This morning I had no breakfast appointments. Relaxed, I communicated with Japan by e-mail from 7a.m. and made several decisions. As it became slightly bright outside, I could see the quietly aligned white Alps Mountains. It's fine again in Davos. Today I'm focusing on the sessions.
Today, David Cameron, prime minister of the UK, and Angela Merkel, chancellor of Germany, are speaking. Listening to them and comparing what they have to say is interesting as well as useful in predicting where Europe will go from now on. At lunchtime, there is a panel discussion featuring Bill Gates, Larry Summers (former president of Harvard University), Peter Thiel (famous as an investor in Facebook), Thomas Friedman, and L. Rafael Reif (president of MIT). What a sumptuous menu!
I'm also looking forward to listening to Henry Kissinger, Dmitry Medvedev (prime minister of the Russian Federation), Mario Monti (prime minister of Italy), and Joseph Stiglitz (Nobel Prize winner for economics). Listening to them, you can get a general picture of the world's trends.
In the evening, Japan Night and GLOBIS Night will be held.
Until last year I was on my own at Davos. This year, however, I'm supported by reliable staff. For this evening's GLOBIS Night, three staff members (two Japanese and one European) are joining me from Tokyo. Also, a former GLOBIS staff member who used to be in the president's office is arriving from Belgium. After Yoshito Hori, GLOBIS is finally making its debut at Davos!
In time for GLOBIS Night, the Japan Times ran an article about me titled "Aiming to take Japan's best onto the global stage", while today's Wall Street Journal carried a GLOBIS ad:
Don't you think the sake bottle and cup add a nice Japanese tone?
I listened to Henry Kissinger at the main venue: "The America I see is still a country that believes in itself; its government is able to ask sacrifices of its people."
David Cameron began his speech. This is his seventh speech at Davos, the last three of which were as prime minister of the UK. This year the UK will host the G8 Summit. I could feel his confidence and enthusiasm in his words as he said that the UK had been doing what it was supposed to do but Europe as a whole had been lagging behind.
Mr. Cameron is using Davos well as a platform to communicate the UK's position. He is also effectively using his G8 presidency, stating that this year's G8 will focus on trade, tax and transparency. G20 has not been mentioned up to the present.
"I believe in low taxes, That is why my government is cutting the top rate of income tax, we've cut corporate tax.” He said that his government raised the income catching rate to increase tax revenue and reduce tax rates, and that the UK now has the most competitive taxation system in the world. The UK corporate tax rate is nearing 20%. They have also lowered the top rate of individual income tax. “I’m about the most pro-business leader you can find.”, Cameron argued.
"This is not about turning our backs on Europe – quite the opposite… This is about how we secure the UK's place within it. Let us negotiate a new settlement for Europe that works for the UK and let’s get fresh consent for it."
Prime Minister Cameron ended his speech. He was impressively eloquent. He left the podium and approached the audience, welcoming questions. His attitude was saying, "I'm ready to answer any questions." He was passionate and precise. My neighbor, a German participant, said that such eloquence was a product of the Oxbridge education, something that the other countries don't have.
The next panel is on the euro zone crisis featuring the Italian prime minister, Mario Monti, as well as the prime ministers of the Netherlands, Denmark, and Ireland - an all-star panel of sorts. Mr Monti started out in fluent English. This panel is likely to be entirely in English.
The Danish prime minister is a 46-year-old woman. Her red jacket is nicely contrasted against her blond hair. She discusses her country's policy in fluent English, emphasizing the importance of austerity, reform, and core European values, as well as the need for open exchange between the euro zone and the other EU member states.
The Dutch prime minister said in effect: a major virtue of the EU is free trade, and this, with the US and Japan joining forces, can lead to further GDP growth; it was unfortunate that too much attention was focused on the euro zone crisis within the EU; more cooperation should be sought from the EU member states which do not belong to the euro zone. This euro/non-euro divide is becoming increasingly conspicuous within the EU.
I moved from the main venue to Morosani Hotel to attend the private lunchtime event in which Larry Summers, Bill Gates, Peter Thiel, and Rafael Reif were on the panel. At the WEF, private events are often far more interesting.
An 11-year-old Pakistani girl appeared on the stage, and Thomas Friedman started interviewing her. This prodigy had recently completed an online Stanford course in artificial intelligence, in addition to complex physics and all the other related courses. She began in English, relating her future dream of becoming a physicist. She enjoyed her online course of which she appreciated the clear explanations and abundant examples. This girl, who demonstrated the great potential of online education, has friends in Iran and India.
