World Economic Forum - Annual Report 2006/2007

World Economic Forum Annual Report 2006/2007

World Economic Forum Annual Report 2006/2007

This report is available online at www.weforum.org





World Economic Forum Annual Report 2006/2007

Contents Executive Chairman’s statement Our major successes and achievements New strategic endeavours Shaping the global agenda Shaping the regional agenda Shaping the industry agenda Building public–private partnerships Creating knowledge networks Engaging our communities and constituencies Working with our members and partners Our organization The Forum community World Economic Forum USA Our financial results Our mission and values

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.

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World Economic Forum Annual Report 2006/2007

Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum





World Economic Forum Annual Report 2006/2007

Executive Chairman’s statement Professor Klaus Schwab

Once again the World Economic Forum has shown itself to be an innovative, dynamic and insightful organization. Acting as a catalyst for global change, we have delivered concrete results that reinforce our mission to improve the state of the world. We achieved this at a time when we continue to expand and evolve to meet the changing needs of our partners and members worldwide.

2006/2007 saw a number of key strategic challenges and opportunities – many of which we share with our members. We have continued to work closely with our members and partners as well as with other key stakeholders from government and civil society in our mission to shape the global agenda in a positive way. As part of this mission we have all had to address the increasing prominence of Asia in the global economy and polity. In addition we have a range of emerging global companies that will take their place in the global economy in the near future. We have also addressed the growing importance of online communities both in the way we do business, how the Forum itself works, and the way we conduct our lives. And we have continued to give prominence to identifying and understanding a new generation of global leaders. The Forum shares with all its members and partners a responsibility and an obligation to reduce its impact on the environment and search for sustainable solutions. As part of this focus, this year the Forum is sending all members a condensed print version of this annual report, while offering the full version on our website at www.weforum.org/annualreport. We hope that you understand and welcome this move. The annual report is also available in Arabic, Chinese, French, German, Japanese and Spanish. Shaping the global agenda: a new global alliance For many years, the Forum was a relatively lone voice in its passionate advocacy of a multistakeholder approach to global issues. British Prime Minister Tony Blair, whom I was delighted to welcome as a member of our Foundation Board in June, captured this truth particularly eloquently at this year’s Annual Meeting. Mr Blair said: “Nations, even the most great, are realizing that they cannot pursue their narrow national interests without invoking broader global values. They are obliged to recognize that interdependence is the defining characteristic of the early twenty-first century. The shifting power equation is, in part, obviously about emerging new powers; but it is equally about the fact that power over global issues can only be effectively wielded today by global alliances, in turn based on global values.” The key role of business in this ‘global alliance’ is becoming increasingly apparent. In 2006/2007, the Forum acted to ensure that our business

expertise and influence were as assured, and invaluable to members, as those of our regional and global perspectives. In this context, I’m pleased that the concept of Corporate Global Citizenship is evolving from a poorly understood slogan to a key principle and strategic cornerstone of responsible businesses. Corporations have not only a licence to operate in a global space, but also a ‘civic duty’ to contribute to the sustainable health of this global space in cooperation with governments and civil society. It is for this reason that Corporate Global Citizenship remains at the very heart of the Forum’s activities. The increased engagement of members demonstrates the value they place in the Forum and its continuing evolution. In 2006/2007, I am very pleased to report, our number of Strategic Partners increased by 18%, as further member companies signalled their closer commitment to the Forum by joining the programme. One-third of our staff, in 14 sector teams, are now dedicated industry experts and, in 2007, our North American office, World Economic Forum USA, became firmly established as the global headquarters for our Centre for Global Industries and for our Industry Partners programme, thus developing unbeatable strategic perspectives and a platform to support the concerted action of our diverse stakeholders. Our Industry Partnership community continues to grow. We increased the number of active members working in a number of tight-knit communities on a range of industry and cross-industry projects by 95%. The Forum’s international expansion with an established office in Beijing and now new premises for our New York headquarters, and the Inaugural Annual Meeting of the New Champions, this year in Dalian in China, has extended our footprint but has not diminished the Forum’s cohesion and unity of purpose. We remain one organization, with a common mission and culture. Asia and the rise of the New Champions It has become an established fact that the rising economies of Asia are poised to equal those of the West, revolutionizing the traditional economic order. Building relationships and understanding between the ‘old’ and ‘new’ economies and business leaders is essential for the future prosperity and stability of both. The Forum has a long and successful history of engagement in Asia, and in China and India in particular, where we have had a major impact in integrating those countries into the global system. We are therefore perfectly placed to be a powerful platform for interaction and cooperation between the emerging and established economies. This is something the Forum has sought to do for many years but it’s clear that this must become a central strategic goal for the Forum as it must be for many of our member companies. The Inaugural Annual Meeting of the New Champions in Dalian, China



World Economic Forum Annual Report 2006/2007

Executive Chairman’s statement Professor Klaus Schwab continued

(6–8 September 2007) brings together emerging global companies – we call them the ‘New Champions’ – with today’s leaders to shape tomorrow’s business landscape. This inaugural meeting creates a powerful platform for interaction and collaboration between traditional and new actors, between East and West, by bringing together far beyond 1,000 top participants. Our close and long-term relationship with the Chinese Government, particularly represented by the NDRC, the National Development and Reform Commission, was key to the establishment of the Dalian meeting and future meetings of the New Champions, as well as the operational success of our office in Beijing. Online communities and the WELCOM project As part of this emerging new world, the virtual communities that the Web has enabled are becoming an increasingly important global resource – and a vital complement to the understanding and relationships forged by faceto-face interaction. They are changing the way we do business and the way we interact as individuals. They have also changed the way we at the Forum work. In partnership with a number of major global companies, we made great progress in developing WELCOM – the World Electronic Community of the World Economic Forum. Developed on a Web 2.0 basis and incorporating videoconferencing capability, WELCOM aims to become the world’s most comprehensive platform and online tool for global CEOs and political leaders. It will enable business leaders, both from established and developing economies, to build their knowledge, understanding and relationships and allow them to stay abreast of the rapidly changing commercial environment. Perhaps more importantly, WELCOM will allow a completely new approach to tackling global challenges by providing an integrated platform. And we have already decided that the first big global issue we will address will be water shortage and water management. The Forum has always led the field in utilizing new technology. WELCOM continues this trend and, after it is rolled out at the Annual Meeting in 2008, we are confident that this exciting tool will prove invaluable to members. Working with tomorrow’s leaders The baby boom generation that shaped the second half of the twentieth century is retiring. The future belongs to a new generation, inspired by different influences, values and goals. The Forum is intent on understanding and harnessing the strengths, talent and vision of this generation. Our sister organization, the Forum of Young Global Leaders, is a key avenue to this group. The group now includes over 660 of the world’s most dynamic and capable under-40 year olds, drawn from 90 countries and representing business, government, civil society, academia and the arts.

I am also delighted to report that our emphasis on discovering and developing new young leaders is reflected in the participants at Davos – demonstrating the Forum’s success in connecting with – and our continuing relevance to – rising generations of leaders. We are also proud of our efforts to improve the representation of women leaders both at our meetings and in the wider business community. I’m particularly happy that we have doubled the representation of women leaders at the Annual Meeting in the last five years. Providing a platform for dialogue and action Once again our Annual Meeting in Davos, our regional events, and our year-round activities and programmes supported and complemented each other. The Annual Meeting, held under the apposite theme ‘Shaping the Global Agenda: The Shifting Power Equation’, brought together 2,400 global decision-makers to examine the implications of moves in economic and political power, climate change and changing community models, particularly virtual ones. And our regional meetings were also a key driver of regional integrations. In the Middle East, despite all the setbacks and negative developments, the Forum endeavours to maintain a spirit of hope and reconciliation. We’ve also introduced in the past year a new feature which has been welcomed by all those who took part: exclusive in-depth dialogue with top leaders – such as the recent roundtable we organized with Chancellor Merkel and her cabinet and in Russia in June with President Putin and his two first deputy prime ministers. Annual and Regional Meetings The significant outcomes of the Annual Meeting included: The announcement of a new international partnership to establish an accepted framework for climate risk-related corporate reporting The establishment of an alliance of leading companies to bring power to villages in subSaharan Africa An agreement by several global development banks to support our Partnering Against Corruption Initiative. Our regional events, which attracted increasing numbers of members from all stakeholder groups, also delivered tangible results. These included: The announcement, at the World Economic Forum on the Middle East, in Jordan, of a US$ 10 billion initiative to promote youth education and a knowledge-based society in the region An insightful meeting between 80 international business leader members and German Chancellor Angela Merkel, as part of a series of informal meetings in Europe, to complement our regional meeting in Turkey The launch of the Alliance for a Green Revolution in Africa, to tackle the challenges faced by millions of farmers in the region, at the World Economic Forum on Africa in Cape Town.



World Economic Forum Annual Report 2006/2007

Here are the regional meetings organized by the World Economic Forum this year: 10 –11 September 2006 China Business Summit, Beijing, China 15 –16 November 2006 Germany Meeting, Berlin, Germany 23 –24 November 2006 World Economic Forum in Turkey, Istanbul 26–28 November 2006 India Economic Summit, New Delhi 9 –10 April 2007 Arab World Competitiveness Roundtable, Doha, Qatar 25 –26 April 2007 World Economic Forum on Latin America, Santiago de Chile 18 –20 May 2007 World Economic Forum on the Middle East, Dead Sea, Jordan 9 –10 June 2007 World Economic Forum Russia CEO Roundtable, St Petersburg 13 –15 June 2007 World Economic Forum on Africa, Cape Town, South Africa 24 –25 June 2007 World Economic Forum on East Asia, Singapore Risks, Competitiveness and Scenarios All through the year, our activities give business leaders the tools to do a better job. For example, our ability to act as a ‘hub’ for the best minds – from academia to business and from government to media – enables us to provide invaluable strategic insights. Our Global Risk Network continued to lead the agenda in risk identification and analysis, amid rising concern over such international issues as climate change and the security of energy supply. In 2007, following a series of workshops, the Network identified 23 core global risks, outlining their conclusions in the Global Risks 2007 report. The Forum’s Global Competitiveness Network continued to assist policy-makers in creating drivers for growth by examining how nations and regions as well as industries can achieve sustained prosperity. In September 2006, we launched the 27th Global Competitiveness Report, covering a record 125 economies providing critical insights on over 100 competitiveness variables. We also launched our first ever Travel & Tourism Competitiveness Report. Our highly respected Scenario Planning team presented three major scenarios at the Annual Meeting 2007, examining: how the Gulf Cooperation Council countries could develop; the potential impact of the convergence of IT, telecoms, media and entertainment; and how technology, innovation and regulation could transform access to, and delivery of, financial services.

Public–Private Partnerships Our members, meanwhile, continued to show the benefits of public–private partnerships in numerous Forum-backed programmes around the world. Our Global Health Initiative, for example, harnessed the influence and expertise of major companies in the fight against AIDS, TB and malaria. In one initiative, the Beyond Big Business Partnership, firms such as Eskom, Heineken, Standard Chartered Bank, Unilever and Volkswagen joined forces with their suppliers to provide HIV/AIDS awareness, prevention and treatment programmes. Our Global Education Initiative, meanwhile, built on its 2006 launch of Partnerships for Education (PfE), which engages leading educationalists in promoting the role of public–private partnerships, by signing a formal partnership with UNESCO to implement PfE. We strongly believe that businesses must be good global corporate citizens and make a positive contribution to society. As well as encouraging multinational companies to act this way, via our partnership with the Schwab Foundation for Social Entrepreneurship we also back enterprises that have a more overt social focus. This year, the foundation ran 30 national competitions for the ‘Social Entrepreneur of the Year’ award, screening 2,500 candidates and conducting 150 site visits. The winners joined the growing community of Schwab Foundation entrepreneurs. I am pleased to report that our members’ continued commitment and ever closer engagement with the Forum contributed to a good financial year while still allowing for significant investment in the strategic priorities of the new WELCOM platform and the inaugural meeting of the New Champions. We also now have plans in hand for the extension of our headquarters to bring all our staff in Geneva back under one roof. The construction should begin early 2009. Looking ahead, the future will be characterized both by great business opportunities and by significant political and economic risks. The Forum will continue to bring strategic insights of both the ‘good’ and the ‘bad’ to members’ attention: wise, effective leadership requires a true understanding of the bigger picture. And in this respect I am pleased that we have added to the range of talents and capabilities of our staff with our Global Leadership Fellows programme, which allows us to do so many complex things to the satisfaction of the most demanding international public. The dedication and engagement of our members and of our staff were what made 2006/07 another successful year for the Forum. I would like to thank you very much for your continued commitment.

