Lloyd's - The power of collaborative innovation

Global leaders gathered in Davos last week

World leaders from business and politics, including Lloyd’s Chairman Lord Levene, gathered last week in the Swiss mountain resort of Davos for the annual meeting of the World Economic Forum. The theme for the conference was The Power of Collaborative Innovation, a theme which was welcomed by Co Chair and former UK Prime Minister Tony Blair who said: “The theme of the annual meeting, ‘The Power of Collaborative Innovation’ is the answer to all the big global challenges we are facing.” Major challenges examined included climate change, global peace and financial crisis. Delegates agreed that collaboration is key to mitigating global risks, but is enough being done to meet the many challenges facing the world today and what needs to happen to turn rhetoric into reality?

The insurance industry in the UK is leading by example by working together to drive the climate change agenda through an initiative called Climatewise. The initiative, of which  Lloyd’s is a founding member, is supported by a group of organisations in the insurance industry who are committed to taking action on climate change through research, awareness raising and public policy debate.  James Begley, Director of Strategy at Arthur J. Gallagher International supports the initiative and says it is possible to reduce emissions while promoting economic growth: “Global businesses should pull together to advance sustainable development, investing in new kinds of cleaner technologies such as bio fuels, whilst integrating climate change risks into national policies and practices.” In another good example of private/public sector collaboration, Tony Blair has taken a position with insurers Zurich to advise on climate change policy.

Of course, collaboration is needed beyond climate change, topical though it is; terrorism is another issue where successful collaboration is vital. As Begley points out: “With terrorism risk, businesses and insurers need to work in partnership with government to develop pre-emptive risk management concepts and ensure that appropriate legislation is enacted.” A good example of global alliances to tackle the global terrorist threat is the International Centre for the Study of Terrorism, based at Pennsylvania State University. Aside from its home hub, the centre operates around a core of universities that are members of the Worldwide Universities Network (WUN), using the network to strengthen the alliance between global research groups.

However, different businesses have not traditionally tended to work together well, even on strategic issues of global significance, doubtless impeded by competing interests and the need to satisfy their own shareholders. Yet as the World Economic Forum’s report Global Risks 2008 puts it: “Global risk, government and business all have different incentives, different goals, common opportunities.”

Can this change? Some experts believe that current global threats such as climate change and terrorism are so much bigger than anything previously encountered, that a collaborative approach is no longer just desirable – it has become a necessity. The report Global Risks 2008 states that climate change will increase the number of undernourished globally from 40 million to 170 million by 2100, and the already fragile geopolitical landscape will only worsen as a result. But collaboration is unlikely to be easy: the recent climate conference in Bali provides a prime example of how competing interests can hamper progress even towards a relatively clear and common goal.  

Organisations like the World Economic Forum undoubtedly have a role to play and can provide an important starting point for government and business to work together.  Charles Emmerson, Associate Director at the World Economic Forum and editor of Global Risks 2008 believes the World Economic Forum is in a remarkable position.  “With the Global Risk Network it is able to provide a unique, holistic annual assessment of global risks; by bringing together different stakeholder groups globally and regionally - crucially including business - it can help raise awareness and shape global conversations between decision-makers."

As this year’s conference in Davos drew to a close, many observers felt that it had proved to be one of the most constructive yet in terms of the level of consensus and the value of topics discussed. Yet although events such as this are a crucial way of engaging global decision makers, goodwill and positive dialogue once a year are not enough. The test will be whether the work continues away from the Swiss ski slopes. The conference in Davos underlined the need for a new attitude among the world’s leaders, and it remains to be seen how the lessons will be taken and applied when the delegates return home.

This table shows some of the recent positive developments that have been coordinated through the World Economic Forum and include significant private sector input.