One of the other panelists also appeared on stage: Daphne Koller, professor in Computer Science Department at Stanford and a co-founder of Coursera. Already 2 million students from 196 countries have been able to study thanks to the program.
The theme of this session is "Online Education Changing the World." Rafael Reif, President of MIT, said that what an online education cannot offer are things like student dormitory life, socializing and the like. Larry Summers said that things occur more slowly than expected, but once they start, they change more quickly than expected, as in the Lehman Brothers crisis and that university education is also likely to change more quickly than estimated.
Larry Summers: "University has not essentially changed. MIT in the 1970s is almost the same as it is today. On the other hand, IBM has changed from a hardware company to a service company. Once university education starts changing, drastic changes should occur in many aspects including the semester system and examinations."
Peter Thiel: "Higher education is currently in a bubble phase, like the real estate bubble or the IT bubble. Such high tuition fees cannot be maintained forever. Something is wrong. Providers of education have largely deviated from the original purpose of learning, regarding education as insurance or a tournament, and have become merchants of weaponry, offering tools to win the war. This situation should be returned to the original state."
Bill Gates appeared, and the girl left the stage. Sebastian Thrun, CEO of Udacity, spoke, saying that education is the foundation of everything, that the most important resources of all are human resources, and that access to education is a fundamental human right.
Rafael Reif: "Professors will be like students' online mentors."
Larry Summers: "Would you like to watch a football game in a stadium or on TV in the comfort of your own home? In any case, which would people spend their money on? You should never underestimate the value of meeting people and interacting with them in person."
Photo 1: The panel of the "Online Education Changing the World" Roundtable, from right: co-founder of Coursera, MIT professor, Bill Gates, Thomas Friedman, Larry Summers, Peter Thiel, and CEO of Udacity:
I left the lunch event venue and returned to the main venue on foot, walking on a snow-covered road for about 20 minutes. I noticed a tall woman standing in front of me, surrounding by body guards. It was Christine Lagarde, managing director of the IMF. Since my gaze met hers, I thought about saying hello but decided against it: she was in a hurry, and so was I.
I arrived at the venue where Angela Merkel had already begun her speech. I got the impression she was very tired. I have listened to her speeches in the last three or so years, and I had never seen her without force and unprepared like that. Is that because of the lack of urgency regarding the euro issue or because of the regional election defeat? She's now starting her talk with Klaus Schwab.
Angela Merkel said she was concerned about Japan's weakened currency. I was slightly taken aback by Dr. Merkel's reference to Japan there. Japan was mentioned again with regard to the independence of central banks. This is the first time that Japan has been discussed with such frequency at Davos. In this sense, we can say that the Abe administration is doing fine, because the worst thing that can happen to a country is being totally ignored by the rest of the world.
In response to David Cameron's speech, Angela Merkel reminded the audience that the euro began with the common understanding that it would be the single currency for all the EU member states and that the euro zone is open to all members who wish to enter.
I noticed that Dr. Merkel used the term "investors" frequently in her speech. Her policies were formulated in full consciousness of investors and markets. She ended her speech almost in a flash without taking any questions from the floor. I suppose that this year Mr. Cameron could be declared the victor.
After listening to Dr. Merkel, I am now at the venue for the "New Vision for Growth" session. The panel comprises the secretary-general of the OECD; the chairman & CEO of The Dow Chemical Company; Azim Premji, chairman of Wipro Limited; the Costa Rican and Swedish presidents and prime ministers, and Atsutoshi Nishida, chairman of the board of Toshiba Corporation.
Mr. Nishida stated that 1) constant innovation, 2) improvement in productivity and 3) resistance to risk are indispensable for growth, and that value innovation and process innovation are two different things in that the former is progressive reform and the latter is improvement, which is actually very difficult.
At this year's WEF, few Japanese speakers took the platform. This is quite unfortunate since the international community's attention is once again turning to Japan and since it is not true that there are few good speakers from Japan.
One of the panelists commented that improvement in productivity reduced jobs around the world. So I asked the following questions from the floor: (1) Is it really true? (2) If so, then how can we increase jobs again? How would you reply to my questions?
I went back to my hotel room for a while and headed for the venue of Japan Night. After that, at 9pm, it’s GLOBIS Night! I'm really looking forward to seeing what it'll be like.
January 30, 2013
At home in Ichibancho, Tokyo