Annual Report 2004/2005

Shaping the global, regional and industry agendas

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.
Contents

The World Economic Forum Disaster Resource Network (DRN) worked tirelessly to coordinate aid following the December 2004 South East Asia tsunami.

The Executive Chairman’s Statement Annual Meeting 2005 The regional agenda Industry Partnerships Strategic Insight Partnership and Governance Our members and partners Our communities and constituencies Our organization The Forum community Sharing knowledge Our financial results Our mission and values

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The Executive Chairman’s Statement
Our summits have always sought to anticipate the needs of member organizations and to reflect key issues and, in doing so, to drive the global agenda. In 2004/2005, we took this commitment even further. In a new move, the agendas of the Annual Meeting and the Africa Economic Summit were structured to give targeted support to the UK as it chaired the G-8 group of industrialized nations and took over the presidency of the EU in the second half of 2005. The programme outline was drawn up in close collaboration with senior UK ministers, with Prime Minister Tony Blair and Chancellor Gordon Brown participating in the Annual Meeting. A ‘town hall’ at the Annual Meeting also demonstrated our receptiveness to members’ needs, by involving them in prioritizing the six core challenges which they wished to focus on and develop action agendas around, both while they were in Davos and beyond. The participants opted for fighting poverty and addressing equitable globalization, climate change, education, the Middle East initiatives and global governance. Fresh thinking comes most easily to younger people, who are less trammelled by convention. In 2004/2005, I created the Forum of Young Global Leaders, a sister foundation to the World Economic Forum. It will provide a framework for the actions and interactions of 1,111 emerging leaders aged between 25 and 40. Building on our previous Global Leaders for Tomorrow Initiative, but incorporating a broader selection procedure, greater critical mass, a wider selection background, and clearer responsibilities, this programme will engage a fresh generation of outstanding young people in improving the state of the world and will enable us to learn from today’s talent and build bonds with tomorrow’s world leaders. We also launched an ambitious development initiative for young professionals joining the Forum. The new three-year Global Leadership Programme attracted 1,700 largely outstanding applications for 30 places. Targeted at the very best, it offers

Exercise selfresponsibility, global responsibility and responsibility to the next generation. Then we will improve the state of the world.
Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum The Executive Chairman with fellow participants at the Asia Roundtable in Singapore. From left: Kim Hyun-Chong, Minister of Trade of the Republic of Korea; Klaus Schwab; Peter Mandelson, EU Trade Commissioner; and Lim Hng-Kiang, Minister for Trade and Industry of Singapore.

The challenges the world faces today are increasingly complex. They cross borders, industry sectors and communities. Traditional solutions, however wellmeaning or well-managed, do not work.
To meet today’s global challenges needs fresh thinking, new approaches and novel partnerships. In 2004/2005, such qualities drove all World Economic Forum activity, both externally and inside our organization.

During the year, we focused in particular on: • Continued moves to build strong partnerships • Increased efforts to help drive the global industry agenda • Greater collaboration with members in planning and executing summit activity • Renewed focus on young and fresh unconventional thinking • Launch of a Global Leadership initiative, to develop outstanding individuals In 2004/2005, our conviction that multistakeholder partnerships are essential for global prosperity inspired the redrafting of our mission. This linked our avowed commitment to ‘improving the state of the world’ with

the explicit assertion that it would be achieved ‘by engaging leaders in partnerships to shape global, regional and industry agendas’. The launch of our Industry Partnerships Programme showed this collaborative drive in action. It benefits industry by bringing together leading companies in key sectors within a structured framework and providing peer learning and input from the world’s leading experts. Having attracted 51 companies in its first nine months, the Programme’s early success was one of the year’s most outstanding highlights. We are confident it will help establish the Forum as an even more essential and sustained partner to industry.

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The Executive Chairman’s Statement

We will be remembered for three things right now. The Internet, the war against terror, and what we did or didn’t do about this glorious continent of Africa and its travails. I think we can be the generation that ends extreme poverty.
Bono, Musician, DATA (Debt, AIDS and Trade in Africa), UK Shoulder-to-shoulder at the Annual Meeting 2005: former US President Bill Clinton, Microsoft Chairman Bill Gates, South African President Thabo Mbeki, UK Prime Minister Tony Blair, musician Bono and Nigerian President Olusegun Obasanjo.

candidates the opportunity to develop their careers and leadership capability by working within the Forum while also working towards a Master’s in Global Leadership, which has been developed in partnership with some of the world’s finest universities. The organization, and its mission, will gain from the influx of their new ideas, drive and vision. The continuing demand for, and relevance of, the Forum and its mission was reflected in our strong financial performance. We again grew by around 13% as income from our different activities and initiatives remained high. Of particular note was the increasing number of members who indicated their commitment to the Forum by becoming strategic partners. The sum of Sfr.1,253,336 that we were able to add to our reserves was also due to our excellent performance in achieving cost efficiencies. The legal status of the Forum as a foundation under the supervision of the Swiss Federal Government, similar to the International Red Cross, ensures that, in perpetuity, our accumulated reserves are dedicated to pursuing our mission.

There were several Management Board changes during the year. José Maria Figueres, CEO, resigned in October; in April, Michel Ogrizek, MD, Head of Communications, left to become ViceChairman of a leading communications company in New York; and, in June, Frédéric Sicre left to become Executive Director of a well-established Dubai asset management firm. Both Michel and Frédéric remain my special advisers. There were two new additions to the Managing Board: Thomas Glanzmann, Acting Managing Director and Senior Adviser to myself, joined in August 2004; and Peter Torreele, Managing Director, Community Development and Marketing, was appointed to the Managing Board in November. The Foundation is a very complex organization, serving numerous constituents while undertaking many activities. This means that complementary skills and experience at the top are essential. One of my key tasks in the year ahead will be the further development of a highly committed and talented Managing Board.

In 2005/2006 we will reshape the Forum to further meet the needs of members. Particularly significant will be the launch of two international offices, in Beijing and New York. The Beijing office will focus on a new community for the Forum: ‘Global Growth Companies’. These are companies that do not meet the size criteria of our core membership but which are likely to be among the global players of tomorrow; for example, high tech or niche companies, family businesses or emerging multinationals in the new markets. The office in the global corporate hub of New York, meanwhile, will enable us to build stronger relationships with industry and will mean we can offer more local support to the one-third of our members who are from North America. Overall, its was a highly rewarding and exciting year. The richest source of satisfaction was the high degree of engagement of our members and partners, along with the commitment and hard work of all those collaborating on Forum activities. Our people are the Forum’s driving force, and I would like to extend to them my warmest thanks.

With the implementation of major strategic stepping stones in hand, the outlook for 2005/2006 is very promising. Having been a major catalyst for advancing social issues during the last year, our focus over the next year will be more industry-, business- and leadership-related. We will also bear in mind that the general mood so far during 2005/2006 has been optimistic. Inevitably, however, recent events such as the terrorist attacks in London will make for a more challenging international environment over the coming months. This, in turn, will make the Forum’s work even more essential.

Professor Klaus Schwab Founder and Executive Chairman www.weforum.org 5

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Annual Meeting 2005

What did the Annual Meeting 2005 deliver?

At the Annual Meeting 2005, 2,250 leaders from all walks of life, and from many different nations, came together to address the world’s major challenges. They achieved some significant goals.
Participants at work in Davos.

It’s completely The theme against our of this year’s interests in Europe, Annual Meeting and I would say, also is ‘Taking against the American Responsibility for interests and against Tough Choices’ – to the interests of the me that’s all about global community leadership. not to have the European Union and N.R. Narayana Murthy, Chairman of the Board and Chief Mentor of Infosys Technologies, India the United States work together.
José Manuel Barroso, President of the European Commission, Brussels

The single greatest contribution the developed world can make to poverty alleviation is to dissolve or at least begin to break down trade barriers. Trade access is worth far more to underdeveloped countries than development assistance.
John Howard, Prime Minister of Australia

The tsunami relief effort showed that we are all interconnected; we stick together when it counts.
Samuel Schmid, President of the Swiss Confederation and Federal Councillor of Defence

The Annual Meeting 2005 in Davos drew together 2,250 leaders from business, politics, academia, non-governmental organizations, the media, religion and civil society. It incorporated lively workshops, panel discussions and plenary sessions and engaged participants under the theme: ‘Taking Responsibility for Tough Choices’. In line with the Forum’s determination to be a member-driven organization, all the participants kicked off the Annual Meeting by setting the agenda collectively during the first-ever ‘town hall’. From a list of 12 topical issues, they voted to prioritize six: poverty, equitable globalization, climate change, education, the Middle East and global governance. Following the town hall, participants dedicated the rest of the Annual Meeting to creating an action agenda around each priority.