Professor Klaus Schwab Founder and Executive Chairman

World Economic Forum Annual Report 2006/2007

Our major successes and achievements

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companies representing more than US$ 500 billion in annual turnover have signed up to Partnering Against Corruption – Principles for Countering Bribery, from the World Economic Forum Partnering Against Corruption Initiative (PACI).





World Economic Forum Annual Report 2006/2007

The World Economic Forum is committed to improving the state of the world by engaging leaders from the public and private sectors and from wider civil society in partnerships to shape the global, regional and industry agendas. Here are some of the year’s highlights.

Global Agenda The World Economic Forum’s Global Education Initiative has expanded from country initiatives in Jordan, India and Egypt – which are reaching over 2,550,000 students – to the global scale. Along with UNESCO, the Global Education Initiative launched the ‘Partnerships for Education’ with the purpose of helping developing countries find multinational and local corporate partners with capabilities relevant to their efforts to provide all children with a basic education. The Forum’s Global Health Initiative is the largest public–private sector network in health. Results from 2006/2007 include: – India Business Alliance to Stop TB – 4,000,000 people were reached through workplace and community programmes delivered by Reliance, Aditya Birla, Jubilant Organosys, Eli Lilly, the World Health Organization, the Global Partnership to Stop TB and the Ministry of Health of India. – China Health Alliance – 5,000,000 people, who are employees of partner companies, are expected to receive education, testing and treatment. Partner firms are Adidas, Standard Chartered Bank, Swire Beverages, Pfizer, the UN and the Chinese Government. – Beyond Big Business Partnership – Around 50,000 people received lifesaving HIV/AIDS awareness, prevention and treatment-intervention programmes delivered by Eskom, Heineken, Standard Chartered Bank, Unilever and Volkswagen who worked with a selection of their suppliers and the GHI. Over 30 companies and other partners including NGOs and the Government of Kenya have joined together to fight hunger in Siaya, the poorest district in Kenya. It is the first project of the World Economic Forum’s Business Alliance Against Chronic Hunger to develop a model for business partnership to reduce hunger which can be scaled up and adapted to other regions. World Economic Forum Industry Partners from many sectors began a collaboration with the G8 Gleneagles Dialogue on Climate Change, Clean Energy and Sustainable Development to develop recommendations for governments regarding ways to construct a long-term climate policy framework to transform energy systems as well as opportunities in the near term to increase market financing and consumer demand for low carbon products through better public–private cooperation.

Regional Agenda His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates and Ruler of Dubai, launched the Mohammed Bin Rashid Al Maktoum Foundation to promote human development with a US$ 10 billion endowment at the World Economic Forum on the Middle East.

The World Economic Forum launched the Israeli-Palestinian Business Council, a key group of Palestinian and Israeli CEOs who are committed to advancing the relationship between the two business communities and, ultimately, assist the region to move towards durable peace and coexistence. An initial 70,000 people in Lesotho and the Democratic Republic of Congo are due to receive electricity as part of the World Economic Forum’s Energy Poverty Alliance. This is a private sector initiative of Forum member companies that delivers business expertise and best practices to reduce energy poverty. The three initiating partners are British Columbia Hydro and Power Authority (Canada), Eskom (South Africa) and Vattenfall (Sweden). The World Economic Forum launched the first index specifically analysing the investment environment for infrastructure. Covering 12 economies in Latin America and the Caribbean, the study, Benchmarking National Attractiveness for Private Investment in Latin American Infrastructure, assesses the main drivers of private investment in infrastructure projects for ports, airports, roads and electricity.

Industry Agenda 123 companies representing more than US$ 500 billion in annual turnover have signed up to Partnering Against Corruption – Principles for Countering Bribery (PACI Principles). Over the past year, PACI significantly deepened its credibility: the heads of the multilateral development banks, the International Finance Corporation and the Inter-American Investment Corporation agreed to work with PACI on individual pilot programmes to advance anti-corruption efforts. The heads of the Big Four Accounting firms (Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers) agreed to work with the PACI and together will explore the development of a framework for companies to benefit from independent reviews of their anti-bribery programmes. The World Economic Forum launched the first-ever Travel & Tourism Competitiveness Report, measuring the factors that make it attractive to develop the industry for 124 countries. The report is a joint effort led by the Industry Partners of the Aviation, Travel and Tourism Industry Partnership Programme and the Global Competitiveness Network. The World Economic Forum’s Working Towards Wellness Initiative aims to stimulate greater business engagement in the global fight against chronic disease through employee wellness. The Women Leaders Programme increased the participation of women in the Annual Meeting from 8% in 2002 to 17% in 2007.



World Economic Forum Annual Report 2006/2007

New strategic endeavours

Our inspiration to be a member of the Community of Global Growth Companies is to mesh with like-minded companies such as ours – companies that firmly believe in providing innovative business models and operating model discontinuity to change the world and to create competitive advantage for themselves and for their clients. Participating in the Inaugural Annual Meeting of the New Champions gives us the opportunity to be among a network of such companies that can work in closer consonance and partnership. Phaneesh Murthy CEO and MD, igate Global Solutions, India



World Economic Forum Annual Report 2006/2007

The Forum remains an effective catalyst for global change. To support our mission we have launched a number of significant projects that support our strategic vision, and ensure that we continue to engage our members and partners. In the past year the Forum has focused on two primary strategic endeavours: the identification and development of a new generation of global leaders, the ‘New Champions’, and the launch of WELCOM, an advanced electronic communication system, which will serve as an invaluable tool for members and partners to help shape agendas.

The New Champions

WELCOM

‘The Shifting Power Equation’ was the framework for discussions in Davos, but it is also the strategic imperative behind the creation of the Community of Global Growth Companies. Power shifts occur only when ‘New Champions’ succeed in both challenging the status quo and forcing change. Therefore early engagement of such leaders and innovators is critical if the World Economic Forum is to retain its leadership in shaping global, regional and industry agendas.

The World Economic Forum firmly believes in the power of collaborative wisdom and action generated by combining face-to-face and virtual interaction. WELCOM – the World Electronic Community of the World Economic Forum – creates a unique online community which functions as an advanced collaborative platform for 10,000 of the world’s top leaders. It is based on the latest videoconferencing capabilities and will provide a unique global governance tool to address the challenges of our globally interconnected, fast-paced world.

The new Community of Global Growth Companies comprises the ‘New Champions’ from industry that will in fact be shaping the future. Its members will interact with current foundation members to understand, and to leverage, the forces transforming the business world, reordering societies worldwide and creating fast-growth economies. The designation of the city of Dalian, China, as the host of the Inaugural Annual Meeting of the New Champions symbolizes the growing economic influence of Asia globally. In addition to the top 500 emerging companies, the meeting in Dalian includes leaders from the world’s most competitive cities and fastest growing regions. The future will also be represented as the Community of Young Global Leaders will gather for their annual meeting. With a strong international media presence, coupled with innovators from the Web 2.0 world, the rise of these New Champions will be explored across all its dimensions.

It offers business, government and intellectual leaders a powerful resource to shape global, regional and industrial agendas through a stateof-the-art technology platform. Developed on a Web 2.0 basis, in partnership with the world’s leading technology companies, the platform will provide an unprecedented opportunity for both established companies and the New Champions to learn from each other and establish ties of cooperation and partnership. The initiative is the latest milestone in the Forum’s history of embracing technological innovation to improve its offering to members.

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World Economic Forum Annual Report 2006/2007

Shaping the global agenda

The World Economic Forum operates on many levels, addressing global, regional and industry agendas, although much of our activity is on a worldwide scale. Working in concert with our members and partners and other key stakeholders, our initiatives have a positive impact on the global community. At the World Economic Forum’s Annual Meeting in Davos each year, we sit down with our partners to frame the global agenda, highlight the challenges of the coming year and work on solutions to some of the world’s complex problems. In this sense, the Annual Meeting is the focus of the work that the Forum does throughout the year.

Annual Meeting The World Economic Forum Annual Meeting 2007 again demonstrated the Forum’s vital role in bringing together global leaders from different regions and sectors to address key international issues. Change was a dominant theme of this year’s Meeting, which was held under the banner: ‘Shaping the Global Agenda: The Shifting Power Equation’. It proved a powerful theme, striking a chord with the 2,400 participants, and reflecting a potent mix of concern and optimism. The continued moves in economic and geopolitical power to emerging economies and resource-rich nations; the recognition of the pressing need to address climate change; and the implications of new community models, often virtual in nature, gave leaders much to discuss and digest. Optimism over the state of the global economy and the growth opportunities ahead was matched by concern over the need to adjust to a new, as-yet undefined, geopolitical landscape. Whether on the G8 agenda, or that of the global business community, there was general agreement on both priorities and the shape that responses will need to take.

Tzipi Livni, Vice-Prime Minister and Minister of Foreign Affairs of Israel and Mahmoud Abbas, President of the Palestinian National Authority, at the 2007 Annual Meeting in Davos

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World Economic Forum Annual Report 2006/2007

The Forum has always believed that global issues can only be resolved if diverse groups work together. It was encouraging to hear from participant after participant that this idea, once considered novel, is now seen as the logical route to deliver effective and lasting solutions. It was climate change, though, that dominated the Annual Meeting 2007. Through a series of 17 sessions related to global warming, the world’s top academics, business leaders, NGO representatives, UN agency chiefs, politicians and many others joined together in advancing the discussion and exploring practical opportunities to make progress through partnership. To underscore the deepening commitment of the business sector to engage other groups in addressing this issue, a new international partnership was announced. Called the Climate Disclosure Standards Board (CDSB), it is made up of seven organizations which will work together to establish a generally accepted framework for climate risk-related reporting by corporations. Founding members include the California Climate Action Registry, Carbon Disclosure Project, Ceres, the Climate Group,

the International Emissions Trading Association, the World Economic Forum Global Greenhouse Gas Register and the World Resources Institute. CDSB member organizations have agreed to align their core requests for information from companies to ensure that they report climate change-related information in a standardized way. It is expected that this will make for easier comparative analysis by investors, managers and the public. A number of other significant projects emerged from the meeting, including the establishment of an alliance of leading companies to bring power to villages in sub-Saharan Africa. The first project will focus on Lesotho. In the ongoing fight against global corruption, the presidents of the World Bank, the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development and the executive director of the International Finance Corporation agreed to lend their support for the Partnering Against Corruption Initiative (PACI). Acting on their recognition of the role the private sector can play in guiding policy and assisting governments, they agreed to pilot a country-specific anti-corruption implementation

The Forum offers a unique opportunity for global leaders to listen, learn and lead. It provides insights into shared challenges through constructive dialogue, as well as the tools and networks needed to act on those learnings. It helped us to act more quickly on micro-insurance and deepened our understanding of our role in the climate change debate. The Forum’s engaged collaborative spirit is what allows it to have such an impact, and makes it a vital development tool for global leaders. I know I have benefited from the opportunity to participate in Forum activities. James J. Schiro Group CEO, Zurich Financial Services, Switzerland

World Economic Forum Annual Report 2006/2007

Shaping the global agenda continued

We recognize the responsibilities we share with governments, community groups and NGOs for the provision of the basic building blocks of community development: clean water, jobs, nutrition and a healthy environment. Because there are no simple, unilateral solutions for these issues, the World Economic Forum’s power to convene those of us who can ensure the sustainability of all our communities is critical for building understanding, respect, trust and partnership. E. Neville Isdell Chairman and CEO, The Coca-Cola Company, USA

