Our client Miles Cheetham, of The Key Revolution (makers of Mobiu), was recently invited to Downing Street, keep reading as he shares his experience and insight below…

When I was about 10 years old, I remember peering through the Downing Street gates on a school trip, wondering what it was like behind the mysterious black door.

On Tuesday I found out: a smart lobby with a fascinating watchman’s chair and a staircase with pictures of prime ministers past covering the walls as it winds past the Cabinet meeting room. Curiously, Tony Blair got the last space at the top of the stairs, so I wonder what they will do after the next election.

The prime minister was hosting a reception sponsored by UK Trade and Investment for innovative British businesses that are exporting to the world and I was there as a guest. There were about 100 companies represented – many far larger than our own company – and the thing that struck me was the energy and dynamism of the innovators in the room.

I felt very proud of our business and the results that our small team has delivered to earn this level of recognition. It’s very easy to get lost in the day-to-day running of a start-up with its rollercoaster ride of successes and challenges – stepping back and reflecting is a very useful and energising exercise. Shaking hands and chatting with the PM was quite an honour – I don’t think there are many companies to have received acknowledgement on that scale after only two years.

We will certainly be working hard to ensure we live up to – and indeed surpass – expectations!

Trust: the tangible unknown

Trust me...?

Trust and integrity have come to the forefront of debate in the last few weeks.  What is common to the MP expenses scandal, the Iranian presidential election and the elections to the European Parliament is that trust, or the lack thereof, is responsible for the difficulties.

It is clear that for political systems and democracy to function, trust needs to be present.  The difficulty with this is that trust is inherently intangible, something emotional and something that cannot easily be measured.

The oil that powers the engine
It is trust that allows governments to govern; politicians to lead; and businesses the right to function in the market.

And whilst there has been a lot of focus on the new regulatory frameworks needed to curtail banking excesses, new rules for MPs expense claims and codes of conduct for those in public office, one truth remains – abiding by the rules is just not enough.  Citizens, consumers, customers expect more and demand more.

Last week, I was talking to a chief executive who said that the real test of leadership is whether people in your organisation do what they should be doing when nobody is watching.  This relies on trust and belief.  It relies on trust between the CEO and his/her team and on a shared belief that the strategy is right and worth pursuing.

The futility of sticking to the rules
On the other hand, it is clear that many MPs require a more public school disciplinarian regime if they are to stick to the rules.  Ironic considering that it is the law-makers themselves that expect and demand citizens to abide by laws without constant supervision.

From the current political malaise, there are lessons for organisations of all types and all sizes.

Good business isn’t just about abiding by the rules whether that is in sustainability, employee relations or financial probity – it is much more than that.  It is about doing business in a way that is authentic.  In a way that is congruent.  In a way which ‘interprets’ public and market sentiment as much as it ‘sticks’ to the rules that determine what it must do.

Building an authentic reputation
The temptation to turn to communications and reputation management programmes mustn’t be driven by the need to don a sticking plaster.  Instead, it should be driven by a desire to build a reputation that is authentic and reflects what an organisation stands for.

By building an authentic reputation many benefits flow: more goodwill amongst your customers, greater brand loyalty from consumers, more engaged and motivated employees, a more respected voice with policy-makers and regulators, and a brand that will stand the test of time and growing media scrutiny.

The truth is that, unless organisations do this, they will be found out.  And if that happens, there is little point in claiming you ‘stuck’ to the rules.

As, in today’s febrile media environment, rules don’t count for much.

EU elections – Why should businesses care?

Personalisation, local community involvement, grass roots politics…as an antithesis to today’s globalised world, what we seem to want from our brands, political representatives, even the media, is a sense of home, involvement and belonging.

It is no wonder then that political campaigns leading up to the European Parliamentary elections which have just taken place, focussed, by and large, on national issues – and not Europe. Eurosceptic and pro-European politicians alike have been using the European Union (EU) to manipulate public opinion in their own favour. Depending on the political stripes, the EU has either been blamed for constricting the economies with its supranational regulation, or seen as a safety harbour away from political turmoil and market volatility.