The Annual Meeting involved a wide range of cultural leaders from the arts, including Nobel Prize-winning US academic Elie Wiesel, US musician Lionel Richie, South African author Nadine Gordimer and British

The spirit of generosity and determination that defined the debate on Africa also

There was also a strong move by participants to eradicate corruption and

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The event was a catalyst towards Africa’s subsequent rise to the top of the global agenda. It began with two high-profile sessions that highlighted the state of the continent. Public figures and sociallyengaged celebrities attending these sessions included UK Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brown, who both made pivotal contributions to key discussions on poverty alleviation and climate change. They were joined by rock star Bono, former US President Bill Clinton, Microsoft Chairman Bill Gates, South African President Thabo Mbeki and Tanzanian President Benjamin Mkapa – among others.

musician Peter Gabriel, along with wellknown figures from the world of film, including Angelina Jolie, Richard Gere, Sharon Stone and Carole Bouquet. Their presence – as concerned global citizens rather than celebrities – helped draw the attention of a broader audience to issues such as AIDS, climate change, poverty alleviation and tsunami relief efforts. The energy generated on day one of the Annual Meeting continues to reverberate across Africa and around the world. During the summer – as the Live 8 series of international concerts kept momentum strong – this energy ensured that Africa, debt relief, trade and global poverty held centre stage at the G-8 meeting in Gleneagles and beyond.

expressed itself in the debate over the role of corporations in disaster relief. With news from South East Asia still dominated by the tsunami disaster, participants stressed that private business has a vital role to play in helping stricken communities. Another outcome of the Annual Meeting was a promise from the European Commission (EC) to reduce the number of goals in its Lisbon Strategy. Signed in 2000, the strategy aims to make Europe ‘the most competitive and knowledgedriven economy by 2010’. EC President José Manuel Barroso’s aim was to increase accountability in an effort to focus on priorities and ownership in the search for long-term growth.

bribery. Agreeing to a zero tolerance policy, 62 corporate leaders voiced their support for the Principles of Countering Bribery, published by the Forum’s Partnering Against Corruption Initiative. Davos also helped direct global attention to the poor international response to the UN’s Millennium Declaration. The Forum’s Global Governance Initiative monitors the efforts of governments, the private sector, civil society and international organizations towards achieving the goals of the Declaration. Among other objectives, this document aims to ensure that the spirit of global citizenship – so evident during the tsunami crisis – becomes a fixed feature of world affairs. But the initiative’s second report, launched at the Annual Meeting 2005, made headlines worldwide after judging efforts to date worthy of just three points out of 10.

Annual Meeting 2005

What tough choices do global leaders face?

Annual Meeting 2005. From left: Luiz Inacio Lula da Silva, President of Brazil, and Gordon Brown, UK Chancellor of the Exchequer.

By working together with governments, faithbased and other non-governmental organizations, we can continue to provide patients with more equitable access to a broader range of quality treatment options so we can halt the spread of this pandemic.
US Senator Bill Frist, following WHO/UNAIDS’ Davos announcement of new estimates on anti-retroviral HIV/AIDS treatment

Today, I am proposing that we go ahead by creating, on an experimental basis, a levy to finance the fight against AIDS. Despite the remarkable action of the Global Fund, the WHO, the World Bank and bilateral donors, we are failing in the face of this terrible pandemic.
Jacques Chirac, President of France

I’m firmly convinced that globalization bears greater opportunities for all ... [But] we have to help less-developed nations to a much greater degree than we have so far.
Gerhard Schröder, Federal Chancellor of Germany

We have every confidence in the future of China. China cannot develop in seclusion and the world cannot develop without China’s development. Our set policy is that we will not menace others, even when we are developed.
Huang Ju, Chinese Executive Vice-Premier

A wide cross-section of leading political figures from the US, among them 10 Senators – the highest number ever – attended Davos. They included Senate

Participants also argued for a closer dialogue between Europe and America. They agreed that transatlantic partnership is vital to future world stability and a major factor in eradicating conflict and poverty. At a separate session, politicians from

Throughout the Annual Meeting, participants pulled no punches when reminding world leaders that tough choices must go hand-in-hand with effective solutions. France’s President Jacques Chirac proposed a voluntary tax to fight

Open Forum Davos 2005
The Open Forum Davos, organized in cooperation with Bread for All and the Federation of Swiss Protestant Churches, runs simultaneously with the Annual Meeting. It is a clear demonstration of the

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Once again, the Annual Meeting showed the World Economic Forum at the hub of world events. Emerging from one of the most turbulent periods in Ukraine’s history, the country’s newly elected president, Victor Yushchenko, chose to make his first appearance outside the region in Davos, where he argued for his country’s admission to NATO and the EU. He also appealed for support from the international business community as his government prepared to reform Ukraine’s economy, which he described as a ‘sleeping elephant’. The Forum responded to his appeal, offering to host the Extraordinary Roundtable in Kiev during June.

majority leader Bill Frist (Republican, Tennessee), who spoke in a plenary session on global health, and Senator John McCain (Republican, Arizona), who generated extensive media interest. Once again, the Brazilian government had a strong presence at the Annual Meeting. Accompanied by six of his ministers, President Luiz Inácio Lula da Silva highlighted his country’s economic achievements during a year of exceptional growth. As well as celebrating their people’s successes, political leaders also embraced the Annual Meeting as an opportunity to resolve conflicts and address emotive issues. At a plenary session, leaders from Israel and the Palestinian Authority agreed that there was renewed hope for a resolution to their conflict. The consensus came at a time when the Israelis were

preparing to dismantle settlements for the first time since 1967 and Mahmoud Abbas, newly-elected President of the Palestinian Authority, had agreed to break the ‘vicious cycle of conditionality’. Referring to Davos, Israeli Vice-Prime Minister Shimon Peres commented: “The magic has returned to the mountain.” Republic of Korea Minister of Unification Chung Dong-Young used the platform at Davos to send a clear message to North Korea that it was still possible for the country to re-engage in multilateral discussions on the nuclear issues.

inside and outside the US debated American foreign policy. Against a background of simmering tensions over Iraq, both sides stated that repairing their relationship was essential to world security. Participants ended the Annual Meeting with a pledge to take tough choices against the ignorance, disease and pollution that threaten the world’s stability and survival. With the emphasis firmly on action and results, the meeting called for concrete measures to reduce greenhouse gas emissions, a fund to accelerate financial aid to the poorest countries and the removal of trade barriers.

poverty, warning of unrest if young people in the developing world are deprived of a future. Echoing these sentiments, Egypt’s Prime Minister Ahmed Mahmoud Nazif called for ‘modernization without westernization’, advocating trade and investment with a strong regional focus. Concluding the summit on a similar note, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, called on participants to exercise ‘self-responsibility alongside global responsibility’. The tsunami relief activity, he said, had shown it could be done.

openness of our organization and our willingness to engage in constructive dialogue with the general public. This year’s event attracted over 2,400 people – up 20% on last year. There was also a notable increase in the volume of enquiries in the run-up to the Annual Meeting and a wider range of topics on the agenda. The event drew a wide range of local people from all walks of life, including schoolchildren, teachers and 50 management trainees from engineering services multinational ABB. The overall theme was ‘When is the economy ethical?’. The agenda struck a balance between debates about longstanding concerns and those of a more topical nature, such as the role of the US and post-tsunami aid. In all cases, discussion progressed beyond the actual surface issues to an exploration of underlying causes.

The regional agenda

What did our regional communities achieve?
In 2005, the Forum engaged with leaders of all nationalities in regional events and dialogue, sharing strategic insights and taking practical steps to improve the state of the world.
I do not believe that you can increase shareholder value over time if you are not concerned about all the different stakeholders who may be affected.
Michael Hawker, CEO and Managing Director of Insurance Australia Group, at the Asia Roundtable Bringing leaders – and communities – together: Victor Yushchenko, President of Ukraine (right), and Aleksander Kwasniewski, President of Poland.

Japan’s 21st century vision focuses on proactive reforms instead of reactive reforms.
Heizo Takenaka, Japanese Minister of State for Economic and Fiscal Policy and for Privatization of the Postal Services

Each year, the World Economic Forum brings together key decision-makers in regional activities to address the most crucial issues facing their locality. These events are recognized as the most timeefficient and productive tool for senior executives wishing to gain new insights into the increasingly complex environment in which they operate. Throughout 2004/2005 the Forum focused on the most important regional and global trends to understand how they affect an ever more interconnected world. We succeeded in establishing close working relationships with the governments that hosted each of our summits and roundtables. They included the governments of China, India, Jordan, Qatar, Singapore, South Africa, Switzerland and Ukraine.

My concern is that after 9/11 Islam is being more misunderstood, and I think it behooves us, as leaders in the Islamic world, to really propagate this message that we are a religion of tolerance and peace.
Shaukat Aziz, Prime Minister of Pakistan

The number of organizations participating in our regional activities increased by an average of 30% on the previous year. Together, key players from business, government, academia and civil society engaged in informal and open dialogue to share first-hand information and insights, seek solutions and define appropriate courses of action for the most pressing issues on regional agendas. This year, the programme was particularly successful, with all activities having to close registration early due to over-subscription.

