 Welcome everybody to this CNBC debate on the 2012 global outlook. Thank you very much for tuning in and thank you, our audience, for being here. Now, we're not very good with change, are we? We fear it, we resist it, and yet we know that change is a daily part of everybody's life. We say, let's make do and mend. We also say, if it ain't broke, let's not fix it. In some way implying that if we were to start tampering, then maybe we could make things worse. Goodness, we know that there are one or two industries at the moment with very large lobbying budgets whose whole basis on preventing regulation is let's not tamper because you might make things worse at the moment. But in 2012, we also know that just won't do, will it? Being unemployment inequality and social unrest tell us that change is coming. Change is going to be a very big part of this year. So how does business and business leaders get ahead of that change? How do they make sure that we don't see politicians who are seeking votes in 2012 try to impose the wrong kind of change on the business community? How do we make sure that overzealous regulators don't, in a way, take away the golden goose that could potentially lay the golden eggs for our global economy in 2012? Let's introduce you to our panel. Peter Vosa joins us from Royal Dutch Shell. Cheryl Sandberg from Facebook. Alessandro Ramirez from Sinopolis. Paul Polman is here from Unilever. Vikram Pandit has joined us from Citi and Yasochika Hasagawa from Takeda Pharmaceuticals. Vikram, let me start with you perhaps with a question that's very much of the moment but in many ways will shape the year as we know it this year. Change needs good leadership. Are we finally seeing what we need to see when it comes to the eurozone debt crisis? We've got to start by acknowledging some of the actions taken by the ECB in the last few months are quite significant. Mario Draghi has understood very well the need for having a stable banking system and he's made some changes there. The eurozone actually is also moving fast on a fiscal compact which can bind together the countries. A lot of positive action that we've seen, the market sentiment, has gotten a lot better. On the other hand, there's still a lot of uncertainty ahead of us. What the markets want to know is what's going to happen to the one and a half trillion euro of sovereign debt that needs to get refinanced between now and three years from now. And by the way, will there be the availability of funds to make that happen? And so I look at this and I say that we're heading in the right direction. We've got to work just a little bit more to get over the humps. And this is a critical issue. The eurozone crisis is probably most significant overhang on global markets. And I say that because it's costing us about 1% in GDP around the world and you do the math. I mean, you do the math, say how many jobs is that? How many people are not working because of that? What could we do to go after the biggest question we've got for this decade between now and the end of the year, which is jobs? The world needs 400 million new jobs within now and year end, decade end, and not counting the 200 million that you need just to get back to full employment right now. That's 600 million jobs. That should be our number one priority. So I take that as a cautiously optimistic on what we've seen so far. But let me broaden it out among the panel because I know your industry is particularly sensitive to a resolution of this crisis. But let me ask anybody else on the panel who'd like to chip in on this. How would what seems to be stabilization and resolution early into this year mean for changes in any business decision you are likely to take through the course of this year? Peter, you're a European based CEO. Perhaps you could give us some insights. I think two quick points here. The one is purely in the energy industry. We cannot actually just look at the next few quarters because we are a 20, 30 years time horizon business and therefore we need to keep going on our strategy and just invest through the cycle. But there is a bot to that, which is the second point. Economic uncertainty always means the companies will look at their investment risks through a different lens. I think that's where we need the certainty that companies actually can start to invest again. And we know that for example in the energy industry over the next 20 years we need close to 40 trillion dollars of investments and as soon as we slow that down we will have less energy coming into the system over the years to come and demand goes up again and that will mean higher prices, more volatility in the prices which then in turn again is not good for the economy. So therefore strong signs of certainty will lead to investments and that's what we need in 2012. Paul. Yeah, I think the Euro crisis is one thing and Fikron has well explained that and I think we'll work our way through it but actually the underlying reasons need to be addressed which is the uncompetitiveness of the Eurozone. And there is an incredible amount of deleveraging that needs to happen over the next few years which will result in slow growth. Any 1% cut in government spending is a 0.75% reduction in growth. So we will be focused more as a company because we still have about 25% of our business in Europe fortunately over 55% in the emerging markets but we will be focused on getting Europe competitive again and I think that is important. So fix the short term issues but work also with Brussels and others involved in getting the long term competitiveness of Europe again at a level that gives us equitable and sustainable growth also for Europe in the future. It's very important. How does that competitiveness come back? Because we're in the great age of deleveraging obviously here and people's idea at the moment or government's ideas at the moment it seems of competitiveness all revolve around firing people, driving down salary expectations, persuading people that their living standards are going to have to fall as they embrace the new normal as our friend over at PIMCO described it. Yeah, there is definitely a readjustment that needs to happen in Europe because if you want to really simplify it we've lived above our means and we've done that for too long and the moment of truth has arrived which means that we need to redistribute. It will not be very good for Europe in the next 10 years if use and employment will go up. We have in some places in Europe 45% use and employment. The risk of whole generations not entering the workforce would do lasting damage to a continent like Europe. So we need to look at redistribution. We need to create more flexibility in the labour market and as we talk