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The Credit Suisse Magazine Since 1895 Issue 5International Edition / English December 2011 / January 2012

The Art of Forgetting Exploring the human memory’s limits and why we need to forget / Philanthropy Campus How to give effectively / High & Mighty Equestrian sporting highlights / Roger Federer More popular than the Dalai Lama / Zurich Film Festival The Green Carpet

TimePerceived Realities

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Foreword

Time and Time Again

06Focus on Time

In ancient Greece, Aristotle claimed that time had an infinite past because, for any time, we can always imagine an earlier time. In medieval times, Aquinas objected to the ancient Greek view, saying past time is finite and that our imagination can’t always be trusted to tell us how things really are. Instead, the past is finite because time began with the creation of Earth a finite time ago. Then, in the late 17th century, Newton argued that time is infinite in the past and in the future. In the standard picture of the big bang today, the implication for both space and time is that, although they were finite in the past, they will be potentially infinite in the future.

Time is, of course, a succession of things, a sequence of events, experienced as irreversible moments. In space, you can go your direction and I can go mine, but in time we all go the same direction, so to speak. In time, we can never go back and we must, inevitably, go forward. Time is relentless, in good and in bad times.

In this issue of bulletin Professor Frieder R. Lang talks about time perception within a more contemporary frame that includes notions of time in psychology, as opposed to earlier discussions of time exclusively based on nuclear physics. Further on, in “The Longevity Paradox,” we look at time and age, and the fact that today, we are living around 30 years longer and have not thought of what to do with all this extra time.

A new editorial section in which we expand on the main topic is also introduced in this issue. In our Premium Dossier, we meet Jean-Claude Biver, CEO of Hublot, one of Switzerland’s more contemporary watchmakers and spend some time with Dr Ivo Pitanguy , the Michelangelo of plastic surgery, who dedicates his life to beauty, but is often confronted with patients who would love nothing more than to literally stop the passing of time altogether.

In good times and through hard times, Credit Suisse prides itself in its principled and proactive partnerships with its clients, making sure that time and time again, we exceed their expectations. At bulletin, we hope to accomplish exactly that, time and time again. Stefan Behmer, Editor-in-Chief

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The Essential Art of Forgetting Human beings are knowledge gatherers. Because the human memory is limited, we need to forget so that we can continue to process what we learn and e xperience. Forgetting is an ancient cultural technique practiced by religions in particular. In a s ociety with an overload of infor-mation, there is an increasing need to rediscover the techniques of forgetting.

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Katrin Zeugexplores the concept of perceptions of time and the future in an interview with Professor Frieder R. Lang | Page 6

Claudia Steinberglooks at a world in which we live 30 years more on average and don’t know what to do with all that extra time | Page 20

Content 3

Ivo PitanguyThe Michelangelo of Surgeons

6

Premium

A Thing About Cheese Jean-Claude Biver2

The New Bear in Town Ernst Tanner10

Timelessness Angela Ahrendts14

East Meets West Hong Kong16

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Research

Global Wealth Rising The latest Credit Suisse Global Wealth Report offers a unique insight into the wealth of every adult worldwide.

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Banking on Wheels bulletin visits two microfinance clients in southern Malawi, in the company of credit advisors from Opportunity International.

Michio Kaku The futurist and physicist reveals what lays ahead in the fields of medicine and technology in an enthralling interview.

Focus on Time06 The Perception of Time Professor Frieder R. Lang

explores our perceptions of time and the future.

14 Photo Essay The concept of time in pictures.

20 The Longevity Paradox The AgeLab at MIT is developing visions for a planet where centenarians can lead active and fulfilled lives.

Credit Suisse33 Wealth Management Conference A quick round-

up of Credit Suisse’s conferences in the US.

34 Philanthropy Campus Discussing the many facets of giving coherently and effectively in today’s world.

36 Holt Lens 2012 is a milestone for Credit Suisse with the rollout of this instrumental software update.

39 Global Ad Campaign Putting clients and their achievements at the forefront of our ad campaign.

46 Twice the Cheer Credit Suisse volunteers are helping the Swiss Red Cross.

52 White Turf Switzerland’s most spectacular horse racing event.

Leader56 Roger Federer The Swiss tennis champion came

in second only to Nelson Mandela among the top figures the world likes and trusts.

Special Dossier

Premium We introduce a new section to bulletin’s editorial mix, focusing on premium content from around the globe.

Leonardo Special The landmark exhibition at London’s National Gallery is completely sold out, but if you are interested in finding out more about “Leonardo da Vinci: Painter at the Court of Milan,” we have produced a 24-page special which you can order from our editor: [email protected] (free delivery – limited amount available)

Leonardo App Inspired by the paintings and literature of the era, the Studio Tour app is a detailed and informative recreation of Leonardo’s Milan studio circa 1490. Download the app now at: www.cs-app.com/en

Luke Syson Curating a landmark exhibition / Insight Leonardo da Vinci as a painter / Painting the Divine The restoration of the “Virgin of the Rocks” / “Salvator Mundi” The recently discovered masterpiece of the “Saviour of the World” / Legacy The fascination with Leonardo da Vinci and his body of work five centuries after his death

Special Edition / Les Amis du Credit Suisse / November 2011

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6 Time

ABOuT MINuTES, HOuRS AND THE

PERCEPTION OF TIMEClocks as we know them came late in human evolution.

Our knowledge of time today is not something we were born with. We discussed this subject with Professor Frieder Lang, who

conducts research in the area of time perception.

Interview: Katrin Zeug

It’s Monday morning, 10 o’clock to be precise. Frieder Lang, a professor of psychology at the Friedrich-Alexander University in Erlangen, Germany, is a man who uses his time well. As we arrive, he is just reviewing a doctoral student’s paper in the company of the ticktock of a clock on the wall. Later, during our interview, he glances at the clock when-ever mentioning minutes and seconds, almost as if he needed a reminder of the reality that time is indeed passing.

However, Professor Lang’s research deals with time of a different sort. Subjective time, or time as humans experience it. When does a moment feel as though it lasts forever? How do we feel when time is running out? Why do the elder-ly perceive time as passing by more quickly? We have just two hours for our interview. In this case, we are short for time!

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It was not easy to find a time slot for this interview. Do you sometimes wish you had more time?

If I had more time, I would take on more work – the outcome would still be the same. So I don’t wish that I had more time, but I’d like more wisdom so that I could do the right things and ignore what is unimportant. How much time we have is a question of personality.

What can we do to get more out of our time?Well, as you know, there are expensive time management seminars where you are supposed to learn how to formulate and organize your own goals. In reality, these are merely motivation courses that have less to do with time as such, but rather the quest for meaning. But those are precisely the concepts that we confuse: making use of our lives and the search for a meaning in life. If I am doing meaningful things, the experience of time becomes irrelevant. But if I focus on countless trivial and unim-portant matters, the time spent will seem long and – looking back – positively empty.

Can we actually comprehend time, given that its passing has so little to do with our perception?

We’re attempting to do so, but this is a very new field in psychology. Until now, it is mainly the physicists who have focused on the question of what time actually is. Its definition is based on nuclear physics: Electromagnetic waves generated during the transition from one energy state to another define time more accurately than ever before. And then we use this as the basis for standardizing machines or electronic devices and we gear our entire modern world to it. However, this approach does not corre-spond to our experience. It was only very late in evolution that humans discovered clocks as a tool to structure and organize their day-to-day lives. Nobody is actually born with the sense of time that we are familiar with nowadays.

Nevertheless, humans do have a sense of time …Yes, but that’s something entirely different – it’s more of a chronobiological sense that is based on day/night rhythms and seasons. We’re very sensitively attuned to these rhythms. For example, we notice when a journey takes us into a different time zone, and we suffer jet lag even with a difference of only a few hours. This experience of time is far removed from the time that we measure in seconds and minutes. There is no sensory perception of time that resembles our senses of hearing and vision. Our current understanding of time is an unnatural construct; only our experience can determine how we perceive duration and pace.

Where in the brain does this perception take place?The way we experience time is so complex that it can only be explained as an interaction between different structures in the brain. The oldest of these is the brain stem, where the pineal gland resides and melatonin is secreted. Among other things, this hormone is responsible for the circadian rhythm that enables us to sleep and wake up. But our sense of time is also based on recognition of causal connections, or causes and their effects. This evaluation of the past is vital to our survival – it involves the memory in collaboration with many different areas. Phylogenetics (the study of evolutionary relatedness) and the perception of time as the future only developed at a much later stage. This resides mainly in the cerebral cortex, which is where actions are controlled, but also where the fulfillment of wishes is deferred, plans are played through and impulses are checked. This part of the brain has grown more than any other during the course of our more recent evolution.

Your colleague, the German psychologist and neuroscientist Ernst Pöppel, says that the present lasts for three seconds. According to him, this is the length of time it takes to swallow, shake hands or stamp your foot – and then the brain asks for something new to do. How do we experience a moment in which we linger?

Professor Frieder R. Lang was born in 1962. He studied

psychology at the Berlin University of Technology and in 2001 he qualified as

a lecturer at the city’s Humboldt University.

He went on to teach develop-

mental psychology at the Martin Luther University of Halle-Wittenberg. Since

2006, Lang has been a professor and the director of

the Institute of Psycho- gerontology at the Friedrich-

Alexander University of Erlangen.

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“Perception of the future developed at a much later stage in the human evolu-tionary development, mainly in the cerebral cortex.”


8 Time

Motivational psychology has shown that people who devote themselves quite passion-ately to an activity – a mountaineer who is suspended from a mountain face, for example – experience something akin to a loss of time. They are totally focused on the here and now. We call this phenomenon a ‘flow experience.’ In retrospect, the moun-taineer will feel that time passed quickly, but during the actual experience – and this is what is remarkable – that person does not think about time at all and their sense of time virtually disappears. On the other hand, we are familiar with the nagging feeling that a task is not demanding enough – it seems as if time drags on forever, we look at the clock more often and it’s as if the hands are hardly moving. Time passes slowly, and we experience boredom.

Apart from these two extremes, we spend much of our day doing routine tasks. How does this affect our perception of time?

Routines lend structure to each day, week or month, and perhaps to our entire lifetimes. To discover their effects, we conducted a study where we asked people to reconstruct the previous day; we asked them what they did from the time they got up until they went to sleep and how they experienced time during the day. It emerged that older people view the day as relatively uniform, that is to say that they have the same sense of time during each episode, but they perceive it as passing more q uickly. By contrast, there is a U-shaped progression among younger adults: Time passes more slowly for them in the middle of the day, regardless of whether or not they are working.

How can you explain this? We assume that routines and the way everyday life is structured are critical to one’s sense of time. Younger people are still trying out a lot of different things, and they perceive imposed routines as constraints or restrictions – as boring. But in the mornings and evenings, they often feel not only well-adjusted, but also self-determined – and this makes the time pass more quickly. On the other hand, older people have already adapted themselves to their lives and settled into their routines. They don’t seem to experience boredom during routine activities in the same way as younger people do.

So can you stay young by avoiding routines? One hypothesis could be that older people who keep seeking out new challenges experience time with a greater sense of fulfillment. This is exactly what the so-called silver surfer generation (today’s 65- to 75-year-olds) aims to do. They seem to be busier than all of the other age groups. Our research gave us the impression that such activities give them more enjoyment in life. These people prolong what might be called the ‘middle phase’ of their life without the constraints of employment, with the idea that you’re only as old as you feel. But this does not give them the sense that they have more time. On the contrary, our findings show that people who think in this way have a sense that time is running out, they feel under pressure to make proper use of the time remaining to them.

Many people feel that time passes more quickly as they get older. Why is that?

