10 Break-Out Sessions

  • Time: 3:30 pm - 4:30 pm

A Demographic Revolution: Young India Takes Charge (with All India Management Association)
Ritesh Agarwal, Founder and Chief Executive Officer, OYO Rooms
Pranjal Sharma (Topic Leader), Economic Analyst, Advisor and Author, India

India is undergoing its economic, technological and demographic transition simultaneously. An old country is becoming youthful and adventurous with the passage of time. Young Indians like OYO founder Ritesh Agarwal are quietly taking charge of Indian ethos by becoming icons of audacious aspirations and tangible proofs of its potential, spawning startups that are becoming most valuable and famous than many legacy companies. How can young revolutionaries find ways to carry the older generation of investors, regulators, workers and consumers with them and what can other economies and founders learn from India’s momentous transition?

Collaborative Advantage Across Generations: Reflecting on the SGS Experience (ISC Alumni)
Former Members of the International Students' Comittee
Christoph Loos (Topic Leader), Chief ­Executive ­Offi­cer, Hilti AG
Vivian Bernet (Topic Leader), Head of the Organising Committe, International Students' Comittee
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For over 50 years teams of student have volunteered to organise the St. Gallen Symposium. They have written countless invitations, met thousands of partners, and welcomed some of the most important personalities of their time on stage. Together with former members of the ISC we will reflect on the St. Gallen Symposium experience of cross-generational dialogue and collaboration, the lessons they have learned for their lives and on how the symposium has evolved. This session is organised together with ISC Alumni.

Collective Genius? Cultivating Creativity in the Arts and Beyond
Susan Goldsworthy, Affiliate Professor of Leadership, Communications and Organizational Change, IMD Business School
Gerry Hofstetter, Light Artist & Film Producer Hofstetter Marketing
Javiera Estrada, Artist
Tatjana Rupp (Topic Leader), Member of the International Students' Committee

As the need for innovation is growing, the routinisation of well-structured creative processes within organizations is key for concurrent value creation. Prof. Susan Goldsworthy of IMD, this year's St. Gallen Symposium artist Javiera Estrada and Light Artist Gerry Hofstetter will discuss the role of collaboration in the creative process. Together, and in conversation with the audience, they’ll explore the way collaboration can drive creativity in various organisational contexts, and, on the other hand, the role of introversion and lone contemplation in creating something new.

Connecting Business with Purpose: The Potential of Skills-Based Volunteering
Curdin Duschletta, Head Community Impact Switzerland & Foundations, UBS
Christopher Jarvis, Executive Director, RWInstitute
Prof. Amanda Shantz (Topic Leader), MBA Director and Professor of Management, University of St.Gallen

Many employee volunteering and giving programs are presented as an employee perk, similar to casual Fridays or a team-building event. But treating workplace giving and volunteering this way fails to fully capitalise on the great potential of such programs: to foster employee personal growth, and address key societal challenges. The panel will particularly explore the potential of skills-based volunteering, its benefits, and the unique challenges that arise when moving from merely transactional volunteering to something far more transformative.

Financing the Next Generation of Entrepreneurs
Patrick Zhong, Founding Managing Partner, M31 Capital
Makram Azar, Founder and Chief Executive Officer, Full Circle Capital
Prof. Julia Binder (Topic Leader), Professor of Sustainable Innovation and Business Transformation, IMD Business School

The investment landscape over the next twenty years will be radically different from previous generations. While there appears to be greater access to capital, there also appears to be much more volatility and debt with no clear dominant financing mechanism. Entrepreneurs, VC, Private Equity, and banks will have to find new ways to work together to create growth and stimulate innovation. How can investors and entrepreneurs better collaborate and find mutually beneficial agreements that balance risk and return?

