Dear ATCA Colleagues; dear IntentBloggers

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

Some 90 participants from 33 countries, ranging from the poorest to the richest, comprising leaders from business, government, NGOs and academe, were recently challenged by myself and other more distinguished luminaries to play their part in coming up with ideas, strategies and innovations to address the complex global challenges facing the world today, whilst appreciating a shared sense of community and humanity's common future.

The Big-10 global risks and opportunities of the 21st century, depend on 'Disruptive Innovation' to address and to begin to resolve some of the seemingly intractable yet interlinked confrontations. As those inherent confrontations accelerate and feed off each other's momentum they possess the capability to damage and to disrupt the delicate global dynamic equilibrium. Faced with this unpalatable prospect for humanity in the coming two decades or less, it is necessary to rethink strategically and come together in joint action, which is the main aim of the high-level global dialogue established by organisations such as The Evian Group, ATCA and The Philanthropia. We need to be moving towards a wisdom based global economy, where longevity and sustainability are at the top of the agenda.

The Evian Group, was founded in 1995 by Prof Jean-Pierre Lehmann at IMD Lausanne, and it is an international coalition of corporate, government and opinion leaders, committed to fostering an open, inclusive, equitable and sustainable global market economy in a rules-based multilateral framework. The Evian Group has consistently stressed that it is inconceivable that a robust and sustainable global market can exist without being underpinned by a sense of global community. Creating a prosperous and inclusive global market and community requires good dosages of cooperation, goodwill, solidarity, intelligence, liberal economic agendas and global outlooks, all in a framework of enlightened self-interest.

Please access the previous announcement from here.

The keynote speech delivered to The Evian Group:

Chairman, Your Excellencies, Ladies and Gentlemen,

It is a great privilege, pleasure, and honour for me to be with you today. What I would like to do is first and foremost say that I am humbled to be here. I feel humbled because all of you are so much more illustrious, and have so much more experience and knowledge of world trade and all these words that don't mean much to poor me. In a sense I am humbled by the experience, the collective knowledge, and wisdom that is accumulated in this room. So thank you very much for taking time out of your busy lives to listen to what I might have to say.

I would like to talk to you about global risk, and I would like to talk about global risk from a personal perspective; not something coming out of textbooks but something that happened in my life step-by-step. I will share with you the journey of my life as a mechanism to prompt questions and dialogue. I believe that dialogue between human beings, the capability to come up with new ideas and thoughts, is absolutely central to being able to reinvent human civilisation and to define our common future as a shared humanity on the world stage. I will be talking about the top ten global risks that we foresee in the 21st century. Of course you may agree or disagree with them, but I hope it will be a starting point for dialogue.

My story begins in the year 1979. The reason why I have chosen 1979 is that my father at that time was a chief engineer to the Shah of Iran, on some aviation projects. He was very convinced that Iran was growing with great momentum and it would remain a very massive, formidable power in the Middle East. All of that changed in late January 1979 with the start of the Iranian revolution. The consequences of the Iranian revolution on my life were that my family photographs were displaced during the revolution, our collections of art and antiques were also destroyed or displaced. I took a moral message out of this revolution and said that for the rest of my life I am not going to be an avid collector of art and antiques; I am going to become an avid collector of interesting people. Because when the Iranian Revolutionary Guards came to burn and to damage houses, people could walk out but the Monets, the Manets and the Picassos remained there ready to get burnt. So in a funny sort of way it had an impact on my life, it was a sort of defining moment.

Let's speed forward. As a young boy, as a teenager, I sought to build a computer and fell in love with computing. I ended-up studying electronics engineering in England and whilst graduating I worked for a little company called IBM. This little company taught me many things about how global business runs around the world while I worked on the design of super computers. One thing led to another and I founded my own company called mi2g. It was founded in England in 1995 and we began with the area of global risk and using super computers to simulate global risk. In 1997 when we were looking deeply at global risk I was fascinated to meet an organisation called Lloyd's of London.

Lloyd's of London is a unique organisation in so much that it is not an insurance provider as such but an insurance and reinsurance market with syndicates that provide specialist risk cover. Lloyd's of London was established in the year 1688 and it is one of the premium places in the world for mapping out and covering global risk.