Africa
Our African communities were instrumental in bringing Africa to the forefront of world attention – arguably, one of the year’s most important achievements.

Kamal Kharrazi, Iranian Minister of Foreign Affairs, left, with Mowaffak Al Rubaie, National Security Adviser of Iraq, at the Annual Meeting 2005.

Shimon Peres, Vice-Prime Minister of Israel and Chairman of the Labour Party

Throughout the run-up to the summit, there was a strong spirit of cooperation between all those involved in its preparation and planning. In particular, the Forum’s Africa team worked closely with government representatives from across

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We have to keep up the momentum – politically, security-wise and economically. We have to create an immediate sense that peace is not just a promise, but peace is an immediate change in people’s lives.

Amplified by politicians, business people and socially-engaged celebrities worldwide, the message from our African communities remained consistently positive: Africa is changing and it is open for business. This ‘Year of Africa’ message set the tone for the Africa Economic Summit in Cape Town, where participants engaged in passionate discussions on how businesses can play a decisive role in ‘re-branding’ Africa by balancing the continent’s relentlessly negative image with real cases of achievement and success. The summit agenda deliberately focused on building support for the key recommendations listed in a report published by the Commission for Africa (CfA), published in March 2005. The CfA was launched at the beginning of 2004 by UK Prime Minister Tony Blair. Its 17

Commissioners, most of them African, are active specialists in their particular spheres. They are responsible for leading an examination of the continent’s past and present and how the international community can contribute to its development. More than 400 participants, representing some 250 regional businesses and multinationals, signed their endorsement of the CfA report, calling on the G-8 group of industrialized nations to join together with business to invest in Africa’s future.

The regional agenda

Women are the backbone of Africa and the Millennium Development Goals cannot be reached without addressing their problems and making them part of the solution.
Hilde Johnson, Minister of International Development of Norway

King Abdullah II of Jordan and Laura Bush, First Lady of the US, at the World Economic Forum in Jordan.

the continent and the United Kingdom, chair of the G-8 group, when shaping the agenda. During the year, to celebrate a decade of democracy in South Africa, we published a collection of essays on the country by Forum members. The proceeds of the sell-out book were donated to the Nelson Mandela Children’s Fund, which will use

the money to provide homes and care for orphans affected by AIDS.

Middle East
Creating the conditions for economic stability and growth in the Middle East is vital to the stability of the wider international community. Throughout 2005, Forum initiatives in the region delivered further tangible results.

Among the most significant developments was the success of our Arab Business Council (ABC) in involving the private sector more closely in sharpening the region’s competitive edge and fulfiling its economic potential. The ABC works closely with governments to improve their national competitiveness. It proactively supports the creation of National Competitiveness Councils (NCCs). Egypt now has a highprofile and influential NCC while Bahrain, Kuwait, Jordan, Qatar and Dubai are following suit. In 2004/2005, the Forum’s regional activity continued to demonstrate its position at the heart of global affairs. ‘Seize the Moment’ was, appropriately, the theme of the World Economic Forum in Jordan. Convened at a critical point in the Middle East’s development, the event coincided with a surge of optimism throughout the region as the IsraeliPalestinian peace process restarted and the region’s oil producers enjoyed a period of high liquidity.

Participants at this year’s Jordan summit responded to the upbeat mood, adding their full weight to accelerating regeneration in the region. During the ‘town hall’ at the start of the event, debate focused on the findings of an extensive street survey conducted by the Forum in partnership with Al-Arabiya TV. This surveyed over 3,000 Arab citizens on issues such as people power in the Arab world; the US agenda in the Middle East; the Israeli-Palestinian peace process; the situation in Iraq; and – most importantly – how to reform for a better future. Summit participants stressed the need to ‘seize the moment’ by acting decisively to bridge the gap between the aspirations of ordinary people and those of their leaders. In total, the meeting brought together over 1,200 leaders from more than 56 countries, including those representing the interests of women and young people. The sense of common purpose between the Forum and Jordan continues to

grow. During the year, we took steps to deepen our cooperation with HM King Abdullah’s government through notable initiatives such as Agenda 2010, a framework of reform priorities for the region. This project was completed in time for the Jordan summit. The high-level international support for, and relevance of, the World Economic Forum was also demonstrated at the Arab Competitiveness Roundtable in Qatar. The Doha event was attended by many senior Middle East politicians, among them ministers with economic portfolios from Jordan, Kuwait, Pakistan, Qatar and Syria.

leaders from business, government and civil society to use the roundtable as a platform to share the critical insights necessary to develop the right strategic response to the region’s forecast growth. Under a new arrangement with the Forum, the Singapore Government seconded an expert to our Business Insight team, a move that further reinforced our strong ties with the country. The China Business Summit, ‘China’s Development: Balancing Fast and Smart Growth’, engaged 556 participants. As shortages of energy and natural resources as well as environmental degradation impact China’s effort to maintain an 8-10% annual growth rate, participants focused on the critical issues of how the country could absorb its labour surplus and reduce the income disparity between the coastal areas and the interior. The Forum entered a cooperation

Asia
The Forum held three timely summits that focused on Asia’s growing economic importance. The Asia Roundtable in Singapore was called, fittingly, ‘Tilting the Global Balance: The Strategic Impact of Asia’s Growth’. In opening the event, Singapore’s Prime Minister Lee Hsien-Loong encouraged

Samar M. Dudin, founding manager and theatre director, Takween Theatre and Arts Workshop for Children and Youth, Jordan, engaging with long-time socially-aware actor Richard Gere, USA, at the World Economic Forum in Jordan.

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The regional agenda

We don’t want to ignore ideological differences, but we have to recognize that there are problems in the world that affect all of us. Brazil is doing its share to reclaim that missing link between social fairness and economic development.
Luiz Inácio Lula da Silva, President of Brazil

Fidela E. Ebuk, CEO, Women’s Health and Economic Development Association, Nigeria, in discussion with Darcy Rezac, MD of the Vancouver Board of Trade and international networking expert, Canada, at the Annual Meeting 2005.

agreement with the Beijing authorities through the National Development and Reform Commission of China (NDRC). The purpose of the agreement is to organize a scenario project examining China’s future, an initiative targeted for completion in early 2006. Overall, the Forum’s relationship with the country continues to thrive. Our proposals to open an office in Beijing met with strong support from the Chinese Government. The emergence of India as a global economic power became a compelling story internationally in 2004/2005: the key players gathered at the Forum’s 20th India Economic Summit in December 2004. “For the first time, there is universal acceptance that India now rides a crest of a wave of reforms and growth,” asserted Palaniappan Chidambaram, India’s Finance Minister. The theme ‘India: The New Dynamics’ reflected the emerging opportunities and growth challenges at the core of this assertion. The summit involved 631 leaders from all sectors in the region.

We live in a society where people think they can realize themselves through consumption... We must not turn people only into consumers but rather into empowered citizens.
Heba Ezzat, Lecturer at Cairo University, Egypt

Europe
The World Economic Forum gathered its members and partners in June for the Extraordinary Ukraine Roundtable in Kiev, following the call of President Yushchenko at the Annual Meeting 2005 in Davos to support his government in its first difficult year in power. Over 300 leaders from business, politics, the media, academia and other parts of society followed this call and joined a small, high-level gathering, which was opened in the presence of presidents from six countries. The roundtable was characterized by an extremely strong engagement from the Ukrainian Government, with the president, the prime minister and virtually all key ministers involved throughout the meeting. At the roundtable, participants obtained first-hand insights into current and upcoming market opportunities in Ukraine and worked out a concrete, 10step working plan for the government to continue the momentum of Ukraine’s ‘Orange Revolution’ and to improve

investor confidence. The working plan was presented to President Yushchenko in the closing plenary, causing a huge echo in the local and international press. Russia continues to play a critical role in world affairs. In 2004/2005, we acted decisively to engage policy-makers and business leaders in Russia, as the country prepares to take over presidency of the G-8 in 2006. One initiative included our Russia and the World Scenario Project. With a timescale of 20 years, this ambitious initiative aims to involve the widest possible cross-section of stakeholders in formulating a sustainable development framework for the Russian Federation.

If the US economy slows, we are possibly going to have some risk and credit problems in Asia and I am not sure we are thinking about this.
Koh Boon-Hwee, Chairman of Singapore Airlines

across the region, to discuss relevant learnings from the Forum’s fourth Global Information Technology Report.

North America
Our international communities continued to lead the drive for global corporate citizenship. In the US, participants at the September Industry Meeting in New York City promoted global corporate citizenship by focusing on an agenda that called for greater international collaboration backed by decisive action. Working in industry-specific groups, participants identified the issues they intended to pursue over the coming year. The Forum’s Global Competitiveness Programme entered into an agreement with the US Agency for International Development (USAID). Under the terms of the agreement, the programme will provide a source of information that USAID can use to analyse the quality of governance and economic performance in countries that could potentially receive development assistance.