It would be simplest to say that this perception is related to ebbing mental efficiency. As we get older, our thinking slows. We need longer for the same processes. However, we cannot draw conclusions about our sense of time from our speed – because older people who are more mentally efficient than their younger peers also have the feeling that their time passes more quickly. Our investigations have shown that people are motivated more by an insidious, growing awareness that the time they have left to live is running out. Fixed periods have a dramatic impact on the sense of time. What makes humans special, of course, is that we can gear our own behavior not only to what we learned in the past, but also to take into account events that might arise in the future. No other organism can do this in a similar way.

“What makes humans special, of course, is that we can gear our own behavior not only

to what we learned in the past, but

also to future events.”


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What changes occur when a fixed time period is running out?We have a more accelerated perception of time. This alters our priorities. When a deadline is approaching at work, for example, we usually act more purposefully and our concentration increases. If people believe that they are at the end of their lives, it is noticeable that emotions play more of a part in many of their decisions. They seek positive feelings, and perhaps feelings that are terrifying and beautiful at the same time, such as yearning or melancholy. But if we believe that we still have plenty of time left to live, we act in a more strategic and purposeful manner. We accumulate knowledge, the value of which will only become apparent in the future – for example, by writing a doctoral thesis that will take many years to complete.

Does digitization also affect our perception of time? I’m not sure about that. Our perception of time increases because we train it from childhood onwards. From doing research in music, we know that many pieces of classical music are played much faster nowadays than when they were composed. And in films, cuts from one scene to the next are also faster. But the biological and neuronal composition of the modern human brain is the same as what was present in our ancestors’ brains, at the start of recorded time.

Do you think that the speed at which we are bombarded with stimuli nowadays is harmful?

There has always been debate as to whether new technical developments are hazardous to health, because they allegedly go against nature and could disrupt life’s natural rhythm. The steam locomotive, which traveled at 35 kilometers (22 miles) per hour, was just one such example. Whenever there’s a new innovation, people worry it could make them ill. But my impression so far is, that we have always learned to deal with new advances so that they enhance the quality of life.

As a result of focusing so much on time, do you have a different approach to it?

I’m afraid I don’t have a secret formula – but from observing those around me, I see that it is far from ideal to take a constantly utilitarian view regarding the time that we have available. Sometimes we also need to spend time without using it – we have to let go of it, in order not to become ill.

Can you do that yourself? Can you spend time without using it? (Laughs) I sometimes try, but whenever I want to relax, one of my two children comes along and asks me what we’re doing next.

Every phase in life, from youth to old age, has its own

particular perception of time.

. . . . . More on the TopicFOR ADDITIONAL

INFORMATION: Please referthe following website: www.geronto.uni-erlangen.de

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10 Time

THE ESSENTIAL ART OF FORGETTING

Human beings are knowledge gatherers. Because the human memory is limited, we need to forget so that we can

continue to process what we learn and experience. Forgetting is an ancient cultural technique practiced by religions, in particular.

In a society with an overload of information, there is an increasing need to rediscover the techniques of forgetting.

Text: Joël Luc Cachelin

What differentiates humans from animals? A key aspect: Our reality is relative. We do not have any drives and instincts that automatically def ine our behavior in every situation. Instead, we ask questions – of our environment, of our fellow humans and also of ourselves. Who am I? Why is there no end to the f inancial crisis? And why is the cat purring on my lap? Ref lection not only guarantees our survival; it also enables us to make increasing use of nature to our benef it.

By asking questions, we get to know the world and at the same time – our egos. But that’s not all. It is no more possible to separate knowledge of the world and knowledge of oneself than it is to isolate human beings from their environment. Asking questions allows us, as a species, to make progress and to keep on developing new technologies and products. Our questions allow us to increase our prosperity – yet we are never satisf ied with what we have. We are always asking how our lives could be even better. Humans are questioning animals, which never f ind the f inal answers and return c onstantly with new questions.

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Time 11

Humans as Knowledge Gatherers With each year we live, more knowledge accumulates within us. The ego constructsits own world from the building blocks of knowledge it collects. One could even go so far as to say that the world exists only in the cerebral cinema of each uniqueindividual. Everything else is part of the scenery and the props. Human beings are knowledge gatherers.

Knowledge gathering starts in very early infancy, when we learn our first words. We use words to form sentences that we can use to voice our needs to other humans. Our quest for knowledge continues at school, where humans who are still almost devoid of knowledge learn the alphabet first, followed by the multiplication table. Then comes basic education in mathematics, languages, geography, history and biology. Little by little, humans learn how to understand the world. We become familiar with social laws and rules and how we must behave within them.

After school finishes, some people gain practical knowledge through an apprenticeship. Others attend university to gain theoretical knowledge. But the acquisition of knowledge does not end there; for a long time, the message has traveled round the world that learning must be a lifelong endeavor if we want to keep up with the require-ments of the knowledge society, also in the future.

The Brain: Human Knowledge Store What we learn is stored in our brains. The brain is a reservoir of knowledge, where the everyday information that we acquire is stored alongside practical and theoretical knowledge. Not all of the experiences we have remain in this “store.” Some insights are so short-lived that they barely surface as thoughts before vanishing again into the depths of what is not known. Modern research shows that most of the knowledge stored by the brain over the long term is linked with its emotions by way of consciousness.

For instance, a bride knows for the rest of her life where she was married and what the weather was like on her wedding day.

The groom will never forget that he was in love with another woman for a few moments before he tied the matri-monial knot for life. On the other hand, neither of them will remember the names or faces of all of the children who were with them in kindergarten. This limiting of knowledge to the facts that are most necessary is not accidental. It is actually crucial in order to keep track of such a vast stock of impressions. Despite its incredible properties, the brain is subject to restrictions. Even so, it houses about 85 billion neurons which, placed end-to-end, would stretch for about 5.8 million kilometers (3.6 million miles), or 145 times the earth’s circumference.

The limitation of the brain is related to the imperative link between remem-bering and forgetting. It’s not that we may forget – we must forget. So that an indi-vidual can remember, that person must empty their memory from time to time, otherwise there is no space to accept new material. Most of our thoughts are not even stored, and our “computing center” has only microseconds to decide what is relevant. It’s similar to how a library works: Unless the librarians weed out books that are no longer needed each year, the library will burst at its seams within a few years. This example shows that it is not necessarily the oldest books that are discarded.

On the contrary: As time goes by, it becomes clear that certain books are classics that should be in every library. They become so important that later books make reference to them. Exactly the same thing happens in our brains. The ego consists of a few key thoughts that are linked to emotions. Science refers to these “ego classics” as our identi-ty. Anything that cannot be related to it will not be perceived at all, or will van-ish as soon as it is processed. Viewed in this way, humans are not only knowledge gatherers – they are also masters of the art of forgetting.

Joël Luc Cachelin studied at the University of

St. Gallen and wrote his doctoral thesis on the future

of management. In 2009, he founded the Wissensfabrik

(Knowledge Factory) to analyze, visualize

and optimize knowledge- intensive companies.

He publishes regularly;

his book entitled “The Power of Forgetting –

The Necessity and Simultaneous Impossibility

of a Forgotten Cultural Technique on the Peripheries

of the Digital World” will be published next year.

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12 Time

Forgetting Through Religious RitualsForgetting has a particularly important function in religion. Religion supports the ego in the process of concentrating on the essentials. Techniques for forgetting may differ from one religion to another, but their objective is generally the same: to leave unwelcome memories behind. In some religions, the sinner seeks out the priest who then relieves that person of their sins. The penitent is absolved and the sins are believed to be “taken away” by God. Religions also hold out prospects of a final act of forgetting that will last for ever. This is the forgetting that will total-ly empty the ego’s memory, preparing the ego for a life after this existence. The ego is cleared out and “reprogrammed.” In Buddhism, one objective is to empty the knowledge store fully while the be-liever is still on earth. The ego meditates, lets go of everything and attempts to be free of all thoughts.

Believers strive to attain Nirvana, where nothing at all is present – only nothingness itself. The ego is then free of the world, but also free of itself. This condition can be described as nothing less

than total forgetting. The ego becomes detached from its world, forgetting not only its worries but also its friends and enemies, its past and its future.

Cultivation of Forgetting Humans have learned to come to terms with the limited nature of their memories and time on earth. They are aware that they are finite beings afflicted with short-comings. So that our store of memories can also accommodate these limitations, humans have the ability to forget con-sciously. This always involves forgetting thoughts, knowledge and memories to make space for new input. The ego is like a room whose windows we open after a restless night. If we do not ventilate the room, the air becomes stale and confined and staying there grows increasingly u npleasant.

Like religious techniques of forget-ting, this secular forgetting process ultimately aims to redeem the ego and to release it from doubt, misfortune and grief. This release feels like a stretching of the present. The focus is no longer on memories of a wayward past or fears about the future. On the contrary:

THE MEMORY THAT LINGERS

Experiments have shown that humans are more apt to remember positive experiences, and repeat actions reinforced by

favorable outcomes. The psychologist B.F. Skinner, who thought human behavior arose in response to variable stimuli,

believed that rewards were effective in leading people to repeat certain behaviors. Rewards (positive reinforcements) might

spur the memory and lead us to consider certain responses as the preferable ones. Giving a child a lollipop for not crying when

receiving an injection at the doctor’s office, for example, might encourage positive behavior the next time the child gets

a shot, even when no lollipop is forthcoming.

“Human beings have learned to

come to terms with the limitations

of memory and our time on earth.”

Joël Luc Cachelin

Time 13


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. . . . . More on the Topic . . . . .

FOR ADDITIONAL INFORMATION: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Man Who Mistook His Wife for a Hat: And Other Clinical Tales Oliver W. Sacks

Touchstone, Simon & Schuster Inc. (2008) ISBN 0684 85394 9

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The ego devotes itself entirely to its pre-sent. It laughs and dances, cooks and sings, goes sailing and engages in debate.

Non-spiritual techniques of forgetting include fantasizing, travel, intoxication and erasing memories. When fantasizing, the ego roams through worlds of ideas that are fanciful and fantastic. It is driven and inspired by films, books and stories. The ego views itself from new angles and leaves the everyday behind. Travel and intoxication produce similar effects. Here too, it is possible to “escape oneself ” for a certain period, and focus entirely on the moment. We use techniques of forgetting to cultivate the ego that has no place amid the constraints of habits and standards.

People who go on vacation or drink a bottle of wine with friends will forget the things that cause them worry and stress. At such times, we devote ourselves entirely to the here and now, without letting the past or the future distress us.

Finally, the ego can attempt to erase its memories by suppressing them, throw-ing things away or “deleting files.” This deliberate erasure is hard because traces of the unpleasant past are always left behind in our memory store. It seems more prom-ising to trust that the natural process of forgetting (due to aging) will gradually relieve us of surplus memories.

Emergence of the Memory MachineRumination about forgetting is taking place at a time when we are working day by day to build a gigantic memory machine – that is, the Internet, the network where we store all the documentation that we come across each day: our photographs, our electronic correspondence, our holiday videos and all of the files that accumulate hour by hour at the workplace. To an increasing extent, the Internet is becoming a symmetrical mirror of reality. It is the brain of the entire human race or, to look at it another way, the home for humans of the next generation. But because the Internet is a machine, it does not forget. Not only does it store material we inten-tionally upload into cyberspace; it also

remembers every click we make, every Google inquiry, every order from the media store and every visit to an online travel agency.

What’s more, it keeps a record if we look at videos or contribute to a polit-ical forum. The Internet takes the ego as a prisoner and never releases it. As this memory machine develops, the real and virtual worlds are merging, as are the past and the future, man and machine. This fact makes it clear that there are more reasons than ever before to forget. Especially in a digital knowledge society, humans can only live carefree in their present if they make regular use of forget-ting techniques.

Fantasizing, travel, intoxication and erasing memories release the ego from its worries and doubts and from the ques-tions that make it impossible to enjoy the moment. If the ego forgets to forget, it risks becoming lost in the infinity of knowledge or ending up as a helpless human machine.

The Internet today provides humans with a gigantic memory machine.