about solving the euro zone crisis and the need for growth we are still able to pass legislation in Brussels at 100 miles an hour that actually reduces our relative competitiveness. So the business leaders need to be heavily involved, need to give our politicians courage and need to be part of that change otherwise this continent will pay a price. As a company itself increasingly our business will be in the emerging markets because let's not forget in about 30 years time 85% of the population will live outside of the US and Europe. But it would be a sad story for all of us Europeans if we don't work on it now and that's really what I'm advocating. You look around the world and it's not just limited to Europe. Quite frankly Japan has this issue, America hasn't even started here. Governments are fat, heavy and slow and they're going to have to go through a process of reducing and slimming down. Companies I have to say by and large when you look around the world large companies and medium-sized companies at least they seem to be quite swollen with cash. Governments are hoping those companies are going to step in and start providing some of the services that governments are going to stop providing and they also hope that those private companies or publicly listed companies are going to start providing jobs. So I think my question and I'll throw it out to anybody who wants to pick it up at this point how do we get you to create demand by creating more jobs? Who wants to start? Cheryl? So we've been looking at this and the Internet sector as a sector has been creating jobs. McKinsey put out a study in May of this year saying that the Internet sector over the last 15 years and 13 countries created 7% of the GDP growth and we did a similar thing looking at what Facebook's done. Deloitte did a study in Europe and said that in 2011 Facebook and the platform companies and the companies that market created added 15.3 billion to the GDP, real value added because that was on 32 billion of revenue and created 230,000 jobs. And so we believe that the other thing the government has to do is make sure we set industry and different sectors up for success. So education is critical. If we want technology to continue to grow we need great scientists and we need them all over the world. Investment in infrastructure is critical and the right regulatory environment as you mentioned in your opening is really critical so that these sectors can thrive. In the old days of course companies used to educate their workers. They take them in as raw talent and then they do a lot of the education themselves. They would also perhaps provide them with housing. They provide healthcare, perhaps low interest rate loans, maybe even tax free savings products. All of those things seem to be gone but governments are saying they're not going to provide them any more. Which one of you is going to be bold enough to step in and start bolstering those parts of your offering? Yeah. Yeah, we are pretty much a regulated industry, a pharmaceutical industry is. But if we take a look at Japan, population is now declining and the market economy is very stagnant. So it is very difficult to create a job even for the pharmaceutical industry no matter how much profit you make. But what we are trying to do is instead if we look around the neighborhood countries including China and the ASEAN countries, they are rapidly growing. So expand our operations to those countries and help them to grow up their economy and also taking the fair share of the growth pie, bring back to Japan and pay the tax to the, we don't say Uncle Sam, but the government. Then government can use that money for elderly care or any other internal domestic demand stimulation. That's the way we are thinking right now. Thank you. You want us to jump in? I think ultimately it is about growth. There's nothing that creates jobs better than growth and the questions to ask ourselves, what can create the conditions for that growth to happen? Well, you heard two things today so far on the panel. One, let's get the immediate uncertainties behind us, the Eurozone crisis. Really important. Second, regulatory uncertainty. Let's try and get those things behind us. But there is something a little bit deeper than that. We've got to recommit to those principles that can drive growth. One, recommit to globalization because it is about trade. It's trade between emerging markets and the developed markets. By the way, that trade is going up exponentially, particularly between emerging markets and emerging markets. When you look at regulations, we talk global, we think national. The second aspect that we must recommit ourselves to is understanding that it's not about the private sector or the public sector. For too long, the two have been at odds with each other, we've got to work together. It's about public-private partnerships and there's no place you can see it better than building out infrastructure. Give us one concrete example of how we can do that. I said exactly the way you should do it is through projects to build out infrastructure. And by the way, when you look around the needs the world has, that is still the number one need. And if you don't have infrastructure, you don't have growth. And I guess the last thing I'll say for my own industry is that we've got to have the right balance between safety and soundness and those conditions to ensure growth. And, you know, I think for all of us as businesses, we acknowledge, particularly in the financial system, that we've got to rebuild trust. Which is a great point because just let me make this point. Of course we want growth, but the problem is at the moment that people around the world feel that that growth is not being shared equitably. They feel that some have it and some don't have it and some are doing better from it than others. And it in part brings us back to the financial system, but only in part. So let me just throw this question out to you. Are we comfortable that we have compensation models in business and in the financial sector that are both transparent and acceptable to everybody? And if we aren't comfortable with that, what do we need to do at this point? And how do we galvanise perhaps compensation committees or shareholders or stakeholders or governments or the general public through social networking perhaps to force that change if there are still, none of you people, let me say, but if there are still some old corporate dinosaurs who feel that they have a right and an obligation to being paid a whole lot more than their workers. Let me throw it out. Well, I think it's a quite thorny issue at the moment. I think there's a lot of reports that have revealed that income inequality is growing