Address at the 25th Annual Presidents' Forum of IEDC Bled School of Management

Bled, 19.10.2012  |  speech

Opening Address by Dr Danilo Türk, President of the Republic of Slovenia, at the 25th Annual Presidents' Forum of IEDC Bled School of Management entitled "With Open Innovation to Success"
Bled, 19 October 2012


I am always pleased to be at the IEDC Bled School of Management because I always hear good news here. We have already heard such news this morning. This is a very good way to start a conference. I would like to congratulate the IEDC on the important award that it received yesterday. I am sure that it is not the last award that this school has received. There will be many more in the future. They will reflect the vitality of the school, and the spirit of optimism and achievement that is associated with it.

It is always a pleasure for me to come to the Presidents' Forum. I must tell you that this is an established tradition in Slovenia by now and I feel an obligation to come to this event every year. The Presidents' Forum is a very important gathering. There are two such events at this time. One takes place at the United Nations in New York, bringing together country presidents. The other one takes place at Bled and unites Danica Purg's guests. This year I did not go to New York because, as you know, we have an electoral campaign going on in Slovenia and I am very busy campaigning. Still, I could not miss the Presidents' Forum at Bled.

I would like to share with you some general thoughts about innovation, which is at the centre of your concerns. I am sure that your discussions will be inspired by your experience, knowledge, business acumen, and other useful qualities that are richly represented in this room. I am going to speak from the position of a politician who is thinking about what is going on in the world, reflecting on the duties of politicians in the future ahead of us.

Obviously, thinking about innovation is always necessary. The period that we live in abounds in innovation. It is one of the most innovative periods in recent history. In fact, we are sometimes overwhelmed by the amount of change that has happened as a result of developments in information technologies, biotechnology, and other areas. This also includes other areas, such as civilian aircraft. It has developed and expanded much beyond what seemed possible 30 or 40 years ago.

We have started thinking of our era as an era of globalisation on the one hand and innovation on the other. We also believe that this is a unique period. And of course it is in many ways. But we have to understand that this is not the fist period of globalisation. Globalisation is a very old process, which started centuries ago. There were several important revolutions in the past: the Industrial Revolution and the invention of the steam engine, the revolutions after the construction of the internal combustion engine, the period after the advent of electricity, and so forth.

One can legitimately ask whether the most recent period of globalisation and innovation has produced an amount of social change comparable to that of the past. The Industrial Revolution of the 19th century generated an enormous social and political upheaval in Europe and so did the widespread use of electricity. These developments affected the way that people lived, interacted, did business and politics, and formed social networks. Everything changed as a result of this wave of innovation in recent history. Also, the previous revolutions produced more jobs than the developments that we are witnessing at present. The revolution in the field of information has not had the same effect yet.

I believe that these changes have political consequences as well. For example the universal suffrage did not happen in the 19th century but later. The women's right to vote is a very recent innovation in politics. There were some political movements that were able to introduce technological change in political programs in a more indirect way. Perhaps we can quote Lenin, with a sense of irony today, who said that communism was Soviet rule plus electrification. The electrification of Russia was a big project and it inevitably had a big political impact.

I believe that today's politicians should think how technological changes, and those in modes of production, influence the social fabric of society and impact its political life. This is a big question these days. I would say that we do not see an adequate amount of innovation in the political organization of society that would be comparable to what has happened in other spheres of life. In my view, this is a problem. We have to think of politics in a variety of new ways and with an innovative spirit. Of course, this is a very easy conclusion to reach. The difficult part is to find a good approach.

I would like to draw your attention to a recent experience that is relevant to the politics, business, and social organization of today, as well as to technological change. What I have in mind is the concept of sustainable development. Originally the concept had to do with the environment. An impressive report by an international study group stressed the need to protect the global environment in order to ensure the sustainability of development. For a very long time after that, the debate on sustainable development focused on environmental issues. The question is if this concept is not far larger, entailing many further tasks.

The debates on global finance or other major economic issues always involve sustainability. It is interesting that sustainability has "crept into" every discussion in the field of economics today. Even the reports of the rating agencies that downgraded Slovenia last August speak mainly about the sustainability of financial arrangements designed to ensure budgetary consolidation. Sustainability has become a central topic in contemporary economics and thinking about development.

Let us think about this and compare this fundamental insight, which is not so hard to reach, with an experience that has to be given further thought. That experience relates to two summits on global environment. One took place in Rio de Janeiro 20 years ago. The other one was held in the same city this year. If we compare these two summits, we will notice that the concept of sustainability was articulated in two very different ways. Twenty years ago, the optimistic spirit of the time led to the belief that there would be global normative arrangements defining the path toward sustainable development. The key achievement of that conference was the agreement that the world had to move toward a treaty on global warming, another treaty on biodiversity, and towards a set of other international instruments. That thinking was based on the idea that there should be binding global international obligations defining a framework for national policies and legislation within which national states would define their specific roles in the promotion of global sustainable development. The focus was on hard laws and binding obligations. That was the way to go.

That idea came to an end in Copenhagen in 2009. The European Union countries, and certainly Slovenia, were very much in favour of a set of binding obligation as an outcome of the practices following the Rio de Janeiro summit. Three years later, the situation became clearer. The world has moved from a belief in a global system based on binding obligations to something much softer: programmatic norms, desirable objectives, recommendations, and things of that kind. That is what prevailed at the Rio de Janeiro summit in June this year. This gives a very different twist to global concerns and policies for sustainable development.

Does this have serious implications for business decision makers? I believe that the answer is positive. Earlier on, business legitimately expected that the global set of binding obligations would be placed within an international legal framework on the basis of which national legislation would be developed. As a result of all that normative development, the business environment would be more predictable, more clearly defined, and of course easier to handle. That was the expectation, discussed at the World Economic Forum in Davos and other places. That expectation was very real. But only two and a half years later it has practically evaporated. So where are we now?

We are where the world has been many times in the past. We are left with the need to innovate in business and other spheres of life. We also need to think what could drive the world toward a future of sustainability. My hypothesis in that regard is that there is a need for innovation in four areas.

One is scientific discovery. We can be reasonably optimistic in this respect. The development of science is marching on and we can expect that scientific innovation will spill over into other areas in which sustainable development is also needed.

The second field is engineering. I believe that we have to think about it much more seriously than before. In the past 20 years, many people in the European Union thought that financial tricks were enough to generate economic development. Now we know that this is far from sufficient. We need to promote engineering and we need innovation for that purpose.

Obviously, business models also need to be innovative and I hope that you will focus your attention on those.

And, finally, there is a need for political innovation. I do not think that you are terribly interested in political innovation at this conference. There are other places to talk about it. As soon as I leave this conference in a little while, I will be involved in political innovation. We have to think what this means for a country like Slovenia. Although every country has its own peculiarities, I suspect that people everywhere have good reasons to be dissatisfied with the quality of politics. This means that there is a need for political innovation.

Ladies and gentlemen, these were some of my basic thoughts on the topic that you are going to discuss today and tomorrow. I wish you success and I promise to read the proceedings of this forum. Danica can testify that I always make this promise and I always keep it.

Let me conclude on a very serious note. The subject that you have chosen is very important. Think about it as well as the broader context in which innovation is taking place today.

Thank you very much and have a nice time in Bled.