Hacking the Fashion & Luxury Watchmaking Industry towards more Sustainability (with Condé Nast College)
Martina Bonnier, Editor-In-Chief, Vogue Scandinavia
Raynald Aeschlimann, President and CEO, Omega S.A
Carmen Jenny, Co-Founder and Chief Executive Officer, CLOTHESfriends AG
Johannes Reponen (Topic Leader), Director of Post-Graduate Programmes; Academic Affairs; Research & Knowledge Exchange, Condé Nast College

The fashion industry accounts for 10% of humanity’s annual carbon emissions – more than all international flights and maritime shipping combined. For long, the fashion and luxury watchmaking industry drove, together with the fashion media industry, unsustainable dynamics in the sector: generating more and more demand through an artificial cycle of new collections and seasonal trends. Businesses’ marketing, media as well as influencers thereby create a constant longing and demand for their products. How can designers, fashion houses and publishers exit this vicious cycle and, collaboratively, drive the transition towards more sustainable and ethical fashion and luxury watchmaking?

M100 Sanssouci Colloquium@St. Gallen: Media’s New Power: More Impact Through Collaborative Journalism
Mathias Müller von Blumencron, Journalist, Member of the Board, Tagesanzeiger and Advisory Board Member M100 Sanssouci Colloquium
Joanna Krawczyk, Chairwoman, Leading European Newspaper Alliance
Paul Radu, Investigative Journalist, Co-Founder OCCRP
Astrid Frohloff (Topic Leader), TV Presenter and Journalist, Advisory Board Member M100 Sanssouci Colloquium

Media diversity, freedom of the press and freedom of expression in Europe are currently under threat. Journalists and independent media companies are increasingly joining forces across borders to respond to such challenges as well as to be able to continue to offer independent quality journalism in the future. This session will identify learnings from new media partnerships such as the Leading European Newspaper Alliance (LENA) and the Organised Crime and Corruption Reporting Project (OCCRP) to identify how media can most effectively work together.

Democratizing Access to the next Generation of Technology and Innovation: Communities and Radical Transformation
Gina Loften, Member of the Board of Trustees, TIAA
Luzius Meisser, Chairman, Bitcoin Suisse
Tycho Onnasch, General Manager, Trust Machines
Shuo Chen (Topic Leader), General Partner, IOVC

Technology, innovation, and entrepreneurship are key drivers of the modern economy and social mobility. Given their importance, we should strive to improve accessibility to tech, education and entrepreneurship across all backgrounds. Creating open and inclusive communities, especially with tech is important to accomplishing this goal, but it is easier said that done. Simultaneously, a third iteration of the internet – Web3 – has the potential to radically transform the internet of things and reduce barriers to access. How can these forces be effectively harnessed and directed for the benefit of all people and move the world forward?

Varieties of Tech Capitalism: Europe's Approach to Innovation and Regulation in a Global Context
Julian Teicke, Founder and Chief Executive Officer, wefox
Lisa-Marie Fassl, Co-Founder and Chief Executive Officer, Female Founders
Christoph Keese (Topic Leader), Managing Partner and Chief Executive Officer, hy

Over the past decades, the tech sector, especially the internet of things, has become a central component of modern economies. Trying to catch up with the exponential pace of technological development, the US, China, and Europe are crafting rules of the game on digital markets. What are the emerging characteristic differences between regulatory regimes of digital markets, in the US, Europe and beyond, and how do they balance innovation and regulation? In light of strategic competition over tech dominance between the US and China, what are the opportunities and challenges for Europe in particular?

Changed for Good? Engaging with the New World of Work
Petra von Strombeck, Chief Executive Officer, New Work SE
Jean-Christophe Deslarzes, Chair of the Board, Adecco Group
Nat Ware, Founder & CEO Forte
Prof. Heike Bruch (Topic Leader), Director, Institute for Leadership and Human Resources Management, University of St. Gallen
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The Covid-19 pandemic has changed the world of work forever. The fast and widespread adoption of remote work and an ever-increasing concern of employees with purpose and meaning on their job have intensified the war for talents. Reaching out to and concurrently engaging employees is key for businesses across sectors and regions. What learnings can be drawn from the pandemic as regards our approach to work? Has the world of work changed for the better? And what role does leadership culture and a new approach to hiring play going forward?

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Stressors for Better Futures: The Capital for Purpose of Elites


In a memorable 2012 discussion entrepreneur, investor and political activist Peter Thiel reproves Google’s Chairman Eric Schmidt:

“Google has 20, 30, 50 (US$) billion in cash, it has no idea how to invest this money in technology effectively (…) the intellectually honest thing to do would be to say that Google is no longer a technology company (…) you are investing in Google because you are investing against technological innovations.”