All of this has left the public across Europe misinformed and, at best, confused about the reasons their countries are a part of the EU, as well as the benefits – and shortcomings – of the membership. According to the Eurobarometer survey on the 2009 European elections, two thirds of Europeans had said they knew little or next to nothing about what the European Parliament did, and only a third had planned to vote in the elections. In fact, the voter turnout was on average 43% across Europe – the lowest since direct elections to the parliament started in 1979. The disconnect between the European public and the EU clearly remains strong.

But, while the political debate has often been off the point and the media coverage sparse, the public must not, and businesses simply cannot, ignore the EU.

With insufficient public deliberation of the issues within the EU realm of power, it is easy for businesses and their communicators to fail to pay sufficient attention to the EU regulation and decision makers. What they may fail to realise, however, is that many of the fundamental issues affecting their operating environment are being decided at the EU level.

And, while it’s true that member states in many ways dictate the regulatory outcomes, businesses can not ignore the institutional dynamics and the need to find common ground, which play out in the corridors of the EU. Thus, businesses have to look beyond the local political debate to understand the context in which the EU decisions are being made. This is critical to businesses’ ability to frame their arguments in the manner that not only resonates with their political representatives, but is also actionable and likely to lead to real results.

Rather than engage in political blackmail, businesses must put forward arguments and proposals that are workable and can help make not just their own case, but the case for the industries they belong to – within and beyond the national borders.

The EU exists to advance the interests and project the values of member states on the issues they cannot address as effectively on their own – issues such as trade, energy, climate change, migration and security. No matter the sentiments, these issues have to be tackled through consensus of the nations involved, as isolated policies and actions are simply not sustainable.

Inevitably, this means that many local industries and ways of life are being affected – from food production, consumer safety standards and infrastructure planning, to education, research and development, and air quality regulation – all of these are being influenced by the decisions made at the EU level, and not just locally.

In fact, if the long-awaited passing of the Lisbon Treaty actually materialises later this year, the European Parliament’s sphere of influence is set to significantly expand. Members of the European Parliament (MEPs) would become co-legislators with the Council in a number of policy areas – including energy,  common financial provisions, economic interests, the Euro, structural funds, European intellectual property rights, personal data protection, immigration, public health, agriculture and fisheries policies, and tourism.

While the Lisbon Treaty failed to pass in June 2008 due to the Irish rejection in a public referendum, the current public polls suggest that a new Irish referendum would likely result in an approval vote this time around. It is worth noting, however, that due to the sharp fall in  the Labour’s share of voice and the rise of the Conservatives and the far right, it is not entirely inconceivable that the UK may prove a new stumbling block to the passing of the Lisbon Treaty, creating new tensions between the UK and the EU.

Regardless of the outcome, key issues currently on the European Parliament agenda are bound to have, in one way or another, great implications for businesses. These include:

• Economic and Monetary Affairs – If there were any doubts beforehand, the recent collapse of the financial markets brought home the extent of interconnectedness and interdependency of global economies. Regulation of the European single market and financial sector will be high on the EU agenda in the year to come, as nation states look for ways to protect their economies from future market events to the extent that may be possible.

• Climate change and energy – Europe is leading the global dialogue on climate change mitigation. The European standards and global agreement on post-Kyoto climate regime are to be determined at the Copenhagen Climate Conference in December of this year.