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World Economic Forum Annual Report 2006/2007

programme, and a sector-specific structural reform initiative that will promote fair competition and transparency. Additionally, the world’s four largest accounting firms agreed to lend their support through the development of a framework for companies to benefit from independent reviews of their anti-bribery programmes. There was a notable consensus that the Forum and its partners in both business and civil society have a responsibility to promote open discussion on globalization. Greater understanding is needed of its advantages and how its negative effects can be reduced. As President and Chief Executive Officer of Renault, France, and President and Chief Executive Officer of Nissan, Japan, Carlos Ghosn, said: “Most people who are hurt or who think they are hurt by globalization know it. Most who benefit do not know it”. This is something we are keen to pursue in the coming year. The activity at this year’s Annual Meeting reached a far wider audience thanks to the latest technological innovations. These included real-time webcasts of our key sessions, regular podcasts, commentaries written and sent out by bloggers and even discussions among participants on SecondLife, the popular Webbased virtual community. This was particularly appropriate to this year’s Meeting, given that social networking and the implications of the rise of the virtual world were at the forefront of many of the discussions. The Forum is keen to continue developing its knowledge of community building and recognizes that new trends in technology will influence the style

of future Annual Meetings. With this in mind, the Forum is currently researching how the latest communications technologies can be utilized for the benefit of its participants and the wider global audience. Open Forum Davos 2007 For the fifth consecutive year, we opened our doors to the general public, via the Open Forum. Co-organized with the Federation of Swiss Protestant Churches, the Open Forum is a series of sessions held in conjunction with the Annual Meeting. More than 2,400 people took part in seven sessions. Participants came from all walks of life, including business, civil society and the local Davos population. This year they included a group of students from Geneva’s international school, one of whom served as a panellist in an Open Forum session. The debates and discussions provided participants with insights on globalization and the impact of some of its consequences. Individual sessions addressed issues such as CEO salaries, development aid and its results, sustainable energy consumption, managing access to oil, multiculturalism, the role of religions in society and the impact of brands. Discussions between the public and panellists allowed for in-depth conversations. Panellists of this year’s Open Forum included the Prime Minister of Pakistan, Shaukat Aziz; Group Chief Executive of global advertising giant WPP, Sir Martin Sorrell; and the Archbishop of Dublin, Diarmuid Martin.

2,400 participants, from 90 countries, including 25 heads of state were at the Annual Meeting 2007.

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World Economic Forum Annual Report 2006/2007

Shaping the regional agenda

Over the past 12 months, the World Economic Forum initiated a succession of high-level regional gatherings aimed at mobilizing key business, government, academic and social groups. Major events in China, India, Singapore, Jordan, Turkey, South Africa and Chile focused on putting programmes into action that would deliver tangible results at the regional level.

In some cases we introduced smaller and less formal gatherings, to facilitate dialogue between key leaders. In others, we organized larger roundtable meetings to achieve broader discussions between greater representations of regional groups. Overall, the aim was to achieve greater knowledge, understanding and action plans for the key challenges affecting the regions. Asia Asia continues to reorder economic, political and social relationships, underscoring its emergence as one of the key areas of ‘The Shifting Power Equation’, which was reflected in the strong presence of top Asian leaders at the Annual Meeting in Davos. The World Economic Forum recognized the 40th anniversary of ASEAN (Association of South-East Asian Nations) in welcoming three heads of state from ASEAN nations to the Annual Meeting in Davos. Gloria MacapagalArroyo, President of the Philippines, and the Chair of ASEAN at that time, spoke of the bold steps forward made by ASEAN at its recent annual meeting.

HM King Abdullah Il Ibn Hussein of the Hashemite Kingdom of Jordan, gave the opening address at the World Economic Forum on the Middle East in Jordan

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World Economic Forum Annual Report 2006/2007

For the first time in the Forum’s history, the Prime Minister of Vietnam, Nguyen Tan Dung, participated in the Annual Meeting, following his country’s entry as the newest member of the World Trade Organization. He spoke about the factors which have driven Vietnam to become the second fastest growing economy in the world. The Prime Minister of Malaysia, Abdullah Ahmad Badawi, made a special address on establishing greater understanding in a multicultural world. In September 2006, the 26th China Business Summit in Beijing was held. The theme of the meeting, ‘Sustainable Growth through Innovation: China’s Creative Imperative’ clearly spelled out the top priority for China, as it aims to achieve a new level of economic development. The Summit attracted over 600 participants, representing business executives, senior government officials as well as top experts and media leaders from China and around the world. During the meeting, the full report on ‘China and the World: Scenarios to 2025’ was released, with contributions from more than 100 leading

70,000 people have been provided with electricity in Africa through the Forum’s Energy Poverty Alliance.

authorities. Three possible scenarios were projected for China for the next 20 years, varying from sluggish development to robust economic growth. The aim of the report was to provide an analysis of how China’s future development may affect global growth, geopolitics, resources allocation and trade and investment. The 22nd India Economic Summit took place in November 2006 in Delhi. Taking as its theme ‘Meeting New Expectations’, the meeting in Delhi was an effective platform in shaping India’s growth agenda on various topics across vertical and horizontal axes of the economy. Discussions were organized under four key pillars: Infrastructure, Managing Growth, Risk Management, and State and National Competitiveness. For the first time, Sonia Gandhi, Chairperson of the United Progressive Alliance and President of the Indian National Congress, attended the meeting. She presented the 2006 India Social Entrepreneur of the Year Award to Vikram Akula of SKS Microfinance, who improved the lives of millions in rural India, through the use of microcredit.

World Economic Forum Annual Report 2006/2007

Shaping the regional agenda continued

The World Economic Forum is a crucial platform that allows people like me to meet with other business leaders to share knowledge and understanding. The Forum’s meetings address the right issues in an extremely comprehensive manner. Moreover the Forum provides the opportunity to meet the public and private sectors simultaneously. Public-private partnerships are essential and both sectors understand that we cannot move forward unless we unite in addressing the issues that affect us all. Putting our minds and hands together to find common solutions is the only way forward. Fadi Ghandour Founder and CEO, Aramex International, Jordan

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Linking the leadership imperatives to Asia’s spectacular growth was the main focus of this year’s World Economic Forum on East Asia in Singapore. Under the banner ‘The Leadership Imperative for an Asian Century’, the meeting brought together 300 top decision-makers from 26 countries to examine how the region views its leadership roles and to analyse the priorities for its industry and regional agendas. On the eve of the Philippines’ handover of the ASEAN Chair to Singapore, the meeting’s participants included Gloria Macapagal-Arroyo, President of the Philippines; Lee Hsien-Loong, Prime Minister of Singapore; Yi Gang, Assistant Governor of the Bank of China; and Masatoshi Wakabayashi, Minister of Environment of Japan. During the year, the opposition Democratic Party of Japan established a Davos Caucus with 34 Diet members, which follows the Davos Caucus established last year in the ruling Liberal Democratic Party. Additionally, in light of Japan’s 2008 G8 Presidency, Klaus Schwab met with Prime Minister Shinzo Abe and five senior cabinet ministers during an official visit to Tokyo. The World Economic Forum’s recognition of Asia’s dynamic impact in shaping the global, regional and industry agendas is further reflected by the fact that the Forum chose Dalian, China, as the location for its Inaugural Annual Meeting of the New Champions, in September 2007. Middle East 2007 was another troubled year for much of the Middle East but despite the precarious geopolitical environment many economies have grown faster than in the previous three decades. The Forum strove to maintain an adequate balance that addresses an extremely sensitive political environment and places the appropriate emphasis also on sustaining the growth momentum in the Arab world. The World Economic Forum Annual Meeting in Davos provided further opportunities to restart negotiations to end the Israeli-Palestinian conflict by bringing together some of the region’s leading policy-makers, including Israeli Foreign Minister, Tzipi Livni, Palestinian President Mahmoud Abbas, former Israeli Prime Minister and new President, Shimon Peres, and King Abdullah of Jordan. An important focus of the Annual Meeting was the launch of the ‘Gulf Cooperation Council Scenarios to 2025’. This exercise explored three possible evolutions of the GCC in terms of its geopolitical stability and leadership capacity to implement effective governance and reforms. Together with key regional partners, the Forum developed in-depth scenarios for Bahrain, Saudi Arabia and the United Arab Emirates. In several high-profile sessions on the future of the region, participants explored how to bridge the roadblock for Arab Israeli peace, the emergence of a financial hub in the Gulf and the development of new urban models.

The Forum launched the third Arab World Competitiveness Report during the Arab World Competitiveness Roundtable held in Doha, Qatar in April. The meeting provided a platform for advancing the reform agenda across the Arab world and analysed three emerging sectors of Arab economies: travel and tourism, healthcare and insurance services. The Arab Business Council (ABC), recognized as the voice of the Arab business community and an initiative of the Forum, continued to build the capacity of National Competitiveness Councils throughout the Arab world. The ABC supported the Egypt Education Initiative, which aims to improve the delivery of education through public–private partnerships, and The Arab World Competitiveness Report. It also initiated and financed a trade study looking at US–Middle East trade agreements and how they can be optimized for the region as a whole. The May 2007 World Economic Forum on the Middle East was held in Jordan under the patronage of His Majesty King Abdullah II. Under the banner ‘Putting Diversity to Work’, the programme for the Jordan meeting was structured around three sub-themes: Industries of the Future; Peace, Stability and International Relations; and Society and Change. Participants explored how to leverage the region’s diversity in pursuit of development and how to manage the tensions arising from difference in order to promote peace. The Israeli-Palestinian Business Council (IPBC) was established by a key group of Palestinian and Israeli chief executives, to advance the relationship between the two business communities and assist the region in moving towards lasting peace and coexistence. We also saw significant engagement of senior Iranian leaders, which created further opportunities to address tensions in the region. The meeting was a successful platform for dialogue between key participants from Iraq, Iran and the United States. At the meeting Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates, and Ruler of Dubai, established the ‘Mohammed Bin Rashid Al Maktoum Foundation’ for human development with an endowment of US$ 10 billion. The goal of this institution is to contribute to a brighter future in the Middle East by promoting youth education and a knowledge-based society. It goes to the heart of what the World Economic Forum aims to promote in the region, and we expect to work closely with the Foundation in the coming years. Europe More than 400 participants from 45 nations gathered in Istanbul for the World Economic Forum in Turkey. Under the banner ‘Connecting Regions – Creating New Opportunities’, discussions included Turkey’s current EU negotiation process, and an assessment

World Economic Forum Annual Report 2006/2007

Shaping the regional agenda continued

More than any individual project alone, we feel that working with the Forum matters because it enables collaboration and dialogue among a variety of different actors. No one entity has the answers to the dilemmas of our world, but multiple organizations working together from multiple angles have a much better chance at addressing them. Tarek Sultan Al-Essa Chairman and Managing Director, Agility, Kuwait

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of its competitive advantages and emerging business opportunities. The country’s role in bridging civilizations and its geopolitical importance in mitigating Europe’s risks both helped towards defining Turkey’s strategic role for Europe and the wider region. Our European activities aim to complement the Annual Meeting with smaller targeted meetings in the region. These events serve two main objectives, the first of which is to create larger roundtables, such as the Istanbul meeting, to shape the regional agenda of “Emerging Europe”. The second is to provide small, informal gettogethers with the leaders of newly elected governments. For example, on 15 November, over 80 international business leaders met German Chancellor Angela Merkel. Discussions included Germany’s domestic reform programme, the EU presidency and the priorities that would define its G8 presidency. The Forum plans similar follow-up meetings with the new governments of other major European countries. In what proved to be a hugely valuable interaction, Forum members had the opportunity to follow up specific discussions with the German ViceChancellor, Franz Müntefering, as well as with the Minister of Health, Ulla Schmidt, and the Minister of Economics and Technology, Michael Glos.

how, with US$ 200 million in funding and a fully operational secretariat in Dar es Salaam, it is about to take its first steps in removing obstacles to domestic and foreign investments across Africa. The Development Bank of Southern Africa, meanwhile, agreed to join the Forum’s Energy Poverty Alliance, as part of a drive to provide basic electricity to African citizens, and committed to hosting the Energy Poverty Action Management Unit at its offices in Midrand, South Africa. Latin America In April 2007, more than 400 people from 30 countries gathered in Santiago de Chile for the second World Economic Forum on Latin America. Taking as its theme ‘The Power of a Positive Regional Agenda’, participants included Chilean President Michelle Bachelet and Brazilian President Luiz Inacio Lula da Silva. A key outcome of the meeting was ‘The Santiago Consensus’, a list of clear priorities and objectives aimed at helping to shape a clear and positive regional agenda to boost economic growth and more equitable income distribution. The initiative focuses on education, environmental responsibility, investment in innovation, the creation of efficient tax systems, and infrastructure development.