A composed Schmidt ducks Thiel’s frontal attack in a CNN Money clip, “there are many, many examples of business innovations (…) that Google is investing in”. Equally true, Alphabet’s (Google’s parent) cash hoard has now ballooned to beyond US$ 100 billion.

Are unemployed masses of cash a red flag that capital has lost its inherent purpose and, more grippingly, are they an indication that we might have left capitalism behind?

In this essay we first (1) propose the purposes of capital. Then (2) we suggest signals of a healthy social and economic system where capital lives out its purpose. Next (3) the ‘framework’ expands to the other side – i.e. capital not for purpose – with the eye keen on the situation today, especially as it concerns the young. We conclude (4) with a path to thriving capital living out its purpose in an economy characterized by ‘good’ elites.

1. On the purpose of capital

We start by suggesting three purposes for capital by answering three questions aiming to understand capital for what it is, what it does and what it is to us.

What is capital? Essentially a social construct, an abstraction, a “powerful pull mechanism” i.e., a most effective narrative. One immensely potent for it aggregates human effort. Society undertakes projects when it finances them – lack of capital discards most other initiatives. Capital coordinates humans and this we consider its first purpose. As social animals our most distinguished gift is that of collective action.

This capacity in the modern context is mostly realized by capital. While other coordinating devices exist such as ideology, club membership or shared national sentiment, capital is the lowest cost, most pervasive and granular approach. Whether iPhone production, the Champions League finale, or the restoration of Notre Dame, capital coordinates the efforts of the thousands, even the millions of individuals involved directly and indirectly in these projects. In short, capital is our mightiest narrative for collective action.

What does capital do? Capital transfers from the present to the future. A future with more possibilities than any non-capital enabled alternatives would ever offer. The second purpose of capital is the construction of superior, otherwise unattainable, prospects. Saving instead of consuming now means that capital can be deployed for investments. The trade-off between the present and the future allows us to consume more tomorrow via the wealth accumulated from the wise deployment of capital and investments. The proverbial apple picked from the garden tree, the services provided at the University of St.Gallen or the device you are reading this text on – indeed everything we are blessed with today – is traceable to past capital accumulation processes, some harking back to the depths of time. In short, capital’s purpose is to build our better future.

What is capital to us? At the individual level, capital releases personal creativity when we pursue those better futures. The richer times to come in healthcare, local manufacturing, education, mobility or entertainment will originate from doctors, workers, teachers, managers or producers at their most ingenious. As a quote attributed to Albert Einstein would have it, “Imagination is everything. It is the preview of life’s coming attractions.” The realization of imaginative visions with the innovative use of capital means also that “true uncertainty” is undertaken. With uncertainty data has no predictive power, and rational choice is preempted by the unknown. In other words, only our original thinking, unique emotions and a very own intuition can guide us in imaginatively investing capital. Creativity might be the ultimate achievement of the human condition, one so powerful that it elevates each of us from animals and from anything AI might hold in store. In short, capital’s third purpose is to realize the humanistic ideal of unleashing our creative potential.

2. On the signals of capital for purpose

Capital carries out its purposes within the scaffold of a particular social system and political economy. Some systems are specially good at nurturing capital for purpose. What are the signals that they are?

The first signal is capital that kills. Steve Jobs’s pondered about death, “the single best invention of life.” Not unlike nature with its cycles of rebirth, one must look for signs that capital destroys.

It vanquishes the old, the parasitic and the weak for the young, the benefactor, the strong. While mirroring nature’s progressions, this harsh Nietzschean property of capital is discomforting. It contradicts the ethics of major narratives like Christianity or Confucianism, and so capital and capitalism is often disliked. And yet any resistance to Schumpeterian creative destruction brought by capital living out its purpose is but the forfeiture of a better future, along the creative powers of individuals and collectives to imagine these original futures. There is no blue ocean or pardon, Shiva-like capital must destroy to create.

The second signal is productivity growth. Capital, deployed either as equity or debt, realizes those finer futures through efficiency gains. These come with funding for high-end basic research on Alzheimer’s, but also for revamped production lines at small factories. So deployed capital generates positive returns for the lenders, borrowers and for society at large. Since a richer future is only conceivable with more knowledge, knowledge and capital become equivalent, they are interchangeable. In a system of capital with purpose, knowledge expands in tandem with capital. Underneath knowledge creation are productivity gains. Over time these compound, and all of society benefits from real wage growth and raises in human development.

