How did Davos do on climate change?

One sometimes hears that the World Economic Forum is all talk and no action. I don’t buy it — talk matters. Social currency is a powerful driver of change, even at the highest reaches of business and government. And last week climate change was on center stage at the famous Davos summit. So as I moved through the WEF Annual Meeting, the question on my mind was simple: How many of the conversations here will lead to real-world outcomes?

President Barack Obama had helped point the spotlight with his second inaugural address two days earlier, but the real reason for renewed focus, after several years of near silence, is the increasingly destructive and incredibly costly wave of unprecedented weather events that have occurred around the globe. There were more than 30 official sessions on climate change, environmental resilience and food security this year at the Annual Meeting, and even more related side events.

At a dinner on climate change and extreme weather hosted by my organization the Environmental Defense Fund and The Weather Company, meteorologist Jim Cantore explained that the vanishing sea ice around the North Pole may be changing the whole jet stream. That could trigger a level of climate chaos that makes the disruptions we’ve seen so far look like child’s play.

Beneath all the talk was doubt about whether humanity could rise to the scale of this massive challenge. More than a few hands shot up in one session when the speaker asked if the time had come to deploy geoengineering – using technology on a massive scale in an attempt to reverse the problem by, for example, altering the chemistry of the ocean, or trying to block the sun’s rays from the atmosphere.

I didn’t raise my hand. I don’t see the logic of compounding the dangers of people playing god, with unknowable results. While these grand – and grandiose – ideas might appeal to a certain kind of techno-optimism, they also provide an easy distraction from the investments we know we need to make to protect against extreme weather that’s already here.

Technological fixes won’t change the fact that a certain amount of climate disruption is already guaranteed, thanks to past emissions. But we also need to make sure we don’t make the problem worse. That means we have to manage the unavoidable, but also avoid the unmanageable. The trend line to hell stops only when we slash emissions.

On that score, the conference reverberated with talk about the U.S. windfall in natural gas from shale, made possible by new drilling techniques, and how it is generating an economic boom while reducing heat-trapping carbon dioxide pollution. Many of these enthusiasts didn’t mention the serious problem posed by methane – the main component of natural gas – leaking from wellheads, pipes, compressors and storage tanks.

Methane is 72 times more potent than CO2 in causing stronger storms, prolonged droughts and higher temperatures over the next two decades. That means these “fugitive” emissions could seriously undermine the climate advantage of natural gas.

I listened as many business people in Davos raised concerns about extreme weather and its effect on their enterprises. This made me hopeful that worried talk will lead to climate action.

The WEF released its Global Risks 2013 report assessing the biggest and most likely risks that threaten the world over the next 10 years, citing rising greenhouse emissions as the third most likely hazard of the coming decade. Not coincidentally, water shortages came in at No. 4. Failure to adapt to changing climate was No. 7, and extreme weather No. 10 on this list of good reasons for sleepless nights.

Business seems to share this view. Seventy percent of companies believe climate change has the potential to significantly affect revenue, according to a report released last week by the Carbon Disclosure Project and Accenture, based on a survey of over 2,400 companies. Nearly a third say they are experiencing the impact already.

Here, I am cautiously positive. There’s no mystery about what we must do to avoid the worst impacts. We need to continue the urgent efforts to cut CO2 emissions. In his first term, President Obama cut carbon emissions from automobiles by acting to double fuel efficiency in cars and light trucks. Now he needs to direct the Environmental Protection Agency to finally cut emissions from power plants, proposed and existing

The president has also begun to open up a second front in the war against climate pollution. The administration founded a 65-nation group with the unwieldy name The Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants to cut emissions of fast-acting potent gasses like methane, which are responsible for up to 40 percent of the incremental warming and radiative forcing we will see in the next 20 years. If we slow the increase in warming, we also reduce the threat of extreme weather impacts.