Africa’s water problems can only be solved in cooperation with business.

Maria Mutagamba, Uganda Minister of State for Water

There is no chance of being able to meet our infrastructure target through public resources alone. Resources will have to come from the private sector, both internal and foreign.
Montek S. Ahluwalia, Deputy Chairman of India’s Planning Commission

Latin America
In Latin America, as business and political leaders continued to acknowledge that IT inadequacies were impairing economic growth, we made a timely contribution. Joining forces with one of our strategic partners, Microsoft, we hosted meetings in five countries

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Industry Partnerships

Strategic Insight

How did we help shape the global business agenda?

In 2004/2005, we took significant steps in developing our partnerships with industry and in identifying the emerging risks and developments that are set to shape the world’s
Singapore is the world’s top economy in exploiting IT, according to the Forum’s Global Information Technology Report.

business and political future.

Industry Partnerships Programme
To further strengthen our bonds with – and value to – members, and to foster closer engagement with industry, we launched our Industry Partnerships Programme in 2004/2005. Our Industry Partners are set to build on the achievements of our Industry Governors, many of whom have already joined the new Programme. Like the Industry Governors who preceded them, our Industry Partners comprise a select community of the world’s foremost industry leaders drawn from a representative cross-section of sectors and regions. Their balanced diversity ensures that they bring a comprehensive,

global and integrated perspective to the Forum’s work. We established the Industry Partnerships Programme in response to three principal drivers: • Although the economy is global, there are – with few exceptions – no global industry associations. The Industry Partnerships Programme provides a dynamic forum to shape global industry agendas. • Timescales are becoming shorter as corporate strategy setting becomes increasingly complex. The Industry Partnerships Programme is designed to enable top corporate decision-

makers to take timely action in the face of constant change. • The dynamics of each sector cannot be addressed in isolation. By bringing all sectors together under a single banner, the Programme will make it possible for organizations to follow joint analysis with collaborative action. Companies are chosen to participate in the Industry Partnerships Programme on the basis of their support for the Forum’s mission. As part of the Programme, CEOs and senior executives from partner companies take part in a structured and strategically focused mix of

activities. These activities bring together industry-specific communities where members can share best practice, carve out new insights and develop proactive solutions to common challenges through a process of debate and knowledge sharing. During 2004/2005, we successfully launched Industry Partnerships in three pilot sectors: IT/telecommunications, energy and financial services. In its first nine months, 51 companies joined the Programme. By 2008, we plan to have created 300 Industry Partnerships across 12 sectors.

and positive contribution to the Forum’s mission during its first full year. Working as a conduit between our networks and communities, the Centre brings increased focus and direction to our activity. It is primarily responsible for aiding members by identifying the emerging risks and developments that will shape future business and political agendas around the world. This year, the Centre played a pivotal role in designing the programme for the Annual Meeting, with its emphasis on the tough decisions faced by global leaders.

Centre for Strategic Insight
Launched in 2004, the Centre for Strategic Insight made an immediate

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Strategic Insight
The Forum’s Global Competitiveness Programme provides the most comprehensive and authoritative assessment of national economies’ ability to compete, so helping global business and political leaders improve their performance.
The Forum’s Global Competitiveness Programme is a core part of the Centre’s work. It provides the most comprehensive and authoritative assessment of national economies’ ability to compete, so helping global business and political leaders improve their performance. The reports it publishes have won international respect as unique benchmarking tools. Among other audiences, they support governments seeking to foster economic growth; businesses developing strategies; academics analysing national economies; and civil society organizations learning more about their countries’ competitive strengths. In October, the programme unveiled its flagship publication, The Global Competitiveness Report, at a press conference in New York. Covering a record 104 countries, the report attracted unprecedented levels of media coverage, making headlines in over 100 major publications worldwide. Its launch drew a record number of hits on the Forum’s website. It was also the subject of a March competitiveness seminar in Moscow. The Centre plans to increase the effectiveness of the report by including an additional 15 economies in the next publication, with an emphasis on including developing countries. This will take the total number of economies covered to 119. In May, the Global Competitiveness Programme launched its milestone study, Woman’s Empowerment: Measuring the Global Gender Gap. The study quantifies the gap between men and women in five critical areas: economic participation, economic opportunity, political empowerment, educational attainment, health and wellbeing. It is designed to help countries identify their strengths and weaknesses in advancing women’s interests – an area of critical importance to national economic development. Two other reports published by the Centre – The Global Information Technology Report 2004-2005 and The Arab World Competitiveness Report 2005 – also gained a great deal of awareness through wide, positive coverage. Meanwhile, the Centre’s Global Risks Programme continued to lead analysis of the biggest challenges facing business today. Through collaboration with the Forum’s networks and communities, this assesses the potential fall-out from three converging forces: technology-driven globalization, the information overload and the constancy of change. Launched in 2004, it has now published its first guide to the major risks confronting the global economy.

Partnership and Governance

How did we further global corporate citizenship?
The Jordan Education Initiative has helped thousands of young people improve their IT skills. Here, Queen Rania of Jordan, World Economic Forum Foundation Board member and head of the nomination committee for the Forum’s Young Global Leaders group, meets schoolgirls in Amman.

The world’s major challenges cannot be met alone. In 2004/2005, our Global Institute for Partnership and Governance engaged different organizations and individuals, from all sectors, in addressing crucial international issues.
Our Global Institute for Partnership and Governance was founded in 2003/2004. It provides a platform for multistakeholder partnerships, striving to tackle global challenges by galvanizing action, improving governance and bridging the gap between divergent perspectives. During its first full year, the Institute made sound progress in a wide range of areas. The Roundtable comprises 24 companies representing a broad cross-section of industry sectors: energy, transport, metals and mining, financial services, electricity, construction and engineering, high tech, and communications. They are based in 11 different nations, including Russia, Canada, Brazil, the US, South Africa, Japan and several countries from the EU. Following an initial CEO meeting with Prime Minister Blair at Davos, climate change experts from each of the companies met three times in London at workshops co-hosted by the Forum and the UK Foreign and Commonwealth Office. These experts developed core recommendations in a statement presented at a second meeting with the prime minister in London on 9 June.

The statement, signed by each of the participating chief executives, emphasizes the need to act on climate change and stresses the importance of market-based solutions. It called on governments to establish ‘clear, transparent and consistent price signals’ through creation of a longterm policy framework that includes all major emitters of greenhouse gases. The statement also highlights the need for technology incentive programmes that use performance-based standards to accelerate commercialization of low carbon technologies, and calls for a ‘new partnership’ between the G-8 countries and China, India, Brazil, South Africa and Mexico to facilitate private investment in low carbon infrastructure. Many of the points raised were reflected in the final Climate Change Communiqué and Plan of Action that emerged from the Gleneagles’ Summit, especially the emphasis on market-based solutions.

G-8 Climate Change Roundtable
The G-8 Climate Change Roundtable was launched at the Annual Meeting 2005 in Davos in response to a request from UK Prime Minister Tony Blair for business’s perspectives on climate change in the runup to July’s G-8 Summit in Gleneagles, Scotland. Mr Blair chaired the summit in his role as President of the G-8 for 2005.

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Partnership and Governance
The contribution Forum members make to global citizenship was clearly evident following the tsunami that struck South East Asia in December 2004.

Our members and partners

alliance of business partners to coordinate humanitarian relief efforts on four continents. Its post-tsunami relief and recovery activity proved an inspiring example of the public-private collaborative model in action. Based at Sri Lanka’s Bandaranaike International Airport, the DRN’s Airport Emergency Team handled over 7,400 tons of relief supplies in 24 days. In total, it contributed an estimated US$ 1.7 million in volunteer labour and services to emergency relief efforts in the afflicted region.

concrete projects as well as a working group that is identifying gaps in how people from Western and Muslim countries are educated about each other.

Jordan Education Initiative
Private-public partnerships are core to Global Institute activity. During the year, two important partnerships made particularly encouraging progress. The Jordan Education Initiative is designed to transform education through technology. It has now evolved into a true partnership involving around 35 organizations supporting over 10,000 students in more than 50 schools. Having attracted substantial funding, the partners plan to replicate the Jordanian model in the Palestinian Authority, Egypt, India and beyond.

Global Health Initiative
The Global Health Initiative (GHI) continues its work to increase the breadth and depth of private sector engagement in the fight against HIV/AIDS, tuberculosis and malaria in Asia and Africa through public-private partnership. To date, the GHI has advised over 200 companies on prevention and treatment programmes in the workplace and community. Key successes this year include the second anniversary of the India Alliance to Stop TB, a sustainable partnership with seven of India’s top ten companies, the country’s Ministry of Health, the World Health Organization and Confederation of Indian Industry. In 2005, the GHI also began expanding its geographic focus to include China, where an alliance influencing a large network of migrant workers is now in its formative stages. To foster public and private sector collaboration at senior level, the GHI strengthened private sector representation on the boards of Roll Back Malaria and Stop TB, In addition, it continues to serve in the private sector delegation of the Global Fund to fight HIV/AIDS, TB and Malaria. The GHI lobbied to keep these three diseases as emergency issues on the global agenda in 2005.