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20 Time

THE LONGEVITY PARADOX

From Japan to Mexico and from Europe to Brazil – the world’s population is aging rapidly, but most planners believe

that the future is the eternal preserve of the young. However, the AgeLab at the Massachusetts Institute of Technology

is developing visions for a planet where centenarians can lead active and fulfi lled lives.

neither a wig nor makeup to achieve this transformation; instead, she accepts the restrictions on movement that are typical for an elderly lady suffering from several degenerative diseases, by voluntarily allowing tight foam cuffs to be fastened around her neck, knees and elbows, as well as strong elastic bands on her wrists and ankles. Her gloves mimic the clumsiness of extrem-ities with poor circulation, and Agnes is forced into a hunched posture by belts fastened around her waist and her crash helmet.

Text: Claudia Steinberg

23-year-old Angelina Gennis has now donned the garb of Agnes (her senior by 50 years) so often that it takes her only a few m inutes to travel through time and turn into a frail old lady. But Angelina, a student of economics and global politics, needs

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As she walks through the rainy streets of Cambridge, she finds it hard to keep her umbrella up in the wind and to negotiate the crosswalks quickly enough. Curious passersby glance sideways at the stooped old lady with the youthful face who obvi-ously finds it a strain to climb up the steps to one of the monumental campus buildingsat the Massachusetts Institute of Technology (MIT). But in the supermarket, where it is a huge effort for Agnes to reach the top shelves, the management team has known Agnes for a long time; this faux pensioner has often led representatives of the food and packaging industries along the aisles to show them that so many products are in-accessible. Sometimes, these emissaries are allowed to try out the straitjacket developed by ergonomists, psychologists and sports physiologists on their own bodies, to make them more sympathetic to older people’s needs and to give them a foretaste of their own declining years.

Radical Demographic ChangeAgnes is helping to promote her namesake, the Age Gain Now Empathy System, and she embodies one of the fundamental concepts behind the MIT AgeLab, which was set up in 1999 by Dr Joseph Coughlin. It aims to give designers, scientists and politi-cians a better understanding of old age, and to motivate them to develop innovative technologies and strategies. Agnes can help anyone from automobile to footwear manu-facturers to design models that also work for older generations. According to the AgeLab’s director, too many companies in the US, Japan and Europe have relied on an inexhaustible reservoir of young consumers – now they must face the fact that 85-year-olds are the fastest-growing group in the population.

Backed by his interdisciplinary team of engineers, psychologists, sociologists and geriatricians, Coughlin aims to solve what is known as the longevity paradox: “On average, we’re living 30 years longer than we did a hundred years ago, but we aren’t giving any thought to what we should do with this extra time. Our pro-longed life span is the greatest achievement of the human race, but we tend to view it primarily as a demographic crisis rather than an opportunity.”

The longer time available to younger generations thanks to medical, technologicaland social factors is attested by some truly amazing statistics: Half of all people born after the start of the third millennium can expect to reach the age of one hundred. Butonly a dwindling minority of urban planners are designing age-friendly cities, and only a few architects are giving any thought to houses that could make everyday life easier for frailer people.

Although many biologists focus their research on aging processes at the cellular level, only a few medics enter the field of geriatric medicine. “Doctors prefer to treat children, and to improve their quality of life over the next 80 years – whereas ageis undeniably associated with impairment,” Coughlin explains. However, he views aging simply as “more time” rather than an accumulation of pain and loss. Oncologistsoften fight to give their patients much shorter periods of extra life, but according to Coughlin: “They have the advantage that we have declared war on cancer and several other diseases.” With aging, however we have to make peace.

Today’s Pensioners Are Better Equipped for Life But the newest members of the older generation in the first world are not necessarily prepared to cope with this situation. The postwar baby-boomer generation that is now coming up to retirement comprises elderly people of a type that has never existedbefore. “They grew up with faster cars, better technology and more peace than anyone before them,” Coughlin says. They are the best-educated and most efficient retirees in the history of the human race, and the most demanding citizens of all time; even during a recession, they assume that “a product, a service or a government

“We’re living 30 years longer than we did a hundred years ago, but we aren’t giving any thought to what we should do with this extra time.”

>

Professor Coughlin Dr Joseph F. Coughlin is

the Director of the Massachusetts Institute of

Technology AgeLab. His research focuses on how

demographic change, social trends and technology

drive future innovations.

He advises governments, the World Economic Forum and OECD. He is a Fellow of Switzerland’s World Demographic & Ageing

Forum. He has received an award from the Geronto l-ogical Society of America.


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measure will guarantee them a better quality of life than their parents enjoyed at the same age.”

Coughlin considers that these expectations are the decisive factor: “We have to believe in a better future,” he comments. At the same time, the new pensioners are confronted with totally unprecedented problems – for example, they have fewer children to look after them than previous generations. Thanks to the high divorce and remarriage rates in recent decades, the descendants of the baby boomers increas-ingly find themselves in the bizarre situation of having more parents than children. Commenting on this fraying of the social fabric, Coughlin observes: “This brings up entirely new loyalty issues.”

There are no role models for the modern generation of pensioners, but Coughlin firmly believes that retirement is out of the question – nor is it socially acceptable. “We are still geared to 18th-century conditions, but a life plan that has you working for 40 years and then doing nothing for another 50 years is untenable for people who earn their living from computers.” In fact, what prompted Coughlin to found the AgeLab was the answer of a woman aged 119 to a reporter who asked her why she was still clinging onto life: “I’m healthy and I’ve got things to do.” This is why Coughlin’s institute investigates how people of different ages can learn new things – because in the future, we shall have to start studying again when we are 40 or 50 so that we can stay competitive for another twenty or thirty years.

Older people envy teenagers’ vastly greater technological expertise, but it will be of little use to them later on because the pace of new inventions is escalating so rapidly that it is becoming ever more difficult to keep up. “My 18-year-old daughter never

Wearing a suit simulating joint stiffness and poor circulation that lessens the sense of touch, it is possible to experience the world as elderly people do. Grocery shopping, negotiating a revolving door or opening an umbrella: Everyday tasks pose major hurdles.

“Working for 40 years and then

doing nothing for 50 is untenable

for people who earn their living from

computers.”


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stops texting, and she does it at top speed. But my 8-year-old daughter thinks her older sister is a dinosaur – she only uses voice commands to operate her smartphone.”

Mastering New TechnologiesThe AgeLab researchers found it all the more surprising that – contrary to common prejudice – older people are very interested in mastering the latest technolo-gies. They might not put their trust in electronics as naturally as younger people, but women aged over 60 in particular are prepared to invest time in learning digital navigation systems – provided that they can identify tangible benefits for themselves and their families from acquiring these skills. “It’s not worth penetrating the mysteriesof a badly designed VCR simply to watch a film that you know anyway,” Coughlin comments. But there is substantial readiness to learn about areas that are inseparable from quality of life and independence, such as cars.

The automobile is actually the most complex and difficult element of our every-day lives and, according to Bryan Reimer, it is an instrument that overtaxes even the sensory faculties and judgment of young drivers. On behalf of AgeLab, this MIT researcher collaborated with Ford to develop a vehicle (nicknamed “Miss Daisy”) equipped with cameras and sensors that can monitor physiological factors such as car-diac frequency, steering wheel control, eye movements and mobility. As well as r ecording vast amounts of data about older drivers’ behavior in recent years, this car has also helped them to compensate for physical handicaps.

For example, Miss Daisy can reverse perfectly into a parking space with no need to touch the steering wheel – a skill that can benefit younger drivers as well as older people who suffer from stiff necks. But it is the members of the older generation who have the resources and the ambition to buy a high-tech vehicle – as long as it also offers high style. What it must definitely not be is a car for old people. As Coughlin knows, “neither young nor old motorists will buy one of those.” This is also why it is so important to introduce Agnes to young automobile designers, so they can take account of the lessons they can learn from her – for everyone’s benefit.

Miss Daisy also supplied the AgeLab researchers with the unexpected and highly significant information that age as such is only a minor factor in poor driving behavior. “The negative effects are caused by diseases such as hypertension, diabetes and arthritis,” Reimer points out. These diseases also unnerve Agnes when she sits be-hind the steering wheel; they prevent her from concentrating and reduce her mobility.“It’s become clear to me that old people complain far less than you might assume; they just quietly accept so many chronic illnesses, and pain follows them like a shadow,Angelina explains.

She finds it extremely exhausting to navigate her way around a world that was designed without any thought for its older citizens – “it’s a real struggle.” Her frequenmetamorphoses into an old lady have made her more aware of the need for healthy nutrition and regular fitness training, and – despite her slender student’s budget – she recently drew up her own pension plan. But the most important insight that she has gained from Agnes and the AgeLab is that “older people are not different beings – they are simply ourselves at a later time of life. If you pay attention to them, you can learn a lot about how to be happier.”

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. . . . . More on this Topic ... . .

FOR ADDITIONAL INFORMATION:

For information about the MIT AgeLab please see the following site:

http://agelab.mit.edu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“If you pay attention to older people, you can learn a lot about how to be happier.”

Ivo PitanguyThe Michelangelo of Surgeons

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A Thing About Cheese Jean-Claude Biver2

The New Bear in Town Ernst Tanner10

T imelessness Angela Ahrendts14

East Meets West Hong Kong16

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Text: Andreas Schiendorfer

Authenticity means a lot to

Jean-Claude Biver. In just over

an hour he will be flying to

B remen for an exclusive dinner

with Hublot collectors, but

right now, the company CEO of one of the

world’s most prestigious watchmakers is

expounding on the virtues of farming.

We’re stepping carefully. This is, after all, a

working operation, with real cows. Biver, a

man with an infectious laugh, obliges

without hesitation when asked to pose for

a photographer in front of a pile of manure.

“Of course!” This is how the chief executive

of one of the world’s most exclusive watch-

makers likes spending his spare time,

literally mucking about in his own barn-

yard. But he draws the line at posing as a

typical farmer with a pitchfork in his hand.

As a child, he paid regular visits to his

grandparents at their farm in Burgundy.

He knows what real farming means, with

its hard work, and he respects tradition.

“I love this farm, but that’s precisely why I

leave the actual work to my caretakers.

I’m useless with my hands.” An odd confes-

sion, truly, for someone who began their

career as a watchmaker. But one that un-

derscores that whatever he does, it must be

real. It must be authentic.

Today, however, the topic is not watch-

making, but cheese. Cheese? While Biver is

the chief executive of Hublot, maker of

exquisite watches worn by monarchs and

celebrities, his personal story has led him

down some unusual paths, including

h erding cows from summer meadows. A

long-standing tradition, each autumn the

cows, bells clanging, become part of a pic-

turesque ritual. Their descent (in French-

speaking areas called the “désalpe”) is

done the old way, a journey on foot in these

parts of some 16 kilometers (10 miles).

Biver recalls how, coming down from the

upper Neuvaz meadows in the region for

the first time, he wore decidedly nontradi-

tional jeans and a pullover. “The herdsman

kept sending me to the back to walk with

the tourists,” he recalls. But the story has a

happy end. Biver at last borrowed a pair of

real farmer’s pants, a typical shirt, vest

and hat. “The outfit didn’t fit me perfectly,

and it wasn’t very clean.” But he wore it

proudly for the remainder of the “désalpe”

as an expression of respect for the tradi-

tions of the region he calls home.