The Annual Meeting 2007 was again characterized by a strong European participation, with Chancellor Merkel opening the meeting and UK Prime Minister Tony Blair heading the closing plenary. Among the many other regional delegations this year, there was strong participation from Russia, headed by the First Deputy Prime Minister, Dmitry Medvedev.

The Forum also released two landmark studies on the region. The first, Benchmarking National Attractiveness for Private Investment in Latin American Infrastructure, mapped out the quality of the infrastructure of 12 Latin American nations and the factors that determine which countries are more attractive for private infrastructure investment. The second study, Latin America@Risk, analysed the main risks that the region faces.

Africa The theme of this year’s World Economic Forum on Africa meeting in Cape Town, ‘Raising the Bar’, underscored the need for the continent’s leaders to remain focused on long-term sustainable growth.

Additionally, we published a book of technical essays on Brazil: Priorities for Action: Economic Growth and Income Distribution. This was a response to the ‘10 Priorities for Action’ established in 2006.

In recent years, Africa has seen a shift of focus from risk, crisis and poverty to a more structured emphasis on how to sustain growth, enhance investment opportunities and integrate the continent into the global economy. In a year when the continent’s GDP is forecast to reach 7%, the June meeting emphasized the need for Africa to build on this positive momentum.

North America North American participants continue to influence and contribute to the development of the global agenda. Over a dozen prominent US Senators and Congressmen as well as delegations from the United States and Canada attended the Annual Meeting in Davos and various other regional events.

The meeting saw the launch of a number of high-profile initiatives, including the Forum’s Africa Competitiveness Report 2007, which recommended building capacity and filling the widening skills gap to underpin continued growth. Other launches included:

The Annual Meeting remains the centrepiece for reviewing the North American agenda. In 2007 US Senator John McCain discussed the challenges of US leadership; US Trade Representative Susan Schwab participated in a number of discussions on Trade; US Secretary of Homeland Security Michael Chertoff discussed global risks including disaster risk reduction and mitigation; and Premier of Quebec Jean Charest spoke about climate change.

The Alliance for a Green Revolution in Africa, chaired by former UN Secretary-General Kofi Annan, to tackle the challenges holding back hundreds of millions of small-scale farmers The Africa Enterprise Challenge Fund, inaugurated by Baroness Amos, Leader of the UK House of Lords, which aims to unlock Africa’s potential by providing match-funding for business innovations. One year after it was launched at our last Africa meeting, the Investment Climate Facility reported

Canada and the United States also played key roles in shaping the global agenda at our regional meetings; discussions included important issues such as developing India–US relations, trade with Asia, the US war in Iraq and the role of North America in promoting prosperity in neighbouring Latin America.

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Shaping the industry agenda

The strong engagement of our members and partners is integral to what we do. In 2006/2007, by working closely with both new and existing corporate champions we continued to make real progress towards our mission.

Industry partners programme An initiative of the Centre for Global Industries, our Industry Partnership Programme exists to engage the global companies in the Forum’s activities at the industry level. It operates in conjunction with the World Economic Forum USA, whose New York offices serve as the worldwide headquarters for the Centre for Global Industries. Industry Partners are select member companies of the World Economic Forum who strongly support our commitment to improving the state of the world. The unparalleled convening power of the Forum brings these companies together to contribute to an evolving portfolio of task forces and to actively participate in several modules. By July 2007, 184 companies had joined the Industry Partnership Programme across 17 industry sectors. Four such areas – energy, financial services, IT and the investors sector – have already achieved the critical mass of 20 or more companies needed to broadly represent the global industry. We remain confident of reaching our goal of 300 commitments across all sectors by the end of 2008.

Vinton Cerf, one of the inventors of the Internet with Dan Elron of Accenture and Ben Verwaayen of British Telecom, at the IT and Telecommunications Governors Meeting

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In addition to joining a highly successful series of Governors Meetings during the Annual Meeting in Davos, our Industry Partners have been active in a number of other key areas. For example, Industry Partners of the financial services, IT and telecoms industries commissioned the Forum to launch a scenario analysis, aimed at exploring how technology will transform financial services up to 2020. The scenarios draw on the views of over 150 practitioners and experts from IT, telecoms and financial services. They examine issues such as the development of emerging technologies, trust in cyber security, the role of specialized new players and broadening access to financial services. We also published our first-ever Travel & Tourism Competitiveness Index (TTCI), based on work mandated by our aviation, travel and tourism (T&T) Industry Partners. Covering 124 countries, the report provides unique data on many relevant qualitative institutional and business environment issues. The TTCI uses a combination of data from publicly available sources, international T&T institutions and experts. It also draws on the results of the Executive Opinion Survey, a

comprehensive annual survey conducted by the Forum, together with its network of Partner Institutes in the countries covered by the report. Energy security and climate change are a top priority for our Energy Industry Partners. According to the International Energy Authority (IEA), society is not investing enough to renew and expand its energy infrastructure. To address this, our Energy Security Roundtable seeks to create dialogue between relevant groups. For example, a meeting was held between sector leaders and the Russian Government earlier this year. In the context of the Gleneagles Dialogue, we provided business input to the G8, with recommendations on the future climate framework. Specific recommendations included a focus on linking mayors with energy companies to improve energy efficiency in cities; splitting the wheat from the chaff in the context of biofuels; and developing Energy Poverty Alliances to electrify off-grid villages in sub-Saharan Africa.

I’m fortunate to be heavily involved with the Information Technologies and Telecommunications Governors, who are focused on helping to bring technology to high-growth markets around the world. On a regional basis, I’m happy to say that the IT Governors have played roles in a variety of pilot programmes and technology trials in Brazil, Africa, India, the Middle East and other regions. Hector Ruiz Chairman and CEO, AMD, USA

World Economic Forum Annual Report 2006/2007

Shaping the industry agenda continued

ABB is involved with the World Economic Forum in a number of ways where we feel our experience can make a real difference. We are participating, for example, in the Forum’s Engineering and Construction Industry Partnership to identify critical issues facing our industry and to develop responses together with other like-minded companies. ABB has made ‘zero tolerance’ of breaches of its ethical guidelines a hallmark of the way it operates around the world and we are supporting that commitment by participating in the Forum’s Partnering Against Corruption Initiative (PACI). Fred Kindle President and CEO, ABB, Switzerland

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Community of Global Growth Companies (GGC) Our Community of Global Growth Companies – or New Champions – is a cross-industry group of businesses with the clear potential to become leaders in the global economy. Such companies have demonstrated leadership in a particular industry and have the aspiration and ability to become leading international players. They are expanding outside their traditional boundaries, have demonstrated leadership in a particular industry and are experiencing strong growth rates, have outstanding executive leadership and typically have revenues between US$ 100 million and US$ 5 billion depending on the industry and region. The Inaugural Annual Meeting of the New Champions in Dalian, China, is the community’s flagship event. It brings together the CEOs of GGCs, World Economic Forum members and partners, international government leaders and the heads of the world’s most competitive cities and fastest-growing regions. It also includes Web 2.0 experts, members of the Forum’s Community of Young Global Leaders and international media representatives. Throughout the year a portfolio of tailor-made events based on “Experience Exchange and Conversation” with a leading global CEO brings the community together with world leaders. Often held in conjunction with the Forum’s regional meetings, these occasions allow today’s global industry leaders to share insights and experiences with rising corporate powers on key business issues such as branding, talent management and leadership.

In November 2006, IBC members were given the opportunity to meet with German Chancellor Angela Merkel and in June 2007 they met with Russian President Vladimir Putin, at the Forum’s CEO Roundtable in St Petersburg. Technology Pioneers ‘The Shifting Power Equation’, the main theme from the Annual Meeting 2007, continues to drive our Technology Pioneers programme, with a significant change in innovation models. We moved away from a vertically integrated model in favour of a more open and flexible approach, where organizations with different skill sets can participate in innovation networks to co-develop new products and services. As the Technology Pioneers ‘class of 2007’ showed, this new model is enabling innovation to become more geographically dispersed. We witnessed a huge increase in nominations, especially from India, China and ASEAN nations. Our final group included 13 nations, resulting in perhaps the strongest-ever group of Technology Pioneers. In 2006, we welcomed two new partners – Accel Partners and BT – to the Technology Pioneers programme. Together with fellow partner, Deloitte Touche Tohmatsu, the three companies were instrumental in increasing global awareness of the programme. Partnering against corruption Now in its third year, the Forum’s Partnering Against Corruption Initiative (PACI) continues to win corporate support towards its goal of ending global corruption and bribery.

International Business Council (IBC) The International Business Council (IBC) is a well-established community of 100 highly respected and influential chief executives from all industries and regions. They come together twice a year for informal, private exchanges on key global issues.

PACI now has the backing of more than 120 signatory companies. In 2007, the heads of the multilateral development banks, the International Finance Corporation and the Inter-American Investment Corporation agreed to work with PACI on individual pilot programmes to advance our global anti-corruption efforts.

The business case for engaging in public–private partnerships was the main theme of the summer meeting in August 2006, providing IBC members with the opportunity to share their experiences in this critical area.

Together with its signatories, the initiative has made substantial progress in achieving corporate commitment to the PACI Principles. It has developed a set of tools to support the execution and evaluation of anti-corruption programmes by companies and strengthened its members’ platform for sharing their experience of the implementation process. PACI plans to launch another mechanism to highlight those signatories that have advanced their programmes and monitoring mechanisms since becoming involved.

At the winter meeting, in January 2007, there was an in-depth discussion on the implications and economics of climate change. It was followed by two individual dialogues with Dmitry Medvedev, First Deputy Prime Minister of the Russian Federation, and Gordon Brown, then UK Chancellor of the Exchequer, now British Prime Minister. On the first day of its winter meeting, the IBC unanimously endorsed the Doha development round. They said the move underlines the responsibility of all decision-makers and political leaders for relevant, constructive and timely action to deliver a successful Doha round.

The initiative showcased its work in high-level sessions at the Forum’s Annual Meeting in Davos. It also presented to the OECD Working Group on Bribery, the International Chamber of Commerce Commission on Anti-Corruption, and the State Parties Meeting of the United Nations Convention Against Corruption.

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Building publicprivate partnerships

The Forum’s Centre for Public–Private Partnership continued to see strong engagement from industry across a number of critical global issues. In particular we saw the start of a major collaboration on climate change. This involved many of the Forum’s Industry Partners working with the G8 Gleneagles ‘Dialogue on Climate Change, Clean Energy and Sustainable Development’.

