World Economic Forum

It Started in China

Experiencing the World Economic Forum and the inspiration for new venture capital

Eighteen months ago, I wrote of my experience in Dalian, China. I had just attended the annual summer meeting of the World Economic Forum, held jointly with the Young Global Leaders (YGL), which I joined earlier in 2019. Of that experience, I wrote that I was “agitated” — a word I chose carefully to acknowledge I had been taken out of my comfort zone, and was left aware of so much more and itching to do something about it, but not knowing what.

It was only in the past month did I realize the impact this experience had on me.

Only weeks before Covid really hit Oklahoma — I was at the Thunder game where they sent everybody home when we learned that Utah Jazz player Rudy Gobert had Covid — my partners and I set in motion what is now Cortado Ventures. What had been a dream for years, we decided, would become a reality in 2020. Covid was in full force by the time we finished our legal paperwork in April, and our decision was galvanized. It became the perfect time to launch Cortado Ventures, a venture capital fund focused on Oklahoma’s unique strengths and opportunities. Cortado would help lead the way to a reinvigorated, diversified, and future-ready economy, starting with our most innovate tech entrepreneurs.

Not even a year old, we are only barely getting started. But even so, our meteoric growth illustrates that Oklahomans are ready to build the future. For me, this journey started when I was “agitated” to do something unique and impactful in my home state, inspired by that trip to Dalian, China.

Figure 1 — Cortado Ventures launch with partners David Woods and fellow YGL Mike Moradi.

This connection did not become apparent to me until I virtually attended the World Economic Forum (WEF) annual meeting, usually held in Davos, Switzerland. In 2019, I was fortunate to be named to the Young Global Leaders network of the WEF. This five-year program exposes participants to events and educational opportunities and experiential opportunities around the world, networking with diverse leaders in various spheres of influence. In July 2019 in Dalian, China, I was blown away by the fascinating topics and world-class speakers. I was equally inspired by the other attendees and the people I met.

Motivated by what I learned, and eager to dig into more WEF opportunities, I planned to attend a program at Harvard and a conference in Ethiopia, and the YGL annual conference which was to be held in Calgary. However much like everybody else’s plans in 2020, none of that happened. The WEF retooled and hosted their world-famous annual meeting in Davos virtually instead. I logged on and watched as much as I could and with the goal of sharing my own perspective from the event.

What follows are my notes on the World Economic Forum annual Davos meeting. My perspective is that of an oil and gas entrepreneur turned venture capitalist, and one of only a few Oklahomans part of the Young Global Leader program (another Okie is Cortado venture partner, Mike Moradi).

Highlights

Day 1

Session on “Reimagining Education” stressed the need to train and develop entrepreneurship. This was a theme across continents. Even universities not traditionally focused on entrepreneurship now have innovation workshops and “hackathons”.

Anthony Fauci spoke about Covid response and vaccine development and deployment. He said: “It makes it extremely problematic to address a public health crisis when you’re in the middle of divisiveness in the country.” About the Covid variants, Fauci said: “The vaccines that we’re using now will be good against both the mutant in South Africa and the UK.”

Figure 2 — Survey results of WEF poll.

In the session “Tackling Alzheimer’s” we learned that diseases of dementia may triple by 2050 and cost $1T, not to mention the emotional toll on families and patients. The model of collaboration seen in Covid vaccine development may be replicable to solve this otherwise intractable illness.

Wrapping up with the survey results (Figure 2) about the most likely fallout for the world stemming from Covid, and hence where WEF members will be spending time.

Day 2

The US rejoined the COVAX program which aims to distribute 2 billion doses of Covid vaccines this year.

CEOs from Barclays, J.P. Morgan and The Carlyle Group agreed that regulators have worked well to keep our economy from a repeat of the post-2008 recession. Central bank balance sheets have doubled, liquidity is strong, and the economy appears resilient. They anticipate roaring 20s, in part from the enormous stores of purchasing power. Their chief concern were structural and societal stability.

The inventor of the Oura ring — the same the NBA used to monitor for illness — discussed ethics around wearables data. Their approach: they shared how their data could be used for bad purposes, and what they do to prevent.