He is now a dual citizen, holding a

Swiss passport along with one of Luxem-

bourg. Having lived in Switzerland since he

was 10 years old, his application for Swiss

citizenship “was all settled over a glass

of wine with the mayor,” he says. Today he

resides in La Tour-de-Peilz, a community

in Western Switzerland in the vicinity of

Vevey. His dual nationality “motivates me

to be a good ambassador and serve my

home country abroad.” However, he cannot

produce a passport on this day, telling us

that it is being processed by Chinese

officials. “Since we moved into the Chinese

market 18 months ago, I’ve been flying to

China once a month for meetings. And

once a month I also host Chinese business

travelers at La Peneyre, where I serve up

our own cheese and wine. The Chinese are

big on luxury. They’re also fond of strong

brands. They don’t buy anything that they

haven’t heard of.” The fact that this kind of

special treatment pays off is already evident

in Brazilian and Mexican markets. “Luxury

is an emotional business. It requires

proximity to the customer. To some extent,

I’m the Enzo Ferrari of Hublot,” laughs

Biver, a reference to the founder of the clas-

sic automobile company. Following that

logic, Hublot and Ferrari have lately an-

nounced an agreement that includes the

watch company becoming the “official

watch and timekeeper of Ferrari” and its

racing arm. The scope includes limited-

edition timepieces, along with possibly

clocks for the dash of these automobiles.

Running Leads to a Career In Switzerland’s Jura region, there was

once no contradiction in the term “watch-

maker-farmer.” Centuries ago, farmers

thereabouts took to the art of watchmak-

ing to while away the winter. Helped by

natural dexterity and patience, a prestige

“My cheeseis our best

ambassador.”Jean-Claude Biver

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Jean-Claude Biver, CEO of Hublot

Jean-Claude Biver spoke at the Swiss Innovation Forum in Basel and at the OSEC Forum for Swiss Foreign Trade and Investment in Zurich, two important events for entrepreneurs that are co-funded by Credit Suisse as main sponsor.

industry soon developed. “In Switzerland, there’s always

something down-to-earth about technology and luxury,”

Biver adds. Besides his hearty laughter, Biver tends to punctuate

his remarks by banging his fists. He feels at home where he

can “hear the cock crowing and the horse neighing,” calling

this “true luxury.” In 1975, he entered the exclusive world of

Swiss watchmaking thanks to his love of fitness, not finery.

As a solitary runner crossing the distances of the Vallée de

Joux in the Jura, one day he encountered a kindred spirit:

Jacques Piguet, whose watchmaking family helped to found

watchmaker Audemars Piguet. On Piguet’s wrist, Biver dis-

covered a transparent watch with inner workings that amazed

him. Biver, the son of a cobbler and trained economist, was

captivated. He began to devote his entire energy to Swiss

watches. At first he learned the art of watchmaking. He then

took a job at Audemars Piguet. His career later led him to

Omega and eventually, he was ready to try something new.

In 1981, as mass-produced quartz watches were taking

over the industry, Biver and Jacques Piguet purchased the

rights to Blancpain, a company that had gone out of business.

Success is often taken for granted in retrospect. But it also

takes courage. In the midst of a crisis that nearly finished the

Swiss watch industry, who would have dared to acquire a

traditional brand that had been defunct for many years and

relaunch it? And employing this slogan, no less: “Since 1735,

there has never been a quartz Blancpain watch. And there

never will be.” Some might think only a madman would

attempt it. But success in the luxury market requires more

than precious, finely crafted objects. “Anyone who spends a

small fortune on a watch merely in order to tell the time

is a fool,” says Biver. There needs to be a message, one that

e ngages the emotions.

In Hublot’s case, the message is fusion: joining tradition

with contemporary vision. This includes, for example, a

high-quality mechanical watch produced with materials such

as carbon and titanium. If you can understand why that is a

valid idea, you are a potential member of the Hublot club.

As our brief visit ends, we turn to the subject that brought us

here in the first place. Cheese. Around 6,000 kilograms

(13,230 pounds) of Biver cheese are produced up in the moun-

tains every summer. But don’t think of calling the cheese

Biver! “The name of the cheese tells us something about its

origin, not about the owner,” he insists. The cheese is called

Neuvaz after the region where it comes from. And it’s a

q uality label. It’s the meadows in the mountain pastures that

give the cheese its distinctive creamy and floral aroma.

There’s no comparison with cheese made from cows fed a

diet of concentrated feed.” In fact the cheese isn’t even for

sale. Anyone who’s allowed to eat it can count themselves

among the extended Hublot family. As we prepare to leave, it

might be only a slight exaggeration as Biver adds: “My cheese

is the best ambassador for Hublot.” ¶

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Time’s Work SuspendedHow we feel about cosmetic surgery may relate to how we feel about time. The subject of aging, and eternal life is a frequent artistic theme. It should come as no surprise that cosmetic surgeon Dr Ivo Pitanguy is sometimes called the “Michelangelo” of his trade.

Text: Alice Ratcliffe

Ivo Pitanguy, the Brazilian doctor whose clinic in Rio opens its

doors to both the wealthy and poor, is sometimes credited with “in-

venting” modern cosmetic plastic surgery. He believes all people

should have the right to look better, or at least “normal.” He is said

to have done surgery on Gina Lollobrigida, Melina Mercouri and

Zsa Zsa Gabor, to name just a few. He also operated on racing driver

Niki Lauda, disfigured by burns suffered in a fiery crash during the

1976 German Grand Prix. But a great many of the world’s lesser-

known citizens also seek him out, hoping to improve their appear-

ance. Revered in his home country, his clinic

draws movie stars and presidents. One day a

week his staff also perform free surgery for

patients suffering from birth defects and ac-

cidents, who might otherwise never receive

help. “To be in peace with one’s own image

is a permanent stimulus to self-esteem,”

Pitanguy told bulletin. But, he cautions, “any

correction of the aging process should be

done with elegance and distinction. After

all, even an illusion should be properly given. Surgeons are not

holding back time,” he says. “We are giving someone the feeling of

living the present moment in fullness and peace. The moment lived

in plenitude is our own eternity.”

The Makropulos AffairHumans have long been tantalized by the prospects of living forev-

er. But there’s one catch. Time gnaws at our faces and bloats and

hollows our bodies, padding here and carving there. Getting older

is only “natural.” Perhaps it is wrong to try to hold back time, that

master artist, who delivers to us our true selves and then eventually

to the arms of death. We cannot outrun this process. Perhaps we

shouldn’t try. That, anyway, is the message of the opera by Leoš

Janáček, the Czech composer whose works include “The Makropu-

los Affair,” performed in August 2011 at the Salzburg Festival. The

opera tells the story of Elina Makropulos, who was born in Crete in

1575. As a 16-year-old girl her father, a court physician, was ordered

to find a formula to provide eternal life. Ordered to try it first on his

young daughter, she falls unconscious and he is put to death. But

after a week, she recovers and flees with the formula, becoming the

greatest singer of her age. In fact, of many ages. As time passes, she

remains young, assuming a variety of aliases to avoid suspicion.

The opera opens as Elina, now calling herself Emilia Marty, has

lived for 337 years. A court case is to be decided about an inheri-

tance. Only a descendent of the Makropulos family can claim the

estate. Elina reveals the location of a secret document that will

prove that the Gregor family are rightful heirs. Baffled by her knowl-

edge of the document’s existence, and its location, she offers her

favors to a member of the wealthy Prus family, which also contested

the inheritance. If the gentleman agrees to bring her an envelope

secreted away on the family’s estate, she will spend the night with

him. Of course he complies. The formula he brings her is the very

one she had received from her father for eter-

nal life. Elina at last explains who she really is.

She had given the formula to her former lover,

a long-dead scion of the Prus, for their son

born out of wedlock, who is a Gregor. Now she

must decide: endless life or aging and death?

Elina resolves to die naturally. As she withers,

she offers the formula of the potion to anyone

who will take it. But only one reaches out her

hand, the young girl, Kristina. Instead of test-

ing it on herself, Kristina burns the paper in a candle flame while

reciting the first lines of the Lord’s Prayer in Greek.

Art, one can sum up, is not fond of immortality. At best being

immortal seems to make us unpleasant and dissatisfied. At worst,

it offers the disadvantages of living forever while denying us any joy:

“Me only cruel immortality Consumes: I wither slowly in thine

arms …” laments Tithonus in the poem by Tennyson. Tithonus,

according to legend, was once a handsome lad of Troy. He was al-

lowed to live forever, but continued to age. The passing years re-

duced him to a “gray shadow” longing for death.

A Life for His ArtPitanguy, who might seem to some to have near-immortal status,

has a face that is lined in a way that indicates a lifetime well-spent.

It is not just the wealthy or even the poor who revere him. Medical

science owes him credit. Academic papers refer to something called

the “Pitanguy line” in facial nerve anatomy. Ironically his career

starts out with him wanting to be older. Born in 1926 in Belo Hori-

zonte in the state of Minas Gerais, Brazil, Pitanguy aspired already

at 15 to be a doctor. The son of a surgeon, he added three years to

his age to be old enough to go to medical school. At the end of the

1940s, plastic surgery was not yet an important specialty. Young

surgeons faced difficulties gaining knowledge. After completing

“Old age is no place for sissies.”

Bette Davis

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his studies in Brazil, Pitanguy received

a grant to continue studying in the US,

where he worked at Bethesda Hospital

and at the Mayo Clinic. Returning to

Brazil, he was anxious to put into prac-

tice the techniques he had learned. He

began at the 19th Infirmary of the Sacred

House of Mercy Hospital, which conduct-

ed South America’s first hand restoration

surgery. A year later, at the invitation of

Marc Iselin, one of the fathers of reconstructive hand surgery,

Pitanguy went to Paris as a visiting fellow surgeon. Returning to

Brazil, he worked to promote his specialty. A turning point came in

1961, after a horrific fire in a circus tent in Niteroi, Brazil, killed 323

people and disfigured scores of others. Working to help the victims,

the tragedy “proved the importance of our specialty,” Pitanguy

says. Since 1963, Pitanguy has headed a team of plastic surgeons

that work under his guidance, using the techniques he has devel-

oped at his clinic. There is also the Ivo Pitanguy Institute founded

in 1975, a nonprofit entity that serves to educate, conduct research

and disseminate information about the benefits derived from plas-

tic surgery. Doctors from all over the world come to study with

Pitanguy. “He’s a living legend,” third-year resident Ricardo Ventu-

ra told German television, describing training in plastic surgery

with Pitanguy as “a dream come true.” At the same time, “he’s a

normal professor, he’s really patient with us, and tries to give the

best of his own experience to us,” Ventura said. “Here we don’t talk

about money. It doesn’t matter if they (patients) are poor or rich. We

have all kinds of people who are coming to the institute.”

Where Problems BeginBut where does the art of plastic surgery end and cross the line into

something seductive, with a whiff of Makropulos about it? Should

we listen to promises that we can be “cured” of aging, as though it

were a disease? Should we spend our money on things like “abdom-

inal etching” that delivers a physique with the requisite six-pack?

Or should we follow the example of Elina Makropulos, who finally

wises up after over 300 years on earth, and longs for life’s natural

conclusion? Of course, each of us believes in secret that we can get

away with thinking we look younger. We are blessed with the blind-

ness that comes from not seeing ourselves as others do. How else to

explain an 80-year old woman dressed like a teenager, or those

comb-overs favored by balding men whose hair has retreated to a

fringe around their ears? Yes, we are all seeking a youthful appear-

ance: “My nose is growing old” is the title of a poem by Richard

Brautigan, an ode to an area “about ½ an inch below the bridge”

which, he notes, “strolls geriatrically down for another inch or so.”

In 1961, scientist Leonard Hayflick discovered that normal cells

can divide only about 50 or 60 times before the cell “dies.” Scien-

tists seeking to halt the process whereby cells stop replicating have

suggested that some substance might slow the process. Well, per-

haps. But in the end we are all aging, like it or not. In many

cultures, age is still revered. Japan’s Re-

spect for the Aged Day is a national holi-

day. But increasingly our modern age is

youth-obsessed. The American Society

for Aesthetic Plastic Surgery reported

that there were almost 9.5 million cos-

metic and nonsurgical procedures per-

formed in the US in 2009, the latest year

this data is available. The top five proce-

dures for women were breast augmenta-

tion, liposuction, eyelid surgery, abdominoplasty and breast reduc-

tion. The top five surgical procedures for men were liposuction,

rhinoplasty, eyelid surgery, breast reduction and hair transplanta-

tion. In total, Americans spend almost 10.5 billion US dollars annu-

ally on cosmetic procedures. Art warns us that trying to cling to

youth or deny nature can have consequences. But the alternative is

not pleasant, either. According to American actress Bette Davis,

“old age is no place for sissies.”

