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Smackdown In Davos.

Posted by: Bruce Nussbaum on January 29, 2009

Fear stalks the halls of the World Economic Forum in 2009. The tone is negative and the attitude is nasty, what with all the finger-pointing, nation-bashing, and fear-mongering going on in the public sessions and in private conversations. Globalization is taking a hit, the US is getting mauled, bankers are being eviscerated, politicians are being criticized, free market capitalism is being jeered, and business people are getting more and more paranoid as they exchange personal stories of revenues in free-fall across the globe.

The scariest thing to me at Davos this year is that despite all the talk of a “transformational crisis,” as WEF founder Klaus Schwab put it, all the solutions being described are the usual predictable conventional wisdom. I had a terrific session with my fellow members of the Global Agenda Council on Design who have the means to help solve many of the big problems being discussed at Davos, but the politicians and economists running the show and the sessions don’t know that design and design thinking even exist. The success of design in the private, corporate sphere is not being replicated in the public policy-making space. How do we win this battle? How do we get access to policy-makers to show them what design and innovation can accomplish?

Meanwhile, nastiness abounds at Davos. Russia’s Prime Minister Putin slapped Michael Dell around on stage when Dell offered to help his country spread digitalization to its schools. “We don’t need you help,” said Putin, in a fairly pugnacious way. OK. China’s Premier Wen Jiabao slapped the US around for having “inappropriate macroeconomic

policies...characterized by prolonged low savings and high consumption." OK. JPMorgan boss James Dimon, one of the few US bankers to show up, blasted regulators for the financial crisis, as well as the banks. And he blamed government politicians and regulators for being all over the place in solving the crisis and and letting it go on for a year and a half without solution. He wants everyone in one room to force a solution, finally. If not, Dimon thinks the financial crisis could go on for another year.

Ana Botin, a board member of Spanish bank Santander, blasted policy-makers in the UK and elsewhere for nationalizing their banks. Her bank is healthy, she said, but can't make loans because the cost of funds are high relative to the government-backed British and European banks. She blamed the European Union for not having consistent rules.

And Benjamin Netnyahu, the Israeli political leader running for top office in upcoming elections, blamed Iran for Hamas and Hezbollah, but that's another blame story.

The final smackdown came at the end of the day in the big hall in the Conference Center when Turkey's Prime Minister Erdogan broke all the rules of polite Davosian public behavior by storming off stage in a heated discussion about Gaza after he was refused extra time to rebute Israeli President Shimon Peres. Washington Post editor David Ignatius allowed Peres to speak 25 minutes, instead of the usual 5. He did, defending Israel passionately. Erdogan was disagreeing with Peres when he left and announced publicly he would never ever return to Davos. Klaus Schwab quickly went after him and, after two hours, persuaded Erdogan to come back next year.

I'm off to a media party where the journalists will probably blame Google for the meltdown of their industry.

At Davos this year, it's all a blame-game.

Reader Comments

Grant Garthersky

January 30, 2009 6:14 AM

Drop the globalization model. It is severely flawed, and EVERYBODY is getting spanked. The amount of social unrest is going to be unbearable for the Masters of the Universe. Watch for protectionism and isolationism to make a comeback. The pendulum has swung too far the other way.

Why Russia needs Dell?

January 30, 2009 7:02 AM

Why Russia would need crap Dell technology? What technology Dell has to offer to anyone? I can understand that Russia does need IBM and Microsoft. Not the company sell crappy products by deceptive methods as charged by state governments.

James Mason

January 30, 2009 7:16 AM

You forgot about the Turkish Prime Minister walking out because the Davos crowd were too busy cheer leading for Israel! Rightly so! At this rate, Davos is going to soon be as relevant to today's world as Lehman Brothers.

Fahad Khan

January 30, 2009 7:33 AM

Beautifully designed summary, of what is happening in Davos, it is.

glen genc

January 30, 2009 8:20 AM

Bussiness week, why are you not mentioning that Turkish prime minister left the meeting because the moderator did not give him an equal lenght time for his speech?

Micheal stms

January 30, 2009 8:38 AM

Can u send me sight of smarkdown.Thank you very much.

Peter Thomson

January 30, 2009 10:45 AM

@Bruce. Between you, Tim Brown and Robert Scoble at Davos there has got to be enough examples and stories from the trenches to be able to demonstrate to policy leaders that design thinking is a powerful tool to solve policy issues. Maybe the immediate issue is for us to distil quickly and simply “what design thinking for policy-making” would look like as easy to digest rules for Davos attendees to take home on the back of a cocktail napkin. Perhaps:
1. Obsessive focus on end-user needs
2. Rapid prototyping of services to check that they work and have the intended effect
3. Small and fast interventions that are managed by front line staff
4. Breakthrough innovations based on genuine, design-based insights

Perhaps you could ask a few policy-makers whether their decisions are based more on raw data or on genuine insights into the human experience of their constituents.