• Enlargement – Croatia, Turkey, Albania and Macedonia are official candidates. Others, such as Serbia, Bosnia and Herzegovina, Montenegro and Kosovo, are recognised as ‘potential candidates’. Debates about whether they should join the EU and when will be high on the Parliament’s agenda in the coming years. Iceland, currently a member of the European Economic Area, is also likely to apply for membership in near future.
  p
• Agriculture – MEPs will take part in preparations for the next major overhaul of the Common Agricultural Policy (CAP), scheduled for 2013. The Lisbon Treaty, if ratified, will give the Parliament joint decision making powers with agriculture ministers in this area.
  p
• Immigration – Countries will continue to seek ways to align various national policies.
  p
• Foreign affairs – Current key foreign policy issues include replacing the expired Partnership and Co-operation Agreement with Russia, preventing the disruption of gas supplies from Russia via the Ukraine, removing non-tariff barriers to trade with China, seeking a solution to the Israeli-Palestinian conflict, and monitoring progress towards association agreements with Latin America.

At the time when businesses are preoccupied with ensuring their survival in the face of recessionary pressures, worrying about European elections may be the last thing on executives’ minds. But, it is exactly the same recessionary pressures that are likely to provide an additional argument for paying close attention to what happens at the EU level. Seeing how vulnerable economies are to massive volatility of consumer and shareholder confidence, regulations and agreements made at the EU level are likely to carry more weight than ever, as it is clear that no single country is immune to what happens outside its borders.

The EU member states just elected 736 MEPs to five-year terms. By proportional representation, they will be accountable to half a billion of Europeans, marking these elections as the biggest transnational elections in history. If your business hasn’t paid attention to the workings of the European Parliament and its representative MEPs, the time to begin doing so is now.

To find out where you stand in comparison to the national political parties on issues relevant to the 2009 European Parliament agenda, http://www.euprofiler.eu may be a good place to begin identifying allies and informing your plan of action to ensure your business can both influence the EU debate, as well as prepare for any regulatory adjustments likely to affect the way you operate.

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EU elections – Why should businesses care?

Personalisation, local community involvement, grass roots politics…as an antithesis to today’s globalised world, what we seem to want from our brands, political representatives, even the media, is a sense of home, involvement and belonging.

It is no wonder then that political campaigns leading up to the European Parliamentary elections which have just taken place, focussed, by and large, on national issues – and not Europe. Eurosceptic and pro-European politicians alike have been using the European Union (EU) to manipulate public opinion in their own favour. Depending on the political stripes, the EU has either been blamed for constricting the economies with its supranational regulation, or seen as a safety harbour away from political turmoil and market volatility.

All of this has left the public across Europe misinformed and, at best, confused about the reasons their countries are a part of the EU, as well as the benefits – and shortcomings – of the membership. According to the Eurobarometer survey on the 2009 European elections, two thirds of Europeans had said they knew little or next to nothing about what the European Parliament did, and only a third had planned to vote in the elections. In fact, the voter turnout was on average 43% across Europe – the lowest since direct elections to the parliament started in 1979. The disconnect between the European public and the EU clearly remains strong.

But, while the political debate has often been off the point and the media coverage sparse, the public must not, and businesses simply cannot, ignore the EU.

With insufficient public deliberation of the issues within the EU realm of power, it is easy for businesses and their communicators to fail to pay sufficient attention to the EU regulation and decision makers. What they may fail to realise, however, is that many of the fundamental issues affecting their operating environment are being decided at the EU level.

And, while it’s true that member states in many ways dictate the regulatory outcomes, businesses can not ignore the institutional dynamics and the need to find common ground, which play out in the corridors of the EU. Thus, businesses have to look beyond the local political debate to understand the context in which the EU decisions are being made. This is critical to businesses’ ability to frame their arguments in the manner that not only resonates with their political representatives, but is also actionable and likely to lead to real results.

Rather than engage in political blackmail, businesses must put forward arguments and proposals that are workable and can help make not just their own case, but the case for the industries they belong to – within and beyond the national borders.

The EU exists to advance the interests and project the values of member states on the issues they cannot address as effectively on their own – issues such as trade, energy, climate change, migration and security. No matter the sentiments, these issues have to be tackled through consensus of the nations involved, as isolated policies and actions are simply not sustainable.