Progress was made in the ongoing battle against the spread of HIV/AIDS. Companies involved in our Global Health Initiative (GHI) launched a new effort in partnership with the Chinese Ministry of Health. This brought together a group of multinational and Chinese companies, with a combined workforce of 5 million. They also devised ground-breaking new models for corporate engagement in strengthening public health systems in Africa and extending HIV/AIDS and TB best practice to supply chains. With sustainability high on the global agenda, companies in our Food and Beverage Industry Partners programme began a new partnership to create sustainable agricultural value chains in Africa through a pilot project in Kenya. We also saw major developments in our Information Technology and Telecommunications Industry Partners programme. The Forum’s International Monetary Convention Project, meanwhile, issued its final report following two years of public–private roundtable meetings on the future of the international monetary system. Gleneagles Dialogue Over the past year the Forum has significantly increased the engagement of the business

Partners of the Rajasthan Education Initiative at a school in Jaipur, Rajasthan. They interact with teachers and students at schools with newly installed computers and other IT infrastructure.

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community in initiatives to combat climate change. The centerpiece activity for our industry partner members is their engagement in the G8 +5 governments’ Gleneagles Action Plan. This is an informal government–business dialogue on climate change, clean energy and sustainable development, designed to develop long-term policies to manage climate change. The Forum invited the World Business Council for Sustainable Development to also collaborate on this engagement process. As part of this dialogue, a number of high-level public–private work streams are now under way, working on policy ideas, north-to-south finance, and practical steps towards reducing carbon emissions in the short run. Outcomes from these working groups will be announced at the G8 leaders meeting in Hokkaido, Japan, in July 2008. There have been some significant developments already. For example: At the Forum’s Annual Meeting in Davos, January 2007, over 40 CEOs, international NGO heads, political leaders and other climate change experts were convened within a workshop environment, to help develop the project focus and activities. In March 2007, the Forum co-hosted a major

meeting on financing clean energy with the multilateral development banks and the G8 governments. More than 35 of the Forum’s Industry Partners took part in the event, which included a keynote speech delivered by Gordon Brown, now the UK Prime Minister. The workshop has catalysed a series of public–private working groups on clean energy finance which will report their ideas back to the World Bank–IMF Annual Meeting in October 2007. In May 2007, more than 80 of the Forum’s Industry Partners gathered for the first in a series of broad climate change policy discussions with a range of environmental policy experts, including Yvo De Boer, the Executive Secretary of the UNFCCC. Global Health Initiative It was a strong year for the Global Health Initiative (GHI). Our efforts to encourage the business community to play a critical role in finding solutions to the problems of AIDS, TB and malaria have delivered impressive results. One initiative, the Beyond Big Business Partnership, saw participation from large global companies such as Eskom, Heineken, Standard Chartered Bank, Unilever and Volkswagen. With support from the

4m

In 2006 the India Business Alliance to Stop TB reached a total of 4 million people with a combination of workplace and community programmes.

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Building publicprivate partnerships continued

GHI, each company joined forces with some of its suppliers in Africa to reach approximately 50,000 people with lifesaving HIV/AIDS awareness, prevention and treatment-intervention programmes. In India, Reliance Industries, Aditya Birla, Jubilant Organosys and Eli Lilly joined the India Business Alliance to Stop TB (IBA). In a classic example of public–private partnership in action, these companies worked with the World Health Organization, the Global Partnership to Stop TB and India’s Ministry of Health to help the IBA reach a total of 4 million people with a combination of workplace and community programmes. The China Health Alliance (CHA) saw Adidas, Standard Chartered Bank, Swire Beverages and Pfizer work with the UN and the Chinese Government on tackling HIV/AIDS and tuberculosis. Launched in September 2006, the CHA commits to providing advocacy and education on these diseases and access to testing and treatment to employees of engaged companies and a select number of their suppliers, with a special emphasis on migrant workers. Up to 5 million people could be reached at full scale-up if all engaged companies and their suppliers reach all of their employees, including their families and dependants.

The World Economic Forum’s meetings play an influential role as one of the world’s most effective sensing systems for future trends and developments. The World Economic Forum also has a proven record for enabling and facilitating the dialogue between the West and the Islamic world across countries, religions and ideologies. I am deeply concerned about the potential business implications of the conflicts in the Middle East. Globalized conflicts may disrupt global capitalism. But in the long run, I hope that capitalism will prove to be the more convincing choice. Hans-Paul Bürkner President and CEO, The Boston Consulting Group, Germany

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June 2006 brought the launch of a GHI white paper called From Funding to Action: Strengthening Healthcare Systems in Sub-Saharan Africa, the first of its kind to highlight the potential role of business in this area. The GHI is currently working in partnership with Merck & Co., Becton Dickinson, Sudler & Hennessey, Accenture, AMREF and UNAIDS to develop a project that will demonstrate the report’s findings in practice. Global Education Initiative Education is vital to the continued development and improvement of global communities. The only way to achieve this successfully is to bring business, government and social groups together through multistakeholder partnerships to help deliver education initiatives and reforms. The number of strategic partners supporting the Forum’s Global Education Initiative (GEI) has doubled over the past year and now includes globally recognized names such as AMD, Cisco, Goldman Sachs, HP, Intel and Microsoft. In 2006 we launched the Partnerships for Education (PfE), which focuses on engaging key education leaders around the world in understanding, sharing and promoting the role of Public–Private Partnerships (PPPs) in education on a global scale. In this regard, a formal partnership with UNESCO was signed in January 2007 and related work is ongoing with the international development and bilateral donor community. Our country-specific activities continued to make progress in Jordan, India and Egypt. Significantly, in November 2006, we handed over formal management of the Jordan Education Initiative (JEI) – which supports students and trains teachers in the public education system – to the country’s government, three years after its launch, as scheduled. We now expect the JEI to continue its success in developing PPP education models, under the leadership of HM Queen Rania of Jordan. Water Initiative The Forum will publish the outcomes of its Water Initiative by the end of this year. This will be the culmination of a three-year effort which has focused on developing public–private partnerships in India and South Africa. During this time, high-level multistakeholder networks for water have been set up in partnership with the New Partnership for Africa’s Development (NEPAD) Business Foundation in South Africa and with the Confederation of Indian Industry in India. A series of innovative projects have been designed as a result, with very favourable reactions from water experts in the public, private and development sector communities. A new, high-level water project, with a focus on the economics and politics of reforming water policy for agriculture, has also begun this year. This has been championed by Nestlé and the Coca-Cola Company, together with expert water

and agriculture partners, such as the Food and Agriculture Organization, the Organization for Economic Co-operation and Development (OECD), Global Water Partnership and the International Water Management Institute. Other environmental Initiatives Other related environmental initiatives are also under way, with the explicit aim of ensuring the Forum’s green activities are not focused on climate change alone. These include work on biofuels, sustainable cities, tourism, and joint industry-specific efforts with the aviation, IT and finance sectors. Disaster Resource Network With thankfully few major catastrophes affecting the world in 2006, our Disaster Resource Network (DRN) was able to focus on building local capacity and the civil infrastructure dimensions of disaster response operations. In one such partnership, DRN-Mexico, together with leaders from the country’s engineering and construction sectors, are currently working to increase Mexico’s emergency response capabilities. DRN-Mexico has assembled a team of 60 volunteers from organizations such as Empresas ICA SAB de CV (ICA), Marhnos, Siemens-Mexico and Cámara Mexicana de la Industria de la Construcción. ICA, which is a consortium of Mexican construction companies, will act as the corporate lead sponsor of the initiative. The team will form the core of a pool of engineering and construction experts who, in the emergency phase of a disaster, will conduct rapid-response infrastructure damage assessments. The volunteer members of Mexico’s Emergency Engineering-Construction Team are expected to complete their training and field exercises in preparation for the launch of operations in early 2008. www.drnglobal.org Council of 100 Leaders: West-Islamic World Dialogue (C-100) The Forum’s C-100 community focused its efforts on two key subjects. The first was ‘Discourse’, which aims to create deeper dialogue between the West and the Islamic world. The second was the development of the ‘Annual Report on WestIslamic Dialogue’, which provides a reference point for faith, government, business, civil and academic leaders in identifying pressing issues. During the year, the Forum’s Religious Leaders community was integrated into the C-100 in meetings in Turkey, Davos and Jordan. Moreover, a C-100 session was organized at the Annual Meeting 2007 on ‘Rules for a Global Neighbourhood in a Multicultural World’, in which leaders from religion, education and government agreed that politics was failing to find solutions for the compelling issues confronting peace and democracy.

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Creating knowledge networks

It has never been more important for governments, business and civil groups to work together. In an increasingly complex, integrated and networked world, situations change quickly, and the ability to make the right decisions regarding the future can only come from regular dialogue and communication with all key stakeholders.

Driving forward collaboration between business, government and civil groups is one of the primary goals of the World Economic Forum. Our Strategic Insight teams work throughout the year to ensure cross-party participation around the major issues of global competitiveness, risk and scenario planning. Global Competitiveness Network Our expertise on international benchmarking continued to grow as we carried out a number of wide-ranging projects aimed at furthering the process of economic development. The Global Competitiveness Network (GCN) acts as a platform for discussion and debate for the business community, government, academia, international organizations and civil society. It provides invaluable insights into the policies, institutions and factors affecting national competitiveness. Our primary role is to examine how national economies might achieve sustained economic growth and long-term prosperity, thereby stimulating the necessary strategies to attain these objectives. In September 2006, the 27th edition of the annual flagship publication, The Global Competitiveness Report, was released. The report has long been the top international reference guide

John Thain, CEO, NYSE Euronext, USA, speaking at the Finance Governors Meeting, at the 2007 Annual Meeting in Davos

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for measures of competitiveness, providing critical insights to the business community and policymakers. This year’s report covers a record 125 economies, up from 117 last year, and presents comprehensive data on over 100 variables on competitiveness. The GCN also carries out a number of competitiveness studies at regional and industry levels, such as the Lisbon Review 2006, published in November. This is the third in a biennial series assessing the progress made by European Union member countries in the far-reaching goals of the EU’s Lisbon Strategy of economic and structural reforms. The study highlights the extent of the progress still needed to transform the EU into “the most competitive and dynamic knowledge-based economy in the world” by 2010. The first-ever Travel & Tourism Competitiveness Report was launched in March 2007. This project assesses the industry’s competitiveness within the context of the Forum’s Aviation, Travel and Tourism Industry Partnership programme. One of the world’s largest economic activities, Travel & Tourism (T&T) is the main industry in many countries, as well as the fastest-growing economic sector in terms of foreign exchange earnings. The report measures and analyses the drivers of T&T competitiveness around

the world and provides the most updated data, rankings and analysis of industry competitiveness in 124 industrialized and emerging economies. It also features the latest thinking and research from the industry’s most prominent figures. We anticipate the T&T report to act as a powerful tool for industry members to enter into informed dialogue with policy-makers, and to identify areas for potential reform. A number of workshops are now being carried out in developing countries, with the aim of improving prospects for the sector. In March 2007, the GCN launched the sixth annual Global Information Technology Report, which assesses the economic impact of information and communication technology (ICT). Being an active force in the digital revolution and leveraging the latest technological advances for development, it is now widely recognized as a key driver of a nation’s competitiveness. The report remains the most comprehensive and respected international assessment of the preparedness of countries to capture the benefits of participating in the networked economy. The third Arab World Competitiveness Report 2007 aims to identify tangible solutions to the constraints that limit faster growth in the region.

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The Global Competitiveness Report 2006–2007 included a record 125 economies worldwide covering all regions and accounting for over 98% of world GDP.

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Creating knowledge networks continued

The competitive performance of Arab world countries is compared with international peers, highlighting the great diversity of economies in the region. The report includes proposed strategies for enhancing the competitiveness of selected sectors that have been identified as potential engines of growth. These include healthcare, travel and tourism, information and communication technologies, insurance and transport and logistics. The report provided the basis for public–private dialogue at the Forum’s Arab World Competitiveness Roundtable in Doha in April 2007. We issued the fourth edition of The Africa Competitiveness Report 2007 (ACR) at the World Economic Forum on Africa in Cape Town in June. The publication marks a new level of cooperation in Africa. It is the first report on the region’s business environment to leverage the combined knowledge and expertise within the African Development Bank, the World Bank and the World Economic Forum. As such, it presents a unified vision and a mapping of the policy challenges which countries on the continent may address as a foundation for sustainable growth and prosperity.

