Goodnight brings solutions to Davos

At the 39th annual World Economic Forum meeting – the largest global gathering since the beginning of the economic crisis – SAS’ CEO shares his views and expertise on issues facing the post-crisis world

Last month SAS CEO Jim Goodnight and Executive Vice President of SAS Europe, Middle East, Africa and Asia Pacific Mikael Hagström joined hundreds of the world’s political, business, academic and civil society leaders for the 39th annual World Economic Forum meeting in the Swiss mountain village of Davos. Despite the blue skies and abundant snow, the mood was radically different from the previous years.

Carrying the theme, “Shaping the Post-Crisis World,” the 2009 Davos event was the largest global gathering since the economic crisis started. More than 2,500 attendees from 96 countries were present to discuss and find solutions to the current global turbulence.

The economic situation was not the only topic on the Davos agenda, however, as other challenges such as sustainability and development, leadership and corporate values, innovation, and education were also discussed in depth.

Where SAS fits in: The role of risk models in finance

In Davos, Goodnight participated in an interactive panel session, titled “Can You Trust Your Model?” Sharing the stage with a number of panelists, including epidemiologist Nassim Nicholas Taleb, author of The Black Swan, Goodnight focused the debate on the role of risk models that banks use to measure and manage their portfolios, and the discrepancy between risk modeling and pricing – one of the chief issues used to explain the meltdown of the financial market.

Goodnight then explained how computational models are essential to the understanding and management of every major global risk today, from ecological risk modeling to models used in the pharmaceutical industry.

He highlighted that SAS has been developing methodologies for years that integrate solid risk management models to address global challenges. He emphasized that regulatory agencies around the world need to move risk modeling to the forefront of their priorities.

Where SAS fits in: The role of IT in sustainability

Goodnight’s second speaking engagement was on the role of IT in the sustainability field. The IT sector represents only about 2 percent of the world’s carbon emissions. However, this sector has the ability to support the sustainability efforts of the other industrial and services sectors, which account for the remaining 98 percent.

Most organizations do not know what their environmental impact is, or they struggle to develop an action plan to mitigate the risk to the environment. Goodnight insisted on the importance of using analytics to drive sustainability efforts. If private or public organizations are really serious about driving down carbon dioxide emissions, he explained, the need to measure and optimize becomes clear.

Here again, regulators have a role to play to set the right standards, which will allow organizations to better plan and execute their sustainability plans.

A clear call to action

The Davos meeting ended with a clear call to action for political leaders. In the post-crisis world, statesmanship and cooperation between all major powers are needed to restore trust, create a new financial architecture and avoid fragmented reactions to the economic crisis.

Additionally, the Davos debates illustrated that “business as usual” for large corporations is no longer an option. Business leaders must adopt a new form of hybrid leadership based on a true understanding of globalization and human capital.

Innovation, skills, talent development and education must also remain priorities for governments and commercial organizations. Regardless of the state of the economy, the global war for talent will keep raging. It is in everyone’s interest that companies work with governments to train future generations with the right skills so they can find the right jobs.

And finally, all participants agreed that protectionism – a threat currently on the rise – must be avoided as much as possible. Adoption of protectionist measures would be a very serious blow to the stability of the international system, and developing countries would be the first to lose.

More about World Economic Forum

The World Economic Forum (WEF) is an independent, international nonprofit organization based in Geneva, Switzerland. WEF’s mission is to improve the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. To learn more about this year’s annual meeting, watch video footage or read session summaries, visit the 2009 Annual Meeting Web site.

SAS Cheif Executive Officer Jim Goodnight