Global Corporate Citizenship Initiative
Meanwhile, the Forum’s Global Corporate Citizenship Initiative – established to improve corporate social responsibility engagement worldwide – published two milestone reports during 2004/2005. The first, Partnering for Success, written in collaboration with the International Business Leaders Forum, examined lessons learned by companies from their private-public partnerships. The second report, Mainstreaming Responsible Investment, in collaboration with AccountAbility, proposed a detailed reform agenda for improving the way the investment community integrates nonfinancial aspects of corporate performance into its investment decisions.

Our members and partners
Co-chairs of the Annual Meeting 2005, from top left: N.R. Narayana Murthy, Chairman of the Board and Chief Mentor, Infosys Technologies, India; Lubna S. Olayan, Chief Executive Officer, Olayan Financing Company, Saudi Arabia; Charles Prince, Chief Executive Officer, Citigroup, USA. From bottom left: Bill Gates, Co-Founder, Bill and Melinda Gates Foundation, and Chairman and Chief Software Architect, Microsoft Corporation, USA; Daniel Vasella, Chairman and Chief Executive Officer, Novartis, Switzerland; John A. Thain, Chief Executive Officer, New York Stock Exchange, USA.

Water Initiative
Sustainable supplies of good water are fundamental to achieving the Forum’s mission. Our Water Initiative – which draws strongly on input from the private sector – supports multistakeholder cooperation in the management of water and watersheds worldwide. During 2004/2005, the initiative focused on advancing specific water partnerships in Africa while laying foundations for similar projects in Asia. For more information about the Global Institute for Partnership and Governance, see www.weforum.org/GIPG

Partnership is central to improving the state of the world. We work with influential businesses drawn from all industry sectors and geographical regions. Together, we seek to tackle the most complex and challenging issues facing mankind.

membership and are selected on the strength of their talent for innovation Organizations applying to become Forum members undergo a rigorous selection process based on strict rules. On average, our membership committee accepts just one out of every three applications. The last two years have seen a continuing escalation in the quality and quantity of our members. During 2004/2005, the number of new members doubled to 154, while the number of organizations leaving the Forum has virtually halved. At the same time, several members demonstrated their commitment to the Forum, and its mission, by becoming partners. During 2004/2005, the World Economic Forum accepted the following new members: Abram Capital, Abu Dhabi Water & Electricity Authority (ADWEA), Advent International Corporation, Aladdin Group, Alfa Laval Corporate AB, American International Group (AIG) Inc., Amerindian Investment Advisors Inc., Arab Bank Plc, Archstone-Smith Trust, Asian Paints (India) Limited, Asia Resource Corporation Pte Ltd, Attijariwafa Bank, Bain Capital, Banco

Council of 100 Leaders
One of the main ways in which the Forum aims to further global citizenship is through bringing people of different origins together. A key example of this is its Council of 100 Leaders. This global community comprises senior leaders dedicated to promoting greater cooperation and understanding between Western and Muslim societies. Launched at the Annual Meeting 2004, the Council is the driving force behind the Forum’s West-Islamic World Dialogue Initiative. During the year, the Council’s meetings at Davos and Jordan were instrumental in bonding its members into a cohesive and powerful force for positive change. Together, they have crystallized a vision in which Western and Muslim societies discuss their differences openly while advancing their common interests with an overriding respect for the dignity and humanity of their cultures. In 2004/2005, the Council launched several

Members
Our members are more than just powerful and influential. They include innovative and inspiring organizations, with the expertise and passion to challenge conventional thinking in pursuit of solutions that deliver results and improve our world. We refer to our members as ‘Globals’, ‘Regionals’ or ‘Shapers’. • ‘Global’ members represent the world’s top 1,000 companies and have an annual turnover of more than US$ 4 billion each. They make up 60% of our membership. Overall, there was a 5% increase in members from the Business Week/Forbes list of the world’s 1,000 largest companies • ‘Regional’ members are drawn from the leading companies in their particular region and represent 30% of Forum membership • ‘Shapers’ constitute 10% of our

Disaster Resource Network
The contribution Forum members make to global citizenship was clearly evident following the tsunami that struck South East Asia in December 2004. The Forum’s Disaster Resource Network (DRN) played an important role in the international relief effort. Launched four years ago, the DRN draws together an

Hipotecario SA, BankMuscat (SAOG), Bank of Ireland Group, Bank of Tokyo-Mitsubishi Ltd, Banque Cantonale Vaudoise, BASF AG, Bayerische Hypo- und Vereinsbank AG (HVB), BBC World, Belron International BV, Brevan Howard Asset Management LLP, Cadence Design Systems Inc., Capitalia SpA, Caterpillar Inc., Centrica Plc, CEZ AS (Czech Power Company), China Development Bank, China Minmetals Corporation, Citadel Investment Group LLC, Convergys Corporation, Corel Corporation, Crescendo Ventures, Dubai Holding, Eagle River Investments, EFG – Hermes Holding, Enany Group of Companies, Enel SpA, Eni SpA, Eurohypo AG, EZZ Industries, Federation of Syrian Chambers of Commerce, Fiat SpA, Fisher Scientific International Inc., Freeport McMoRan Copper and Gold Inc., Freescale Semiconductor, Gap Inc., GeoPost International Management & Development Holding GmbH, Gerdau SA, Grupo Industrial Lala, Gulf Air Company, Habib Bank Limited, Heinrich Deichmann Schuhe GmbH & Co., Henry Schein Inc., H&Q Asia Pacific, Hummer Winblad Venture Partners, Huntsman Corporation, India Brand Equity Foundation, Industrial Development and Renovation Organization of Iran (IDRO),

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Our members and partners

Our communities and constituencies

We are constantly…asking our teams and our co-workers and our board: how can we be more effective, how can we be better leaders?…In an industry where the variables are changing so quickly if you’re not changing at or faster than the rate of those changes, you’re going to fall off very quickly.
Michael S. Dell, Chairman of the Board, Dell, USA, and member of the Foundation Board of the World Economic Forum

In addition to the strategic partners, the Forum has 15 companies that partner us on industry programmes, another 26 businesses that partner us on regional events, and many more that support our private–public initiatives. Last year, our partners held two notable meetings. The first was their traditional brainstorming session at the Annual Meeting, where partners contributed to the agenda. The second – the Industry Agenda meeting – took place in New York and focused on identifying key themes for the Industry Governors meeting. By the end of the year, we had 49 strategic partners. This number decreased by only three during 2004/2005, even though we introduced a price increase of 25% across most of our strategic partner contracts. As of 30 June, our strategic partners were: ABB, Accel Partners, Accenture, Apax Partners, Audi, Bain & Company, Barclays Capital, Barco, The Boeing Company, Booz Allen Hamilton, BT, Cisco Systems, The Coca-Cola Company, Computer Associates International, Deloitte, Deutsche Bank, DHL, Dubai Holding, Economic Development Board of Bahrain, Ernst & Young, Fluor Corporation, HP, IBM Corporation, Infosys Technologies, Investcorp, KPMG, Kudelski Group, Manpower, Marsh & McLennan Companies, McKinsey & Company, Merck & Co., Merrill Lynch, Microsoft Corporation, Nakheel, Nestlé, New York Stock Exchange, Nike, PepsiCo, Pfizer, PricewaterhouseCoopers, Qatar Airways, Reliance Industries, Saudi Basic Industries Corporation (SABIC), Siemens, Swiss Re, Time Warner, UBS, Volkswagen and Zurich Financial Services.

Our communities and constituencies
Communities
To increase the breadth and depth of specialist expertise at our disposal, the Forum has created communities of member and partner companies, and encourages them to interact whenever relevant and productive. Economic Forum activities. During this year’s Annual Meeting, we inaugurated two regional Advisory Groups – one in India, the other in China – to support our development strategy in Asia.

Technology Pioneers
Technology Pioneers – chief executives from the world’s most innovative companies – remain integral to the Forum’s efforts to create a better world. The external advisory board that selects the Forum’s Technology Pioneers comprises technology experts from various fields. Its strength is one of the principal factors underpinning the programme’s success. In 2004/2005, the calibre of the new Technology Pioneers was again exemplary. From 107 candidates, the board selected 29 companies. They were chosen on the strength of their response to four emerging trends: demographic shifts driven by low birth rates and rising life expectancy; the impeding ‘energy crunch’ and the need to find alternative fossil fuel sources; the switch from fixed to mobile IT devices; and heightened security concerns. Once again, the Technology Pioneers made an invaluable contribution to Forum initiatives, task forces and events, notably the Annual Meeting. Future challenges include maintaining the high standard of members, while ensuring they are drawn from a representative regional base. In order to sustain the contribution of Technology Pioneers all year round, they will increasingly be invited to regional summits.