The third signal is genuine competition for capital by elites. Mancur Olson compellingly theorized about the logic of collective action where small groups enjoy coordination cost advantages. Economies are thus dominated by such small groups, often know as elites (Switzerland’s radical democracy is in many ways exceptional). Elite dominance cannot be circumvented and indeed that dominance is desirable, as an elite vacuum means lack of economic coordination or even chaos. Elite ascendancy determines which projects get capital and the direction of an economy. Will capital be available for Belt and Road Initiative (BRI) connectivity projects in Eurasia, for potential unicorns in Silicon Valley, or for Greek debt? Credit cards, mortgages and car loans see non-elites consuming capital, yet the future is built by the substantial capital pools invested by dominant coalitions. Open and competitive contests for these pools see well-coordinated small groups play out their chances at elite status. Capital allocation via open elite contests most accurately portends capital for purpose. That includes capital that trickles down to the middle classes and their projects along Harry Markowitz’ efficient risk/return frontier. Competitive capital allocation effectively mints winners that possess the most captivating future visions as well as the executive capacities to realize their promises. That is, they produce good elites.

3. On the signals of capital not for purpose

In the first part of this essay we ventured that capital with purpose (i) elicits collective action, (ii) builds finer futures and (iii) unleashes our creativity. In the second part we discussed the signals a system of capital for purpose emits. Now in the third part, we review signals from the economy that might betray an opposite reality – capital not for purpose.

The first signal of capital not for purpose is hoarding akin to the gold stashes of yore. Storage freezes and paralyzes capital which then ceases to be the vehicle for collective and creative action. Reserve balances with federal reserve banks stand at US$ 1,8 trillion (hitting a peak of 2,8 trillion in 2015), while before the crises these hovelled at around US$ 50 billion. Not knowing what to do with the resource, banks park capital overnight with central banks at no gain. Yes, unemployed capital is a red flag. So are the large amounts of non-financial corporate cash laying around, much of it at the most innovative firms, the world’s main creators of futures. The top five – Apple, Microsoft, Alphabet, Oracle and Cisco – hold a hoard of USD 600 billion. The unemployment of capital is not less serious than the unemployment of labor. Both are signs that we operate at below cooperation potential and innovation capacity, and point to a lesser future.

second signal is negative or low interest rates, a sure bet on a future forfeited. Money priced at below equilibrium, the result of well-meaning loose monetary policies, is a prime slayer of better futures. The effects of artificially low interest rates in the Soviet Union (its state enterprises did not have to pay back debt de facto enjoying negative interest), or in Japan with its ZIRP (zero interest rate policy implemented from 1999 as a reaction to the bubble collapse) are self-evident (the Soviet economy collapsed, while Japan has been trapped for a quarter of a century at 1% growth). Negative interest rates are the mark of a topsy-turvy matrix where one takes from the future to subsidize the present. Low interest rates see less productivity gains because capital has lower pressure to work, take risks and deliver decent returns. Top disruptive projects in Silicon Valley and Berlin will still receive VC funding, yet a majority of the funds not stashed are allocated to low quality projects that can afford to pay back cheap debt (but would not have a chance if interest rates stood at 3%). Middle class projects so important to collectively build prosperous futures, with their reasonable but higher risks, are starved for capital. The economy is high and low end, hollowed out in the middle. Exiled from society is Nassim Taleb’s antifragility. That is, the cardinal property of resilient and robust systems that emerges from being challenged by stressors, shocks and mistakes. In the context of capital, stressors are natural interest rates set without the artificial pushes of central banks. The FT lexicon explains how central banks nullify the neutral rate of interest by “separating interest rates from their market clearing level.” While unobservable, the neutral rate is assumed at between 3% and 5%. Anything less might lead to declining productivity growth and possibly to great stagnation. The future depreciates. Haphazard inequality, pessimism, cynicism, discontent and the raise of alternative political options all ensue in complex interactions. This is especially unsettling in a West whose citizens are unlikely to be as stoic as Japanese or as resilient as post-Soviet Russians.