Those are good steps, of course, but they’re not enough. To bend the climate trend line upward from the fire pit, we need to pick up the pace of change. That’s going to take the combined efforts of leaders from all walks of life, as well as new action by government.

Getting there will not happen without continued public pressure. But I am more optimistic than I have been in a long time that we may be ready to break the political logjam and move forward once again on the solutions needed to prevent economic and environmental catastrophe.

The question now is what happens when these global leaders go back to their day jobs. Without action, talk is cheap. And we know silence will be devastatingly expensive.

PHOTO: A woman wearing a mask rides past smoking chimneys and cooling towers of a steel plant in Beijing, January 17, 2013. REUTERS/Suzie Wong

 

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One sometimes hears that the World Economic Forum is all talk and no action. I don’t buy it — talk matters. Social currency is a powerful driver of change, even at the highest reaches of business and government. And last week climate change was on center stage at the famous Davos summit. So as I moved through the WEF Annual Meeting, the question on my mind was simple: How many of the conversations here will lead to real-world outcomes?

President Barack Obama had helped point the spotlight with his second inaugural address two days earlier, but the real reason for renewed focus, after several years of near silence, is the increasingly destructive and incredibly costly wave of unprecedented weather events that have occurred around the globe. There were more than 30 official sessions on climate change, environmental resilience and food security this year at the Annual Meeting, and even more related side events.

At a dinner on climate change and extreme weather hosted by my organization the Environmental Defense Fund and The Weather Company, meteorologist Jim Cantore explained that the vanishing sea ice around the North Pole may be changing the whole jet stream. That could trigger a level of climate chaos that makes the disruptions we’ve seen so far look like child’s play.

Beneath all the talk was doubt about whether humanity could rise to the scale of this massive challenge. More than a few hands shot up in one session when the speaker asked if the time had come to deploy geoengineering – using technology on a massive scale in an attempt to reverse the problem by, for example, altering the chemistry of the ocean, or trying to block the sun’s rays from the atmosphere.

I didn’t raise my hand. I don’t see the logic of compounding the dangers of people playing god, with unknowable results. While these grand – and grandiose – ideas might appeal to a certain kind of techno-optimism, they also provide an easy distraction from the investments we know we need to make to protect against extreme weather that’s already here.

Technological fixes won’t change the fact that a certain amount of climate disruption is already guaranteed, thanks to past emissions. But we also need to make sure we don’t make the problem worse. That means we have to manage the unavoidable, but also avoid the unmanageable. The trend line to hell stops only when we slash emissions.

On that score, the conference reverberated with talk about the U.S. windfall in natural gas from shale, made possible by new drilling techniques, and how it is generating an economic boom while reducing heat-trapping carbon dioxide pollution. Many of these enthusiasts didn’t mention the serious problem posed by methane – the main component of natural gas – leaking from wellheads, pipes, compressors and storage tanks.

Methane is 72 times more potent than CO2 in causing stronger storms, prolonged droughts and higher temperatures over the next two decades. That means these “fugitive” emissions could seriously undermine the climate advantage of natural gas.

I listened as many business people in Davos raised concerns about extreme weather and its effect on their enterprises. This made me hopeful that worried talk will lead to climate action.

The WEF released its Global Risks 2013 report assessing the biggest and most likely risks that threaten the world over the next 10 years, citing rising greenhouse emissions as the third most likely hazard of the coming decade. Not coincidentally, water shortages came in at No. 4. Failure to adapt to changing climate was No. 7, and extreme weather No. 10 on this list of good reasons for sleepless nights.

Business seems to share this view. Seventy percent of companies believe climate change has the potential to significantly affect revenue, according to a report released last week by the Carbon Disclosure Project and Accenture, based on a survey of over 2,400 companies. Nearly a third say they are experiencing the impact already.