in almost every country. And of course there's the backlash that public opinion about corporate compensation. But I think in emerging markets, in Latin America in particular, corporate governance has increased in the past couple of years. And I think we need to have more transparency and we need to in some way reduce the income inequality that we're seeing almost everywhere in the world. And that is creating this backlash of public opinion. Paul? Well, it's no doubt that any growth that is not more equitable than it is today where only a few people benefit and many others don't participate in that process will not be a lasting system. And I see you see some cracks happening right now. I don't think anybody disagrees with that. And it is in our interest across the total world to be sure that many people are lifted out of poverty. It's unacceptable that in today's world a billion people go to bed hungry every day whilst not a billion are obese. And it's unacceptable that 200 million people cannot enter the workforce and get their respect and dignity that we all deserve. So we agree with that. As far as compensation is concerned, it's what Alec Hondero is saying. Transparency is the first thing and there's a lot of legislation in that direction. I would add to that linking it to performance. There needs to be a clear link to performance. And then it gets to my third point. That needs to be long-term performance. If reward is linked to long-term performance and to some extent the market forces will give us differences within a reasonable limit. I would be the one advocating for that as well. I think we'll live in a better system. But more importantly is how do we pull up the people that are excluded from the workforce, the bottom of the pyramid to participate in this enormous wealth creation that globalization has brought. And that we haven't quite figured out yet. Vikram? Well, I think Paul's got exactly the right points. Let me tell you as one company, what are we doing? We're committed to three very important principles. It has to be pay for long-term performance. That's how you structure compensation. Two, it's got to be meritocracy. You have to pay people for how they do. And the third is we have to be cognizant of the fact that we do live in a market economy. And that we've got to deal with it. Those are three important principles. But the most important thing Paul said, which I would say, is you've got to create those conditions to make sure there's growth everywhere else. And for financial industry, that's all about supporting the real economy. Are we lending to individuals? Are you lending to small and middle-sized enterprises? Are you making sure people are in their homes? That's what we can do. So the President in his State of the Union said, we need to start taxing the millionaires in America, and he threw out a few numbers. But let me ask you about the broad point. Is President Obama saying the right thing at the moment? And is this an approach that we can all agree is the right one? So let me start by saying I think one of the most important things in the U.S. is tax reform. You've got to have tax reform. It's got to be comprehensive. And one of the reasons why you need tax reform is that's how you're going to deal with the deficit. We've been talking about Europe. There is the U.S. out there, and we've got to make sure those two come together. In the context of that, I believe everybody should be willing to do their fair share. We've got to take a quick break. We'll be back in just a moment. When we come back, why isn't green technology thriving at $100 a barrel oil? We'll see you after this. Which way? Where do you want me? Okay. How's that? We're talking about the great issues for 2012. And one of the biggest, I guess, is energy and what happens with the energy complex in 2012. Peter, let me start with you. You're the natural person to ask on this. Oil price volatility has been phenomenal over the last 18 months, I guess. And we've had the Arab Spring, and we've had what's going on in Iran, and that has contributed to that. And we've also had a lot of movement in supply and demand flows in developed and developing world economies at this point. So, let me ask you firstly, is that volatility here to stay throughout 2012? And secondly, what does that mean for the way we should all think of investing in the economy today? I think the volatility will stay. It is not just 2012. It will actually stay for the longer term. I think you used the term new normal. I think the new normal has prolonged periods of price volatility and cyclicality. I think this is not going to go away. We will have to get used to it. The second point is energy will be more costly in general. It will actually go up. The third point is we will need investments in all energy forms. So, starting with renewable, starting with fossil, nuclear and any R&D which we are investing to. Because we will have a doubling of the demand of energy over the next 40 years, as world population goes up to 9 billion. We still have 1.5 billion people without access to electricity and energy, and all of them go through the most intensive energy phase in their life at the moment. Therefore, again, I come back to my earlier point, investments need to happen. In renewables, green technology you mentioned, they need to go on. We need to find ways actually to develop all of them. But also, I am a market-driven person. We cannot go on forever subsidizing. We need breakthroughs on innovation. We need breakthroughs on technology. Therefore, R&D spend, investments into education, into scientific education is absolutely key. Let me not ask an oil man this question now, but let's ask someone who is in a different sector of the economy. Cheryl, maybe we could just ask you. How do you justify to your board, or maybe ultimately shareholders at some point when it comes to your business, but how do you justify to those people that you are going to invest in a technology today that is a lot more expensive than perhaps going with carbon, which we know is going to be around for the next 30 years at least, and if you look at the LNG price, wow, that's destroying the economic model. Isn't it for green technology? So the way we think about this is that as Facebook, as social media, we have an obligation to contribute back. And we contribute back in lots of ways and try to do it in every sector. And we've done this in two ways. For us, we run on data centers. They use a lot of energy. And historically in our industry, people have figured out more efficient ways to run data centers and held that knowledge for themselves. And it becomes a competitive advantage. We did the opposite. We worked on a new platform to running