The third signal is elites that rent-seek. A big fallacy is that elites in capitalist societies must be capitalist. Let us say that they are not when they cease to deploy capital for purpose. The capitalist system, even with capital accumulation processes, private property and free markets, decays into a crony version of itself characterized by mispriced money, high entry barriers, subsidies, import quotas, near monopoly grants, licensing and a host of other rent-seeking, wealth transfer activities. The value of these rents is a social cost as Anne Krueger showed in The Political Economy of the Rent-Seeking Society (1974). Capital can multiply in sustainable and non-sustainable ways – it is either invested in rent-seeking wealth transfer projects, or in innovative wealth creation projects. Investments must not just increase one’s slice; good elites enlarge the pie.

4. On the stressors to elites for purpose

Our conjecture is that capital for purpose stimulates collective action, ushers better futures, and enables human creativity. What is the state of capital in mid-2019?

At the close end of a hypothetical spectrum capital increases productivity and diligently engages in creative destruction, while elites innovate as they fiercely compete with each other to build finer futures. At the far end of that hypothetical spectrum capital is unemployed, artificially priced, shackled by rigged rent-seeking contests. The nation that finds itself at the far end has seen the purpose of its capital compromised. Moreover, its socio-economic system is now fragile, brittle to the point of not breaking. Rather than cycles of creative destruction paralleling nature, endless stagnation and lost generations await. Incumbent organizations and low productivity growth encumber the economy, smacking middle and lower classes especially hard.

The question is whether for most of the young the present is worth more than the future?

If our appraisal says that millennials will never be able to afford homes, that the savings of retirees will not yield returns, that governments are saddled with debt they can never hope to repay without devaluations (such as leaving the Eurozone) or inflation, that there is sluggish wage growth and persistent youth unemployment, or that elections lead to results reflecting discontent … then implicitly we have answered with “yes”. We are in denial when we ascribe these above troubles variously to globalization, to an aging society or to work automatization in the context of the Fourth Industrial Revolution. These explanations are but false flags. We claim that the listed problems are related to asset inflation, to low interest rates, to elites that take no risks. All are manifestations not of capitalism but of the opposite, a system where capital captured and disarmed has lost purpose.

The stagnation trap is less a challenge of the intellect than one of collective and political will.

The signals of capital have to be recognized for what they are, but immediately after there is the will. The question here is, how do we advance the right elites to the forefront of our economic system? This is the primary – really the only – question for presidents and parliaments. Most have failed to seriously contemplate the matter, meaning others will now ponder.

The crux resides in the elites. They are necessary, they must not be forcibly replaced, there must be no revolution. Elites, quite simply, must live with stressors – the ones of capitalism. More specifically, dominant coalitions must pay the true opportunity cost for using capital. The price of money has to be set at levels that assume a future better than the present. Moreover, the state ought not to subsidize or protect elites from Schumpeterian creative destruction. Capital access is to be obtained by competitive, market processes. Relatedly, elites must prove their mettle in free global markets with no or low entry barriers.

Elites need not be noble, they merely must enrich themselves by enlarging the cake. How should society and politics deal with dominant groups? Again, with the will to invoke stressors. The natural stressor of capitalism is competition, the essential incentive structure for new wealth creation. Redistribution policies might be tempting, the downside being that the transfer from the productive to the less productive makes everybody poorer. Regulation too might prove appealing, but it only consolidates wealth transfer models as it invariably yields more rents. President Roosevelt’s Banking Act of 1933 (Glass-Steagall Act) had only 37 pages and created competition. The heavy regulations of President Obama’s Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 has 849 pages and begot reduced competition in banking.

The primary role of politics is to identify rent seeking across all industries and then to design tailored stressors. Politicians and public discourse would benefit from research by the academy rating ‘good elites’ in terms of wealth creation and potential for rent-seeking. Industries with the ‘best’ elites constitute institutional models for the rest of the economy. Areas with the ‘least’ good elites will most benefit from competitive shocks and stressors applied for the sake of antifragility and the end of stagnation. Essentially, the aggregate ‘goodness’ levels of national elites rank countries according to their futures.

The future wealth and poverty of a nation depends on how good its elites are. Elites are best in countries where capital lives out its innate purpose.

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