The Beautiful Suffer MostThe road to preservation of our “mortal remains” can take some

strange detours. According to Pitanguy, most neuroses in patients

are subtle and hard to detect, especially in patients who start with

one small procedure, then have another and another. “People want

to be perfect,” Pitanguy said in an interview published in W Maga-

zine, devoted to fashion and style. “In a healthy form, that means

taking care of yourself, following a proper diet. But when they want

perfection to an extreme, that’s impossible. This form of narcis-

sism becomes self-destructive, even pathological.” Getting older,

he notes, is often most difficult for beautiful women. “They don’t

feel it is natural to age,” he says. But if you help them with a proper

operation, they will be much happier. As for himself, Pitanguy in-

sists he’s never had cosmetic surgery and doesn’t plan to. “I have a

tolerant ego,” he says. “As long as you can tolerate yourself, you

don’t need a surgeon.” ¶

The Credit Suisse Summer Forum The Makropulos Affair was one of the many top performances at the Salzburg Festival 2011. Originally written in 1926, the Salzburg performance of Leoš Janáček’s opera was staged in conjunction with the Teatr Wielki, the Polish National Opera. Conducted by acclaimed Finnish-born Esa-Pekka Salonen, with staging by Swiss director Christoph Marthaler, German soprano Angela Denoke starred in the role of Emilia Marty. According to the program by Karl Harb, the opera interweaves “the past, present and future in a daring manner.” As one of the most renowned music festivals in the world, Salzburg attracts both prestigious established artists and intriguing new talent. Credit Suisse has been a sponsor of the annual festival since 2006, and also sponsors the Young Singers Project among its efforts to nurture young talent. As part of its engagement in Salzburg, Credit Suisse hosts the Summer Forum. This year’s round table discussed “Eternal Youth – Eternal Life” and included genetic scientist Professor Markus Hengstschläger, Christoph Marthaler, director Malte ubenauf, set designer and director Anna Viebrock and Dr Ivo Pitanguy.

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“The moment lived in

plenitude is ourown eternity.”

Dr Ivo Pitanguy

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Text: Andreas Schiendorfer

According to the Credit Suisse

Worry Barometer, 99 percent of

Swiss people are proud of the

international reputation for

quality that their economy has

earned, and 97 percent say the same about

the strength of Swiss brands abroad. They

single out a sense of order and precision

as the key identifying features, while

giving almost equally high ratings to the

country’s top products: watches, cheese and

chocolate. The Swiss public is glad to

provide concrete proof of these theoretical

survey findings. In 2010, Swiss people

bought an average 21.55 kilograms of

cheese and 12 kilograms of chocolate.

Those are world records.

uS and Germany Are Key MarketsIt should not be forgotten that exports

are vitally important for Switzerland’s

18 chocolate manufacturers. They exported

107,000 tons of chocolate worth a whop-

ping 845 million Swiss francs – almost

60 percent of their total production – to

150 markets in 2010. Ernst Tanner, CEO

and Chairman of the Board of Directors

of Lindt & Sprüngli, says that “given the

worldwide competition, we can only

manage to do this on the basis of quality.

We focus consistently on products in the

top premium segment. And this approach

is successful, because growing numbers

of consumers throughout the world are

ready to pay a correspondingly higher price

for the right quality. For them, consuming

fine chocolate is becoming a culinary

experience.”

Nevertheless, the new success story

that has unfolded since Tanner took

over in 1993 is also linked to the targeted

globalization of the company, made

possible by its stock market flotation

25 years ago. This success is based on the

quality and brand awareness of Lindt’s

Maîtres Chocolatiers combined with

an expert knowledge of regional affini-

ties that is deployed to pro mote sales.

Lindt & Sprüngli now manufactures

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about 3,000 different products with a work-

force of over 7,500 employees at eight

factories in Switzerland, Germany, France,

Italy, Austria and the US. In 2010, the

company’s sales totaled 2.58 billion Swiss

francs. The group also includes two

non-Swiss companies with traditions of

their own, Caffarel in the Piemonte region

of Italy and Ghirar delli in California. One

special feature that promotes quality is

Lindt & Sprüngli’s total control over every

single step in the production chain,

starting with the selection of cocoa beans

from Central America and West Africa.

Cortés: Smarter Than ColumbusDespite the Swiss love of all things sweet,

North America has now overtaken

Germany as the leading sales market for

Lindt & Sprüngli. This comes as something

of a surprise, because chocolate’s first

contact with the New World in 1502 was

hardly a success. The cocoa bean came as a

bitter disappointment to Columbus, who

was the first European to see one. But can

someone who mixes up the New World and

India really be taken seriously? Hernán

Cortés showed more foresight by bringing

cocoa beans back to Europe in 1528, along

with the exotic beverage known as xocoatl.

In actual fact, chocolate was mainly

consumed as a drink until well into the

19th century – especially by the aristoc-

racy – but in this form, it quickly lost

ground to coffee and tea, the beverages

of the bourgeoisie.

We owe the name “chocolate”

(or “bitter water”) to the Mayas, whereas

the origin of “cocoa” is commonly attrib-

uted to the Aztecs, who called their

beverage cacuatl. But it has recently

come to light that the Olmec, a people who

were already living in Mexico about

3,000 years ago, used the name kakawa

for the seeds from this valuable fruit.

Cocoa Growers Also Stand to BenefitThe advanced civilizations of Central

America held chocolate at such high

value, that they even used cocoa beans as a

means of payment. Weak though the euro

and the dollar may be, we have come a

long way since then. But it is worth noting

that Lindt & Sprüngli accords just as much

importance to the quality of the raw

materials as to a socially compatible and

sustainable procurement policy. “To

guarantee this, we developed a special

purchasing model in Ghana that enables

us to trace the cocoa back as far as the

local producers. All the participating

growers are given fixed prices and in return

we are guaranteed adequate availability

of the best quality cocoa beans,” says

Rudolf K. Sprüngli, sixth-generation board

member and Chair of the Corporate Social

Responsibility Committee. “Last year,

we paid more than a million US dollars in

extra funding to establish traceability

and for local social projects implemented

efficiently on the ground by a local

foundation – for example, to provide water

supplies, build schools or prevent malaria.

Now we are investigating how this system

could be extended to Ecuador.”

Going back to the roots again, we

learn that the Maya and Aztec peoples

also used liquid chocolate for ritual

purposes, and they offered the precious

cocoa beans to the gods as a sacrifice. This

prompted the Swedish naturalist Carl von

Linné to give the cocoa bean the melodi-

ous Latin name of Theobroma cacao,

which means nothing less than “Food of

the Gods.” This name dates back to 1753.

Switzerland Long Too Prudish

Culinarily speaking, Switzerland – now

the mecca of chocolate – did not even

feature among the emerging countries

at that time. Back in 1697, Heinrich Escher,

the mayor of Zurich, brought chocolate

from Brussels to Lake Zurich but in 1772,

the city council banned its consumption

as an aphrodisiac that was “unsuitable

for people of virtue”; indeed, a certain

Casanova compared its effects to those

of champagne.

Of course, such a hostile attitude

on the part of the authorities offered

few prospects of lasting business success

for the Swiss chocolate factories and

parlors that appeared on the scene in

Berne for the first time in 1750 and 1792

respectively. Leaving aside further attempts in

the French- and Italian-speaking regions of

Switzerland, it can be said that Swiss branded

chocolate really dates back to 1819, when

François-Louis Cailler set up a mechanized

chocolate factory in Corsier and Philippe

Suchard followed suit at Serrières in 1826.

However, the key global milestones in the

history of chocolate were set by Daniel Peter

Cailler, who invented milk chocolate in 1875,

and by Rodolphe Lindt’s invention of fondant (or “molten”)

chocolate in 1879. Both these developments enabled quantum

leaps in terms of quality. Whether he wanted to or not, Lindt was

obliged to use the conching process to produce fondant chocolate:

The cacao paste is refined for several days in a rounded conch (a

longitudinal refining machine whose name is derived from the

Spanish word for seashell); cocoa butter is added and the mixture

is heated at the same time to produce the melt-in-your-mouth

chocolate known as “surfin – chocolat fondant.”

175 Years of Chocolate HistoryAnd what about Sprüngli? Rudolf Sprüngli-Ammann started

to manufacture chocolate in 1845 at the confectioner’s shop

belonging to his father, David Sprüngli-Schwarz, in the heart of

Zurich’s old town. This marked the beginning of operations by

what is now Switzerland’s most distinguished chocolate producer.

But in 1836 – exactly 175 years ago – David Sprüngli had already

sold the shop in the “Zum goldenen Ring” building to his employ-

er’s widow. For its part, the Vogel confectionery shop on Markt-

gasse dates back as far as 1720.

As the chocolate manufacturing operation grew in size,

Rudolf Sprüngli relocated it to Horgen in 1847 and then back to

Zurich Werdmühle in 1870. But in 1859, he moved the confectionery

business into the Tiefenhof building on Paradeplatz, very close

to the Schweizerische Kreditanstalt (now Credit Suisse) founded

three years earlier. In 1892, he divided the business between his

two sons: Rudolf Sprüngli-Schifferli took over the chocolate

factory, while David Sprüngli-Baud took charge of the confection-

ery business. From then on, both firms followed separate (but

equally successful) paths.

1899: Lindt and Sprüngli MergeAs the 20th century dawned, Rudolf Sprüngli junior took several

steps that paved the way for a successful future. In 1898, the firm

was converted into a joint- stock company; the factory in Kilchberg-

Bendlikon was built in 1898–1899; the Rod. Lindt Fils company

of Berne was acquired in 1899; and in 1900, the company’s own

health insurance plan was set up, enabling Lindt to meet its social

responsibilities well before most other firms did – a step that was

to yield long-term benefits. By 1901, the conching process that had

been closely guarded for 12 years could no longer be kept secret:

Lindt & Sprüngli (then known as “Aktiengesellschaft Vereinigte

Credit Suisse Clients

Berner & Zürcher Chocoladefabriken Lindt &

Sprüngli”) responded by continuing to

improve its products; with the importance of

exports in mind, the firm also built up and

consistently defended the Lindt brand. The

years from 1906 to 1927 saw the first bitterly

contested battle to protect trademark rights –

against two relatives of Rodolphe Lindt, it

should be noted. “Maintaining the Lindt

brand is just as important now as it was back

then,” Ernst Tanner stresses. “The key factor here is the quality

mind-set of each and every employee. Especially in the premium

segment, our workforce is crucial to success.”

Bear Joins the Family The story of Lindt’s family of gold-wrapped animals dates back to

1952. On a sunny day in March, one of Lindt’s Maîtres Chocolatiers

discovered a small rabbit in his garden. His young son started to

weep bitterly as the animal vanished into the bushes – and at this

precise moment, the idea for the “Lindt Snow Bunny” (as it was

then called) was born. The animal was given a little bell on a red

ribbon to make sure that he would never be lost again. Nowadays

at Eastertide, more than 100 million Gold Bunnies are lovingly

devoured by people of all ages who are delighted to receive them as

gifts. In 2005, a gold reindeer leapt onto the Christmas scene

(mostly in the Anglo-Saxon world), and the Lindt Teddy Bear

joined this exclusive menagerie for the first time to mark the new

year in 2011. The red ribbon around the bear’s neck has already

prompted many chocolate aficionados to take him to their

hearts. ¶

The Olmec used the name kakawa for the seeds from this valuable fruit

about 3‚000 years ago.

