World economic gaps widening, summit agrees

THE world's corporate and political elite have been gathered inthe Swiss ski resort of Davos since Thursday to debate the burningsocial and political agendas of the hour at the six-day meeting ofthe World Economic Forum. The collective influence of this meetingshould not be underestimated. With corporate assets said to be worth$4trillion, the net worth of the delegates is greater than that ofall the member countries of the United Nations.

It is an indication of the pull of this conference, thebrainchild of Swiss-German management professor Klaus Schwab wholaunched the annual event in 1971, that attendees this year includeUS president Bill Clinton and British prime minister Tony Blair aswell as regulars such as Microsoft founder Bill Gates, NewsInternational chairman Rupert Murdoch, and John Browne, chiefexecutive of BP Amoco.

But Schwab's child has grown up and matured. What has at timesbeen characterised, perhaps unfairly, as a playground for theworld's biggest egos has developed not only a social conscience butself-doubt as well. The ultimate capitalist club has recognised that'globalisation' is not necessarily the panacea for all ills. "Toavoid backlashes to globalisation, we have to respond to anabsolutely essential societal imperative: we have to define policiesto make the internet and genetic revolutions beneficial andacceptable to all," said Schwab in his opening address.

As a result, the overriding concern so far has been the wideninggap between the haves and the have-nots from both politicians andcorporates alike. "The bane of all modern developed nations issocial exclusion," Blair has said. But many discussions have gonebeyond national need to address the international dimension. "Theinequality between the western democracies and the rest isincreasing," said Kurt Biedenkopf, head of the German state ofSaxony .

Unsurprisingly, the failure of the World Trade Organisation's(WTO) talks in Seattle in the autumn have cast rather a pall overproceedings this year. As Mike Moore, the WTO's director-general,wearily pointed out: "Globalisation has become the 'ism to hate. Butit's a process, not a philosophy." Still seemingly shocked by thescenes of the protesters last year, he added: "Celebrating thefailure of Seattle is like celebrating the Berlin Wall going up."

Can business offer any answers? Certainly not all of them. LouisSchweitzer, chairman and chief executive of French car manufacturerRenault, bluntly reminded listeners that "corporations cannotaddress all of the issues of society, like healthcare, education andminimum incomes, and they should not interfere in the democraticprocess".

There was general agreement that identifying what needs to bedone and implementing the solution are two very separate issues."Business is focused on market share and shareholder value -that issometimes in conflict with the things being talked about here," saysPhilip Laskawy, chairman of Ernst & Young. "Should corporations hiveoff a piece of shareholder value for a low return if it is sociallyresponsible?" he asks. "There is less of it than there used to be."

So far the great hope of the meeting , called upon to narrowthese gaps, has been the hi-tech sector. Charles Holliday, chairmanand chief executive of chemical giant DuPont, pointedly asked: "Howdo we bring the potential to make use of this technology to theworld's two billion people who live on less than $2 a day?"

The technologists are not entirely happy about the faith placedin them. James Schiro, chief executive of PricewaterhouseCoopers,pointed out that half the world's CEOs believe the internet willactually widen the gap between developing and developed nations.Indeed, while on one hand the gap between developed countries isnarrowing -"Five years ago the technology gap between the US andEurope was five years, now it is a year and a half," says Schiro -in much of the rest of the world it is as wide as ever.

Lyric Hughes, president and chief executive of China Online,agrees, citing the fact that "Korea has as many people online as thewhole of China".

But so far only Michael Dell, founder of Dell ComputerCorporation, has offered anything approaching a solution - arguingthe pace of change in technology has to be matched by governmentreform.