Inevitably, this means that many local industries and ways of life are being affected – from food production, consumer safety standards and infrastructure planning, to education, research and development, and air quality regulation – all of these are being influenced by the decisions made at the EU level, and not just locally.

In fact, if the long-awaited passing of the Lisbon Treaty actually materialises later this year, the European Parliament’s sphere of influence is set to significantly expand. Members of the European Parliament (MEPs) would become co-legislators with the Council in a number of policy areas – including energy, common financial provisions, economic interests, the Euro, structural funds, European intellectual property rights, personal data protection, immigration, public health, agriculture and fisheries policies, and tourism.

While the Lisbon Treaty failed to pass in June 2008 due to the Irish rejection in a public referendum, the current public polls suggest that a new Irish referendum would likely result in an approval vote this time around. It is worth noting, however, that due to the sharp fall in the Labour’s share of voice and the rise of the Conservatives and the far right, it is not entirely inconceivable that the UK may prove a new stumbling block to the passing of the Lisbon Treaty, creating new tensions between the UK and the EU.

Regardless of the outcome, key issues currently on the European Parliament agenda are bound to have, in one way or another, great implications for businesses. These include:

§ Economic and Monetary Affairs – If there were any doubts beforehand, the recent collapse of the financial markets brought home the extent of interconnectedness and interdependency of global economies. Regulation of the European single market and financial sector will be high on the EU agenda in the year to come, as nation states look for ways to protect their economies from future market events to the extent that may be possible.

§ Climate change and energy – Europe is leading the global dialogue on climate change mitigation. The European standards and global agreement on post-Kyoto climate regime are to be determined at the Copenhagen Climate Conference in December of this year.

§ Enlargement – Croatia, Turkey, Albania and Macedonia are official candidates. Others, such as Serbia, Bosnia and Herzegovina, Montenegro and Kosovo, are recognised as ‘potential candidates’. Debates about whether they should join the EU and when will be high on the Parliament’s agenda in the coming years. Iceland, currently a member of the European Economic Area, is also likely to apply for membership in near future.

§ Agriculture – MEPs will take part in preparations for the next major overhaul of the Common Agricultural Policy (CAP), scheduled for 2013. The Lisbon Treaty, if ratified, will give the Parliament joint decision making powers with agriculture ministers in this area.

§ Immigration – Countries will continue to seek ways to align various national policies.

§ Foreign affairs – Current key foreign policy issues include replacing the expired Partnership and Co-operation Agreement with Russia, preventing the disruption of gas supplies from Russia via the Ukraine, removing non-tariff barriers to trade with China, seeking a solution to the Israeli-Palestinian conflict, and monitoring progress towards association agreements with Latin America.

At the time when businesses are preoccupied with ensuring their survival in the face of recessionary pressures, worrying about European elections may be the last thing on executives’ minds. But, it is exactly the same recessionary pressures that are likely to provide an additional argument for paying close attention to what happens at the EU level. Seeing how vulnerable economies are to massive volatility of consumer and shareholder confidence, regulations and agreements made at the EU level are likely to carry more weight than ever, as it is clear that no single country is immune to what happens outside its borders.

The EU member states just elected 736 MEPs to five-year terms. By proportional representation, they will be accountable to half a billion of Europeans, marking these elections as the biggest transnational elections in history. If your business hasn’t paid attention to the workings of the European Parliament and its representative MEPs, the time to begin doing so is now.

To find out where you stand in comparison to the national political parties on issues relevant to the 2009 European Parliament agenda, www.euprofiler.eu may be a good place to begin identifying allies and informing your plan of action to ensure your business can both influence the EU debate, as well as prepare for any regulatory adjustments likely to affect the way you operate.

What will be the impact of the current downturn on business psyche?

Green shoots?

Join the ‘What future for business?’ debate

With many people desperate to seize on today’s headlines that the infamous green shoots of recovery are here, what will be the lasting impact of the downturn?