In the session “Rethinking Cities for a Post-COVID Future”, panelists stressed that cities with highly functional relationships between NGOs, private and public sectors are doing better through the pandemic. Quantela Inc. discussed their work with cities. Specifically, they partner to provide smart logistics, lower costs, and connected services.

Day 3

In “Accelerating a Real Economy-led Recovery,” theme across countries was building infrastructure. Potentially enabled by high levels of liquidity, and a significant source of jobs by so many displaced from Covid.

London Mayor Sadiq Khan discussed the London Recovery Board in the session “Delivering Social Justice in the Recovery.” LRB highlights 9 focus areas, incl digital access and re-skilling. Ford Foundation President said focus should shift from the “future of work” to the “future of workers” and emphasized re-imagining ownership such as through ESOPs.

“Building a Path to Net-Zero Aviation” was interesting — broad commitment to achieve zero-emission commercial aviation by 2050. There are currently 7 alternative fuels logging 300k commercial flights. Encouraging tech but a long way to go, requiring massive public and private investment.

In “Accelerating Clean Energy Transitions” much of the advancements are needed in emerging economics, especially in Asia, but ESG focused funds are not investing there. Call to leverage high liquidity in central banks to incentivize, but today alone there were three groups calling to tap these funds.

Day 4

Inspired by some fellow members of The Forum of Young Global Leaders. They talked about their tech solutions launched on the WEF social media platform TopLink. Desolenator converts ocean to fresh water; Reforestum uses opt-in satellite imagery to build trust in large-scale projects; Cubex Global saves maritime shippers money and decreases impact of oceanic shipping; Global Citizen Capital using tech to help people reopen with Covid and distributed 1M masks.

“Fostering Responsible AI Leadership” discussed if there are red lines that tech shouldn’t cross. The answer from all panelists was no. Focus was on responsible data sourcing and transparency, and international standards.

“Resetting the Business of Data and AI in Healthcare” continued the AI discussion, this time centered around who owns health data. Nobody said that individuals own their health data; rather there have been legal cases and standards around governments and companies owning the data for the greater good, and that IP is up to the inventor.

Impressed by Colombia President Iván Duque Márquez. Driven to reinvent country in innovation, entrepreneurship, tech. Colombia instituted 6 years tax-free for tech entrepreneurs, and is training 100k programmers and covering 70% of population with broadband. Impressive panel with heads of Accenture and Microsoft talked about the areas they expect massive growth post Covid including fintech, telemedicine, edtech, and cybersecurity. Verticals of interest for Cortado Ventures.

“Shaping Post-Pandemic Politics” panelists were mixed with optimism and pessimism. Besides economic divides laid bare by Covid, we also are seeing where government works and where it doesn’t, and whom people trust. Massive popular movements on opposite ends of the spectrum. One panelist said this will be the “decade of impatience.” Nationalism has been fueled and a need for economic security. Call for international institutions to “put away the austerity playbook and pull out the investment playbook” to tackle challenges and spur economic prosperity.

Day 5

“Retooling Global Foreign Direct Investment” focused on removing trade barriers for economic development domestically. Reps from China, France and Finland discussed efforts to attract FDI, with China boasting of their openness but stopping short on areas “key to their security” which IMO seems to exclude many US tech companies.

The “dark side of meritocracy” highlighted in “Renewing the Moral Foundations of a Post-COVID World”. We put too much weight on our achievements overlooking luck and circumstances. Meritocracy can be a crutch to discredit those that are behind, brushing over institutions that reward their own. Bold proposal for universities like Harvard University to cull those qualified and then accept based on lottery.

Figure 3 — Where immunizations go.

Theme from “Reimagining Manufacturing for Growth” was what change will endure post-pandemic. Next generation of manufacturing is always imminent but never sticks. CEOs from Hewlett Packard Enterprise, Siemens, and Volvo Group insisted that decentralized and customized manufacturing would endure, enabled by internet of things (IoT) and data analytics, both informing manufacturing and support.

Lastly, discussion of distribution of vaccines, explained best through Figure 3.