a data center more efficiently, and then we open sourced it. So we found a way to run our data centers where 38% more energy efficient than the average. And we open sourced the whole thing and just put it out to the world. It's a project we called Open Compute. To say here, we got 38% more. Can other people contribute? Can we all start working together? Energy efficiency can't be a competitive advantage. Energy efficiency has to be something that we all try to give back. And the second thing we've done is we've partnered with Opower and others to take this to consumers. People are in the process right now of building apps that will measure how much energy an individual is using and importantly, share that with their friends. And the idea behind that is if people start sharing and actually competing, I can cut this much energy. What can you do? And then sharing with their friends how? It's not just the oil sector or the government that has responsibility but companies in other sectors and individuals. Do you think that that model can be applied to older, more traditional industries who see the cost of energy as part of their competitive advantage? You know, I think industry responsibility and individual action in this world can be applied to anything. I think we are seeing what happens when individual citizens and individual people all over the world get voice in a new way. Historically, in order to broadcast, in order to have a big opinion, you know, you had to be an anchor on CNBC or own a newspaper, you had to be one of the historically powerful. And as social media is rolling out, we're shifting and the historically powerless are getting voice. And I think that voice can and will be applied across every sector all over the world. You're going to give me delusions of grandeur if you pursue that line for too long. Let me pass it along here, Paul. It's not only about the price of energy. It's not only about the price of energy. It's about the responsibility we have to be very careful with our scarce resources that is equally important. And there's a pricing mechanism that drives behavior, but there's also a social consciousness, I hope, still in this world that drives behavior. We in our own operations have about 3 million tons of CO2 emission, but that's our factories, our travel. Sure we cut those down, but our total value chain is over 400 million. So why don't we work with the industry together like we did this week at the World Economic Forum to move to natural refrigerants for our ice cream cabinets and our freezers and coolers? That's 4% of the global warming. Why don't we look with the industry to bring energy to a broader path of the population in a responsible way, green energy? And that's what we are talking here in the World Economic Forum. Models like Ben and Jerry's, one of our ice creams, is totally carbon neutral, and that's why consumers buy it and they're willing to pay the price for it because they feel, not only that they get a good ice cream but that they make a contribution to a better world. So I think irrespective of the price of ice cream there are enough arguments to infest, to get us to use less resources that make sense for your shareholders if that's what you're after, but more importantly it makes sense for the consumers who care about this planet. But does the climate change agenda actually work now in an age where we have austerity? You know, we've all been coming to Davos and the World Economic Forum for many years and you sit there and the numbers got more and more exaggerated. Oh, we need a trillion dollars to make climate change happen. Oh, we need ten trillion dollars and if we only got governments to focus on that and business to spend we could have a real climate change agenda. Now we know governments are not going to spend that kind of money and it's going to be tough to ask private companies to do that in this environment. What do you think? Do we now have a climate change agenda that isn't worth the paper it's written on? I think even in a context of austerity there are things that can be done, there are policies that can be applied and interventions that have a net present value, a positive net present value. And I'll give you two examples from my country, from Mexico. About 40% of the households in Mexico had very old appliances, specifically refrigerators. And the government realized that those refrigerators were very energy inefficient and they were consuming much more energy than they needed to. So they had this government program that switched all refrigerators for new ones. So there was an incentive because they were subsidized and with that, you know, Mexico is saving out 5% in electricity. And the same thing was done with light bulbs. You know, all throughout Mexico there was a government program to switch non-efficient light bulbs for energy efficient light bulbs. I think you're saying a very important thing here about changes that are happening all across the global economy as we know it, that the multilateral big picture approach has failed and that you're going to smaller initiatives that are happening because governments and local communities want them to happen. They think it's the right thing to do. And the multilateral large big picture story of COP 15 type agendas seems to be fading into the background here. Peter, I know you want to talk about this. Yeah, maybe four points. If you look at the investments in 2011 on renewables or green energies, it had again a phenomenal growth. So I understand that it has slowed down in some areas but it is actually still growing very fast which is your point as well. The second one is we are at Shell for now more than a decade. We actually assume a CO2 price in any investments which we do. And I think that's something we could all commit and when we look at our investments, then let's assume and we use $40 a ton and you can argue if it is right or not but we use it and then investment needs to actually meet that hurdle as well. We could all commit to that when we look at internal and external projects to actually do that. The third one for me is we need a CO2 price in general because that will actually also drive the right investments. It will drive the right innovation, the right technology. So if you can't land that on a global basis which I understand is quite difficult, you have now a few countries which are driving it and you see actually a different behaviour. So I don't understand why we are not actually can drive that on a global basis in a different way and it will make a big difference. Vikram, I've got one very quick question for you. Gas could raise the possibility that the United States has energy independence and security for the first time