Here, I am cautiously positive. There’s no mystery about what we must do to avoid the worst impacts. We need to continue the urgent efforts to cut CO2 emissions. In his first term, President Obama cut carbon emissions from automobiles by acting to double fuel efficiency in cars and light trucks. Now he needs to direct the Environmental Protection Agency to finally cut emissions from power plants, proposed and existing

The president has also begun to open up a second front in the war against climate pollution. The administration founded a 65-nation group with the unwieldy name The Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants to cut emissions of fast-acting potent gasses like methane, which are responsible for up to 40 percent of the incremental warming and radiative forcing we will see in the next 20 years. If we slow the increase in warming, we also reduce the threat of extreme weather impacts.

Those are good steps, of course, but they’re not enough. To bend the climate trend line upward from the fire pit, we need to pick up the pace of change. That’s going to take the combined efforts of leaders from all walks of life, as well as new action by government.

Getting there will not happen without continued public pressure. But I am more optimistic than I have been in a long time that we may be ready to break the political logjam and move forward once again on the solutions needed to prevent economic and environmental catastrophe.

The question now is what happens when these global leaders go back to their day jobs. Without action, talk is cheap. And we know silence will be devastatingly expensive.

PHOTO: A woman wearing a mask rides past smoking chimneys and cooling towers of a steel plant in Beijing, January 17, 2013. REUTERS/Suzie Wong

 



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How did Davos do on climate change?

One sometimes hears that the World Economic Forum is all talk and no action. I don’t buy it — talk matters.

One sometimes hears that the World Economic Forum is all talk and no action. I don’t buy it — talk matters. Social currency is a powerful driver of change, even at the highest reaches of business and government. And last week climate change was on center stage at the famous Davos summit. So as I moved through the WEF Annual Meeting, the question on my mind was simple: How many of the conversations here will lead to real-world outcomes?

President Barack Obama had helped point the spotlight with his second inaugural address two days earlier, but the real reason for renewed focus, after several years of near silence, is the increasingly destructive and incredibly costly wave of unprecedented weather events that have occurred around the globe. There were more than 30 official sessions on climate change, environmental resilience and food security this year at the Annual Meeting, and even more related side events.

At a dinner on climate change and extreme weather hosted by my organization the Environmental Defense Fund and The Weather Company, meteorologist Jim Cantore explained that the vanishing sea ice around the North Pole may be changing the whole jet stream. That could trigger a level of climate chaos that makes the disruptions we’ve seen so far look like child’s play.

Beneath all the talk was doubt about whether humanity could rise to the scale of this massive challenge. More than a few hands shot up in one session when the speaker asked if the time had come to deploy geoengineering – using technology on a massive scale in an attempt to reverse the problem by, for example, altering the chemistry of the ocean, or trying to block the sun’s rays from the atmosphere.

I didn’t raise my hand. I don’t see the logic of compounding the dangers of people playing god, with unknowable results. While these grand – and grandiose – ideas might appeal to a certain kind of techno-optimism, they also provide an easy distraction from the investments we know we need to make to protect against extreme weather that’s already here.

Technological fixes won’t change the fact that a certain amount of climate disruption is already guaranteed, thanks to past emissions. But we also need to make sure we don’t make the problem worse. That means we have to manage the unavoidable, but also avoid the unmanageable. The trend line to hell stops only when we slash emissions.

On that score, the conference reverberated with talk about the U.S. windfall in natural gas from shale, made possible by new drilling techniques, and how it is generating an economic boom while reducing heat-trapping carbon dioxide pollution. Many of these enthusiasts didn’t mention the serious problem posed by methane – the main component of natural gas – leaking from wellheads, pipes, compressors and storage tanks.

Methane is 72 times more potent than CO2 in causing stronger storms, prolonged droughts and higher temperatures over the next two decades. That means these “fugitive” emissions could seriously undermine the climate advantage of natural gas.

I listened as many business people in Davos raised concerns about extreme weather and its effect on their enterprises. This made me hopeful that worried talk will lead to climate action.