My Takeaway

Quick take surprise to the upside:

Colombia President Iván Duque Márquez was incredibly impressive. Real vision for creating a future-ready economy and dialed in on how to make it happen.

Really enjoyed the panel of YGLs discussing their real-world solutions on pressing problems and how they’re engaging the YGL community. These people are hands-on improving the state of the world, whether working on desalinating water, building solutions to enable companies and countries to re-open safely post-pandemic, or drastically cutting costs and waste for maritime shippers to both improve environmental impact and enable commerce.

Quick take surprise to the downside:

Many of the panels had speakers who share a very similar world view. In many cases they would just build on each other along the same line of thought. I would like to see speakers who approach the same problem differently or with different priorities, or perhaps even outright disagreement over the nature of the problem. It would be interesting to see a real debate on these heady topics.

Major themes that emerged included:

  • “Build back better” — As our economies and institutions emerge from the pandemic, we should address the structural weaknesses laid bare including equity.
  • Liquidity — Financial institutions have massive liquidity which is a source of encouragement and also opportunity to build back better, as in using to incentivize investments in sustainable development.
  • Sustainable development — There is a need and opportunity to build infrastructure for economic development and employment. With emerging technologies, liquidity, and more political will than ever, there is a push for environmentally sustainable development.
  • Energy and the environment — A common theme for WEF, many speakers addressed the need for energy technologies and policies that prioritize the environment.
  • Technology stewardship — As technology increasingly permeates our societies (accelerated by the pandemic) the need for security and data protection is more important than ever. Questions like “who owns our data?” and “are there limits to what is acceptable?” prompted rigorous discussion.

Given my perspective as an oil and gas entrepreneur and technology investor, these last two themes caught my attention the most. It has long been a priority for the World Economic Forum to promote environmental stewardship and opposition to fossil fuels. What I have noticed even in just the 18 months since joining is a recognition among some that natural gas has done as much as any fuel source to improve the environmental impact of power generation. Developed countries have been transitioning to — and developing countries have been building — natural gas infrastructure as the most viable power generation source with much less environmental impact than coal, for example. There has also been increasing awareness to consider the full-cycle impact of an energy alternative. One notable example is the disposal of lithium batteries, which is becoming a real point of concern.

Figure 4 — Power cost surge in winter ’21 storm.

While there is not a single all-around best source for power gen, there is general recognition that a mix of sources will be essential. As I write this, record cold and blizzards have temporarily driven natural gas prices as much as 4,000% in Oklahoma, as wind and solar have been functionally shuttered in these conditions. Even so, the lack of a superior alternative to fossil fuels is no reason to besmirch the effort to develop one. Just like fossil fuel’s environmental shortcomings is no reason to abandon its practical and balanced inclusion while embracing alternatives with equally problematic full-cycle environmental impact.

I will close with my impression of the discussions around technology. A clear trend was our rights to privacy, security, and even ownership of our data. Data breaches have become more common even in the face of enhanced security, and technology envelopes even more of our lives in the pandemic. The efforts to ensure security and anonymize data, and to remove inherent bias in data-collection methods, have intensified and governments need to lead. Already there have been legal challenges over who owns our health data. And questions continue about whether there is a line that should not be crossed.

For as long as there have been technological advancements, we have always asked ourselves whether we should. We have always answered “yes,” if not through our words but by our actions. We are asking ourselves these questions more often now as the pace of advancements accelerates. I believe it is safe to assume that we will always eventually choose to cross a sacred line. Denying this leaves the ethical decision-making in the wrong hands. Instead, governments should construct ethical frameworks for every manner of technological advancement.

The World Economic Forum excels in bringing together world leaders in government, culture, science and the private sector to advance big ideas. If Covid showed us one positive possibility, it was in the lightning fast development of a vaccine, made possible by technological breakthroughs, carefully stewarded data, and international cooperation amongst governments and the private sector. For those who are looking, big ideas can inspire local initiative with broad impact.

Managing Partner for Cortado Ventures and Young Global Leader in the World Economic Forum. Investor and advisor for tech startups, building a better future.

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