13Premium

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In October 2011, Credit Suisse launched a global advertising cam-paign featuring six different corporate clients or their representatives, with striking combinations of images. Alongside chocolate manufac-turer Lindt & Sprüngli and the Zermatt Railways from Switzerland, four clients from other countries agreed to make themselves available for this campaign: the American designer Jen Kao, the Chinese search engine company Baidu, as well as the Maccaferri industrial group and the electric scooter manufacturer Oxygen of Italy. For more information, please visit: www.credit-suisse.com/clients

To watch extracts of the speaker session with Burberry CEO Angela Ahrendts, please scan the QR code below and a film will be streamed directly to your smartphone.

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Quintessentially British, undeniably Global – BurberryText: Celeste Neill

As part of the speaker series in partner-

ship with Newsweek/The Daily Beast,

Credit Suisse hosted an inspiring evening

with Burberry CEO Angela Ahrendts at

London’s National Gallery. The brainchild

of Pamela Thomas-Graham, Chief Talent, Branding

and Communication Officer at Credit Suisse,

this speaker series is moderated by Newsweek and

The Daily Beast editor-in-chief Tina Brown. After a

notable publishing career in England, Brown

crossed the Atlantic with high-profile stops at Vanity

Fair and The New Yorker, before taking the helm

of Newsweek and The Daily Beast, bringing together

print and online media, challenging the way in

which we consume and communicate information

today. The aim of these informal talks is to showcase

women of accomplishment and Credit Suisse’s

dinner at the National Gallery brought to the stage

the dynamism and foresight of Angela Ahrendts,

CEO of Burberry, this most quintessential of British

power brands.

Arriving at the highly successful but somewhat

plateaued brand in 2006, Ahrendts quickly turned

it into the global entity Burberry has become today.

In close collaboration with Chief Creative Officer

Christopher Bailey, a team of seasoned executives and

Burberry’s worldwide workforce, Ahrendts steered

the company first into the FTSE 100, and now the FTSE

50, selling British attitude all over the world and

pioneering innovative digital initiatives. Remarkably,

this traditional label has also firmly placed itself at

the very forefront of the social media revolution in

luxury retail. Today, you would be hard-pressed to find

another luxury mega brand that connects to its

customer base more concisely. Burberry pioneered the

broadcast of its runway shows in 3-D in New York, Los

Angeles, Paris, Tokyo and Dubai. Viewers at home can

stream the shows on-line and post comments immedi-

ately, creating a realtime interaction and dialogue

between the brand and its more tech-savvy client base.

Outerwear and bags are made available through a

convenient click-and-buy technology, with delivery

several months before they reach the store shelves.

Burberry has around 10 million “likes” on Facebook –

Gucci in contrast has about 5.5 million – and at the

recently created artofthetrench.com, a social-media

site, people can submit photos of themselves in the

legendary trench coats. Burberry has an average

of 1 million visitors per week to Burberry.com, with

customers staying on the site for more than seven

minutes on average, interacting with every facet of th

brand from heritage to Burberry Acoustic – the brand

collaboration with young British music talent – and

of course, the collections themselves.

But the interest for Burberry is not confined to t

cyber world. High-end shoppers still want to touch,

feel and experience the brand. The company’s answer

to their customers’ needs and wants is a carefully

orchestrated strategy in which the real-life experience

is mapped around the online experience. The window

displays resemble the landing pages, the branding

is concise and the feeling is transferred from a cyber

to the real world. With the opening of mega stores,

Burberry further aims to magnify the experience. “It’

not about the size of the store, but about one amazing

experience,” says Ahrendts.

Interestingly, much of Burberry’s business

can be traced back to customers who are tourists,

com plemented by sales at its flagship stores around

the world. Early attention paid to emerging markets,

coupled with its focus on digital communication,

has also given the brand a competitive edge includin

among younger customers in countries such as India

Brazil or China. The company’s successful strategies

and close control have paid off, serving as an example

to its competitors. ¶

“It’s not about the size of our stores, it’s about one amazing experience.”Angela AhrendtsCEO of Burberry

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Text: Terri James

Hong Kong Calling

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Hong Kong is frequently described as a place where “East meets West,” balancing a modern way of life with traditional Chinese practices.

As one of the globe’s leading international financial centers, Hong Kong has a major capitalist service economy and its currency is amongst the Top 10 most traded in the world.

Considered the world’s most vertical city and renowned for its expansive skyline, Hong Kong’s lack of space created demand for denser construc-tions, resulting in modern architectural land -marks amongst its more than 7,500 skyscrapers. Concepts like feng shui are taken very seriously, with expensive construction projects often hiring expert consultants who are believed to make or break a business.

However, Hong Kong’s electrifying energy is not exclusively derived from its pulsating business environment. It is a culturally diverse, intense city with enough leisure options to rival any worldly metropolis today. Welcome to Hong Kong: Work hard, play hard!

16Premium

D Dining

Armani / Aqua

The city that loves food and fashion in equal measures fi nally has the dining experience to match its cravings. Armani/Aqua, the collaboration between the Italian designer and the restaurant group that sets the standards in Hong Kong, brings together both Italian (naturally) and Japanese cuisine, without falling into the fusion trap, managing to excel at both instead, allowing diners to mix and match at leisure. Stunning interiors and a terrace that raised the bench-mark of locations with a view in the city, make for a perfect spot for a truly memorable dining experience.

Armani / AquaChater House 8 Connaught Road, Centralwww.armani-aqua.com

N Nightlife

Ozone, Ritz-Carlton Hotel

It’s important to choose your evening wisely when visiting Ozone. Hong Kong’s not always known for the cleanest air but when the skies are clear, this 118th-fl oor bar – surely one of the highest in the world – offers some of the most dramatic vistas of Hong Kong. Ozone is part of the recently opened Ritz-Carlton atop the ICC, Hong Kong’s tallest building. The terrace, naturally, offers the best experience, although it can get crowded.

Ozone, The Ritz-CarltonICC, 1 Austin Road West, Kowloonwww.ritzcarlton.com

S Shopping

Cat Street Market

There are treasures to be found amongst the jumble of Cat Street, but they have to be wheedled out.

Part yard sale and part antiques market, you can pick up anything from antique tea chests and abacuses to secondhand chess sets and any amount of Hong Kong memorabilia. Somewhat confusingly, Cat Street is actually called Upper Lascar Row.

his vernacular name derives from its earliest days, where the market was used as a clearinghouse for stolen goods, and cats were the buyers of goods from the thieves – the rats – that stole them.

at Street Antiques Marketupper Lascar Row, Sheung Wan,

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C Culture

Fo Tan Art Community

With a growing number of empty industrial spaces, some pioneers have taken to the former industrial district of Fo Tan, creating an art community of working studios about 45 minutes outside of Central. There are currently around 70 artists based here and while not all of them have an open-door policy, there are several galleries, including Blue Lotus, which have been central to fostering a community spirit amongst the artists working in Fo Tan.

Blue Lotus Gallery Wah Luen Industrial Building15–21 Wong Chuk Yeung Streetwww.bluelotus-gallery.com

M Must-Do

Dim Sum

It may be available around the world these days but true afi cionados know that only Hong Kong does dim sum to perfection. Everyone has his or her favorite, but for a real Hong Kong experi-ence Luk Yu Teahouse in Central takes some beating.

Sadly the dim sum carts are now an endangered species in Hong Kong as health and safety laws tighten up, and Luk Yu is no exception but the dim sum remains as good as it ever was. The décor is classic teahouse – high ceilings, lazy fans and an abundance of carved wood paneling, which only adds to the atmosphere.

The restaurant is famous through-out Hong Kong and has been a fi rm local favorite since opening back in 1933. The fi rst fl oor is u noffi cially reserved for regulars, but the ground fl oor is welcoming to tourists and residents alike.

Luk Yu Teahouse24 Stanley Street, Central

E Event

Hong Kong Arts Festival

Founded in 1972, the Hong Kong Arts Festival has been show-casing local and international artistic talent, evolving to one of the premier events in the region. Featuring an eclectic array of music, theater, dance, fi lm and exhibitions programs, the festival runs annually.

Since 2009, Credit Suisse has partnered with the Hong Kong Arts Festival to launch the Emerging Artists Series, a unique series, featuring the inspirational and innovative work of young u p-and-coming musicians and ar tists from around the globe.

Internationally acclaimed artists who have performed here in the past include José Carreras, Yo-Yo Ma and Mikhail Baryshnikov. This year’s highlights include p erformances by the Bavarian State Opera, the Hamburg Ballet and the Beijing Opera amongst many others.

Hong Kong Arts Festival January 28 to March 8, 2012www.hk.artsfestival.org

17Premium

strellson.com get the story

Read more on page 27

Economic Research

Profit From our Expert Knowledge at Credit SuisseThese Studies and Research Dossiers can be ordered at www.credit-suisse.com/shop.

Emerging Consumer Survey 2011

Insights not available from traditional sources of economic information

Global Wealth Report 2011

Measuring and analyzing trends in wealth across the world

Asia Family Businesses Report 2011 Performance and key trends of Asia’s businesses

Global Investor 2/2011

Examining inheritance of assets and of inspira-tion and structures

What can you buy with 231,000 ,000, 000, 000 dollars?

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Global Wealth Report 2011 Scan the QR code for a full copy of the report published by the Credit Suisse Research Institute or download online at www.credit-suisse.com.

Wealth Report Video Scan the QR code above for a video on the 2011 Global Wealth Report, compiled by the Credit Suisse Research Institute.

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decision-making directly. Success in the

Credit Suisse Research Institute

The Bank’s Think TankLeadership on strategic issues is the specialty of the Credit Suisse Research Institute. Its expert studies on economic themes highlight a range of issues that are of interest to specialists and the general public alike.

Established in 2008, the Credit Suisse Research Institute provides thought leadeship on strategic research issues at an in-tegrated bank level. The Research Institutfocuses on key topics for world markets. Favoring new, under-explored issues whiltaking a longer-term perspective, it relies on a deep investigative approach. It drawson both Credit Suisse’s internal resourcesand external experts and academics. It complements other cross-divisional initiatives, including the recently launchedEmerging Markets Research Institute, along with the Global Economics and Strategy Group’s focus on asset allocatioApart from a small central coordination team, the Institute has no staff of its own,relying instead on the world-class researcteams available across the entire bank.

Reports With a unique Character

By being first in setting the analytical debate and getting proprietary data, the Research Institute has two main objectiveto ensure Credit Suisse has the tools to egage in dialogue with its stakeholders at the highest level; and to benefit clients’

first objective is apparent through wide-spread media coverage of the Investment Returns Yearbook, Emerging Consumer Survey, Asian Family Businesses Report and other publications. As to the second, so far this year approximately 45,000 cop-ies of its reports have been distributed or downloaded. More than 3,000 people have listened to Research Institute conference calls on market themes with experts such as Theo Waigel, the former German finance minister, or Jacques de Larosière, previ-ously the head of the International Mone-tary Fund and formerly also governor of the Bank of France. Specific investment ideas based on the institute’s work (for example, on the theme of stocks and emerging consumers) are published separately by research in I nvestment Banking and Private Banking. Asset Management clients also benefit extensively from its findings.

Debating Future Trends

Underscoring its importance, the Research Institute is chaired by Urs Rohner, Chair-man of the Board of Directors of Credit Suisse Group. He also chairs biannual meetings where key issues such as the

crises affecting the Eurozone and future trends in banking are discussed and debated. Those participating in these dialogues include internal researchers and eminent external senior advisors. The latter group currently comprises Walter B. Kielholz (Chairman of Swiss Re), Sir John Major (former UK Prime Minister), Laura D’Andrea Tyson (Former Chair-woman of the Council of Economic Advisors under US President Bill Clinton), Long Yongtu (Secretary-general of the Centre for the G20 Research Center and China’s former WTO negotiator) and Ernesto Zedillo Ponce de León (Mexican economist and politician). Future topics for the Research Institute include insights for the outlook of the Mediterranean area, learning from previous democratic transi-tions, and a study of the boundary area between not-for-profit social enterprises and for-profit listed companies that adhere to tight environmental, social and gover-nance p rinciples. The institute aims to continue to provide leadership to enhance knowledge in key areas including global wealth, consumer demand and investing.