The WEF released its Global Risks 2013 report assessing the biggest and most likely risks that threaten the world over the next 10 years, citing rising greenhouse emissions as the third most likely hazard of the coming decade. Not coincidentally, water shortages came in at No. 4. Failure to adapt to changing climate was No. 7, and extreme weather No. 10 on this list of good reasons for sleepless nights.

Business seems to share this view. Seventy percent of companies believe climate change has the potential to significantly affect revenue, according to a report released last week by the Carbon Disclosure Project and Accenture, based on a survey of over 2,400 companies. Nearly a third say they are experiencing the impact already.

Here, I am cautiously positive. There’s no mystery about what we must do to avoid the worst impacts. We need to continue the urgent efforts to cut CO2 emissions. In his first term, President Obama cut carbon emissions from automobiles by acting to double fuel efficiency in cars and light trucks. Now he needs to direct the Environmental Protection Agency to finally cut emissions from power plants, proposed and existing

The president has also begun to open up a second front in the war against climate pollution. The administration founded a 65-nation group with the unwieldy name The Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants to cut emissions of fast-acting potent gasses like methane, which are responsible for up to 40 percent of the incremental warming and radiative forcing we will see in the next 20 years. If we slow the increase in warming, we also reduce the threat of extreme weather impacts.

Those are good steps, of course, but they’re not enough. To bend the climate trend line upward from the fire pit, we need to pick up the pace of change. That’s going to take the combined efforts of leaders from all walks of life, as well as new action by government.

Getting there will not happen without continued public pressure. But I am more optimistic than I have been in a long time that we may be ready to break the political logjam and move forward once again on the solutions needed to prevent economic and environmental catastrophe.

The question now is what happens when these global leaders go back to their day jobs. Without action, talk is cheap. And we know silence will be devastatingly expensive.

PHOTO: A woman wearing a mask rides past smoking chimneys and cooling towers of a steel plant in Beijing, January 17, 2013. REUTERS/Suzie Wong

 

A handy guide to Davos-speak

“The impatience for growth will really take patience” — that’s Bank of America CEO Brian Moynihan in a panel on low economic growth, using the particular kind of language particular to the people who inhabit particular places like Davos. A panel called “No Growth, Easy Money — The New Normal?” (those latter three words another terrible Davos phrase) began with the moderator grimly telling the crowd: “Will we ever return to the normal, free world?” This kind of sentence is ostensibly the kind of English you and I subscribe to, but on further examination, not so much.

Are the Davos elite really worrying about their freedom? Well, no. The World Economic Forum has no shortage of silly phrases, but some of them actually do have meaning beyond the euphemistic. What Davos folks mean when they constantly call for a “growth plan” or “restoring growth” is that no one can see any particular industry that’s going to increase the pace at which they get rich. And, as a result, the rest of us will have fewer jobs.

Ray Dalio, who runs Bridgewater, the world’s biggest hedge fund, had probably the clearest take on this low-growth world. In a post-crisis, high-debt global economy, Dalio said, economic growth can’t come from debt, as it did during the last few decades or so. Economies are still deleveraging, debt won’t rise faster than income and the primary way large economies can grow is by increasing productivity. (CNBC has a bit more on his philosophy here).

What does Dalio actually mean by this? Dalio expanded a bit: the big conversation in politics and economics, he said, will be about how to get more out of workers – growth won’t come  from the next Internet, the next real estate boom or any new asset, in other words. This means, he said, hard choices about questions like “How long is a vacation?” or “What is a good life?”

If you unpack this Davos-speak a bit, what Dalio is saying is particularly dire for the rest of us. When the world’s most successful investors tells you economic growth is going to depend on whether or not you take a vacation, it’s time to worry. This is what Tyler Cowen calls “the great stagnation,” a period of declining productivity growth that could hurt living standards.