Insurance Australia Group Ltd (IAG), Interbank, International Development Law Organization (IDLO), International Organization for Standardization (ISO), Europe, Interpipe Group, Invitrogen Corporation, ITI Group, JSC Russian Railways (RZD), KB Home, KfW Bankengruppe, Korea First Bank, Lippo Group, LSI Logic Corporation, Mahindra & Mahindra Ltd, Marriott Lodging International, Mashreqbank PSC, MediaNews Group, Mitsui Sumitomo Insurance Co. Ltd, Nahas Enterprises Group, National Health Service (NHS), Network Appliance Inc., Nishat Group of Companies, Norsk Hydro Asa, Olympus Capital Holdings Asia, Orascom Telecom Holding SAE, Oriental Weavers Group, Pacific Investment Management Company (PIMCO), Pakistan International Airlines (PIA), Partners Group, Pitney Bowes Inc., Pon Holdings BV, Powszechny Zaklad Ubezpieczen SA, Prospect Venture Partners, Qatar Airways, Qualcomm Inc., Ranbaxy Laboratories Ltd, Red Hat, Inc., Roll International Corporation, Sal. Oppenheim Jr & Cie KGaA, Sanpaolo IMI Spa, Seagate Technology Inc., Shougang Group, Singapore Airlines Limited (SIA), SOil Corporation, Solectron Corporation, South Africa Foundation, Sucocitrico Cutrale Ltda, Sultan Center for Food Products, Swiss Life Group (Swiss Life Holding), Tata Consultancy Services Ltd, Teijin Ltd, Telefonaktiebolaget LM Ericsson, TeleTech Holdings, Inc., Texas Pacific Group, The British Land Company Plc,

The Dawood Group, The St Paul Travelers Companies, Inc., The Thomson Corporation, The Timken Company, Third Point Management Company LLC, Thomson, Tomkins Plc, TPG Ventures, TXU Corp., Unisys Corporation, United Business Media Plc, Univar Corporation, Univar NV, URS Corporation, Valeo, Verlagsgruppe Georg von Holtzbrinck GmbH & Co. KG, Woodside Petroleum Ltd, Yasar Holding AS, Yuhan-Kimberly Ltd, Zenith Bank Plc, Zinifex Ltd.

Forum Faculty
The Forum 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 development of the Annual Meeting and/or regional events, take part in sessions, and assist in workshops, governor meetings and Industry Partnership activities.

International Business Council
In 2004/2005, the International Business Council (IBC) met twice and continued to address business issues of global importance. Key events included a private meeting with Huang Ju, Executive Vice-Premier of the People’s Republic of China; a joint update on trade from Robert Zoellick, US Deputy Secretary of State, and Pascal Lamy, former EU Trade Commissioner and – from 31 August – Director-General of the World Trade Organization; and an enlightening exchange of views on how to create a great company. In addition, Council members made an active contribution to the Annual Meeting agenda.

Partners
Our strategic partners are select member companies of the World Economic Forum, who strongly support the Forum’s mission. Their executives provide vital leadership to our global, regional and industry programmes, contributing their expertise and resources at the highest level to advance worldwide economic and social progress. Their guidance helps ensure that our initiatives and programmes remain relevant and focused. As well as intellectual guidance, strategic partners also contribute essential financial and in-kind support to the Forum’s operations and activities. In some cases, partners second executives to the Forum. This gives us access to specialist expertise while offering secondees interesting development opportunities.

Women Leaders
Our Women Leaders Programme is dedicated to building a worldwide network of female leaders, creating a mentoring arrangement between upcoming and established women, and ensuring that they interact closely with the Forum of Young Global Leaders. It remains focused on supporting the advancement of women leaders while ensuring that issues affecting women are addressed in the global arena. The proportion of woman participants at the Annual Meeting 2005 reached an all-time high of 15% but we are not satisfied with this ratio and will continue our efforts to increase it.

Constituencies
Advisory Groups
Our Advisory Groups cover a range of interests – from religious bodies and non-governmental organizations to academic institutions and trade unions. Their purpose is to assist other key stakeholders in the global economy to engage in, and help shape, World

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Our communities and constituencies

We’ve seen an incredible variety of Technology Pioneers: from companies with just a few employees to large, million-dollar corporations. Regardless of their size, all focus on making a positive impact on society.
Anne Taylor, Chief Strategy Officer, Deloitte, USA

Here, 200 participants outlined a plan of action to shape their immediate direction. The nomination committee, which is headed by Queen Rania of the Hashemite Kingdom of Jordan, will announce the second group of around 220 young leaders in January 2006. The group will be split equally between the business and non-business sectors. The forum’s launch won extensive international coverage in over 100 of the world’s most authoritative newspapers.

international competition process. The new members come from Brazil, Cambodia, India, Japan, Kenya, Mexico, Nepal, Paraguay, Pakistan, Peru, the UK and the US. To promote awareness of social entrepreneurship, in January 2005 the Schwab Foundation launched an ambitious campaign to identify a ‘Social Entrepreneur of the Year’ in 24 countries. Carefully-chosen media partners in each country will manage the selection process. National committees will comprise business and academic leaders and, wherever possible, will also include Foundation representatives and Forum members. As part of another important initiative, the Foundation established a new partnership with the global law firm Linklaters to review the legal and financial restraints on promoting social entrepreneurship in Brazil, Germany, Poland, the UK and the US. During the year, five Social Entrepreneurs attended a Harvard Executive Course and three received pro-bono consulting work with PricewaterhouseCoopers.

The Schwab Foundation for Social Entrepreneurship
The World Economic Forum works closely with the Schwab Foundation for Social Entrepreneurship, to promote profitable businesses with a public purpose. This reflects the Forum’s belief that global citizenship and sustainable capitalism should never become mutually exclusive. Together, the two organizations showcase businesses that combine financial success with the drive to achieve social and environmental change. The Foundation’s network comprises 84 members, 15 of them selected during 2004/2005 through a rigorous
Towards the summit: Young Global Leaders at their inaugural meeting, entitled ‘The World in 2020’, in Zermatt, Switzerland, June 2005.

Civil society and NGOs
The World Economic Forum has always recognized the importance of engaging civil society, encouraging its representatives to articulate their views at all our events. During 2004/2005, we continued to foster strong relationships with an expanding cross-section of unions and non-governmental organizations (NGOs). These relationships proved invaluable to progressing such programmes as the Global Health Initiative and the Partnership Against Corruption Initiative, the latter benefiting, for example, from the involvement of Transparency International.

Other NGOs that made a significant contribution to the Forum’s work during the year included Amnesty International and the International Alliance of Save the Children, Oxfam and WWF. In total, 55 NGOs attended this year’s Annual Meeting, where organizations from Swiss civil society were instrumental to the success of the Open Forum.

The Forum of Young Global Leaders
The creation of the Forum of Young Global Leaders was announced in January 2004 by Professor Klaus Schwab and was created with funds he received on being awarded the US$ 1m Dan David Prize, for helping to build the Forum into an organization that works for peace and social responsibility. Comprising dynamic and inspiring leaders up to the age of 40, it was established in response to the growing consensus that the interlocking challenges confronting our world – from now, into the future – demand integrated solutions based on a holistic, forward-looking vision.

It aims to define a vision for a better world – and to translate that vision into results by 2020. To this end, members will initially focus on the 2020 Initiative, which addresses fundamental issues such as development, poverty, health, security, environmental matters and global governance. Selected from over 8,000 candidates, the forum’s first 238 members represent 69 countries. Drawn from all sectors, more than 30% of them are women. They were chosen by a nomination committee comprising some of the world’s most eminent media leaders. Under the theme ‘The World in 2020’, the group held its inaugural summit at Zermatt, Switzerland, in June 2005.

Sister organizations
The Forum of Young Global Leaders and the Schwab Foundation for Social Entrepreneurship both collaborate closely with the Forum as sister organizations. While the former is moving towards full independent status, the latter is already a fully independent foundation.

Social Entrepreneur company Riders for Health enables healthcare workers from several African countries to reliably service remote areas, lowering infant and maternal mortality rates. With each motorcycle it runs, 20,000 receive primary healthcare every year (www.riders.org).

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Our organization

Our organization

The 2004/2005 World Economic Forum Managing Board with the Executive Chairman. Top, from left: Rick Samans, André Schneider, Ged Davis, Klaus Schwab, Thomas Glanzmann, Michel Ogrizek, Frédéric Sicre, Peter Torreele.

