularly on women and children. The Fund’s Executive Director - Dr Michel Kazatchkine - spoke movingly of the difference this money was making.

Tony Blair described this as essentially a new model of charity for the 21st Century. That through their actions people give and receive something at the same time. This type of thinking is really finding an audience in Davos. The most pioneering businesses are moving beyond traditional philanthropy and charity and looking to how their everyday business activities can make a difference. Of course, businesses recognise that this is in their own interest - through increased staff motivation and satisfaction, amongst other reasons.

Continue reading "The power of the market for progress" »

Posted by: Ian Bremmer, President, Eurasia Group

Finally have had a moment to peruse my fellow FT bloggers. I’m in strong agreement on the sudden Davos mood swing towards optimism on the global economy. On Wednesday, led by the three R’s of recession (Roach, Roubini, and Rogoff), delegates were prepared to jump off buildings. By yesterday, all was forgiven.

The tipping point (Davos folk like to identify tipping points) was probably the BBC-hosted debate on the state of the economy Friday afternoon. All the political participants (including Chinese National People’s Congress Vice Chaiman Cheng Siwei, Indian Finance Minister Palaniappan Chidambaram, and former US Treasury Secretary John Snow) proclaimed slowdown, no recession and, more importantly, fundamental stability in the US economy.

I’m no economist. But my two cents, aside from discounting the gloss that accompanies speechifying of political officials (sitting or emeritus), is that it’s critical that the slowdown/recession is happening at a particularly inopportune time politically. If you’re in the optimist camp, you don’t want a presidential election when Americans are experience exceptional skittishness about their trajectory. You don’t want a resurgent China having an immensely successful Beijing Olympics. You don’t want quickly growing geopolitical tensions in the Middle East. That way, market inefficient outcomes lie.

Continue reading "Politics versus economics - and politics is winning" »

Posted by: Jasmine Whitbread, Chief Executive, Save the Children UK

The snow underfoot is dirty and all churned up now as I traipse down to the congress centre for the last time. I don’t want to be late for my meeting with the Gates people, and then I’m a panellist on a foreboding-sounding session called Death, Disease and Dirty Water.

Of course these are issues where Save the Children has plenty of experience, but somehow I don’t see it quite like the title says it - devoid of the human element and therefore missing a sense of outrage or opportunity. But I’m more interested in changing things than describing them. I think most people here are too.

Nearly everyone I’ve met is looking for, or has just made, a deal of some sort. No doubt many are purely money-making deals, but I tend to hear about the ones aimed at improving the world in some way.

On Friday, deal-making (and announcing) seemed to reach fever-pitch, perhaps spurred by Ban Ki Moons’ high-profile press conference where business leaders (re)pledged their commitment to achieving the Millennium Development Goals. It might also have something to do with the fact that Bono has hit town.

Continue reading "Death, disease and Bono the waiter" »

Posted by: Ken Rogoff, economist, Harvard University

The mood swing in Davos this week has simply been meteoric, everyone is joking about it. Last night, as the Google party was setting up, hotel staff were pushing in carts of expensive looking champagne bottles.

I met a businessman from an emerging market who explained that among his companies many lines of business, they are world’s largest producer of polypropolene. Most of their products are used for shipping, but he mentioned, their highest tech product are body bags which require enormous strength and only come in black. With the markets tentatively back, I guess they are going to lose a few sales here.