January 28, 2009, 9:29 AM — What this world needs most… Will we find it at Davos?
I remember January 1997. I was 25 living in an apartment in Russia opposite the Kremlin. Guns were routinely checked at the door in my local restaurant. This was before the stock market crash of 1998, before Putin, before $150 oil prices. I would stay up nights, moonlighting on my first software company and the Internet infrastructure and email client I used in Moscow was already better than what my employer provided. And I was itching to get out there and catch this wave!
I recall coming back from a run and stretching on the wooden floor in front of the TV and watching the leaders assembled in Davos: Gates, Clinton and more. …The WEF seemed to be where the action was; as bright a manifestation of hope as the fresh snow was a promise of a great day’s skiing to come.
In the intervening years I, like many others, experienced personally a cycle of boom/bust when my company’s market cap plummeted from $1.4Bn to $10m in less than 9 months.
But as pointed out by Nobel Prize winning Paul Krugman in The Return of Depression Economics, we were embarking on a visible business transformation. The transformation that technologies like the fax, email and enterprise software achieved from the 1970’s to the turn of the century; the return of the lone entrepreneur of the 90’s as a figure of virtue, heroism and wealth; and most critically, the surprising spread and growth of prosperity in both the advanced and the developing world, had given cause for a highly optimistic view of capitalism. It was on the back of that optimism that I founded my second software company, Tideway.
Now here I am a Technology Pioneer 2009 traveling to my first World Economic Forum in Davos, by tube, plane, 3 Swiss trains, and a car. (I have it on good authority that some Wall Street types are still coming…but are arriving by bicycle for appearance’s sake). We have a Commodities Index that has lost 70% of its value in less than a year, the US banking system is effectively nationalized, and yesterday saw the announcement of more than 75,000 job losses across a range of household names. Effective demand has evaporated across industries and around the globe. 82% of companies are presently cutting costs according to today’s Financial Times. This was not the environment I envisioned for my first trip to the WEF.
Yet there is no real questioning of free markets and capitalism today, and I would say rightly so. Because the challenge today is: how do we couple efficiency with sustainability - and how do we underpin that with the technology innovation that leads to job creation and improved standards of living? How can each decision to purchase a new server be made in the light of its monetary and environmental costs? How do we unleash the aggregate impact of the thousands or millions of actions of individuals, who are both well-informed and incentivized?