I am sure you would have your own definitions of global risk but I believe that insurance and reinsurance are the DNA of modern capitalism. In order to understand how modern capitalism works and how risk is syndicated, one has to be able to understand the mechanisms of risk transfer that are inherent within insurance and reinsurance. Working with the blessing of the Chairman of Lloyd's of London at the time, a charming man who went to the same university as I - I went to Southampton University as did Max Taylor the Chairman of Lloyds, so we had a good bridge -, he started saying to me let's look at the top ten global risks. What about them? We wanted to know about these from the point of view of insurance and reinsurance. We went into dialogue with organisations like General Reinsurance Corporation owned by Warren Buffett, we went into dialogue with the other large players like Swiss Re and Munich Re, and basically the five or six major reinsurers in the world. We had deep discussions with them about how they look at global risk.

What was I struck by? I was struck by the fact that reinsurance companies can look at the world from a 250 year horizon; in some cases they were looking 250 years into the past. It fascinated me because I thought, well here we are thinking about the coming 90 days for a listed company, and our horizons had now blinkered to the point that we were thinking 90 days for everything. The quarter by quarter reportage has completely destroyed our capability to think in decades and some of these reinsurance companies look at actuarial risk over the past 250 years and try to map risk over the coming 100, 200 years. Therefore I thought, well this is an industry I must get to know more deeply as a student of history because of the fact that they are also trying to look at the future from a historical perspective.

The other thing that struck me about reinsurance was to look at risk, which was asymmetric. Asymmetric risk is defined as that kind of risk which is not normative or normal risk. When people will talk about global risks they will talk about general demographics, they will talk about water shortages or global geopolitical conflict. All of these risks are real risks but it is not as if mankind has not learnt to understand demographic growth and has not really understood how to cope with another billion people on the planet. The point is it is a risk, but it is not asymmetric because it evolves slowly and allows humankind to adapt albeit with huge pain.

So we started mapping asymmetric risk, and the top ten asymmetric risks that we mapped in 1999 were climate chaos and environmental degradation as number one, radical poverty - the differences between the rich and the poor nations across the world - as number two, organised crime with a profitability of about USD 1 trillion worldwide as the number three risk to global stability. Then we looked at extremism, terrorism and radicalism in society as the fourth global risk. Beyond that we looked at emerging science and technology risks: we looked at robotics, genetics, artificial intelligence, informatics and nanotechnology. So these five risks, followed by the interlinked nature of financial markets and financial systems became the top ten global risks that we looked at. It became quite clear to us that humankind hadn't got the foggiest about how these particular risks are unfolding on the world stage.

The reason why I think that it is so important for all of you who are looking at world trade to think about these top ten global risks is because I genuinely believe that these risks interplay - think about the world in which we are living today. The year is 2006: go back to a man who fell asleep on the 10th of September 2001, tell him that 9/11 happened and tell him that we live in a world today defined by 9/11 to some extent. He will not understand the world in which we live today. That is the impact of an asymmetric risk, and there are more to come. I do not believe that humanity is not going to be able to circumvent those risks. I don't believe that the resourcefulness and the ingenuity of man is going to stop us from being able to deal with those risks. But I do genuinely believe that we are not looking in the right places for risk. We are not looking in the right places for opportunity and we are not mapping and planning the future from the point of view of that which is the unknown, and only basing it on what we already know, which is too little.

We've talked about the ten risks, now I would like to go into some depth. When we talk about climate chaos, people talk about global warming and yet, according to most recent research data, what we are probably going to face in the Northern Hemisphere is an extreme cooling down. So when we talk about climate chaos people are thinking about warm sunshine in England. The reality is that there is something called the Gulf Stream. The Gulf Stream comes out of the Gulf of Mexico and circulates very warm water all the way up to Northern Europe. London, at a latitude which is comparable to other cities in complete ice, remains a temperate city because of the Gulf Stream. The Gulf Stream has slowed down by 25% in the last ten years. Nobody knows why the Gulf Stream is slowing down, there are some speculations that the Gulf Stream is slowing down because of environmental degradation, ocean pollution, carbon dioxide gases. This is speculation, but there is some evidence to suggest that the salinity of the water is changing because the Arctic and Antarctic ice-caps are melting and they are melting very fast now, much faster than originally simulated. So it is quite clear that we are facing a chaotic and modifying dynamic equilibrium.