in decades but is that a good thing for the rest of the world that's seen the US having to engage internationally because it's needed energy security? So I think your point on natural gas is exactly right. It's not only in the US. There are huge fines in the Mediterranean Sea. There are fines all over the world. It's incredible how much gas, natural gas we've found over the last five years around the world and these will be transformative. Not only in the US, they'll be transformative everywhere else. I'll tell you, the wonderful thing about gas is that it's clean energy. It's clean energy and of course for us as a bank, our job is to finance transformative projects and we're doing that. We're doing that in financing projects in the Mediterranean. We're doing that in the US just as, by the way, this is our 200th year. We finance Panama Canal, transatlantic cable, satellites, Jumbo jet. So it's something we know how to do very well. I do think one of the biggest drivers of cost structures around the world and getting to competitiveness is to get to cheaper sources of energy, cleaner sources of energy and it actually could be a wonderful supply side stimulus to get all this gas monetized into real energy. So that's a no. We shouldn't be fearful of a US that is energy secure. Well, I think having energy security should be an objective for everybody and of the US's energy, sufficient energy secure. That's a good thing. Good. Vikram, thank you very much indeed for that. We're going to wrap up this bit of the conversation about energy. We're going to move on. Is the internet and social networking safe from governments or perhaps it should be our government's safe from the internet and social networking? We'll be back after the break. Yes. Yeah, surely. How's it going? It's all right. Good. Thank you. Are we okay? We look messy. Mm. Okay. Now I just drive. Drive. Yeah, I know about it. Ah. Okay. Yeah. Yeah. Hi, Leonie. Yeah. Yeah. We can have a go. Yeah. Yeah. Yeah. Yeah. Where would you like me? On the step. Okay. We can come back in the same place. Okay. Okay. Are we? Yep. Yep. We're back, everybody. You're watching this special CNBC program on the global outlook for 2012. Let's talk about freedom for the internet and social networking. The question I asked as we were going into the break is is the internet and social networking safe from government interference? Cheryl. So we think, and I think a lot of people think that the internet and mobile technology really represents one of the best opportunities we've ever had to advance the human condition. And there's been a lot of concern that not everyone had access. And historically we talk about the digital divide as a divide between people who are connected and who aren't. And that divide is still very important, but increasingly mobile access growing, fewer and fewer people have no access at all. There's a new digital divide I think that's coming out, which we spoke about, and I think you really thought of it this way, which is the difference between people who have access to a free and open internet and people who have access, but they have access to an internet that's increasingly narrow and closed. And we think, of course, this is hugely important because you can see the impact both on individuals and on governments of real access to information. And I think it's incumbent upon all of us, not just those of us in my sector, but across the world, to really make sure that we are strongly for an internet where people have expression, an internet where people are also safe and secure and their privacy is protected, and an internet where people can communicate and share as they want to. Super important for the world. So everybody in the room is thinking, yeah, you know those Chinese or those Arab countries in the Middle East who are trying to lock down social networking. They don't want a free internet. They don't want their people to be well informed. They don't want them to engage through social media. But let's ask our CEOs. So I know of a number of media companies, and mine is not limited, that issues regulations, rules on how we use Twitter. It tells us which social networking sites we should be able to use in office time, and there's a suggestion that maybe we don't want to use them in our leisure time either, lest what happens in our leisure time come back and affect what happens in our work time. So I'd like to run along each of you and ask you what is your policy on Twittering and on Facebook and on other social networking sites. Peter. We as a company are facing our consumers and our customers and they are using it. And hence I'm, and therefore Shell has a rather open approach to this, and therefore it can be used. And it should be used in the right way for the company but also for our consumers. And by the way, I get now a regular update what's going on in the social networks as a CEO. That's summarized so that I actually feel, where is our brand going, what our customers are thinking, what our suppliers are thinking. So I think I have embraced it in a different way. I've said this is part of our life, of society, and hence we are going to use it in the way that we actually can improve our sustainable performance for the longer term. For us, social media is a very powerful tool to interact with our customers. We have on our Facebook page in Mexico over two million fans. We actually were the first company to start selling tickets for movie theaters through Facebook platform. And for me, Twitter is also a very powerful tool to communicate with customers directly. They know my Twitter account. So it's a direct way to contact the CEO of the company. And I ask all of my senior executives to have a Twitter account and to actually tweet and to respond to customers that contact us through social media. Yeah, well, dealing with millions of consumers a day totally opened in the way of our own Facebook. Obviously working very actively with the new companies in that space. The only thing we don't do is pay for overtime if someone twitters or uses Facebook in the weekends. We apologize for that. But we certainly make the technology available. And I think you have to. Here again, it's a question of new technology, you don't stop. I don't think it would be foolish for governments to stop that. I think I just came back from the Middle East and the use of the social sites is probably one of the highest in the world there. And it really is a positive force for society if you channel it in that direction. And that's what we should focus on. The same in companies. You shouldn't focus on the rules or regulations on how to use it. You should actually strengthen the values that you have as a company. And these values