This isn’t good news for those of us who don’t have Davosian savings to rely on. But there’s another troubling phrase that kept coming up: on Friday, Mario Draghi said the ECB’s actions last year had “removed the tail risk” from the Euro, a phrase that was repeated by a handful of panelists on Friday. This a funny way to put it — as my Reuters colleague Felix Salmon has pointed out at length, tail risk is something that is , by definition, improbable, elusive and generally hard to identify. When a Davos luminary, even one as accomplished as Mario Draghi, starts claiming to have identified something largely unidentifiable, take it with a big dose of non-euphemistic skepticism.

Or, to put it in, Davos-speak: retain your “uber-mindfulness-influence”

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“The impatience for growth will really take patience” — that’s Bank of America CEO Brian Moynihan in a panel on low economic growth, using the particular kind of language particular to the people who inhabit particular places like Davos. A panel called “No Growth, Easy Money — The New Normal?” (those latter three words another terrible Davos phrase) began with the moderator grimly telling the crowd: “Will we ever return to the normal, free world?” This kind of sentence is ostensibly the kind of English you and I subscribe to, but on further examination, not so much.

Are the Davos elite really worrying about their freedom? Well, no. The World Economic Forum has no shortage of silly phrases, but some of them actually do have meaning beyond the euphemistic. What Davos folks mean when they constantly call for a “growth plan” or “restoring growth” is that no one can see any particular industry that’s going to increase the pace at which they get rich. And, as a result, the rest of us will have fewer jobs.

Ray Dalio, who runs Bridgewater, the world’s biggest hedge fund, had probably the clearest take on this low-growth world. In a post-crisis, high-debt global economy, Dalio said, economic growth can’t come from debt, as it did during the last few decades or so. Economies are still deleveraging, debt won’t rise faster than income and the primary way large economies can grow is by increasing productivity. (CNBC has a bit more on his philosophy here).

What does Dalio actually mean by this? Dalio expanded a bit: the big conversation in politics and economics, he said, will be about how to get more out of workers – growth won’t come  from the next Internet, the next real estate boom or any new asset, in other words. This means, he said, hard choices about questions like “How long is a vacation?” or “What is a good life?”

If you unpack this Davos-speak a bit, what Dalio is saying is particularly dire for the rest of us. When the world’s most successful investors tells you economic growth is going to depend on whether or not you take a vacation, it’s time to worry. This is what Tyler Cowen calls “the great stagnation,” a period of declining productivity growth that could hurt living standards.

This isn’t good news for those of us who don’t have Davosian savings to rely on. But there’s another troubling phrase that kept coming up: on Friday, Mario Draghi said the ECB’s actions last year had “removed the tail risk” from the Euro, a phrase that was repeated by a handful of panelists on Friday. This a funny way to put it — as my Reuters colleague Felix Salmon has pointed out at length, tail risk is something that is , by definition, improbable, elusive and generally hard to identify. When a Davos luminary, even one as accomplished as Mario Draghi, starts claiming to have identified something largely unidentifiable, take it with a big dose of non-euphemistic skepticism.

Or, to put it in, Davos-speak: retain your “uber-mindfulness-influence”



Powered By WizardRSS.com | Full Text RSS Feed

A handy guide to Davos-speak

The World Economic Forum has no shortage of silly phrases, but some of them actually do have meaning beyond the euphemistic.

“The impatience for growth will really take patience” — that’s Bank of America CEO Brian Moynihan in a panel on low economic growth, using the particular kind of language particular to the people who inhabit particular places like Davos. A panel called “No Growth, Easy Money — The New Normal?” (those latter three words another terrible Davos phrase) began with the moderator grimly telling the crowd: “Will we ever return to the normal, free world?” This kind of sentence is ostensibly the kind of English you and I subscribe to, but on further examination, not so much.

Are the Davos elite really worrying about their freedom? Well, no. The World Economic Forum has no shortage of silly phrases, but some of them actually do have meaning beyond the euphemistic. What Davos folks mean when they constantly call for a “growth plan” or “restoring growth” is that no one can see any particular industry that’s going to increase the pace at which they get rich. And, as a result, the rest of us will have fewer jobs.