January 30, 2009 12:24 PM

First of all, the translation of Putin's words is incorrect. He said (exact words): "You know, the trick is in the fact that we do not need help". Secondly, the context was such that he talked about the need for investment and cooperation.

The Brother Jim

January 30, 2009 12:57 PM

I cannot recall the last time I thanked the stars for the Davos forum. It is great showcasing and probably worth it if you are looking to enhance your business connections as a multibillion dollar firm. might as well be aired as another reality TV show. Davos is a waste of time. It is another show of exclusivity that creates nothing. Nothing at all. There is a lot of talk and then .... nothing.

Elena Konopleva

January 30, 2009 1:07 PM

Thank you for this article. This is good, in time event which reveals actual problems in thinking, in personal design and in interface each person is living in. After revealing these problems it will be the next step to design new common interface, which is actually taking some time as revisioning process for many many people is expected. Let's move step by step with natural clear thinking, each one getting consciosness, understanding that a solution has been here already for all time.


January 30, 2009 2:09 PM

Michael Dell wants to know how he can increase market shares in Russia, henced his wordings were IT industry for "better business" & "education", think of the children Putin! What Michael Dell said: Help! my company is still tailgating HP, because it such an established global brand.
Putin: I got a country to run, my number one commodity is not doing so well, you pesky capitalist ceos are just a bunch of annoying salesman. Go sit in your corner. Don't you have your country to worry about?
Putin: I got real issues to deal with like unemployment, inflation, and starving peasants that can turn rebellious.

Andrew Gregory

January 30, 2009 2:48 PM

Wow...this is quite interesting and has some very far reaching political, social and economic ramifications for the foreseeable future. This concerns me and I am assuming would concern most of the US.

Mark Julian Smith

January 30, 2009 2:54 PM

Tweedledee and Tweedledum – Russia and China – IT WAS NOT US YOUR HONOR

Tweedledee and Tweedledum have obviously forgotten their Nations integral part in the world economic collapse. Russian and Chinese combined National greed and self-interest have had at least equal part if not more in contributing to the current economic mess.

Dear Chinese Premier Wen Jiabao China has manipulated the Chinese currency in a successful attempt to move the worlds manufacturing base from the US and other industrialised nations, as well their wealth into China, and thereby reducing the US and other Nations to their current decrepit industrial States.

What has happened is China after manipulating currencies to derive advantage over other Nations has positioned itself in such a way that it can afford to suddenly reduce production. The rest of the world is forced into recession. The rapid decrease in production forces the price of raw materials and other goods into a nose dive and the distressed companies are now open to takeover or at least influence via significant shareholdings and/or financial support.

Who needs tanks.

Did Putin blink when the price of oil more than trebled putting sever economic pressure on the rest of the world? The reason for Putin going into Georgia was simply to control energy supplies to Europe. As well the disruption of energy supplies to Europe does not appear to have helped the world economic circumstance? Russian financial prudence – get real.

Tweedledee and Tweedledum try and change your Nations approach from self-interest to enabling the independence others first, history will reflect much more kindly on your efforts.


January 30, 2009 3:27 PM

Are you reporting on a soap opera? Who cares about these whiners.


January 30, 2009 3:32 PM

This article reveals so well how a small clique (US, Israel, UK) run things at Davos, and think they are entitled to run the world.

Oh right, their efforts to run the world have given us a terrible mess.

Sezer Dastan

January 30, 2009 3:40 PM

This article states that Turkish PM Erdogan broke all the rules of politeness. But what about the rules of politeness in Gaza. Is Killing children and thousand people in 20 days really a polite behavior ? Is there anything like killing politely? Those leaders are total hypocrites.

Unekwu Peters

January 30, 2009 3:40 PM

The meeting culminate into a complex interplay of many factors. The organisation was not to cluster too many leaders to argue. Real solution of a year long problem can not come out of a 7 days meeting. They should all go home and check their draw board to map out a game plan for a win/win. after all they all caused these problems! Am I blaming anybody? No.


January 30, 2009 5:00 PM

The most refreshing and promising event
of Davos was Erdogan standing up to the western manipulation of news. Notice how no one in the media dares reveal what machinations led to David Ignatius becoming the moderator in the first place!
The South Americans have stopped going to Davos. Hopefully the moslem countries will boycott this circus next year.

A. Viirlaid

January 30, 2009 5:07 PM

Someone could make some big money with a video game called "DAVOS SMACKDOWN".

