The Big Power Shift

The official theme for last year's World Economic Forum in Davos was "The Creative Imperative." But chitchat in the hallways and hotel suites of the glittery Swiss resort centered on the rise of China and India as the century's new superpowers. As the world's top bankers, CEOs, think tankers and statesmen gather once again for Davos 2007, it raises the question: what will the assembled movers and shakers actually be talking about?

Don't anticipate a rehashing of the already tired idea that power is geographically shifting from West to East. (If it is.) Instead, expect talk to focus on the way power is slipping its traditional institutional bonds--from the domain of nation-states and megacorporations, say--and into the hands of the masses. From the few to the many, in other words, thanks to the accelerating digital revolution. "When we say 'the shifting power equation'," says Jonathan Schmidt, director of the World Economic Forum, "what we mean is that power has dispersed." Think YouTube on steroids.

Like always, not much skiing will get done. Running from before breakfast until after midnight, Davosians are called upon to think about everything from the growing power of Russia and Vietnam to the implications of accelerating climate change and the widening threat of terrorism. Lighter subjects include "Sensuality and Self-Esteem" and "Why Do Brains Sleep?" (Something that will no doubt be on the minds of many jet-lagged execs.) The voices will be as varied as the messages. In a nod to Germany's taking the helm of both the G8 and the European Union this year, Chancellor Angela Merkel will grace the opening plenary, while Caterina Fake, founder of the popular online photography bank Flickr, will conduct a tour of virtual communities. (Don't forget to pack your avatar!)

Some of the most serious--and interesting--fare will investigate how small or niche economies are emerging to play with the big boys on the global stage. "Emerging economies--whose growth will again outpace developed markets by better than three to one this year--are flexing their muscles," says Neville Isdell, CEO of Coca-Cola and a co-chair of this year's meeting. If last year was all about China and India, this year promises to be more about Russia and Vietnam.

Russia, with its oil and gas supplies, epitomizes the emerging geopolitical prowess that energy-rich countries now wield. Last week's controversy over Russia's decision to block oil exports through Belarus will serve as a backdrop to a broader Davos debate over Russia--how best to do business there, the perils of investing, new opportunities in fast-growing sectors of the Russian economy. Says Ruben Vardanian, CEO of Russia's largest private investment company, Troika Dialog: "Five years ago, a one-year investment seemed like a long investment; we need to get to the point where 15 years is a long investment."

Vietnam will exemplify the up-and-coming power of small countries banking on the competitive edge they've gained from having a cheap, skilled work force powering their export-driven economies. Though Vietnam's story is not as familiar as that of its larger neighbors, its economy has grown nearly as fast as China's over the past decade. Last year, it raked in about $7 billion in foreign direct investment, roughly the same amount as India. And in November, Vietnam joined the World Trade Organization--a huge capitalist leap forward.

For Vietnam, the question at Davos will be, now what? Hellmut Schütte, insead's Singapore-based expert on Southeast Asia, will chair a panel exploring what he sees as Vietnam's chief challenge: to continue to work at aligning itself with other ASEAN member states, such as Malaysia and Thailand, in forging a feasible common market. That's the only way smaller Asian economies can avoid being swallowed in the "big sucking noise" that is China and India, he says.

In the spirit of "shifting power," this year's discussions will be open to the broader public via blogs and vodcasts (video podcasts) and the online virtual world of Second Life, where global Internet users will be invited to ask questions and contribute ideas. "The world's new leaders need to have the ability to build constituent groups outside their networks," says the WEF's Schmidt. Davos is clearly aiming to position itself as a platform from which the world's diverse power brokers can do just that.