Giles Keating, Stefano Natella

The Credit Suisse Research Institute complements other cross-divisional initiatives such as the Emerging Markets Research Institute.

26 Economic Research


Emerging Markets Research Institute

Credit Suisse is pleased to announce the formation of the Credit Suisse Emerging Markets Research Institute (EMRI), a joint product leadership initiative coordinated between the Investment Banking, Private Banking and Asset Management divisions of Credit Suisse. The Credit Suisse EMRI will operate in conjunction with the existing Credit Suisse Research Institute and the Credit Suisse Emerging Markets Council to provide a unique competitive ad-vantage to serve the investment needs of our clients. www.credit-suisse.com/researchinstitute

Global Wealth Report

Tallying the World’s WealthGlobal Wealth Rising: What can you buy with 231 trillion uS dollars? Credit Suisse’s Global Wealth Report offers unique insights into the personal assets of every adult, worldwide.

How much is 231 trillion US dollars? Accord-ing to the Credit Suisse Global Wealth R eport, this is the amount held by private in-dividuals throughout the world, taking into account 4.5 billion adults. It includes cash, stocks, bonds, property and valuables, minus debts. The figure followed by 12 zeros is enough to pay the US federal budget deficit about 180 times over, or to buy thousands of Manchester United football clubs (124,194 to be precise). Despite a decade of near- zero real returns on stocks, several equity bear markets and the collapse of housing bubbles, total global wealth has risen from 195 trillion US dollars in 2010, and has nearly doubled from 117 trillion US dollars in 2000, accord-ing to the annual Credit Suisse Global Wealth Report. Strong economic growth and in-creasing populations in emerging markets are important drivers of this trend, which ap-pears set to continue. Total world wealth, al-ready at an all-time high, is expected to in-crease by 50 percent to 345 trillion US dol-lars by the end of 2016, according to the report, which offers some surprising insights on where wealth is increasing, as well as where it is stagnating or even declining.Emerging markets’ share of overall personal wealth is continuing to increase, as might be expected given the fast growth in many of these rapidly developing nations. During the period of the past year, as the global econ-omy recovered from the financial crisis, all regions except Europe achieved higherwealth growth from the start of 2010 to mid-2011 than they did from end-2000 to end-2009. China, India, Brazil, Indonesia and South Africa maintained their strong perfor-mance of the past decade, although a dra-matic growth in Russian wealth has tailed off in recent months. Some countries were

affected by currency appreciation due to how the figures were reported, expressed in US dollars: Japan’s improvement in personal wealth was due to the yen’s rise against the dollar, while the strength of the Swiss franc led net worth per adult in that country to all-time highs expressed in the US currency. As part of the equation, the report also looked at the flip side of wealth, namely personal li-abilities: Average debt rose by 80 percent from 2000 to 2007 and then leveled off. Globally it totals 9,070 US dollars per adult.

Vital but under-Researched

Wealth “is a vital, but relatively under-re-searched cog in the economic system,” the report notes, stating that not only are per-sonal assets a store of future consumption, especially in retirement, but they also serve to reduce vulnerability to shocks such as job loss, sickness and natural disasters. Wealth “enhances opportunities,” including serving as a basis for entrepreneurial activities, ei-ther directly or as loans. Money – or the lack of it – could rightly be said to determine the course not only of individual lives, but of en-tire nations. The report is unusual because it

looks at all households, rich and poor. One notable aspect is the wide discrepancy be-tween those at the wealth pyramid’s very top and the bottom. While the population in the lower half owns barely 1 percent of global wealth, the wealthiest 1 percent of the world’s citizens own 44 percent of per-sonal assets. Based on figures for mid-2011, an estimated 29.7 million adults have more than 1 million US dollars. It is estimated that 85,000 individuals are worth more than 50 million US dollars and 29,000 have more than 100 million US dollars. In terms of wealthy individuals, there are just over 1 mil-lion millionaires in China today, and more than 5,000 residents with wealth above 50 million US dollars in that country. Only the US, it seems, can claim more of these “ultra-high-net-worth individuals”.

It is interesting that almost one-third of the world’s population with between 10,000 and 100,000 US dollars today is Chinese. The middle segment of the pyramid is grow-ing rapidly in many emerging economies. This could have major impacts on consumption trends, developments in the financial servic-es industry and even politics in some of these nations. In total, approximately one out of four adults throughout the world fall into this range. This segment is continuing to grow and is expected to comprise nearly one-third of the world’s adult population by 2016. In high-income countries, that band represents average wealth for a typical person over most of his or her adult life. In middle-income countries this would generally be obtained by a middle-class person who has accumu-lated some wealth by middle age. In low-in-come countries, only those in the top 10 per-cent qualify, restricting membership to sig-nificant landowners, successful business >

“Over the next five years, we expect to see a big improvement in the position of emerging economies.”

Michael O’Sullivan, Credit Suisse

Economic Research 27


Global Wealth Pyramid An estimated 4.5 billion adults’ personal wealth totaled 231 trillion US dollars in 2011. The number of wealthy people at the top of the pyramid equals about 1 percent of the global population. Total household wealth is expected to rise by 50 percent in the next five years to 345 trillion US dollars, an increase equal to 8.4 percent growth per year. Net worth per adult is expected to reach an average of 70,700 US dollars in 2016, an increase of almost 40 percent.

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Wealth Range in uSD

Percentage of total wealth owned by percent of world population

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Economic Research 29

1.129Africa

0.754Europe

Inhabitantsin billion

Wealth sharesin %

1.211India

1.339China

1.526Asia-Pacific

0.549North America

0.469Latin America

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Total wealth 2016

Total wealth 2011

people, professionals and the like. Once debts have been subtracted, an adult needs only 4,200 US dollars in assets to count among the wealthiest half of the world’s pop-ulation. But even still, looking at the lower tier of the pyramid, meaning those with a personal wealth of only up to 10,000 US dol-lars, this poorer category is an enormous segment, comprising two out of three of the world’s adults (3.1 billion individuals). In total, the wealth of those in this category equals 7.6 trillion US dollars. But whether the people in this group feel rich or poor depends in part on where they live. More than 90 percent of the world’s adult population in India and Africa fall into this spectrum. In many low-income African countries, the segment en-compasses close to the entire population. However, the cost of living in many of these countries also tends to be quite low. For a resident of India, for instance, assets of 10,000 US dollars would be the equivalent of about 30,000 US dollars for someone in the US. In much of the developing world, this would be a significant amount of money, per-haps even enough to own a house or land – albeit possibly with uncertain property rights – and to have a comfortable lifestyle by local standards.

Age also may play a part in wealth accu-mulation and determining who is poor. The lowest wealth segment in the study includes a high proportion of young people with little opportunity or interest in accumulating as-sets. Limited amounts of tangible assets combined with credit card debts and student loans lead many young people to have even a negative net worth. This is an important and often overlooked group, not least in the context of the credit crisis. Low wealth is also a common feature of the older age groups, particularly with regards to those individuals suffering ill health and facing high medical bills. Interestingly, the way personal assets are tested to determine public benefits, es-pecially contributions to the cost of residen-tial homes, might even be an incentive to shed wealth, according to the report.

Emerging Nations Catching up

Over the next five years, wealth growth is likely to be notable in emerging economies. Wealth in both China and Africa as a whole is projected to rise by over 90 percent. India and Brazil are forecast to do even better, with personal wealth more than doubling by 2016. In India, where wealth is skewed to the bottom end, private assets have almost

Wealth Shares 2011per regions

Expectation of Growthin trillion USD

quadrupled since the year 2000. Indonesia has also seen spectacular growth in person-al wealth, and in Latin America, the aggre-gate today is approximately 10.2 trillion US dollars, compared with 3.3 trillion US dollars in 2000.

Some of these emerging countries are also quickly catching up in terms of the level of personal wealth vis-à-vis developed coun-tries. China’s total personal wealth currently stands at 20.1 trillion US dollars, equivalent to the US in 1968. If recent trends continue, by 2016 China could reach the wealth level that the US achieved in 1990 – a jump of 22 “US years” in a short span of just five years. Similar trends are expected for some other emerging countries. The case of India is par-ticularly striking. With a total wealth of 4.1 trillion US dollars in 2011, India’s household assets are at a level comparable to US total wealth in 1916. But during the next five years, India is projected to gain as much wealth as the US amassed over the course of 30 years, starting from 1916. This is due to an increase in wealth per adult accompanied by a signif-icant rise in India’s adult population. The case of Brazil is also noteworthy. With household wealth expected to reach 9.2 trillion US dol-lars by 2016 – a level comparable to the US in 1948 – the rise in wealth in that country the next five years should correspond to the gain in the US over the 23-year period from 1925 to 1948.

uS Still at the Top

The US leads in aggregate personal wealth, with a total of 58 trillion US dollars today, up from 40 trillion US dollars in 2000, and is expected to retain its premier position at the top of the “wealth league” despite rapid growth in developing countries, with 81 tril-lion US dollars by 2016, according to the re-port. Today about one-third of the world’s dollar millionaires live in the US. The US is unusual in that its wealthy hold a very high proportion of personal assets, equal to 68 percent, in financial form, and the US also has a larger number of active shareholders than other countries. Further, it has a high level of economic activity in the private sec-tor, as opposed to the public sector. And even though the report noted that there has been a significant rise in household debt relative to income in all the major developed econo-mies, despite what people say about Ameri-cans’ spending habits, debts of 59,000 US dollars per adult in that country are “not ex-treme by international standards,” the report

Information in this article was based on the Credit Suisse Global Wealth Report 2011 authored by professors Anthony Shorrocks, Jim Davies and Rodrigo Lluberas. Michael O’Sullivan, Head of Portfolio Strategy & Thematic Research, Credit Suisse and Richard Kersley, Head of Global Research Product, Investment Banking Research at Credit Suisse, also contributed to the report.

Michael O’Sullivan, Head of Portfolio Strategy & Thematic Research, Credit Suisse

said. The US and France have the longest data series detailing the relationship between household wealth and income, stretching back to 1900. The most striking feature of such data is the relatively stable pattern ob-served for the wealth/income ratio in the US. For most of the period since 1900, house-hold wealth in the US has fluctuated in a nar-row band between about four and five times disposable income. Furthermore, there is no upward trend detected over the whole period: The wealth/income ratio for the last two years for which data are available (4.8 in 2008 to 2009) is almost identical to that re-corded 100 years earlier (4.7 in 1908 to 1909).

Ranked second in overall personal wealth, Japan’s proportion of population owning wealth above 100,000 US dollars is nearly seven times the global average. But the country has “the least impressive wealth re-cord” of any of the top economies in recent years, according to the report. While its av-erage wealth today is higher calculated in US dollars, Japan’s wealth has fallen by about 10 percent expressed in yen. A decline in property prices has been a major reason for this: Real estate prices fell for three decades after a period of explosive growth in wealth tied to appreciation of property prices.

China’s total household wealth is now the third highest in the world, behind the US and Japan but ahead of France. It is catching up and expected to surpass Japan, adding a to-tal of 18 trillion US dollars to the stock of global wealth in the next five years. By 2016, China’s total household wealth could reach almost 39 trillion US dollars versus Japan’s 31 trillion. Personal debt in China meanwhile averages a low 630 US dollars per adult. Privatized housing, construction and rural land are major contributors to China’s wealth.

Among Asian powerhouses, Singapore’s wealth also has risen steadily since the start of the millennium. Household wealth has in-creased to 285,000 US dollars per adult from 105,000 US dollars at the start of 2000. Singapore now ranks sixth in the world in terms of mean personal wealth. Un-like some countries in developed regions, however, Singapore’s wealth distribution shows only moderate inequality.