The narrative of humankind is that we are here to build for ourselves a better life. But it has to change to become: we want to build a better world for each other. This is where we share our humanity, and we have to be thinking outside the box of nation states. I would say that the sovereignty of the nation-state itself is being superseded by the sovereignty of the individual in the 21st century. If you think about the 9/11 hijackers; the 9/11 hijackers were nineteen, sixteen of them were from Saudi Arabia, but the government of Saudi Arabia was not per se involved in the 9/11 incident. Those sixteen hijackers chose to carry out their dastardly actions based on an individualised sovereignty that they had accepted in their within. And I think we are facing those types of risks where the sovereignty of the nation-state is very difficult to enforce and to maintain. Look at the Lebanon-Israel conflict in the last couple of months and what you will see is that there is an organisation called Hezbollah, a guerrilla organisation not entirely controlled by the Lebanese government, and it can hold the Lebanese government to ransom. Then suddenly there is a war starting between Israel and Lebanon where there is the Hezbollah, which has erupted and has exercised its sovereignty over and beyond that of its host nation state.

Let's move onwards, towards robotics, genetics, nanotechnology, artificial technology and informatics. Most of us are living off these devices, mobile phones and PDAs, I carry two of them. The reality is that these devices which we carry, we live off them or should I say, that they live off us? And if they stop working for even six hours it completely alters the dynamic of our thinking and our action/reaction capability. This is a clear vulnerability in the society that we are building up fast, so the informatics vulnerability is very clearly there. In Japan there is a show called the Aichi Robot Show. What you can see in this show is robots greeting you: you go to the reception, a bit like this hotel reception, and the lady who is greeting you in English, in German, in French, in Japanese, or in Mandarin, happens to be doing it impeccably and she's a robot. And she's even got a facial that looks human. This kind of robot-lady can be mass produced; they can make a million of them.

Today we are outsourcing to India and China because they are cheaper labour points. Tomorrow the robots are going to be replacing those cheaper labour points in mass manufacturing and some services because that is where the world is headed: towards mass robotics. We may be 10 years away from it, we may be fifteen years away from it, or we may be 5 years away from it. But today if we go inside the Japanese Tokyo sub-city systems and we look at the way sewage is being cleaned, we look at the way other types of cleaning operations are undertaken in Japan, it is all robot driven. And who is there to say that these robots cannot be used for warfare? Look at the number of spy-plane drones that are being used, including in the latest Israeli-Lebanon conflict, and also in the way certain belligerents were shot dead in Yemen by the Americans. They used these kinds of robot-driven drones to carry-out those asymmetric attacks.

So I think that we are basically facing different kinds of asymmetric threats at present and in the years to come. Then there is the artificial intelligence collage. The chief executive of Google the other day was talking about the way that politicians are not going to be able to lie in the future to their electorate because Google's artificial intelligence algorithm will work out what a politician said five years ago, and four years ago. You can put in a statement by Tony Blair and it can work out what is the probability he may not be telling the truth on this occasion based on historical data. I think that politicians have figured out how television works, they know how to manipulate television, they know how to come across with a smile on television, they know how to disobey on television, and they know how to manipulate our emotions on television. What they haven't figured out is the Internet. Look at the blogging phenomenon. You know that Steven Silverman, the politician who lost the County Executive primary race in the United States, he lost his seat because of the phenomenon of internet blogs and internet community chat rooms. This is a revolution, which is taking place, the grassroots activism is bubbling away and changing the way that the political landscape is defined for political parties and leaders in the future.

I have talked a bit about robotics, now nanotechnology. If I hold in my hand a small capsule full of water, in it I show you something like pepper, maybe a hundred pieces of little pepper inside, and then I tell you these are a hundred microchips. Some of these microchips can be injected into your bloodstream. And once they are injected they can measure your temperature, they can figure out that as a diabetic you are running low on sugar, and all of this work is underway. Nanotechnology is here with us. You may not be able to see the microchips but they are here. And tomorrow you think about nanotechnology driven robots in the hands of a terrorist. You've got nanobots that extremists are able to utilise, commandeer, for their purposes. Where does our civilisation, our sophisticated civilisation, stand with that kind of blended threat?

