All of the Indian outsourcers were there. Infosys' lavish parties from year's past have upped the ante -- now all of the top Indian players are out in force. They have five worries: 1) the "tax holiday" that the Indian government bestowed on Indian IT companies will not be renewed in 2009, 2) the price of the rupee is too high, 3) the price of the dollar is too low, 4) U.S. recession, and 5) somehow, someway to get leverage. The ten year math on Tata/TCS, Wipro, Infosys and their smaller brethren doesn't work. There aren't enough smart, employable people to satisfy their current growth rates, and the planned growth of IBM, Accenture, and the captive players. They should go into the software business...
Asia was a hot topic. The consensus was that the Asian economy is not decoupled from the U.S. economy. A U.S. recession will take Asia with it -- at least for the next five years. There is $9 trillion of consumer spending in the U.S. per year, and only $1.6 trillion in "Chindia" -- China and India. If the U.S. consumer stops spending, Chindia can't make up the difference. Big debates about whether China can pass the EU or U.S. in GDP over the next 25 years without political reform. A lot of the hard-bitten economists and business people say that China will "muddle through." Pei Minxin of the Carnegie Foundation said that without political change, the Chinese people cannot see the future. He called China's expansion "authoritarian growth" or "high-speed, low-quality growth." In his opinion, political change is inevitable. But the Chinese government watched the clumsy Soviet Union to Russia transition and doesn't want to make the same mistakes.
The wane in U.S. power and influence was a subtext of the proceedings. If the U.S. economy was truly de-coupled from the rest of the world, you get the impression that no one at Davos would be talking about America --they'd be focused on the fast growing India, China, Korea, et al economies.
Lots of talk about the emerging worldwide water crisis. Some interesting thoughts: 90% of the world's water is used in agriculture. To cut this number we need another green revolution. That would be a genetic revolution -- but governments won't permit it. That's got to change if the impending water crisis is to be avoided. Energy places large demands on water supplies. It takes 2.5 liters of water to produce one liter of oil. The production of heavy oil or oil sands (the hard-to-get-stuff that the world will turn to as "easy" oil depletes) takes ten times as much water -- big problem. Ethanol is a double whammy -- it consumes lots of water to produce the corn, then it takes a lot of water to go from corn to ethanol. And you still get high CO2 emissions.
Seven years before the mast...I mean, hey, this is my seventh year attending the World Economic Forum! Lovely place -- snowy and cold. It's fun to watch all of these important people slipping and sliding on the ice in their expensive, leather-soled shoes...
Biggest topic: "Are we going to have a recession?" Everyone's worried. But when I probed on the health of their businesses, CEOs said that things looked pretty good. The world's best economists and finance ministers don't think a recession is imminent. If we do have one it will be mild. Unlike the Japanese debt crisis in the early 1990s which took six years to clean up due to slow-moving banks and government, Merrill, Citibank et. al. are moving fast to re-capitalize. The only other potential shoe to drop on the credit markets is a private equity or hedge fund collapse.
August 6, 2007 My View: Web 2.0 And The CEO by George F. Colony
Quickly: Six things about marketing in the world of Web 2.0 that the CEO should know.
I often get to sit down with large company CEOs to talk about new technology. These days, the topic of conversation frequently turns to Web 2.0 — how to sell insurance, or aircraft parts, or cars when the 30-second TV spot and the one-page newspaper ad are dying. Here's what I tell them:
In the future, no major media will be serial. When I say "serial" I refer to media that starts at A and runs to B, with limited control from the user. It's content that forces a listener/reader/watcher to sit and, for the most part, passively follow. Examples of serial media include: podcasts, satellite radio, terrestrial radio, movies, broadcast television, paper newspapers (sort of).
Why will serial media fade? Because consumers are changing from listeners to adept conversers. The Web has acclimated them to ultimate control (I'll go when and where I want to) and to participation. Ever wonder why TV watchers flip so much? Because they are looking for what they want, not what CBS wants to show them. Their attention span is short, and their appetite for choice is too high to bear passivity.
This trend will put increasing pressure on the serialists like XM/Sirius, NBC, Fox, Clear Channel, The New York Times, and Time Warner to accelerate their transformation.
For years I have written notes to Forrester clients about technology, business, and the future -- this blog will now carry many of those thoughts. Why "Counterintuitive?" My earliest mentor, Howard Anderson, founder of the Yankee Group, taught me that the most valuable analysis looks at the world in new ways -- questioning prevailing sentiment. I've got three "counters" in mind for this blog: 1) The lunch counter. I want to stimulate a commonsensical conversation about complex ideas -- in the simple language of the diner. 2) Counting. I will be surfacing lots of Forrester data that challenges common beliefs. 3) Counter...to the conventional intuition.
I will seek to serve four roles: CEOs, Chief Information Officers, Chief Marketing Officers, and Strategy Professionals.
This is a test. I aspire to originate valuable analysis and conversations at this blog. If not, I'll find a different medium.