To explore this question we have launched an online debate on the impact of the global downturn on the future of business.  However, instead of looking solely at the arithmetic and economic impact, which has and will be explored to death, we are exploring its impact on business psyche.  We are looking at what impact the downturn will have on how business people think and make decisions and what it will mean for the way that business is likely to be conducted in the future.

The project launches with a series of online debates where, each week for six weeks, two contributors provide alternative views on different facets of the subject.  Contributors are prominent business executives, media figures and politicians, including David Kern from the British Chamber of Commerce, Paul Mason from BBC Newsnight, Jenny Davey from The Sunday Times, Chris Francis from IBM and more.  Everyone will also be able to have their say by joining the ‘What future for business?’ debate here.

Topics to be discussed include: How gloomy or hopeful should we be?  The role of business psyche?  What can we learn from past experiences?  What do today’s CEOs think?  What do the business leaders of tomorrow think?  What are the implications for tomorrow?

We will also be hosting a live debate at 7pm on 7 July at The Commonwealth Club, where the contributors and audience will continue the discussion face-to-face.

This project is part of our Hothouse Foresight initiative, which is a series of research, debates and events exploring how changes in the economic, social, political, business and media landscape – both locally and globally – are impacting organisations and their stakeholders.

Resignations and a reshuffle… can Brown survive?

The dramatic events of last night continued through the morning as Downing Street went on the offensive with an early reshuffle. The major faces are for the most part where they started: Alistair Darling, contrary to widespread predictions stays at No. 11, Jack Straw stays at Justice, David Milliband stays at the Foreign Office. The big move is Alan Johnson from Health to Home Office.

At this point it looks like Brown may live to fight another day – if not another year. James Purnell’s resignation offered the big players a key opportunity to force a leadership contest: Peter Mandelson, Alan Johnson and, perhaps most surprisingly, David Milliband have all publicly aligned themselves with the Prime Minister. The latter – close friend and long-time political ally of Purnell – is now being criticised in some quarters for not taking the initiative.

Mr Brown owes a great deal to Peter Mandelson – who voiced his unequivocal support quickly and articulately. More critically, he is also held responsible for rallying Blairites and Brownites alike to defend him.

The election results look like they could be worse than predicted with The Guardian suggesting that Labour attrition could be as high as 75% in some areas.
265 key wards have been declared and the change in the share of the vote for each party according to the BBC is as follows:

Conservatives up 4

Labour down 12

Lib Dems down 2

Another round-up later tonight…

Insights from Wireless and Mobile 09

Morning on the show floor

We’ve started our second day at Wireless and Mobile 09 in Olympia, where we’re running the press office for Europe’s largest wireless show, now in its fifth year.  The mood here seems realistic and upbeat.  Yesterday, educational seminars were all full and footfall at the event is doing extremely well; demonstrating that even if people are finding the economy tough, the appetite for growth and technological development does not seem to be waning.

Opera Software gave an interesting perspective on the role of the internet in today’s world.   Jon S. Von Tetzchner, Opera’s co-founder, reminded the audience that despite the internet’s centrality to seemingly everything in the developed world, actually only 20% of the world population currently has online access.  It will be interesting to see how fast this percentage grows over the next year as the developing world starts using some of the mobile technology on offer here today.

Continuing with this theme, Opera ran a survey in 1998 asking, ‘what would you rather do without, TV or your PC with internet access’? In 1998, 80% of respondents said they would rather be without the internet while 20% said TV.  In 2007 they ran the same survey and unsurprisingly the balance had shifted, but what was surprising was by how much; 85% now say they could now live without TV and only 15% were still wedded to their telly.

Encouragingly though, it seems as though this hypothetical conundrum may soon be solved as Jon finished his talk by telling us that within the next ten years every TV set produced will have internet access. Given that one of Opera’s customers is the TV giant Sony Bravia, they are probably in quite a good place to make this prediction.

Staying focused on the future

The PR recruitment industry?

