“It’s the system, stupid!”

Bill Clinton, the former United States president, knows how to hold an audience. His opening speech at the 2004 World Economic Forum on 21 January used language which was to resonate through the rest of that high-octane, high-testosterone week. If the guiding phrase of his electoral campaign of 1992 was “It’s the economy, stupid!”, the implicit message of his survey of today’s global, economic, social and environmental challenges is: “It’s the system, stupid!”

Clinton suggested that creative social entrepreneurs like the Grameen Bank’s Muhammad Yunus and the property-rights-for-the-poor campaigner Hernando de Soto – should be invited into the centre of such summit events. No doubt some corporate hearts beat uneasily at this call for some sort of Third Way revolution, but what exactly was Clinton prescribing? Sadly, the ex-president was not only visibly jet-lagged but short on detail.

Read Simon Zadek’s different view of the World Economic Forum in Davos, “From the magic mountain”

Clinton’s declaration in favour of systemic change would no doubt have won agreement from many of those across the road at the ‘Public Eye on Davos’ and, indeed, at the World Social Forum in Mumbai, India. But most of these people would be unlikely to agree with him – and the Davos crowd as a whole – about the nature and costs of such change.

Yet it would be easy to over-dramatise the chasm between Davos and Mumbai. The divides are there, but both sides are – willingly or not – in the process of adjusting their mindsets. In fact, this was the third time I had attended the World Economic Forum’s annual summit and I was forcefully struck by just how far both the nature and content of the debate have shifted over the past three years.

The silence of the NGOs

At WEF, many once forceful pro-globalisers are now off-balance. Some even take part in sessions on corporate social responsibility and sustainable development. The agenda is a lot more nuanced than it was just a few years ago. Moreover, a growing number of former anti-globalisers (albeit still in a parallel universe for the most part) are experimenting with labels like altermondialiste and talking in terms of ‘responsible globalisation’.

In short, the basis for some form of convergence is clearly there. That marks a real shift. My first WEF event was in New York in 2002, in the wake of the 9/11 attacks. By 2003, the caravan returned happily to its Swiss base in snowy Davos. It was an event marked by bitter recriminations between America and its putative allies – those who were actively planning for war and those who opposed invasion, with or without UN sanction. I recall a session where General Wesley Clark pointed energetically to places on the map of Iraq where the coalition forces expected to be attacked with anthrax and other weapons of mass destruction.

What a difference twelve months can make. This year, US vice-president Dick Cheney was in conciliatory mood, while British foreign secretary Jack Straw drew no cheers for his lacklustre defence of the Iraqi venture. My overall impression was that most participants were much more interested in what would happen to the US recovery and to the dollar, though most seemed to have little appetite for major changes in the world’s economic architecture.

Something else had changed too. A goodly number of NGOs and their fellow-travellers, myself included, invaded the New York summit of 2002. The trend accelerated in 2003. In each case, street demonstrations in the vicinity helped keep the political atmosphere on the boiling. This year, by contrast, the security forces choked off most of the protests in and around Davos. The NGO presence seemed muted.

The world’s report card

Behind the scenes, there were clashes between World Economic Forum officials and some NGOs on the best ways forward. The head of one reputable NGO told me later that he – they – would not be coming back. I could understand the frustration. A couple of the parallel sessions I attended were surprisingly glib and ill-informed, although in my experience they were the exception. Some of the WEF’s research partners see the that the relationship with WEF is unbalanced in the forum’s favour. Yet it remains one of the most coherent platforms for integrated debate about global issues.

I challenged the forum’s co-CEO Jose Maria Figueres, a former president of Costa Rica, about whether the WEF would ever adopt a position on a major policy issue. Figueres – who has welcomed “equal room for partnerships that will create prosperity”, from Davos to Mumbai – responded that it is essentially neutral in what it does. But, however you judge that claim, the forum really is raising its profile in the debate.

This year, for example, the WEF Global Governance Initiative launched its first annual report. It is surprisingly critical of current efforts to tackle the priority issues identified at the 2000 United Nations summit – the Millennium Development Goals. The WEF scored each of seven areas of activity for 2003, with a maximum of 10 points signifying that “the world – that is, national governments, businesses, civil society and international organizations taken together – essentially did everything needed to be on track to reach the goals.” The report came up with the following results: peace and security (3), poverty (4), hunger (3), education (3), health (4), environment (3) and human rights (3).

Perhaps the world really does need a regular “school report” of this kind. And the WEF is helping drive forward other such initiatives. For example, the voices of social entrepreneurs in Davos – first convened at New York by the Schwab Foundation www.schwabfound.org of WEF founder Klaus Schwab and his wife Hilde – were louder and more confident than the NGOs.

Some social entrepreneurs, like Muhammad Yunus or Sanjit Bunker Roy of Barefoot College, are publicised by international media, but most work behind a screen of public ignorance. Many of them will fail, some more than once. But these people have the potential to transform the way in which hundreds of millions of people live, learn and work.

A huge variety of social entrepreneurs is tackling such issues as environmental protection, family planning, the empowerment of women, fair trade, food security, the homeless, HIV/Aids orphans, and youth development. Where markets fail, as they do in relation to many of these issues, social entrepreneurs are applying “leapfrog thinking”, technology and business models to find creative solutions. Profit can be their reward, but it is not their primary motive.

I have been lucky to witness their progress at successive WEFs. In 2002, I attended the first WEF social entrepreneur session in New York; in 2003, I facilitated the first Davos social entrepreneurs session. In 2004, with Pamela Hartigan of the Schwab Foundation, I was privileged to interview around fifteen social entrepreneurs for a book we are planning. That’s around a quarter of the Schwab Foundation’s current network. I emerged supercharged: an hour with any one of these people is inspiring.

If those present at Davos and the WSF alike want to see evidence of real progress in future Global Governance Initiative scorecards, there is one clear way to do it: to throw their collective weight behind these extraordinary pioneers.

This article draws on John Elkington’s own blog.

The real question now is how “top-down” changes to the market system can be introduced in order to help social entrepreneurs bring their “bottom-up” activities into the global arena. Maybe it will help if we all adopt the mantra: “It’s the system, stupid!”