Reviewing The First Day Of Davos ‘17
Yesterday was a jam-packed first day at the World Economic Forum Annual Meeting, allow HPS to highlight quotes from some of the key events before you start Day 2:
Size Matters — The Future of Big business
As Tony Fratto previewed, the future of big business is going to be a hot topic for discussion at this year’s meetings. Panelists Andrew R. Sorkin, Sir Martin Sorrell, Andrew N. Liveris, Ruth Porat, Tidjane Thiam and Sunil Bharti Mittal address the roles of corporate cooperation, innovation, and competition in today’s landscape.
Strategic Update : The Future of Finance
Panelists discuss the major drivers transforming the financial sector and how leaders should prepare for this new context.
Mario Greco: “The big issue that we’re facing is the integration of capital rules. Capital rules are very different in the U.S., Europe and Asia. Of course, we favor a standardization of capital rules across the continents but we think this is very unlikely and difficult to achieve.”
John Cryan: “We are placing our bets on technology. We’re not sure that the fundamental nature of products will change much, although regulation could change that, we don’t think the demands of our clients and counterparts will change too much, so it’s the delivery mechanism. And that will help us to protect ourselves, we can use technology to improve our own controls, we can use technology to improve our efficiency, and then we can use technology to improve the customer service.”
Kenneth Rogoff: “…many regulators arrived at the solution that each bank would incorporate in each country separately, but the modern finance absolutely wants global players, there’s very natural synergies and natural oligopolies in this. I don’t know how we resolve that, Europe couldn’t resolve it. Look how much trouble they had bailing out their banks and theoretically the Eurozone had everything in place to allow this to work seamlessly. So this is a big political problem going forward — that finance wants to be international, yet the political system just doesn’t come close to having a mechanism for dealing with it.”
Outlook for United States
Philipp Rösler and Anthony Scaramucci, Assistant to the President-Elect and Director of Public Liaison, Office of the President-Elect of the United States discuss the priorities of the incoming administration.
On China: “In the last ten years eight-million more Americans have gone from the working class to the working poor. We have to come up with policies to change that. I respect China, I certainly respect the President of China, and we want to have a phenomenal relationship with the Chinese. But if the Chinese really believe in globalism and the words of Lincoln, they have to reach now towards us and allow us to create this symmetry because the path to globalism for the world is through the American worker, and the American middle class.”
On Communicating With The Public: “[President-elect Trump] isn’t necessarily communicating in a way the people in [the Davos community] would love. But he is communicating very very effectively to a very large group of the population in Europe and in the United States that are feeling a common struggle right now that maybe many of us in this room don’t feel.”
On Communicating With The Media: “What is happening to European journalists, and to American journalists, is he is saying things that are cuffed and its setting off alarm bells. People are lighting matches to their own hair and setting their hair on fire and they’re running around in rooms like this all crazy and they really don’t need to do that. This is a great leader, this is a guy that can galvanize people and bring people together. He has an enormous amount of respect for these other leaders, and I’ll make a prediction right here in this room — he will have a phenomenal relationship with one of my former law school classmates, President Barack Obama.”
Strategic Update: The Future of the Digital Economy
Panelists discuss the drivers transforming the digital economy — specifically the shift from digital-to-consumer services to business-to-business products.
Steve Bolze: “The digital transformation is the single biggest thing for us, and will be for the next 20 years. As you said this is our 125th year, I’ve been with GE for 23 years, I was an electrical engineer and didn’t talk a lot about software for my first 20 years of my career, and this digital transformation is real. The industrial internet will be two times as big as the consumer internet and we really started going at this five years ago. If you look at a gas turbine, one of our core products, two terabytes of data come off it everyday and that’s more than any of us could possibly put on social media in a year. In the utility group only two percent of that data is used for something today productively. So there’s a tremendous amount of productivity that can be released to get better performance pout of existing assets.”
Inga Beale: “There are two firms in the world when it comes to knowing about cyber — there’s the firms that know that they’ve been hacked and attacked and there’s those who have been hacked and attacked but don’t know they have. Let’s face it, that’s what’s going on in the world. We know there are all sorts of types of hackers out there, some just doing it for sport, some are much more malicious in wanting to bring companies and potentially governments down. It’s a really serious threat out there and way, way up on our emerging risk radar is we’re looking at the risks that business are facing, of course because we do mainly ensure businesses.”
Bill McDermott: “One of my favorite stories is Under Armour because it’s a performance inspired brand that makes shirts and shoes but now you’re seeing the evolution of the business model based on data. If I can have embeddables and wearable technology connecting to the device that maps my run, is very focused on what I eat, and how I’m performing and how I’m sleeping, imagine the data now that’s generated from that. What business is Under Armour in? Are they in the shirts and shoes business or are they in the healthcare business? Ultimately what is their greatest asset? Perhaps it’s the data that’s generated from the 195 million digital consumers out there that are just trying to get better everyday.”
Check back again tomorrow for more insight, and remember to follow @HPSinsight_Eur on Twitter.