will guide you in proper usage. We obviously have some values that if social media would be used for purposes that would not fit with our values, there are strong consequences. So I think it's far more important to let technology go and to spend a lot of time on who you are as a company and trust your employees to simply do the right thing. So as a regulated company and banks are certainly regulated well around the world, by and large the decision of how we use media is made for us. But that's not the question. I think the question to us has been one about how do we use all the changes in technology to go after the two and a half billion people in the world that are not part of the financial system. So financial inclusion is a big, big goal for us. And what technology does is reduces friction costs dramatically. Social networking is friction costs and ideas. But mobile is about getting to the last mile. So we're just starting something with USAID. And they've been instrumental in driving change and development around the world. And the job is to get vouchers, help vouchers down to the last mile, the last person, transportation vouchers down there, get food coupons down there. When we had the accident in Haiti, the earthquake there, we worked with the local telephone company to make sure there were food vouchers available with people so they could actually walk in and get food because they didn't have any money with them because of what happened. This is a significant opportunity to us. We're working with governments in Africa. We're launching a big network in Latin America. But the goal to us is to use technology to get financial services down to the last mile. It's never been easier. Can I bring you in? Yeah. We are the company just recently started our own internal social network, our primary purpose are two-fold. Number one is improve communications. And number two is whenever we have a corporate wide challenging issue, we just throw in and get people's idea. And if something comes up, we may or may not pick them up. That's our primary purpose. On top of that, because of the nature of the business, medical representative is becoming a lot tougher and tougher to see physicians face to face to mitigate that communication shortage. We are using this kind of... So let me throw out some more difficult questions because you all neatly, I think, said that you think it's a great opportunity for all of your companies and you're all free and open and it's apart from Vikram, I think, who said he's regulated. So there are certain things. You're pretty happy to embrace and engage. Let me ask you some more difficult questions and invite you to step up. Who thinks that we should use the Internet and companies in the Internet space to force open freedoms in the emerging world? We've seen what happened in the Arab Spring. Should we be asking companies like Facebook and Google and Twitter not to give private information to governments but instead to seek access in places where governments don't want it? I think definitely yes. I think we need social networks in emerging markets and especially in countries that still have authoritarian regimes and I think we saw what happened in the Arab Spring. We've seen how social media empowers the common citizen and allows them to connect and to overcome or go around censorship, official government censorship on media. So I think social media is a tremendously powerful tool to liberate populations around the world that are still living under authoritarian regimes. I think one of the interesting things we face now is that when we talk about the difference between a free and open Internet and a more restrained Internet, we naturally do think of countries like this in the Arab Spring. But I think increasingly we're seeing that question arise in places we don't normally think about it. So I get uncomfortable when I hear western country leaders talk about civilizing the Internet. We get uncomfortable when even democracies start making demands that there's content they want taken down. We think about what just happened in the United States which was a raging debate between intellectual property protection which we all believe in but things that would actually shut down access. So increasingly it's not really just a question of the usual suspects who are non-democratic. It's actually the role that democratic governments are playing in how open the Internet will be, how much free expression there will be and how much regulation there will be that potentially and even inadvertently can stop that openness. So let me ask the other people on the panel this because you're all, I think, in businesses where you have your own intellectual property developed in-house. And I think part of that piracy conversation that Wikipedia went dark over was a question about should intellectual property be shared without regard to the profit motive through the Internet. And we've also got, let's not just focus on the United States, we have Vivienne Redding pushing through this data security legislation for Europe which on the face of it appears very benign but there are critics who say it's 10 years out of date and it misunderstands the rapidity of the transfer of data across electrons. So let me ask maybe some other people on the panel about this piracy question and whether we actually do need to limit some aspects of the Internet and that there is a dark side to the Internet. Well, let me start by saying, by the way, the right to privacy is one of the most fundamental human rights. You can go back to the U.S. Constitution. You can go back to the Declaration of Independence in the U.S. and it's been a constant battle and that dialogue is not over yet. As a matter of fact, it's closer to the beginning than it is to the end. We need to have that dialogue. The dialogue on intellectual property, you know, if somebody came and stole that chair you'd have a different conversation. Is intellectual property different than physical property? Well, you can have a dialogue on that but if it is, that's a very different world than the world that spurs innovation. There is a dialogue that needs to be had, a continual dialogue on that, and I suspect we're closer to the beginning rather than end when you'll get to respecting intellectual property and then there is the third question, which you're asking, which is different, one of cybersecurity, okay? If somebody breaks into your house, you know how to think about that. If somebody breaks into your network, how do you want to think about that? These are sort of very significant conceptual questions. I don't think they are hard, but I can tell you there are going to be different points of view on that and that's the dialogue