What we do

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. For more information about the Managing Board, visit www.weforum.org/managingboard

member. Henry McKinnell was unanimously elected to succeed him. During the year, the Forum welcomed Maurice Lévy, Chairman and CEO of Publicis Group, France, as a member of the Foundation Board. On 30 June 2005, the Foundation Board consisted of: Klaus Schwab, Executive Chairman Josef Ackermann, Vice-Chairman Henry A. McKinnell, Vice-Chairman Kurt Alig, Secretary Peter Brabeck-Letmathe Lord Carey Victor L.L. Chu Flavio Cotti Michael S. Dell Carly Fiorina Niall FitzGerald Orit Gadiesh Rajat Gupta Nobuyuki Idei Caio Koch-Weser Maurice Lévy Heinrich von Pierer HM Queen Rania of the Hashemite Kingdom of Jordan Peter Sutherland William I.M. Turner Ernesto Zedillo

The committees of the Foundation Board
The Foundation Board appoints four committees from among its members: • The Executive Committee prepares the decisions of the Foundation Board and oversees the Managing Board • The Audit Committee ensures compliance with all financial, accounting and control processes • The Evaluation and Remuneration Committee recommends candidates for positions on the Managing Board and monitors their performance • The Mission Compliance Committee reviews Forum policies, strategies and activities in light of its mission For more information about the Foundation Board, visit www.weforum.org/foundationboard

Global Competitiveness Programme Global Competitiveness Programme Global Risk Programme

Annual Meeting Global initiatives

The Foundation Board
The Foundation Board is responsible for inspiring business and public confidence by ensuring a flawless standard of governance. Board members are individuals with unique leadership experience from business, politics, academia and civil society. The Board’s role includes: managing the statutes of the World Economic Forum; appointing new members; determining and monitoring execution of Forum strategies, and defining the roles of the Managing Board and committees. Membership criteria includes integrity, global vision, leadership experience and participation in world affairs. In November, William Turner handed over his responsibilities as a Vice-Chairman of the Foundation Board, but remains a

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Regional meetings Regional initiatives Regional scenarios

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Industry Partnerships (Governors meetings) Industry initiatives

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Our organization

The Forum community

Structure
The Forum’s structure consists of six core departments: Community Management, Community Development, the Global Institute for Partnership and Governance, the Centre for Strategic Insight, Communications, and Events and Resources Management.

Global Institute for Partnership and Governance
The Global Institute for Partnership and Governance 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 Institute 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.

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 members and non-members alike how it delivers on its mission.

The Forum community
Our people reflect the diversity of our membership, being drawn from 40 countries. Their skills and experience are central to the fulfilment of our mission. Last year they included: Droz, Margareta Drzeniek, Ilaria Frau, Oliver Haugen, Kerry Jaggi, Stéphanie Janet, Alia Karaouni, Emma Loades, Augusto LopezClaros, Thierry Malleret, Irene Mia, Bud Ris, Justina Roberts, Sarah Saffar, Shubhra Saxena, Jonathan Schmidt, Vidhi Tambiah, Alexander Van de Putte, Saadia Zahidi.

Community Management
Community Management is responsible for managing relations with the 1,000 world-leading companies that make up the Forum’s key constituency. The 30strong team focuses on forging relationships with 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. This year’s priorities include building on the programme’s early success by expanding it to include at least eight of its 15 industry sectors.

Events and Resources Management
Each year the World Economic Forum brings together thousands of decisionmakers in meetings and regional summits 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 highcalibre events.

Chairman’s Office
Klaus Schwab, Executive Chairman Monika Boerlin, Sandra Costa-Marini, Claudia Gonzalez, Stéphanie Nassenstein, Juraj Ondrejkovic, Fiona Paua, Regula Waltenspuel, Maryse Zwick.

Communications
Michel Ogrizek, Managing Director Mark Adams, Marie-Laure Burgener, Laura Deal, Richard Evans, Nina Joyce, Kamal Kimaoui, Matthias Lüfkens, Fon Mathuros, Laurent Sfumat, Fabienne Stassen, Samantha Tonkin, Isabelle Tornare, Nancy Tranchet, Yann Zopf.

Centre for Strategic Insight
The Centre for Strategic Insight works with the Forum’s network of communities, such as business leaders, NGOs and policy-makers to create relevant strategic insight. The Centre has four core teams, focusing on business insight, global insight, economics and competitiveness, and global and regional agendas.

Community Management
Thomas Glanzmann, Managing Director David Aikman, Stefano Ammirati, Mercedes Aubert, Alain Baumann, Mireille Bertolini Cabezas, Giancarlo Bruno, Théa Chiesa, Séverine Currit, Mahasti Dadressan, Magguy Deleaval, Samantha Dimeck, Cristiana Falcone, Réka Fogarasi Musso, Christoph Frei, Nadia Guillot Socquet, Susanne Helmsley, Laura Italici, Anna Janczak, Helena Leurent, Matthew McSorley, Viraj Mehta, Nathan Monash, Tanya Mounier, Simon Mulcahy, Andrew Richards, Samantha Sampietri, Susan Simmons, Elena Smirnova, Martha Stack, Kevin Steinberg, Anand Sunderji, Mady Tissot, Silvia Von Gunten, Alex Wong.

Events and Resources Management
André Schneider, Managing Director and Chief Operating Officer Chantal Adamson, Ntsoa Arintsoa, Helena Baars, Virginie Bays, Grégory Bernarda, Emmanuelle Blaser Morel, Nadine Bonard, Doris Borchardt, Damian Buchs, Denise Burnet, Nancy Chazal, Raymonde Christmann, Steve Crettenand, Irène Croisier-Rapin, Stéphanie Danhier, Laura de Wolf, Jean-Loup Denereaz, Maggie Fliege, Floriane Freymond, Yannick Fuentes, Agnès Gabirout, Malte Godbersen, Karine Guitton, Elly Hammar, Nour-Eddine Iguimdrane, George Jacovides, Julianne Jammers, Carine Kulloian, George Kumpera, Madeleine Manusia, Martine Michaud, Annabell Molnar, Anouk Pache, Annemarie Peter, Manuella Quilez, Petra Ruiz, Mehru Ruiz-Faizi, Wouter Savrij Droste, Pascale Schibli, Angela Scioscia, Christel Sutherland, Ursula Wehrli-Köpper, Sarah-Jane Zeller.

Community Development
The Community Development team delivers value to members and potential members via a series of regional and national meetings. The department has six regional teams who focus on the most important regional and global trends to understand how they affect an increasingly interconnected world.

Community Development
Peter Torreele, Managing Director Haiko Alfeld, Thomas Berglund, Helen Besson, Els Boekhoudt, Fabienne Chanavat, Kavita Choudhry, Daniel Davies, Natalia de la Huerga, Yvonne Diallo, Sherif El Diwany, Meaza Essenberg, Anne Catherine Gay des Combes, Serge Guex, Felix Howald, Lee Howell, Giuseppe Iorio, Julian Jaeger, Jeremy Jurgens, Carmen Keller-Baretto, Béatrice Laenzlinger, Macha Levinson, Colette Mathur, Amal Mbarki, Grant McKibbin, Sylvie Naville, Lucien Rieben, Kifah Salameh, Jessica Saulle, Solène Sfeir, Uschi Trouilhet, Marika Volosin, Christophe Weber, Carolina Windmeijer, Li Zhang, Reza Zia-Ebrahimi.

Global Leaders and Special Groups
Frédéric Sicre, Managing Director Paula Verholen.

Schwab Foundation for Social Entrepreneurship
Pamela Hartigan, Managing Director Solenn de Kersauson, Maria Hermoso, Sandor Nagy, Rodrigo Sanchez Saavedra, Mirjam Schoening.

Global Institute for Partnership and Governance
Rick Samans, Managing Director Pratik Bhatnagar, Francesca Boldrini, Alexandra Dauphin, Elizabeth Dreier, Stefanie Held, Andreï Iatsenia, Emma Jupp, Carina Larsfälten, Jason Liu, Monica Lodygensky, Satya Rajan, Clementina Todor, Valerie Weinzierl.

The Forum of Young Global Leaders
www.weforum.org 29
Nicole Schwab Sanchez, Director Martina Gmür, Rosanna Mastrogiacomo, Magdalena Thurig, Catherine Vindret. These details reflect the situation on 30 June 2005.

Centre for Strategic Insight
Ged Davis, Managing Director Sven Behrendt, Judith Binzegger, Jennifer Blanke, Carla Boeckman, Nathalie Cerutti, Johannah Christensen, Ibrahim Cotran, Simone

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The Forum community

Our people

Some of the World Economic Forum team, reflecting our focus on diversity.