Merrill Lynch has worked closely with the Forum on a number of initiatives. As a participant in the Finance Governors programme, we explored the interplay among financial markets and the forces impacting global markets. As part of the Global Risks Network, we discussed how best to address the structural risks embedded in the financial system. These discussions allow us to hear a variety of perspectives on important issues and that’s valuable to the Forum, to Merrill Lynch and to the industry as a whole. Gregory Fleming Executive Vice-President and President, Global Markets and Investment Banking, Merrill Lynch, USA

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The GCN continues to collaborate with over 140 partner institutes around the world. The network of Partner Institutes consists typically of research or academic institutes located in each country covered by the competitiveness report series. We also work closely with key Forum members and partners, which this year included FedEx, Gallup International, Microsoft and Cisco. Global Risk Network Now in its third year, the Forum’s Global Risk Network (GRN) continues to grow in stature amid mounting concern over climate change, energy insecurity, geopolitical instability and potential economic upheaval. We organized a series of workshops in London and New York to identify and discuss how to reduce the impact of these key risks. With input from groups of business, academic and policymaking experts on economics, the environment, societal change and geopolitics, we identified a list of 23 ‘core’ global risks. We also analysed the associated trends, likelihood and potential severity of impact of these risks, and attempted to characterize the correlation between them and the complex scenarios in which they could emerge. Most of these issues are likely to increase over the next decade, while the institutional capacity to manage them is lagging behind. The findings of the workshops were published in the Global Risks 2007 report, which received extensive global media coverage. The report’s recommendations included institutional innovations such as the development of flexible, fast-moving coalitions of companies and countries and the creation of a country risk officer to allow the public sector to manage a risk in a more balanced and less politicized fashion. The GRN also helped the Forum’s industry communities deepen their insight into the mitigation of global risks. Two specialist sessions – one in London on avian influenza and one in New York on natural catastrophes – each brought together more than 100 strategy officers from the Forum’s Industry Partner companies. The latter has since grown into a multistakeholder dialogue on Disaster Risk Reduction, in partnership with the World Bank, the United Nations and the United States Department of Homeland Security. Additional work produced projects on water risks with the food and beverage industry and information-sharing with the aviation, travel and tourism sectors. During the year, the GRN also launched the Region@Risk series, exploring the regional contexts in which global risks emerge. Europe@Risk analysed the potential role of Turkey in reducing

European exposure to global issues, while India@Risk highlighted six key dangers to continued human and economic development on the sub-continent. Scenario planning The World Economic Forum’s Scenario Planning team presented three major scenarios at the Annual Meeting in Davos. ‘The Gulf Cooperation Council (GCC) countries and the World: Scenarios to 2025’ examined how the region could develop over the next 18 years. It raised key questions over the ability of GCC countries to implement necessary reforms, and how they could maintain order and stability in the face of regional uncertainty. Following workshops involving over 150 experts and participants, three scenarios for the GCC region were developed: ‘Oasis’, ‘Sandstorm’ and ‘The Fertile Gulf’. Four themes emerged as being crucial to the future of GCC countries: education, innovation, leadership and governance. ‘The Digital Ecosystem – Convergence between IT, Telecoms, Media and Entertainment: Scenarios to 2015’, the second scenario publication, examined the shape and size of the space emerging from the convergence of the Information Technology, Telecommunications, and Media and Entertainment industries. User empowerment, market structure, regulation and intellectual property rights were among the major factors shaping this evolution. Three scenarios, ‘Safe Havens’, ‘Middle Kingdoms’ and ‘Youniverse’ were developed in cooperation with the Industry Partners as well as over 100 academic, social, government and business leaders. ‘Technology and Innovation in Financial Services: Scenarios to 2020’ was a product of cross-industry cooperation with financial services, IT and telecoms industries. The focus was on how technology, innovation and regulation may transform access to and delivery of financial services by the year 2020. Through the scenario workshops and interviews comprising over 150 practitioners, three scenarios, ‘Global Ivy League’, ‘Next Frontier’ and ‘Innovation Islands’, were created. These three scenario projects, together with our previous work on China, India and Russia, provide an excellent basis for ongoing dialogue within the Industry Partnership programme, the Annual Meeting and the Forum’s regional meetings.

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World Economic Forum Annual Report 2006/2007

Engaging our communities and constituencies

Our communities of members and partner companies are vital in driving forward the activities of the Forum. Their participation and interaction, with both the Forum and each other, are fundamental to our mission of improving the state of the world.

The Forum of Young Global Leaders Our Young Global Leaders (YGL) continue to make a significant contribution to the Forum’s communities, programmes and initiatives. With the new class of 2007 joining in January, the community now has over 660 members from 90 different countries. They are drawn from the fields of business, government, civil society, academia and the arts, and are all under the age of 40. The YGL community has developed several exciting new dimensions, particularly in the areas of leadership, policy insight and regional development. For example, in partnership with Harvard’s John F. Kennedy School of Government, it is launching ‘Global Leadership for the 21st Century’. The initiative aims to help YGLs better understand issues of global concern, create a vision for a better future and put forward innovative solutions to translate their vision into immediate action. Supported by David Rubenstein, Managing Director of the Carlyle Group, and William George, author of Authentic Leadership and member of the board of the World Economic Forum USA, the partnership will create one of the world’s foremost executive education leadership programmes. Over 100 YGLs met in Washington DC in April 2007 for the US Policy Roundtable, hosted by

HM Queen Rania of the Hashemite Kingdom of Jordan, with Young Global Leaders in a school during a visit to celebrate Dignity Day

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World Economic Forum Annual Report 2006/2007

Dina Habib Powell, Assistant US Secretary of State for Educational and Cultural Affairs, and former Jordanian Ambassador to the US, Karim Kawar, President of the Kawar Group of Companies. Key topics included climate change as a priority for the US Government, the increasing importance of public–private partnerships to support foreign diplomacy, and the need for reform of international organizations.

As well as the above, throughout the year, the Young Global Leaders continued to build the momentum behind task forces in the fields of health, education, global governance and security, and the environment.

The Young Global Leaders also played active roles at the Forum’s regional meetings. YGL Linda Rottenberg, Co-Founder and Chief Executive Officer of Endeavor Global, USA, co-chaired the World Economic Forum on the Middle East 2007; and YGL Malvinder M. Singh, Chief Executive Officer and Managing Director of Ranbaxy Laboratories, India, co-chaired the Forum’s Africa meeting in Cape Town in June 2007.

The Schwab Foundation for Social Entrepreneurship The Forum works closely with the Schwab Foundation for Social Entrepreneurship to showcase successful social innovators who have combined business principles with a public purpose. Together we have created a unique platform upon which these visionary pragmatists can come together with business, public, media and cultural leaders. The aim is to establish concrete initiatives that transform social and environmental challenges and create sustainable livelihoods for the poor and excluded.

Moreover, at the meeting in Santiago de Chile, YGLs worked side by side with beneficiaries and other volunteers to construct two homes in one of Santiago’s poorest areas. And at the World Economic Forum on the Middle East in Jordan, YGLs accompanied HM Queen Rania of Jordan on a ‘Dignity Day’ visit to Al-Jubaiha Secondary School for Girls in Amman.

Both social entrepreneurs and Forum members have seen significant benefits from this close working relationship. Entrepreneurs have been able to mobilize millions of dollars of investment for their operations, and companies have gained market intelligence, enhanced their brand value and increased their ability to attract and retain talent.

The World Economic Forum has the ability to convene the very best leaders and share the best ideas to overcome the hurdles that currently restrict the impact that entrepreneurs have on their communities. Linda Rottenberg Co-Founder and CEO, Endeavor Global, USA

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World Economic Forum Annual Report 2006/2007

Engaging our communities and constituencies continued

The Foundation searches and selects members of its community in collaboration with media and business partners all over the world. As well as identifying candidates at a global level, the Foundation runs 30 national competitions for the ‘Social Entrepreneur of the Year’ award. In 2006 the Foundation screened 2,500 candidates and conducted in-depth due diligence site visits on approximately 150 individuals. The winners were selected by national juries drawn from the country’s business and thought leaders and went on to join the growing community of Schwab Foundation social entrepreneurs. Women Leaders Programme Our Women Leaders Programme (WLP) is committed to promoting women’s leadership and the issues affecting their lives globally. This was demonstrated during the year by, for example, specific WLP activities at our regional meetings in Turkey, the Middle East and Latin America. More generally, female leaders actively participated in all our regional meetings, while the ratio of women at our Annual Meeting in Davos increased to 17%. In 2006, the WLP also launched its second Global Gender Gap Report, a benchmarking tool which ranks 115 countries according to the size of the gap between the sexes. This covered critical areas such as political empowerment, health, education and economic participation. Utilizing the full potential of women in society is vital in enhancing a country’s human resources pool and boosting competitiveness. To this end, the report functions as a tool for identifying existing strengths and weaknesses of countries. It also acts as a catalyst for creating opportunities to learn from countries which have been successful in promoting the role of women. Additionally, the Women Leaders Programme continues to reach out to the appropriate policymakers to ensure effective dissemination of, and action around, the information revealed by the study. International Media Council (IMC) With the objective to offer an informal, neutral

platform for peer exchanges among the opinion shapers in media, the World Economic Forum created the International Media Council. This newly created community met for its inaugural gathering on the occasion of the Annual Meeting 2007 in Davos; prominent digital media shapers from all over the world led an interactive debate with their peers from traditional media on the challenges and opportunities posed by the new wave of citizen journalism (participatory media). Stakeholders and NGOs Civil society organizations continue to occupy a central position within the Forum’s multistakeholder platform. The unique expertise and far-reaching influence of these groups, which include NGOs, labour unions, religious communities and philanthropic foundations, make them valuable collaborators in many of our initiatives and programmes. At both the Annual Meeting and our regional meetings, leaders of major civil society organizations played significant roles in helping to define the global and regional agendas. NGOs remain particularly active in Forum work-streams and multistakeholder partnership projects. They bring their specialist knowledge and experience to bear on a number of key topics, including education, the environment and humanitarian relief. Forum faculties The Faculty is one of our richest sources of intellectual capital. Its members include many of the world’s most distinguished thinkers, experts, scientists, commentators and cultural leaders. Faculty members contribute to the identification of issues and development of content for regional events and the Annual Meeting; participate in discussions at our events; and assist in workshops, Governors Meetings and Industry Partners activities. The activities of the Global Competitiveness Network, the Global Risk Network and Business Insight/Strategic Planning also benefit greatly from the support of the Forum Faculty.

2,000

families in India and Pakistan were able to move from makeshift tents and crowded camps to specially designed transitional shelters provided by the World Economic Forum’s Disaster Resource Network and its partners.

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World Economic Forum Annual Report 2006/2007

Working with our members and partners

The Forum recognizes that working with our members and partners is essential to helping us find truly sustainable solutions to improve the state of the world. They also provide an endless source of hope and positive energy which helps to keep our vision alive.

Members Our 1,000 member companies are at the heart of all our activities and provide invaluable support to our mission. Achieving balance in membership from all major industries and regions is crucial to our continuing success. In 2006/2007, we increased the number of our major multinational members by more than 15%. Conversely, one-third of our members continue to come from emerging economies, which provides the Forum with a truly global business perspective and allows business leaders from these economies to participate in the international business arena. We experienced record participation by members in all Forum activities, including the Annual Meeting. Overall, more than 60% of member companies engaged in an event or initiative led by the World Economic Forum other than the Davos Annual Meeting, reinforcing our commitment of being a member-driven organization.