Ray Dalio, who runs Bridgewater, the world’s biggest hedge fund, had probably the clearest take on this low-growth world. In a post-crisis, high-debt global economy, Dalio said, economic growth can’t come from debt, as it did during the last few decades or so. Economies are still deleveraging, debt won’t rise faster than income and the primary way large economies can grow is by increasing productivity. (CNBC has a bit more on his philosophy here).

What does Dalio actually mean by this? Dalio expanded a bit: the big conversation in politics and economics, he said, will be about how to get more out of workers – growth won’t come  from the next Internet, the next real estate boom or any new asset, in other words. This means, he said, hard choices about questions like “How long is a vacation?” or “What is a good life?”

If you unpack this Davos-speak a bit, what Dalio is saying is particularly dire for the rest of us. When the world’s most successful investors tells you economic growth is going to depend on whether or not you take a vacation, it’s time to worry. This is what Tyler Cowen calls “the great stagnation,” a period of declining productivity growth that could hurt living standards.

This isn’t good news for those of us who don’t have Davosian savings to rely on. But there’s another troubling phrase that kept coming up: on Friday, Mario Draghi said the ECB’s actions last year had “removed the tail risk” from the Euro, a phrase that was repeated by a handful of panelists on Friday. This a funny way to put it — as my Reuters colleague Felix Salmon has pointed out at length, tail risk is something that is , by definition, improbable, elusive and generally hard to identify. When a Davos luminary, even one as accomplished as Mario Draghi, starts claiming to have identified something largely unidentifiable, take it with a big dose of non-euphemistic skepticism.

Or, to put it in, Davos-speak: retain your “uber-mindfulness-influence”

Advertising in Davos: The message isn’t medium

Advertisments in Davos aim at a different demographic.

With 1,500 business leaders and up to 50 government officials in town for the World Economic Forum it shouldn’t be a surprise that advertising messages in Davos are aimed at a different demographic than one would expect in even the most upscale of ski resorts.

The most popular source of ads are emerging nations attempting to attract investors with millions of dollars to sling around. For example many of the buses here tout former Soviet State Azerbaijan as the “Land of the Future.”

Despite their subject matter, some of the ads adhere to standard conventions such as citing statistics to prove their “product” is bigger or better than competitors. For example this billboard above Davos’s famed Kaffee Klatsch restaurant informs passing plutocrats of India’s high population of low median age people who apparently enjoy dressing up and striking nonchalant poses.

This ad and many others seen around town are sponsored by the India Brand Equity Foundation – “A hub of knowledge for all facts, market research, industry reports, trade information etc related to Brand India.” Here’s another one that informs the skiers and elderly residents boarding this bus that India is an “aspirational nation of potential and promise” and that, by the way, the electronics market there will grow by 700% by 2020.

Not all of the ads in town go for the hard sell. This banner on the side of the Kirchner Museum features a tasteful image of the South African flag with the simple, if open-ended, message “South Africa – Inspiring new ways.”

On the even softer-sell side, some ads aren’t at all clear about what they’re selling. This billboard posted outside a centrally-located restaurant touts something called INDIAFRICA as being “the largest people to people and youth outreach programme for over 2.5 billion people across India and Africa.”

Those wanting clarification on what INDIAFRICA actually does can visit their website which states that “INDIAFRICA: A Shared Future is a unique people to people initiative that aims at engaging multiple stakeholders in India and Africa through contests, fellowships, discussions, events, collaborative projects and cultural exchanges” a message that perhaps can only be deciphered by those in the 1%.

Where emerging markets are headed next

Without doubt, emerging economies are showing more resilience and promise than their established counterparts – the Americas and the Eurozone.

In its video presentation “Looking to 2060: A Global Vision of Long-term Growth,” the Organization for Economic Cooperation and Development predicts that China will soon surpass the United States to become the world’s largest economy, and will account for 28 percent of global gross domestic product by 2030. The OECD also predicts that by 2060 the combined GDP of China and India will overtake that of the OECD economies. Meanwhile, Bain estimates that by 2020 emerging economies will account for two-thirds of global economic growth.