we need to have and I believe we're at early stages of that and we need to get a lot better at it. You want me to come in? No, but here again, there's a dark side to anything you do but again, you need to keep the debate right. The Internet is a tool. It's a new technology that has come along and others will come along in the future. The issues that you raise, for example, on countries, is any country that doesn't respect its own people is bound to fail long-term. The Internet exposes it more but the underlying issue is respect for your people. Any body that is not willing to respect intellectual property rights I think is setting itself up for failure in its underlying economy. The Internet exposes it more. The respect for privacy is something that we all need to have. The Internet exposes it more. So yes, the Internet galvanizes the debate but the debate should be under the underlying values on how we want to run our society which has increasingly become interdependent. Cheryl, can I ask you to respond to what you've heard here? It's just a tool. It's just another tool. Well, it's a tool but it's an important tool so the right to privacy is hugely important and something we all need to respect and take very seriously. People must have the ability to own their own data, to delete their own data and to share their own data when they want to and we need to make sure that regulation allows for all of that. Same thing with security. If you look at law enforcement resources around the world they're overwhelmingly put against in-person crime. We actually feel like we could use more help on cyber crime. If someone breaks into your house, people help on cyber crime in many ways. Industry leads and the government follows and we need more help. I think the thing we have to understand with the relationship with governments and regulation is we need to make sure we're regulating the right goals and not the process because that's where it gets out of date. So for example, there are laws that have been passed where they specify that you must verify something by fax machine. Go find one in the United States these days but the law in the book says you must have a fax machine. Similarly, there are things being considered in different parts of the world which tell companies like mine you must notify users. Notifying users is great. We're here for that and will agree to that. The law should say notify users the most effective way you can because what they're talking about now is writing into the law notify users by email. 11% of teenagers email every day. If you force us to notify by email, I promise it'll be slower than notifying by Facebook and so we need to get to the right legislation which gets to the goals but understands that the methods of achieving those goals shift faster than the legislative or regulatory process. We're going to move on. Thank you very much indeed, our panel for that. We're going to take a swift break. We'll be back in just a moment. We're talking about new models for 2012. So if we are so good at managing resources, why are a billion people still hungry? We'll see you in a moment. Good. So let's... It's coming up. Twenty. Take less than that. Good. Everybody okay? Let's move on. Good. We're back. Let's talk about living. Let's talk about the staples and the things that matter to the way we manage our lifestyles. Food, health, important things like that. Paul, I want to pick up with you. Are higher food prices here to stay and why are they here to stay? Surely we're sophisticated enough now to know how we match supply with demand. No, we sure are. There are two things happening actually in the world right now that cause the food prices to rise, but more importantly than the rise is actually the volatility that we see in food prices. The statistics are very simple. We have 7 billion people. We're going to 9 billion people. That puts a pressure on the demand for food, but more importantly, the people are changing habits. More and more people are entering the middle class, taking dairy products, taking meat, and that's an accelerator effect on the demand of food. Some people have estimated the FAO that between now and the next 50 years we need the same amount of food that we've consumed in the last 10,000 years just to bring that home. 70% increase in the food capacity. That's why we spend so much time this week in the World Economic Forum on bringing food security on the top of the agenda of the upcoming G20 that Mexico will be hosting. It will be a big part of the discussions that we will have in Rio Plus 20. We've launched here two years ago, which is gaining traction, the new fishing for agriculture. And this demand that is there for food is manageable. I'm not a Malthusian disaster thing because that results in the growth of food that we can actually plan for and food prices will go up a little bit, but not dramatically. What makes it more difficult is not the ships that we see that I just described, the shocks that we see increasingly to climate change and other things that influence the volatility of the food prices. And that's why it's absolutely important that we work globally on the food security issue. Let's just take this to everybody here. Yes, Achika, I wanted to ask you, we were talking before we started the panel about this remarkable statistic. 40% of food is lost, wasted or spoiled in the supply chain. This is not shocks we're talking about. This is the way we manage our societies. Now, what's the problem here? Is it education? Is it regulation? Or is it bad business? And I think you told me that 40% figure is low in the Japanese context. Yes. For example, Japanese are spoiled. Even though Japanese are importing 5 trillion, which is probably around 25 billion or maybe 30 billion USD per annum. So we are the food importers, but we are wasting more than the World Food Organization is substituting to the developing countries quantity-wise. That's a major waste, but that's because of the very, very high demand from the customer side. They just don't want to eat any food on the convenience stores where on the shelf maybe more than 8 hours. That's why shopkeepers knowing they are still edible and no problem, but just dump them. That kind of business practice creates a big problem. Nobody, as far as we can acquire the products, food and supply to the people, nobody wants to change their system. That is a problem and I don't know. How can we change Japanese people's mentality? So is this an issue of the industrialized world and the emerging world have very different needs when it comes to food security? Are we actually just recognizing that we have a conflict here? Actually I would keep it at the global level because I think we have