Business leaders trying to construct a company model, at a WorkSpace session of the Annual Meeting 2007 in Davos

36

World Economic Forum Annual Report 2006/2007

Working with our members and partners continued

Beyond meeting the smartest and most influential people in business and society, as Strategic Partners, WPP develops important insights into the latest global trends and issues affecting our clients’ businesses and our own. We then provide feedback to our companies and their people so all benefit. Our partnership with the Forum has grown from attending the Annual Meeting to becoming a Strategic Partner in 2005. We are now actively involved in steering the debates and support the Forum where we can add the most value – especially where there are programmes that can make a difference in today’s and tomorrow’s world. Sir Martin Sorrell Group Chief Executive, WPP, United Kingdom

Over the past year, we selected the following new members to join the Forum community: 3i Group, Actis Capital, Adani Group, Adobe Systems, Adolf Würth, Aflac Japan, Africa Israel Investments, Alibaba.com, All Nippon Airways (ANA), Alpha Technologies, Amdocs, Amec, Arup Group, Ashok Leyland, Aviva, Best Buy Co., Braskem, China Construction Bank, Chinese Petroleum Corporation, Chunghwa Telecom (CHT), Cleveland Clinic, CNP Assurances, Confederation of British Industry (CBI), Daiwa Securities Group, Dimensional Fund Advisors, EGL (Elektrizitäts-Gesellschaft Laufenburg), Elcoteq, Etihad Etisalat, Eurocash, Federation of German Industries (BDI), FIBA (International Basketball Federation), Fiba Holding, Franz Haniel & Cie, Government Savings Bank, Grupo Nueva, HCL Technologies, Index Ventures, Industrial Union of Donbass (IUD), International Road Transport Union (IRU), Japan Post Corporation, Johnson & Johnson, Kaiser Permanente, Kleiner, Perkins, Caufield & Byers (KPCB), Kohlberg Kravis Roberts, MBK Partners, Medtronic, Mitsubishi Chemical Corporation, Mitsui & Co.,

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World Economic Forum Annual Report 2006/2007

NBC Universal, News Corporation, Norske Skogindustrier, Novo Nordisk, Novatek, OC Oerlikon Management, Odebrecht, Paltel Group, Perella Weinberg Partners, Permira Advisers, Providence Equity Partners, Sabanci Holding, Sanyo Electric Co., Saudi Oger, Silversea Cruises Group, Sojitz Corporation, SONATEL (Société Nationale des Télécommunications du Sénégal), SPARX Group, Suzlon Energy, System Capital Management, Takeda Pharmaceutical Company, Teck Cominco, TiVo, Tokyo Electric Power Company (TEPCO), Tokyo Electron, Travelport, Tullett Prebon, Türk Telekom, Uralkali, UTStarcom, VinaCapital Group, Ziff Brothers Investment. Strategic Partners Our Strategic Partners comprise some of the world’s leading corporate citizens and provide essential leadership in support of the Forum’s mission. In 2006/2007, the number of Strategic Partners increased to 71, as further member companies signalled their commitment to the Forum by joining the programme. This year saw particularly significant involvement from emerging markets, such as Russia (VimpelCom), Malaysia (Petronas) and South Korea (SK Group). The Strategic Partners are a key force in our activities and communities, at global, regional and industry levels. They help shape our initiatives, projects and task forces and give intellectual guidance through the participation of their most senior executives on steering boards and advisory groups. Their considerable financial support and in-kind services – including the provision of dedicated staff to assist with our operations – allows the Forum to deliver its programmes and advance worldwide economic and social progress. As part of their role, the Strategic Partners provide significant insights to the Annual Meeting in Davos. They are also active participants at our regional meetings and are closely involved in governing the communities and corporate global citizenship initiatives of the Forum.

Credit Suisse, Deloitte, Deutsche Bank, Deutsche Post World Net, Dubai Holding, DuPont, E*TRADE, Ernst & Young, Fluor Corporation, Goldman Sachs, Google, HP, Infosys Technologies, Intel Corporation, JPMorgan Chase, KPMG, Kudelski Group, Lehman Brothers, Manpower, Marsh & McLennan Companies (MMC), McKinsey & Company, Merck & Co., Merrill Lynch, METRO Group, Microsoft Corporation, Morgan Stanley, NASDAQ, Nestlé, Nike, NYSE Group, PepsiCo, Petronas, Pfizer, PricewaterhouseCoopers, Reliance Industries, Reuters, Roland Berger Strategy Consultants, Saudi Basic Industries Corporation (SABIC), Siemens, SK Group, Swiss Re, UBS, Unilever, VimpelCom, Volkswagen, WPP, Xenel Group, Zurich Financial Services. Industry partners Now in its second successful year, our Industry Partners programme continues to gather momentum and new members. There are now 197 partnerships, representing 184 companies, some of whom have joined multiple industry programmes. These Industry Partners have joined the programme from a broad range of business sectors including construction, aviation, technology, tourism, food and beverage, engineering and financial services. Industry Partners play an active role in a number of our projects, meeting and engaging with key decision-makers on the most pressing global issues. They have also commissioned us to produce insights and reports across a range of key industries including travel and tourism, financial services, information technologies, telecommunications and energy. Global Growth Companies The Forum’s Community of Global Growth Companies are drawn from those with the potential to become leaders in the global economy within the next five years. These ‘New Champions’ have the aspiration and ability to become true global champions and are experiencing growth rates exceeding 15% year-on-year with revenues of between US$ 100 million and US$ 5 billion.

On 30 June 2007 our Strategic Partners included: ABB, ABN AMRO Bank, Accel Partners, Accenture, Alcan, Alcoa, AMD, American International Group Inc. (AIG), Apax Partners, Audi, Avaya, Bahrain Economic Development Board, Bain & Company, Barclays, Bombardier, Booz Allen Hamilton, The Boston Consulting Group, BP, BT, CA, Cisco, Citigroup, The Coca-Cola Company,

The Inaugural Annual Meeting of the New Champions in Dalian, China, is the Community’s flagship event, bringing together growing global names such as Chinese IT firm, Neusoft Group; life sciences specialist, Qiagen of Germany; US biopharmaceutical firm, Cephelon; green fuels company, Praj Industries; YES Bank, from India; and Lebanese technology firm, MDS Holdings.

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World Economic Forum Annual Report 2006/2007

Our organization

The Managing Board The Managing Board acts as the executive body of the Foundation. It ensures that activities fulfil the mission of the World Economic Forum and acts as its representative to outside parties. In 2006/2007, the Managing Board consisted of: Klaus Schwab, Executive Chairman (1) Jean-Pierre Rosso, Chairman, World Economic Forum USA (2) André Schneider (3) Richard Samans (4) Peter Torreele (5) Michael Obermayer (until 10 February 2007) For more information about the Managing Board, visit www.weforum.org/leadershipteam The Foundation Board The Foundation Board is responsible for maintaining business and public confidence by ensuring an exemplary standard of governance throughout the Forum. It acts as the Board of Trustees and guardian of the Forum’s mission, values and brand. Board members are individuals with unique leadership experience from business, politics, academia and civil society. They do not represent any personal or professional interests, but solely

1

5

3

2

4

39

World Economic Forum Annual Report 2006/2007

those of the Foundation. Membership criteria include integrity, global vision, leadership experience and engagement in world affairs. The Board’s role encompasses supervising the activities of the Foundation and its bodies; managing the statutory dispositions of the Forum; appointing new members; approving the strategic direction of the Forum; defining the roles of the Managing Board and committees; and approving the annual report, the annual accounts and the Foundation’s budget. The committees of the Foundation Board At its January meeting, the Foundation Board revised its statutes and restructured its committees: The Audit Committee ensures compliance with all financial, accounting and control processes in accordance with global best practice and the principles of good corporate governance The Strategy Committee acts as a sounding board to the Managing Board in elaborating the Forum’s plans. In particular it reviews the strategies related to partnerships and memberships of the Forum The Programme Committee monitors the mission orientation of all the Forum’s activities. The chairmen of each of the above committees (together with the executive chairman and the secretary of the Foundation Board) make up the Executive Committee of the Foundation Board. Their task is to prepare and execute the decisions of the Foundation Board and oversee the activities of the Foundation and its bodies. To engage Foundation Board members even more into the governance process, the rule was introduced that each member of the Board has to serve on at least one committee. In its January 2007 meeting, Ivan Pictet, Managing Partner of Pictet & Cie Private Bankers, and Heizo Takenaka, Director, Global Security Research Institute, Keio University, and a former member of the Japanese Government, were unanimously elected new members of the Board. During the same Board meeting, Heinrich von Pierer and Nobuyuki Idei, whose three terms of three years each had come to an end, did not seek re-election. The Board expressed its great appreciation for their engagement and friendship. On 28 June 2007, the World Economic Forum announced that former UK Prime Minister Tony Blair has joined the Foundation Board. On 1 July 2007, the Foundation Board consisted of the following members: Klaus Schwab, Executive Chairman Josef Ackermann, Vice-Chairman Kurt Alig, Secretary Tony Blair Peter Brabeck-Letmathe Lord Carey of Clifton Victor L.L. Chu Flavio Cotti Michael S. Dell Niall FitzGerald Orit Gadiesh Carlos Ghosn Rajat Gupta

Maurice Lévy Nandan Nilekani Ivan Pictet HM Queen Rania of the Hashemite Kingdom of Jordan Peter Sutherland Heizo Takenaka Ernesto Zedillo For more information about the Foundation Board, visit www.weforum.org/foundationboard Structure The Forum’s structure consists of six core departments: the Centre for Global Industries, Regional Agenda Teams, the Centre for Public–Private Partnerships, Strategic Insight Teams, Communications, and Events and Resources Management. Centre for Global Industries Our Centre for Global Industries is based in New York and is responsible for managing relations with the global communities of business leaders drawn from around 15 industry sectors. It is committed to fostering engagement between Forum members through the Industry Partnerships programme. Regional Agenda Teams The Regional Agenda teams deliver value to members and potential members via a series of regional and national meetings. The department has six teams who focus on key regional and global trends to develop an understanding of how they affect an increasingly interconnected world. Centre for Public–Private Partnerships The Centre for Public–Private Partnerships was created by the World Economic Forum to broaden the application of public–private partnerships to some of the world’s most pressing problems. The Centre consolidates all of our task forces and initiatives and is a comprehensive resource for companies seeking to engage with the public sector to tackle global issues. Strategic Insight Teams The Strategic Insight teams work with the Forum’s network of communities, such as business leaders, NGOs and policy-makers to create relevant strategic insight. The department has four core teams, focusing on the global agenda, scenarios, economics and competitiveness, and global challenges. Communications The Communications department consists of three teams, focusing on the World Economic Forum’s website, publications and media relations. The three teams work together to publicize the Forum’s work and to explain to both members and non-members how it delivers on its mission. Events and Resources Management Each year we bring together thousands of decisionmakers at World Economic Forum meetings and regional meetings to address the most crucial issues facing mankind. To maintain quality and effectiveness, we have a team with unique knowledge and experience in developing such high-calibre events.