Without doubt, emerging countries are showing more resilience and promise than established economies in the Americas and the euro zone.

While emerging economies have shown potential for many years, they came of age during the global financial crisis. Thanks to prudent government and monetary policies, they have helped stabilize the global economy. A closer look at the emerging market growth story reveals some of its key strengths.

Investment potential

Emerging markets provide an attractive destination for investment funds and already account for nearly half and one-fourth of global foreign direct investment inflows and outflows, respectively. However, they still face challenges, including inflation, income inequity and poor governance, that threaten their growth. They remain countries of contradiction, with high growth on one hand and inequitable growth and underdevelopment on the other.

Business potential

With almost $2.5 trillion in assets, the Industrial and Commercial Bank of China was the fourth-largest bank in the world in 2012. In India, conglomerates ? such as Aditya Birla Group, one of the world’s most cost-efficient producers of copper and aluminium – are showing their peers how to succeed. As emerging market businesses grow into global leaders, they will strengthen as well as disrupt the competitive landscape. The Indian company Tata Nano’s emergence as a leader in low-cost, four-wheel transportation is a classic example.

Leading emerging-market multinationals will not only compete with companies from the developed world but also will invest in them through joint ventures, mergers and outright acquisitions. This will open up opportunities for companies in the developed world to sell their knowledge, expertise and technology to the emerging world.

Innovation potential

Emerging markets have moved up the value chain beyond their traditional roles as cost-saving hubs. Today they are hubs of growth, talent and innovation. Innovation in emerging markets, however, is not about designing bigger, faster and smarter products but rather leaner, more durable and more affordable ones. Narayana Hrudayalaya, for instance, is one of India’s leading cardiac care hospitals, which is bringing state-of-the-art medical facilities to the masses. Founded by Dr. Devi Shetty, the average open-heart surgery at the hospital costs less than $2,000. This is a third of the cost elsewhere in India and a fraction of its costs in the U.S.

Another example, the Tata Nano, is an outcome of reverse innovation, which led to it being the cheapest car in the world at $2,500. In China, companies such as Lenovo, BYD, Alibaba and Huawei have risen in the rankings of the world’s most innovative companies. Innovations from emerging market companies are no longer limited to local markets but appeal to a global audience. For instance, 60 percent of multinational corporations in a recent survey said they expect to conduct research and development in China for their global markets.

Frugal innovation, which plays a key role in emerging markets, is gaining popularity even in developed markets.

Talent potential

Rising domestic costs have diminished emerging markets’ potential for labor cost savings, but there are finding new opportunities to supply large-scale technical and English-speaking human capital. In the United Kingdom, the number of engineering graduates dropped 3 percent, to about 12,000, from 2003 to 2011; the drop in computer science graduates was a steep 27 percent (to 11,400) in the same period. In contrast, India produces close to 700,000 engineers each year. Yes, research indicates that about 75 percent of these graduates aren’t directly employable because they lack industry-relevant skills. However, India’s corporate sector has found a solution in the form of in-campus training and apprenticeship programs. We have trained thousands of engineers at the Infosys campuses in India each year. We recently launched a technical training and apprenticeship initiative in the UK, which has met with resounding success. That, I believe, is as good an example of developing world contribution as any.

PHOTO: A Tata Motors Nano car is loaded onto a goods train for shipment at Sanand railway station in the western Indian state of Gujarat September 1, 2011. REUTERS/Amit Dave

To fight worker illness, we need uniform measurements

Improving the health of employees worldwide is vital to our global economic strength and growth. In the U.S. alone, the economic cost of chronic diseases is estimated at $1.3 trillion annually.