As everyone is well aware, we are in one of the most uncertain market environments the world has seen in decades.  For most industries this has, quite rightly,  prompted an introspective ‘baton down the hatches’ and generally make sure your ship is in order approach.  Indeed, it may be one good thing to come out of this market correction; that businesses are better run and there is generally less wastage all around.

However, one  major negative impact brought by the winds of recession swirling around us is that industries can start to lose structure as holes appear through freezes in training and recruitment.  Take the PR industry: in the recession of the 1990s, there was a fairly industry-wide approach, lead by giants like WPP,  to not only halt recruitment but also to cancel all graduate training programmes.  Whilst this fixed the short term problem of cost control, it has meant the industry has been seriously short of good talent for years after as that ‘year group’ of capable, bright recruits were missing from the system as AEs and then AMs and now ADs.

Times are tough, there is no doubt about it, but it is so important to keep talent coming through industry.  Tempting though it is to completely nail those hatches shut, it is essential to keep one eye on the future of whatever industry we are in and invest in the talent that is going to be by our side when the sun finally comes out again.

The best of the budget

The dizzying numbers and near constant stream of leaks around the ’09 budget meant the press were always going to have an unqualified field day. But the 50p tax rate  (and the fact that David Cameron seems to have lost the power of normal speech as his rebuttal consisted entirely of soundbites) has prompted some exciting and valuable debate.

Please find some of the top tid-bits below:

Jackie Ashley at The Guardian provides a useful analysis of the 50p tax rate as a political gamble.

The FT’s take on the political partnership between Gordon Brown and Alistair Darling

The Telegraph (believe it or not) carries a piece from Mary Riddell hailing the ‘Robin Hood budget’ – athough she seems a bit wistful that it hadn’t been delivered sooner.

James MacIntyre at The New Statesman welcomes ‘Labour’s bold budget’ and proclaims that Labour have changed the rules of the game.

Gillian Tett’s chocolate tuppence is definitely worth a look.

Vince Cable critiques the growth forecasts outlined and the political tokenism of the 50% tax rate.

John Kampfner discusses the demise of New Labour in The Evening Standard

A new world order?

A view from the front row at the Obama and Brown G20 briefings

Spending 15 hours in ExCel isn’t something I would wish on anyone.  However, spending 15 hours in ExCel at the London Summit of the G20 yesterday was an incredible experience.

Agree with the communiqué or not, the Summit was historic. Historic because of the sheer size of measures announced. Historic because of the extent of co-operation across countries with divergent agendas. Historic because there was an unmistakable sense that yesterday really was a day that would be remembered – and judged – by history.

Despite the columns of copy, hours of footage, number of tweets dedicated to the event, its success cannot be judged until a few months down the line. It may come to be seen as the world’s costliest mistake, or the day the world identified and acted upon the realities posed by a new world order.

Sitting in the front row at the Brown and Obama briefings, it became clear to me that we are all, like it or not, operating in a new era. And, whilst rhetoric was not absent from either briefing, there was a clear sense that we are genuinely entering a changed environment. One in which the role of government, through regulation and intervention, is going to be more dominant, and one where businesses and their leaders are to be questioned more, scrutinised more and, perhaps, restrained more.

The implications for all businesses – global or UK – will emerge over the coming weeks.  But, what is certain is that, in this new era, government intervention will be commonplace, scrutiny over the actions of corporations more intense than ever; and the shifts of power between the East and the West, developed and developing, will become current and dominant trends – not just speculations.

The new challenge for communicators

All of this has huge implications for communicators. It makes the stakeholder map more complex as the concept of ‘shareholder value’ becomes blurred. It calls into question the role that business plays in society, as politicians start to believe that it is them who can (and must) ‘manage globalisation’.

It calls for the reassessment of not just commercial strategies, but for the re-evaluation of communications strategies, as well.  How businesses communicate and interact with employees, customers and the wider network of stakeholders, is about to undergo a fundamental transformation.