We haven't talked about genetics. Genetics is often touted as a saviour, because, when you plant a crop of wheat in a temperate environment, the type of weed killer, or the killer which is needed to deal with a particular pest, is inside the wheat. This has been genetically engineered into the wheat. But nobody knows what the human consequences are of eating that wheat. And the notion that the Federal Drugs Agency trial over five years to prove that that wheat is safe and is good enough to eat is not good enough. We may need to be able to spend a hundred years to be able to figure out what our next generation, and the generation after that is going to suffer as a result of the genetically modified food that is resistant to pests or has some other special resistance characteristics and may damage us in ways that we do not understand.

I think that as a society we are facing ethical dilemmas, emotional dilemmas, expertise dilemmas. We are using the lens of economics, narrowly defined. We are using the lens of GDP growth and Return on Investment (RoI), as our singular lens, which we have then shrunk further: to mean, economy means finance. No it doesn't. Economy means people, economy means societies, and economy means communities. We have to be able to forge and understand the alliances that exist in all of this.

Financial markets. Previously if you had a disaster in a part of the world, you could easily say that the financial markets are not going to globally go into some kind of a problem. But in today's environment, Asia's bonds purchase, the amount of bonds that China and Japan purchase from the United States dictates the value of the US dollar. Therefore the US dollar is not really beholden to the US Federal Reserve policy as much as it is beholden to what Japan and the government of China are going to do; or their surrogates their central banks. So I believe that we are dealing with an extremely runaway phenomenon in terms of the way financial markets are said to be in free will and yet we are dealing with instruments and financial vehicles that we are ill able to judge or understand.

I have talked about these ten global risks. Now I want to talk to you about optimism, love, doing things in a positive way and how all of this is going to come together. I do not genuinely believe that humanity is done. I do believe that humanity is resourceful, I believe in the power of collective wisdom, and I believe that the global economy will have to go towards a wisdom denominated economy. When we move towards a wisdom denominated economy we'll be able to think in terms of longevity and sustainability. When we think about longevity and sustainability and how our decisions are going to affect other nations, not just ourselves, then we are beginning to think in a holistic way. And holism is the mantra for the 21st century; being able to look beyond the individualised, compartmentalised notions of this world, which we share and inhabit together.

And I think that the reductionist view of science and the way that reductionism has been at the centre of minimising everything has got to be replaced with much more meaningful things like love, and much more meaningful things like passion, and much more meaningful things like the exchange of new ideas, doing things in different ways and innovation. And when we think in those ways, and when we act in those ways, then I believe that human kind is not only going to survive, it is going to thrive and it is going to have an even greater future than the civilisations that we have come to esteem over the last thousands of years.

On that very positive note, I would like to say that my wife and I -- Surinda and I -- we feel particularly happy with the way that our own project to build a better world is coming alive. It is called The Philanthropia - philos for love, anthropos for human kind - and Philanthropia is setting up these five funds which are dedicated to clean energy and sustainable technology, microfinance and water and eco-friendly infrastructure because we genuinely believe that unless we bring about a renaissance in modern capitalism through these types of innovative, ethical investment funds, we are not going to be able to deal with some of the dilemmas that human kind is facing today.

I would like to thank you for your patience and I hope that this has been a useful thought from little DK.

[ENDS]

We look forward to your further thoughts, observations and views. Thank you.

Best wishes

For and on behalf of DK Matai, Chairman, Asymmetric Threats Contingency Alliance (ATCA)

---

ATCA: The Asymmetric Threats Contingency Alliance is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses opportunities and threats arising from climate chaos, radical poverty, organised crime & extremism, advanced technologies -- bio, info, nano, robo & AI, demographic skews, pandemics and financial systems. Present membership of ATCA is by invitation only and has over 5,000 distinguished members from over 100 countries: including several from the House of Lords, House of Commons, EU Parliament, US Congress & Senate, G10's Senior Government officials and over 1,500 CEOs from financial institutions, scientific corporates and voluntary organisations as well as over 750 Professors from academic centres of excellence worldwide.

---

Intelligence Unit | mi2g | tel +44 (0) 20 7712 1782 fax +44 (0) 20 7712 1501 | internet www.mi2g.net
mi2g: Winner of the Queen's Award for Enterprise in the category of Innovation

[ENDS]