Improving the health of employees worldwide is vital to our global economic strength and growth. In the U.S. alone, the economic cost of chronic diseases is estimated at $1.3 trillion annually. The World Economic Forum’s Workplace Wellness Alliance was launched in 2010, and it has spent the years since driving home the critical importance of investing in workplace wellness.

This year, the Alliance is releasing a report that underscores a crucial ingredient to help our mission. Entitled “Making the Right Investment: Employee Health and the Power of Metrics,” the report focuses on the need to establish a common set of yardsticks that organizations can use to understand fully the impact of their wellness programs. It further demonstrates how imperative it is for all of us to work together to learn more about the ways we can encourage and enhance health and wellness in the workplace.

The Alliance’s collaborative structure has generated several key insights about developing a sustainable workforce. Primarily, we’ve learned that a healthy work environment makes a positive impact on employee engagement, productivity and the bottom line.

Among our insights and discoveries, Alliance members have also learned the monstrous toll of chronic diseases. In any given year, one-third of the world’s workforce must deal with diabetes, cancers, obesity and high blood pressure, among other maladies. But, workplace wellness programs that emphasize lifestyle changes and promote health clearly prove beneficial, research shows.

As the wise saying goes, what gets measured gets managed. That’s why we have collected homogeneous health metrics from almost two million employees across 25 companies. These metrics will help companies collaborate on a set of successful approaches and learn how to adapt best practices to their employees’ health needs.

This information repository will be housed on a web portal for any company to use. Through this effort we will be able to create a business case for companies to champion workplace wellness programs. These programs are designed to help employees address familiar risk factors – such as smoking, inactivity and poor diet – that cause complex chronic diseases and conditions.

The good news is that employers are recognizing the value of wellness programs and more companies are offering them today than ever before. In the U.S., 73 percent of large firms with 500 or more employees and 27 percent of smaller firms offered such programs in 2011, up from 49 percent and 16 percent, respectively, five years earlier.

Alliance members better understand that making progress on wellness lies in structured processes and collaborations. They’re essential to identify risk factor targets and design programs to mitigate them, and also to identify programs that make a difference to employee wellness.

My former company Humana and South Africa-based Discovery Holdings Ltd. have created a program that provides a comprehensive wellness and loyalty program that integrates rewards with healthy behaviors. HumanaVitality helps reduce costs by providing the tools and support to help members live healthier lives. Already, HumanaVitality has more than 1.7 nearly 2.6 million members enhancing their well-being through this comprehensive integrated approach to lifestyle improvement.

Members can save money at Walmart through a program that gives a five percent saving on certain healthier foods. Additionally, Humana members participate in healthy living, fitness and education activities to earn bonus points redeemable for movie tickets, hotel discounts, gift cards, and more.

Novartis, also an Alliance member, offers a wellness program called “Be Healthy,” that’s tailored to suit all employees from manufacturing to office-based roles. In 2012 this initiative reached 95 percent of more than 120,000 Novartis associates worldwide and it expects its absence rate to decline. Program champions also communicate regularly with employees, monitor participation and encourage best practice sharing.

A third Alliance member, Johnson & Johnson, is focusing on preventing chronic diseases by making smoking cessation a top priority. The company has a tobacco-free policy on company property, supports smoking cessation education and subsidizes efforts to quit. In this year’s WEF Workplace Alliance Report, the initiative’s return on investment, calculated on the time employees previously spent on smoking breaks, includes improved productivity equated to about $3.9 million per year.

Through knowledge sharing and metrics, the Alliance is working to achieve a global standard of wellness to enhance population health and workforce productivity. It has grown from a few companies to more than 150 multinational corporations, representing hundreds of thousands of employees. You can count on the Alliance and its new leadership, the Institute of Health and Productivity Management, to continue to collaborate and achieve further strides with employee wellness as a vector for improved population health and organizational resilience.

PHOTO: Nurse Donna Riccardi administers a shot of Influenze virus vaccine to patient Deanna Joa at the New York Downtown Hospital in New York January 10, 2013. REUTERS/Andrew Kelly