Change may have been the slogan of the successful Obama campaign. But, for communicators, change must become a guiding principle as we help businesses navigate this new era, connect with new and more demanding audiences, and establish authentic and credible reputations that work in the interests of shareholders – and not against them.

All of us in communications should relish the challenge that this new world presents. In many ways, it is us who are best placed to help business adapt and respond to this new reality.

Capitalism after the downturn: a shifting ideology

The world leaders arrived at the G20 summit with several Herculean tasks in front of them: to somehow reboot a devastated financial system, to agree reforms that would safeguard the global economy in the future, and to restore public confidence in a discredited system that has caused brutal damage to individual lives – and may continue to do so for a long time to come as the recession intensifies.

Whether the summit has succeeded in mapping a path out of this global recession remains to be seen, but whatever the eventual outcome, it has afforded an insight into the future of capitalism and the imminent realignment of world order.

Towards a progressive agenda

As jobs are lost and houses repossessed, public frustration continues to grow. This dissatisfaction indicates a fundamental change in public sentiment that Barack Obama identified in his inaugural address, when he claimed that “what the cynics fail to understand is that the ground has shifted beneath them”. This change has enabled the US President to put forward an unapologetically progressive agenda explicitly designed to address the deeper failings of capitalism, namely, rising income inequality and corporate misconduct.

The Obama agenda is emblematic of an ideological shift towards what Lord Layard recently identified as ‘a less selfish capitalism’. In a Financial Times article he called for ‘a more humane brand of capitalism, based not only on better regulation but on better values’. The financial crisis has acted as a reality check, demanding a reassessment of what constitutes ‘progress’. As Lord Layard pointed out, the term was defined by the Anglo-Saxon Enlightenment as the reduction of misery and the increase of happiness. Wealth creation is no longer synonymous with progress.

Capitalism: ‘a different animal’

The developing countries of the world will demand that capitalism survive this crisis – China, India, Brazil will not forfeit the benefits it can confer – but it will have undergone significant transformation. I is unlikely that wealth creation will be accepted as an end in itself. Brazil’s President Lula da Silva is well attuned to this shift: “Capitalism will be a different animal once the turbulence is over”, he told TIME in a recent interview. “Developing countries will be responsible for a major percentage of world economic growth.”

There is a growing sense that Brazil is outperforming the other emerging giants: poverty may be falling in India and China but inequality is only falling in Brazil. This expansion of social mobility is attributable to what Lula refers to as ‘the financial strategy of the future’. In simplest terms, this strategy is a post-ideological approach that places as much emphasis on wealth redistribution as on wealth creation.

Brazil’s problems are still weighty and numerous – political corruption is endemic, the education system barely functions, and absolute poverty is still rife – but Lula’s take on capitalism may constitute a route out of a classic dilemma facing developing countries: how to expand an under-achieving economy and simultaneously reduce social inequality. It is no wonder he has an approval rating of 80 percent.

The Asian influence

Traditional capitalist strongholds like the US and western Europe will be permanently scarred by this recession, and it is likely that the greatest proponents of capitalism in the future will be in Asia. It is reductive to discuss an ‘Asian approach’ to capitalism, but there is a tangible gap in perspectives between the West and the East. The divergence is only likely to increase as the global recession deepens. Widespread scepticism about the American model of deregulation has always existed in Asia and, as Kishore Mahbubani notes as part of the Financial Times’ Future of Capitalism series, Asian capitalists will greet any economic advice now emanating from the West with even greater cynicism.

The world order will shift as the global economy recovers and the brand of capitalism that emerges will be reflective of this. It will be characterised by caution and dominated by the strong regulation and expectation of government supervision that pervade Asian approaches to capitalism.

Finding a new way

It is tempting to see this imminent remodelling of capitalism as a great challenge facing the corporate world, but it could also constitute an unprecedented opportunity. In throwing out the old ways, businesses will be able to shape the new.

As President Obama’s esteemed chief of staff Rahm Emmanuel put it: “Rule one: never allow a crisis to go to waste.”