The skills, knowledge and dedication of our people are essential to fulfiling our mission. Last year we recruited a number of new people, expanding and reinforcing our skill-base to better support our members. Our total headcount now stands at 192, compared to 180 the previous year. Reflecting our diverse, multistakeholder focus, our people are drawn from 40 countries, with almost two out of three being women. Forum employees remain the most highly skilled in the sector, with 70% being graduates and 8% holding a PhD. Their learning and experience is complemented by their youth, with their median age being around 35years-old. One of the year’s important human resources developments was the launch of the Forum’s Global Leadership Programme. Set to welcome its first intake of Fellows in September 2005, the programme received over 1,700 applications from 138 countries and 120 of the most promising candidates were interviewed in July.

The programme will prepare exceptionally talented individuals for leadership roles in an increasingly complex and interdependent world. In September 2005, we will adapt the organization to better serve our members and constituents and ensure the continued success of the Industry Partnerships Programme. This will be done by integrating the new Global Leadership Fellows, by constituting a team uniquely serving the Industry Partners, and by merging our regional efforts with our efforts to serve our members.

Nationality
American Argentinian Australian Belgian Bolivian Brazilian British Canadian Chinese Danish Dutch Egyptian Ethiopian Finnish French German Hungarian Indian Iranian Irish Italian Lebanese Malagasy Mexican Moroccan New Zealander Norwegian Pakistani

Numbers*
21 1 3 2 2 2 12 5 1 2 6 1 1 1 26 14 1 6 2 1 14 3 1 1 3 1 1 1

Nationality
Polish Romanian Russian Slovak South African Spanish Sri Lankan Swedish Swiss Thai Ukrainian Total

Numbers*
3 1 1 1 2 4 1 3 39 1 1 192

Age group
20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 62 63 to 65 65 or older Grand total

Numbers*
6 39 52 36 21 13 5 11 3 4 2 192
*As of 30 June 2005.

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Sharing knowledge

Sharing knowledge
Information technology and knowledge management
Harnessing the power of technology in collaboration with our Technology Partners is fundamental to fulfiling the World Economic Forum’s mission. It furthers our aims and objectives by improving our internal business functions; enhancing communications between our communities; fostering links with key constituencies, including the public; and creating world-class meetings. Innovative technology again enhanced the Annual Meeting, as participants were able to ‘test-drive’ a range of new IT services first-hand. Among other innovations, participants benefited from: • Electronic voting during the first global ‘town hall’ • An advanced version of the KnowledgeConcierge service, which is part of our Cyber Network Centre. This updated device delivers a ‘state-of-thedebate’ essay on each session in the Annual Meeting. Via a portable wireless tablet PC, participants were able to access any of these essays, from anywhere in the venue. Via KnowledgeConcierge, we also published each essay on the public section of the Forum’s website, which also carried live webcasts along with video and written summaries of each session. This move was in line with our drive to share information with the widest possible audience • An upgraded Davos Companion, incorporating a wireless, handheld iPAQ designed to deliver information specific to the personal requirements of each individual participant • Smart cards to access the personalized navigation systems on the electronic information kiosks • Quotes from each session broadcast on a network of 15 LCD screens. Most extracts appeared on screen before the session in question had concluded After the Annual Meeting, participants donated 450 Davos Companions to three Social Entrepreneur organizations: India’s Aravind Eye Care System, Afghanistan’s BRAC and the international TechnoServe organization. Another 100 devices were donated to the World Health Organization and UNICEF as part of the Asian tsunami relief appeal. At its headquarters, the Forum took an important step towards web-enabling its customer relationship management (CRM) system. This involved combining it with the Forum’s finance system to streamline business processes, specifically those applying to member management and meeting registration. Another important initiative involved re-engineering the electronic workplace used by employees. They were migrated to a more flexible electronic workplace, incorporating an enhanced operating system and more robust security tools. In the run-up to the Annual Meeting, we launched My Agenda on www.weforum.org. This feature enables participants to make best use of their time at Davos by allowing them to manage logistics online and organize meetings in advance.

Israel's Michel Kichka watches fellow editorial cartoonist Patrick Oliphant, USA, drawing US Secretary of State Condoleezza Rice and other American leaders during the Annual Meeting 2005 workshop ‘Plotting a New Course for the Transatlantic Partnership’.

again made clear by the high number of editors who actively participated in – rather than just covered – our Annual Meeting and regional summits. Overall, media leaders, including a significant number of eminent columnists and television news anchors, made up one-fifth of participants. A special programme for media leaders at the Annual Meeting enabled senior journalists to share experiences and address the issues raised by new technology and the constantly changing ethical landscape in which they work. We further increased awareness of the Forum’s activities by achieving a significant growth in coverage across a broad range of media – most notably television. There was a steep increase in the number of international TV broadcasters who attended the Annual Meeting, reaching a global audience of one billion people. The Forum continued to reinforce its strong relationship with BBC World, as coverage of debates was transmitted to a worldwide audience of over 250 million people. Media participants at the Annual Meeting included 10 of the world’s leading editorial cartoonists from Israel, Japan, Kenya, Singapore, Slovenia, South Africa, Switzerland and the US. Cartoonists also added their wit and insight to meetings in Jordan, Singapore and South Africa.

Looking ahead, we will reinforce efforts to further expand coverage and analysis of the Forum’s meetings. At the same time, we recognize the importance of keeping our initiatives’ profile consistently high between headline events. This inspired a successful campaign to promote a series of important Forum publications, including The Global Competitiveness Report, The Global Information Technology Report and The Gender Gap Report. Our relationship with opinion research company Gallup International remains important to the Forum, playing an instrumental role in shaping the Annual Meeting agenda through the ‘town hall’ programme. Throughout the year, there was a concerted effort to enhance editorial and reporting standards on the Forum’s website, www.weforum.org. The introduction of searchable topic essays, session summaries, webcasts, photo galleries and real-time reporting helped present content more incisively. A strong combination of increasingly sophisticated technology and more engaging content helped attract significantly higher volumes of traffic to the site. Traffic to the members’ portal rose by 15%, while traffic to the public

site increased by 35%. Statistics also show that visitors to the public site are staying longer and reading content in more depth. In April alone, the average time per visit increased by 270% compared with the previous year.

Partnerships
The World Economic Forum seeks to forge partnerships with institutions that share its vision and values. It has NGO consultative status with the Economic and Social Council of the United Nations. It works closely with civil society organizations, think-tanks, governmental institutions, and foundations such as the United Nations, the Prince Of Wales International Business Leaders Forum, the World Business Council for Sustainable Development, AccountAbility, SustainAbility, the UN Foundation, the International Finance Corporation, the Rockefeller Foundation, the Swiss Agency for Development and Cooperation, the Centre for International Governance Innovation, Transparency International and the Bill and Melinda Gates Foundation.

Communications
The communications team works to further our mission by sharing insights and information with all our stakeholders, from Forum members to the general public. The Forum’s commitment to transparency and constructive, informed dialogue was

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Our financial results

Total income 2000-2004
figures in Swiss francs

Our financial results
Our financial results
In 2004/2005, 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 into the launch of our Industry Partnerships Programme. Among the most notable revenue drivers was the growing number of Forum members choosing to become strategic partners. In total, this trend added Sfr.1,253,336 to our reserves. This figure was also due to cost efficiencies we achieved during the year. In finance, as throughout our organization, we aim for excellence. During the year, we took steps to make our approach compliant with US GAAP, pursued best practice across our processes and improved our internal reporting methods. 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.

2000/2001 2001/2002 2002/2003 2003/2004 2004/2005

63,806,052 72,195,453 66,454,727 74,058,911 83,336,839

Key figures
Year Total income* out of which members’ fees participation fees partnership 2000/2001 63,806,052 23,588,125 2001/2002 72,195,453 24,965,367 26,972,981 18,946,940 2002/2003 66,454,727 25,530,325 21,465,398 17,390,452 2003/2004 74,058,911 25,137,257 20,543,108 24,552,385 2004/2005 83,336,839 26,546,382 20,824,213 31,035,927

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.

Total expenditure out of which personnel costs office costs activity-related costs

63,556,294

69,077,008 27,097,659 10,642,445 31,336,904

66,454,522 26,584,768 8,360,352 31,509,401

72,307,790 29,620,236 9,044,738 33,642,815

82,083,503 35,723,308 9,253,213 37,106,982

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
Surplus to be added to the Foundation capital

249,759

3,118,445

205

1,751,121

1,253,336

Foundation capital

8,996,308

12,114,753

12,114,958

13,866,079

15,119,415

* all key figures in Swiss francs

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Total staff Full time out of which seconded by Forum members Part time

125

139 4 28

130 4 28

134 5 28

162 5 30

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Our mission and values

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-forprofit; 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

Saadia Zahidi, Forum economist and co-author of Women’s Empowerment: Measuring the Global Gender Gap, at the report’s London launch, with leading UK barrister Cherie Blair QC.

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Contact details: World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Telephone +41 (0)22 869 1212 Fax +41 (0)22 786 2744 e-mail: contact@weforum.org www.weforum.org

© World Economic Forum 2005

Designed and edited by Wardour Communications

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