to conflict at the global level and we need to work together. Maybe 10 years ago you wouldn't have seen Shell working with Unilever or Nestle or with Monsanto on the agriculture side and discussing how we can actually optimize the resources used in these various chains because we are talking about food, water, energy and land usage. And I think what we have learned also this week in Davos is actually these things come together and we need to find new ways of actually working together and really helping to produce the right amount of food in the right way with the right process using less water using less energy because otherwise we can actually not optimize that triangle anymore and I think we can only do this on a global basis because you will have countries with much more water whilst others have more or less no water and I think you cannot go regionally after these things, you need to broaden this. Talking about nutrition in developing countries I think one thing that emerged from one of the sessions this week at the World Economic Forum is that there are very cost-effective interventions that will increase nutritional levels in an important way in the poorest countries. There are 400 million children that have parasitic worms in the world today and those parasitic worms not only reduce the nutrition and health of the child but also reduce the school attendance and it costs only 50 cents per child per year of a US dollar to give him a de-warming pill. So there are many things that have received relatively little attention than other diseases like malaria TB or HIV because usually you don't die from a worm but that really inhibits the development of children and that is extraordinarily cost-effective. Very briefly if I can ask you The issue is bigger there are a billion people going to bed hungry every day, every six seconds a child dies of hunger 40% of the world population works in agriculture 70% of these people are at the bottom of the pyramid that's why we're looking at the food supply chain holistically including waste but as Peter says it's only a small part of that. The new fishing for agriculture for the first time looks at that holistically it started under the leadership of President Kikweke in Tanzania it's about employment creation especially small-hold farmers it's about sustainable farming and I think we should use the upcoming G20 there are now 11 of these projects in the world to scale them up and to show the world that we can actually provide a different business model which is what this great transformation we've been talking about here at the World Economic Forum is all about to feed the world at the same time we have a billion people becoming obese and that's actually growing that issue of health needs to be attacked at the same time. What are the models for 2012 really and how we make the transformation going forward I just want to change the tone slightly here and just lighten things as we come towards the close of our program and I'd like to very quickly run along all of our panellists and just ask them for one personal ambition for 2012 that we might come back and talk about in 12 months time. Peter My personal ambition is really to move from debate to action to make the small projects we can do in order to actually improve on the many issues we have talked about obviously we'll focus on energy but I think there's a lot to be done and I think we know what to do and therefore move from debate to action So Facebook's mission is to make the world more open and connected and so my personal ambition and hopefully the position a personal ambition of everyone working with us is to make the world more open and connected give more people the power of voice and not just receive information but reach out to others and form the kind of communities we're going to need to address the problems we've been talking about My hope is that this year we recover momentum for the international trade agenda I think trade talks have been paralyzed for some years now and I think we need to move on and to recognize that international trade is something positive for growth and for job creation Move forward on the models we've developed for sustainable equitable growth so we have the opportunity of the G20 coming up and the Rio Plus 20 to really lift the commitments we make there are two moments in your life to plant a tree one is 30 years ago and one is now, let's plant it Well 2012 is a special year for city it's our 200th anniversary so we're going to commemorate that rededicate ourselves to enabling progress connecting the world and igniting growth World Economic Forum is a great place to learn what we need to do if I'm coming from business world instead of putting blame on someone else we are just talking and not implementing why do we take initiative and one step just like described here committed to improving the world that's our mission and that's on our side so I'm going to do something We're just about to wrap up but Cheryl I know we are in a froth of anticipation about what we might learn very shortly about your business I don't expect you to tell me very much about that but what I will ask you is we're very bad as human beings at thinking about dates and connecting them with meaningful moments but we're very good at remembering events and connecting them with meaningful moments when we get an announcement hopefully soon that Facebook will be becoming a public company how do we connect that to a trend or a moment in history will it represent a coming of age for a whole new business model I think the best thing it can represent is the kind of growth that creates jobs so Facebook's a company that's barely seven years old and has created we have 3,000 employees around the world not very much but just the studies we've done in the last year say we've created more than 450,000 jobs just in Europe and the US and obviously much more around the world you know the world is looking for economic growth the kind of economic growth that feeds a billion people that deworms millions of children who shouldn't have to live lives like that and then employs people all around the world and it has to be that new technologies which sometimes take away jobs must also grow jobs and if this for the economy can be seen as the job growth it is and importantly for people the opportunity to use their voice to change their world we hope that's the part of the movement we're part of so pleased that you took the question thank you very much for answering and thank you to all of our panel for what they've done for us in this program today and a big thank you to our audience for being here and enjoying our event thank you for tuning into this program we'll see you next time