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World Economic Forum Annual Report 2006/2007

The Forum community

Our people The skills, knowledge and dedication of our people are essential to the success of the Forum. In 2006/2007, to meet the growing needs of our mission and strategy, we recruited a number of new employees. Our headcount today stands at 277, compared with 229 for the previous year. Our Global Leadership Fellows programme continued to develop. We saw the first group of 47 Fellows successfully enter their second-year programme, while a second group, composed of 32 people, joined us in autumn 2006 to start their first year. We also continued to attract extremely skilled, motivated and internationally trained people to the Forum and its activities, thus reflecting our diverse, multistakeholder focus. Currently, our staff represents 51 nationalities, of whom 57% are women and 82% are graduates, with 7% holding a PhD. The average age of our team is now 36. Global Leadership Fellows Now in its third year, our Master’s Programme in Global Leadership continues to draw highly skilled young professionals. To date, we have

41

World Economic Forum Annual Report 2006/2007

almost 90 Fellows working throughout the various Forum departments. They are utilizing their skills and experience to engage with leaders to shape the global agenda. Under the guidance of a new dean, Professor Gilbert Probst, the programme structure now consists of two years of academic courses with a third year dedicated to project work, leadership workshops, coaching and mentorship. Over the past year, Fellows have attended courses in a broad range of subjects, including decision-making, strategy, philosophy, international relations, coaching and executive communication. These classes were taught by leading lecturers and tutors drawn from our Academic Partners, which are INSEAD, Columbia University and London Business School. We are confident that the experience these Fellows have gained from the Forum’s programme will position them to become successful and responsible global leaders in the future. World Economic Forum, China China’s emerging global leadership and influence are becoming increasingly important to the business world, not least to Forum members and partners. In return, in 2006/2007, the Chinese Government showed its recognition of the importance of the World Economic Forum to global and national affairs by making it the first-ever international foundation to be legally recognized and registered in China. Through our Beijing Representative Office, we are developing and deepening our relationships with the National Development and Reform Commission, the Ministry of Foreign Affairs, the Ministry of Commerce, State Council Information Office and other key Chinese Government ministries. In addition to the national government, the Forum has established or strengthened relationships with other key bodies including key provincial and municipal governments, the China Council for Promotion of International Trade and national academic and media organizations. With a full-time staff of five, our Beijing office has seamlessly integrated with the Forum’s operations in Geneva and New York. The Beijing team supports outreach to Chinese Forum members, potential members and Global Growth Companies. This has resulted in an additional 10 companies (including Global Growth Companies) joining the World Economic Forum’s communities and activities since September 2006. The China-based team has created a solid foundation for the Inaugural Annual Meeting of the New Champions, the first of which is held in Dalian, China. We will continue to expand our activities in China with the development of the Centre for Global Growth Companies and the increased engagement of Global Growth Companies on a global basis.

Nationality American Argentinian Australian Belgian Brazilian British Canadian Chinese Croatian Danish Dutch Egyptian Ethiopian Finnish French German Greek Guatemalan Hungarian Indian Irish Italian Japanese Kenyan Latvian Lebanese Malagasy Malaysian Mexican Moroccan Nepalese New Zealander Nigerian Norwegian Pakistani Polish Portuguese Romanian Russian Singaporean Slovak South African South Korean Spanish Sri Lankan Swedish Swiss Thai Tunisian Ukrainian Venezuelan

28 2 4 3 1 24 7 5 1 2 10 1 2 1 20 22 1 1 2 6 4 11 4 2 1 2 1 1 3 3 1 1 1 1 2 3 1 3 2 2 1 4 1 10 1 7 52 1 2 1 1

Average age

36

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World Economic Forum Annual Report 2006/2007

World Economic Forum USA

The World Economic Forum USA has seen a period of exceptional growth since starting operations in 2006. Over this fiscal year, it has moved into its own fully operational offices in mid-Manhattan, has seen the number of employees grow from four to over 25 and has almost doubled the number of industry partnerships across the Centre for Global Industries to 197.

The World Economic Forum USA (‘Forum USA’) is the North American affiliate of the World Economic Forum, which was founded in December 2005 and serves as the global headquarters for the Centre for Global Industries. The initial drive to establish a presence in North America stemmed from the desire to better serve our key members and partners, coupled with the objective of better integrating industry and other expertise into our growing organization. On both of these fronts, our ambitious expectations have been surpassed. At the beginning of this fiscal year in July 2006, Forum USA was still in its infancy, with four employees using borrowed office space from Partner companies. Just one year later, we are proud to relay that we are occupying our new office space in mid-town Manhattan with 25 full-time staff. As expected, the expanding team in New York includes new full-time colleagues with considerable industry experience as well as temporary employees from Partner companies on secondment. These new team members are complemented by several experienced World Economic Forum employees who have crossed the Atlantic to help establish operations in the USA.

Klaus Schwab, staff and friends of the World Economic Forum USA ring the New York Stock Exchange Closing Bell

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World Economic Forum Annual Report 2006/2007

Our team today truly mirrors the involvement of the corporate world into our activities. Our flagship Industry Partnership programme, under which we serve companies from both our New York and Geneva offices, boasts 197 partnerships as of July 2007 – an increase of over 80% from the previous year. These partners span 17 industries, including five industry groups which were based out of North America during 2006–07: Banking & Capital Markets; Healthcare; Insurance & Asset Management; Investors; and Media & Entertainment. As of July, global responsibility for an additional five industries has been transitioned to NY as well: Automotive; Aviation, Travel & Tourism; Transportation Services; Food and Beverage; and Retail & Consumer Goods. Over the past year, the Centre for Global Industries has convened dozens of sessions in New York and globally, ranging from structured meetings of multiple stakeholders to smaller, informal CEO dinners. Working groups on subjects varying from Partnering Against Corruption to addressing the ramifications of the Globalization of Alternative Investments have led to publications, public commitments from participating companies, and practical solutions to pressing societal imperatives such as our Working Towards Wellness effort.

Jean-Pierre Rosso Chairman, Centre for Global Industries The World Economic Forum USA is an independent non-profit organization committed to improving the state of the world by engaging industry leaders in partnerships to shape global, regional and industry agendas. Incorporated in December 2005 as a non-profit business league based in New York, the World Economic Forum USA is impartial and not-forprofit; it is tied to no political, partisan or national interests. The Forum USA is an affiliate of the World Economic Forum, and its relationship is governed by an affiliation agreement, which is a contractual agreement under which the Forum USA coordinates with the World Economic Forum when conducting its activities. The Forum USA’s application for recognition of exemption from income taxes under §501(c)6 of the US Internal Revenue Service code is currently pending approval. The World Economic Forum USA’s New York offices serve as the global headquarters for the Centre for Global Industries. The Centre for Global Industries’ primary focus is the Industry Partnership programme, which is aimed at engaging global companies in the Forum’s activities at the industry level. This programme enables participating corporations to contribute to an evolving portfolio of task forces and engage in specific meetings for designated senior executives. To date, 197 industry partnerships have been signed representing 184 companies which have formally joined the

programme, including some which have subscribed to multiple partnerships. For more information, please refer to: www.weforum.org/forumusa The Board of Directors of the World Economic Forum USA oversees the overall business and affairs of the organization. It currently comprises: Jean-Pierre Rosso (Chairman) Alfred Berkeley William George Rajat Gupta Joe Schoendorf Kevin Steinberg (Corporate Secretary). Day-to-day operations for the Forum USA are led by a Management Committee comprised of its officers, which serves as its executive body. These officers are: John Moavenzadeh Sarita Nayyar Jean-Pierre Rosso Kevin Steinberg. In addition to the above officers, as of 1 July the World Economic Forum USA employed 25 full-time staff. For more information about the Board, officers or staff, please go to www.weforum.org/usa/ leadershipteam Financial results The Forum USA’s financial results for the 2006– 2007 year have been consistent with its budget, resulting in a net loss of US$ 776,043 off from US$ 7,253,854 in revenues, despite significant startup expenses and investments. All Forum USA financials are reported in US dollars, consistent with US GAAP. The Forum USA’s primary source of financial support is membership/partnership dues paid by the Forum’s Industry Partners and Industry Associates. In addition, the Forum USA received an initial loan of working capital from the World Economic Forum, which it expects to repay in June 2008. The Forum USA’s financial results are audited by PricewaterhouseCoopers who examine both the balance sheet and accounts. The 2006–2007 figures follow: Year Total income* out of which members’ fees participation fees

2006/2007 7,253,854 0 0

partnership other income

6,109,192 1,144,662

Total expenditure

8,029,897

out of which personnel costs office costs activity related costs Surplus *all key figures in US$

3,229,731 500,504 4,299,662 (776,043)

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World Economic Forum Annual Report 2006/2007

Our financial results

Our financial results In 2006/2007, we achieved strong financial results as income from all our initiatives and activities continued to grow. We did not touch our reserve funds during the year, despite investing a significant sum in the launch of our Global Growth Companies. The most notable revenue drivers continued to be the growing number of Forum members choosing to become partners and participating in our activities. In total, this trend added Sfr. 2,769,846 to our reserves. This figure was also due to important cost reductions and efficiencies we achieved during the year. In finance, as throughout our organization, we aim for excellence and most efficient use of the funds received. Financial policy The World Economic Forum’s financial policy states that membership fees in principle should cover operational costs, that events are funded

through cost contributions and that projects are supported by income from partnership contracts. The Forum may accept grants, donations, legacies and other contributions or subsidies that are consistent with its purpose of ‘integrating leaders from business, politics and society at large into a community for global action committed to improving the state of the world and the well-being and prosperity of human society’. The World Economic Forum makes no payments to political personalities, parties or other organizations and avoids involvement in national politics. Auditors The World Economic Forum’s financial results are audited by PricewaterhouseCoopers, who examine the balance sheet and accounts. The annual report, as well as all institutional documents, are submitted to the Swiss Federal Government, which in law acts as the supervisory body for the Foundation.

Year

2002/2003

2003/2004

2004/2005

2005/2006

2006/2007

Total income*

66,454,727

74,058,911

83,336,839

104,766,543

114,574,874

out of which members’ fees

25,530,325

25,137,257

26,546,382

26,410,294

27,763,874

participation fees

21,465,398

20,543,108

20,824,213

27,063,138

30,160,303

partnership

17,390,452

24,552,385

31,035,927

44,668,943

50,881,934

Total expenditure

66,454,522

72,307,790

82,083,503

102,735,578

111,805,027

26,584,768

29,620,236

35,723,308

40,035,452

47,887,856

8,360,352

9,044,738

9,253,213

12,537,175

11,884,632

31,509,401

33,642,815

37,106,982

42,732,347

52,032,539

205

1,751,121

1,253,336

2,030,965

2,769,846

12,114,958

13,866,079

15,119,415

17,150,380

19,920,227

130

134

162

204

247

out of which personnel costs office costs activity-related costs Surplus to be added to the Foundation capital Foundation capital Total staff full time out of which seconded by Forum members part time *all key figures in Swiss francs

4

5

5

7

8

28

28

31

25

30

45

World Economic Forum Annual Report 2006/2007

Our mission and values

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.

Incorporated by Professor Klaus Schwab as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. Our culture combines the best elements of entrepreneurship with those of public service. Thus, our motto is ‘entrepreneurship in the global public interest’. We cultivate public trust by never compromising our institutional integrity. We constantly strive to win the respect of our members and constituents by ensuring everything we undertake is ‘first in class’. We can serve our communities best by making ourselves a role model for a highly interactive, open and fast learning community. Our mission is best realized through activities which promote economic and social development. We believe that economic progress without social development is not sustainable, while social development without economic progress is not feasible. In addition to convening world leaders, the Forum aims to involve them in living communities of common interest and purpose. The Forum

ensures substance in the form of strategic insights and, where relevant, platforms for joint action. To carry out its mission, the World Economic Forum has developed an integrated value chain by involving world leaders in communities, inspiring them with strategic insights and enabling them through initiatives. Our vision for the World Economic Forum is threefold. To be: The foremost organization which builds and energizes leading global communities The creative force shaping global, regional and industry strategies for its communities The catalyst of choice for its communities when undertaking global initiatives to improve the state of the world. The World Economic Forum enjoys unique global positioning by recognizing and responding to two developments: The world’s key challenges cannot be met by governments, business or civil society alone In a world characterized by complexity, fragility and ever-greater synchronicity, strategic insights cannot be passively acquired. They are best developed through continuous interaction with peers and with the most knowledgeable people in the field (learning communities). For more information see www. weforum.org

Schwab Social Entrepreneur Bunker Roy, Founder and Director of the Barefoot College, builds the capacity and confidence of illiterate and semi-literate unemployed rural youth to be “barefoot” professionals. Reaching over 500,000 poor rural families, Barefoot College solar engineers have installed solar photovoltaic home lighting systems and fabricated solar lanterns across 10 Indian states.

The annual report is available electronically at www.weforum.org/annualreport – also in Arabic, Chinese, French, German, Japanese and Spanish versions.

Designed and edited by Wardour Publishing & Design Photos by R. Kalvar (Magnum); Swiss Image

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