They could even license the DAVOS name from the DAVOS Organization and help defray the costs of running the get-togethers in the future.

But seriously, the prevailing mood at Davos is a sign-of-the-times. We are all just starting to get serious with SMACKDOWNS going on ALL over the Whole Wide World.

I can see it now. The Thrill of Victory, the Agony of Defeat.

This mood will bring a lot of ugly behavior to the fore in our world.

Let’s hope it doesn’t lead to more serious conflict.

Ed Russell

January 30, 2009 5:34 PM

Watched this on C-Span. In the interest of "fairness", David Ignatius should have either cut President Shimon Peres' time short or given Prime Minister Erdogan the additional time he requested.

I was glad to hear President Peres speak his mind and I would have liked to hear PM Erdogan's rebuttal. I question the sincerity of Mr. Ignatius' excuse for denying extra time on the grounds that the audience couldn't be kept from a scheduled dinner because Klaus Schwab rattled off 10 minutes worth of closing remarks that could have been sacrificed in favor of additional debate.


January 30, 2009 6:38 PM

Bring back protectionism. We dont need "globalization" at the cost of our jobs and our houses.

CTurner, Durham, NC

January 30, 2009 9:36 PM

"Globalization is taking a hit, the US is getting mauled, bankers are being eviscerated, politicians are being criticized, free market capitalism is being jeered, and business people are getting more and more paranoid..."

This has to be the feel-good story of the year. I wish I had been there. The politicians and the bankers and globalization cheerleaders have needed a good public thrashing for a long time. Our "watchdog" media aren't up to the job, so I guess it's up to the participants themselves to punish one another.

Tarry Singh

January 31, 2009 11:31 PM

The subjective people are coming out of the glorified statesmen. Blind and unregulated globalization has faked us all to believe that it's all going to be fine. Protectionism will lead to closed and suppressed states. Welcome back to a rerun of the mid-19th century.

Great things will come to light and many great discoveries will be made but a lot of bestiality too will not go unnoticed. I just hope that we can find a model somewhere where we can have some sort of regulated [not necessarily all parts governmentalized] practice where we just don't adopt blindly and constantly keep each other in thought-provoking dialog.




February 1, 2009 11:54 PM

It would be wholly unnatural if protectionism didn't result from the global economic meltdown. Hopefully it won't lead to another world war like the last time. The wages of sin are death. Thanks bankers and regulators - your greed is surpassed only by your stupidity! These people aren't smart, they're just evil. A few trillion in taxpayers money is just the tip of the iceberg - social unrest, homes lost, lives all but destroyed due to lack of jobs, the spectre of war. Nice going. We humans are really clever.


February 2, 2009 3:19 PM

We need more globalization not less. I can't believe there are people on this site saying "drop the globalization model." It will lower everyone's standard of living on average. Sure there are specific winners and losers in a globalized system, but in aggregate the population as a whole benefits when each area concentrates on where it has a comparative advantage. We've known this since Adam Smith's days but there are still neo-luddites in this world who don't have even a basic understanding of economics. It is distortions to the market which have caused these problems more than anything else. The cure is not more heavy handed government regulation and tariffs.

horace manoor

February 2, 2009 3:19 PM

i'm delighted that the moderator cut off the prime minister of turkey -- he thus enhanced the prime minister's standing among muslims -- he thus lowered israel's standing everywhere except in the usa -- he thus lowered the standing of the usa everywhere except in israel -- kudos to the moderator

Sean Piquet

February 2, 2009 10:23 PM

World economic forum?? What a joke. the "politicians don't even have a grasp of the most complex causes of the current problems and thus will not solve problems they really don't comprehend. All they see are the symptoms and that's all they talk about for the most part. Our "leaders" are not economists but politicians who are looking at the next election before them so what we are getting are their concoted ill-conceived "political solutions" to fundamental economic and financial problems. The result - economic dislocation and truly massive inflation down the track the likes of which the world has not seen for more than 50 years. Oh no this can't be right. Obama is going to save the US and the world is he not? Oh thank goodness for that. I was worried there for a while.


February 3, 2009 4:30 PM

It is wonderful to think of applying design thought to the problem, and of course this would work admirably in a free world. Unfortunately, most of the world is far from free, especially the most powerful nations. The people in control have no interest but self interest and so will hear no opinions but their own. Too bad there are not any undiscovered continents left we could escape to and design a better way!
WAIT! There is a place... of peace, prosperity, and... no, you wont want to make the trip...its too hard, and its soo much easier to whine and blame.
Oh, ok, I'll tell you: Enlightenment, people. Individual exploration of self, individual experimentation, research, and development... and never forget community! Good luck; love and light to you all. Yeah, I mean it!

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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