Even among the richest nations in North America, Western Europe, the prosperous Asia-Pacific countries and in the Middle East, the trends in private wealth accumulation have varied. France’s citizens, representing just 1.1 percent of the world’s adult popula-tion, doubled their wealth to 9 percent of the global total over the past 10 years. Indeed, there are more millionaires in France today than in any other European country, partly due to an appreciation in the value of prop-erty, which now accounts for two-thirds of household assets in France. France’s per-sonal wealth totals 20.1 trillion US dollars, followed by Germany with 19.6 trillion US dollars. But Germany has more people above the 50-million US dollar mark, and both Ger-many and the UK rank higher in terms of people with more than 100 million US dollars.

In terms of individual wealth, a few small-er countries stand out. Remarkable for a na-tion with just 0.1 percent of the world’s pop-ulation, “fully 1.8 percent of the global top 1 percent (of wealthy people) is Swiss,” the re-port notes. Switzerland is now the “first and only” country to register wealth per adult in excess of 500,000 US dollars, it said. But, it added, “almost all of the rise in wealth since 2000 has been due to the appreciation of the Swiss franc against the US dollar.” Like the US, much of the wealth in Switzerland is held in financial assets, comprising 59 per-cent of total assets. And, perhaps surpris-ingly, debts in Switzerland averaged 131,000 US dollars per adult, “one of the highest lev-els in the world,” although this also reflects the strength of the Swiss currency.

The Fortune at the Bottom of the Pyramid Eradicating Poverty Through Profits Author: C.K. Prahalad, 2005 Pearson Education, Inc.

Perspectives on Growth and Poverty Authors: Rolph Van der Hoeven and Anthony Shorrocks, 2003, United Nations University Press

30 Economic Research


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Vedika Bhandarkar featured on Fortune’s most powerful women in business list.

Olivier Thiriet, named new CEO of

Credit Suisse Japan.

N ews

High RanksVedika Bhandarkar, Vice Chairman of Credit Suisse India, made the list of India’s most powerful women in business in Fortune magazine’s 2011 ranking. Ms Bhandarkar is responsible for increas-ing Credit Suisse’s share of business in India in areas including mergers and acquisi tions, capital markets and financing. During her career in the financial services industry, Ms Bhandarkar has led some of India’s most high profile transactions for blue chip corporations.

New CEO for JapanCredit Suisse has named Olivier Thiriet as Chief Executive Officer for Japan, who will take up the position starting in January 2012. “He will bring his con-siderable experience in Japan and of building market-leading businesses to further strengthen the bank’s fran-chise in this important market for Credit Suisse,” the bank said, announc-ing the appointment. Mr Thiriet will be responsible for Credit Suisse’s over-all franchise in Japan, reporting to O sama Abbasi, Credit Suisse’s Chief Executive Officer for the Asia Pacific region.

Asia Innovation Awards

32 Credit Suisse


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Credit Suisse Private Banking Asia Pacific hosted a gala in Hong Kong last November to announce the winners of the Asia Innovation Awards 2011. The goaward went to Adlens Ltd., cre-ator of eyeglasses that can be adjusted to correct near- or farsightedness. The Institute of Bioengineering and Nanotechnoogy of Singapore, which devel-oped a portable disease detec-

tion system, won the silver award. “Each one of you has made a

- remarkable effort in coming up with an innovative idea and turn-

ld ing it into a reality that helps to enrich and improve the quality of life and productivity,” Francesco de Ferrari, Deputy Head of Private Banking Asia Pacific, told

l- the winners. This is the second year Credit Suisse has supported the Asia Innovation Awards.

Face-Lift One, Credit Suisse’s employee mag-azine, has long been the main link between the bank’s many d ivisions across the globe. From January 2012, the award-winning publication gets a face-lift and relaunches with exciting new features: a smaller format, more dynamic visuals and information-packed layouts. The brand spanking new pages reflect that One is truly in tune with the times and Credit Suisse employees the world over. Further exploring cross-media approaches, additional content will be added to a new onlineplatform, accessed openly through the corporate site. A tablet edition rounds up the offering for those on the go, making the One magazine reader experience a most comfort-able one!

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Wealth Management Conference

T he Changing Balance of PowerCredit Suisse Private Banking in the US brought together some 450 clients, advisers and expert speakers for the firm’s annual Wealth Management Conferences in Chicago and New York. Participants had plenty of material to ponder around the theme of the conferences, “Assessing the Changing Balance of Power.”

Text: Jack Grone

The pace of change and the volatility of global events over the past year have been nothing short of astound-ing,” said Peter Skoglund, Head of

Private Banking USA, as he welcomed par-ticipants to the event in New York this past October. “Who would have thought just a year ago that we would all be such experts on Greek sovereign debt, and how we would hang on to every comment that Angela Merkel makes? We cannot ignore the global landscape, regardless of where we reside or what we own in our portfolios.” That theme had already been picked up in Chicago by Barbara Reinhard, Chief Investment Strate-gist for Private Banking Americas, during her keynote presentation. She observed that many investors have been slow to recognize this shift in influence from developed econo-mies to emerging markets. “For the past 24 years, most investors have held steady and have not really increased their exposure to the emerging markets,” Reinhard said. “The average investor in the US has less than five percent of their portfolio targeted towards emerging market equities and emerging mar-ket debt. That is a disadvantage.”

At the New York conference, Credit Suisse Chief Global Strategist Jonathan Wilmot not-ed that the current structure of the world economy resembles in many ways the struc-ture that existed toward the end of the 19th century, with emerging powerhouse China now cast in the role that used to be played by the US. Cross-border flows of capital, rapid wealth creation, large-scale migration and regular financial panics: All were common-place in the economic landscape 120 years ago. This is one reason why he advises inves-tors to take a long-term, nuanced view of the structural changes now underway.

“We still have enormous potential to create wealth in the world economy, and not just in emerging markets,” Wilmot said. “It’s become rather fashionable to write off the ageing,overindebted developed world, but I’m not so pessimistic. We’ve seen this all before, at least in terms of the general nature of the script.” Participants at the conferences also attended breakout sessions tailored to their individual interests, with topics including the future of the US dollar, mobile and cloudcomputing, commodities, estate planning, an entrepreneur’s life after exiting from thecompany, and the global impact of emerging-market consumers.

Highlights at both conferences included keynotes by James Dinan, founder and CEO of investment fund York Capital and Jonah Lehrer, contributing editor of Wired magazine and author of “How We Decide.” Lehrer’s presentation, “Making Sense of Bubbles,”described the history of finance as being in fact the history of financial bubbles, includ-ing those of the past decade that involved dot-com stocks and the property market. He believes that the development of these bub-bles is driven by the interplay between human reason and emotion, a subject that’s been

studied at least since the time of Plato. Our decisions therefore usually reflect the out-come of a battle involving different areas of the brain: One area anticipates rewards, while others are stimulated by the realization that everything has a price. “When we go to buy a George Foreman grill or a cashmere sweater or that new smartphone, we don’t deliberately try to maximize utility. We don’t crunch the numbers in our head,” he said. “Instead, we outsource these calculations to our emotions, to these brain areas which en-gage in this tug-of-war. And whichever emo-tion wins tends to drive our decision.”

A Wealth Management Conference was also held in Los Angeles in November, and another one is scheduled for Miami during March 2012.


Credit Suisse 33

David McGranahan, Head of the Midwest Region, greeting

participants in Chicago.

Jonah Lehrer, author of “How We Decide,” discussed

behavioral finance and the concept of financial bubbles.

Philanthropy Campus

G iving S uccessfullyPhilanthropists are rapidly transforming their field with new initiatives and fresh ways of bringing donors and recipients together. The Credit Suisse Philanthropy Campus, held in New York City in September 2011, marked a new phase in the ongoing partnership between the public and private sectors, uniting the bank’s expertise in wealth planning and philanthropy advisory services with New York University to examine what it means to be a philanthropist today.

As one speaker at Credit Suisse’s Philanthropy Cam-pus put it: “Philanthropy is power; it is power in your hands. It’s not only giving a check; it’s giving the donor

a role in determining how an organization grows. Philanthropy is the power to be use-ful; the power to be influential during your lifetime and beyond.”

Approximately 70 Credit Suisse private banking clients, philanthropists, consultants, foundation executives and Credit Suisse ex-perts attended the three-day campus, which featured a curriculum developed by Private Banking USA and the faculty of the George H. Heyman Jr. Center for Philanthropy and Fundraising at New York University (NYU). In lectures, panel sessions, informal discussions and off-site visits, participants discussed a wide range of themes relevant to both new and experienced philanthropists, including leadership, fundraising and investing, and family philanthropy.

The Campus kicked off with a dialogue be-tween two prominent figures in public policy and philanthropy: Sir John Major, former prime minister of the UK and Senior Advisor to Credit Suisse, and Jeff Raikes, CEO of The Bill & Melinda Gates Foundation. Answering questions posed by Sir John, Raikes outlined the mission of the Gates Foundation, which funds global health and development pro-grams as well as programs in the US. He gave frank assessments of the organization’s progress and the challenges posed by its high public profile.

The Philanthropy Campus was held at New York University’s Kimmel Center.

Text: Jack Grone

34 Credit Suisse


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Sir John Major: Deciding to devote your-

self to philanthropy and actually doing

it are two rather different things. How did

you begin?

Jeff Raikes: All lives should have equal value, but when you look around the world you see all these inequalities. Bill and Melinda Gates asked themselves what they could do to have an impact in the developing world and also here in the United States, particularly in ed-ucation. We bring a business-minded focus to what we do, and we always look at how we can get the greatest leverage out of the dollars we invest.

That suggests an interesting contradic-

tion. The reason to start the philanthropy

was emotional, but then the approach you

took was somewhat hard-headed.

Bill and Melinda often say they like to be in wholesale rather than retail when it comes to philanthropy. What this means is that we really try and have a sense of what things we should be doing that will have the broadest impact in terms of dollars spent. That is the balance between heart and mind.

How do you make decisions about

funding short-term versus long-term

programs?

We look at the data and the evidence to try and find the right balance. The longest-term project at the moment that pops into my head is the desire to eradicate malaria. This is go-ing to take a long time. Unless we have some amazing breakthroughs in vaccines, to erad-icate malaria will probably take 35 to 50

years. I hope I’m there when they make the declaration that malaria has been eradicated. It’s like research and development that a private company does: You don’t get the b enefits immediately; you have to look at the long-term view. That’s where we bring a business-minded approach to the table.

What were your biggest surprises, and

your biggest successes and failures?

One surprise was the notion of competition. When we first started we said to ourselves, there’s no competition, we’re not competing against anyone else.” Well, guess what? There are a lot of organizations out there who will fight against the changes that you need to make, and you need to think of them as opponents, not just as competitors. In terms of successes, some of the vaccines that our partners have developed have made a huge difference. If you help save the lives of chil-dren and reduce the mortality rate, you start to reduce the birth rate, too. So you’re not

“

only reducing mortality; you’re managing the human footprint and the long-term effects of rapid population growth on the environment.

What about innovation? How do you

define that in philanthropy?

You have to think the same way with philan-thropy as you do with technology. Innovation is about a transformational approach. New technologies and breakthroughs in research mean we can make an exponential leap in terms of the impact of innovation. Let me give you an example: Twenty years ago there were about 400,000 new cases of polio a year. Now, there are only about 1,500 each year. There was just one case of polio re-ported this year in India. If we can rid the world of polio, we can save the world’s econ-omies a collective 20 to 50 billion dollars over the next 20 years.

What kind of advice would you give

to smaller foundations?

You make bets on people. You have to work with partners and own the theory of change if you’re going to achieve your goals.

You meet government officials a great

deal. How do you engage with them and

get them to work constructively with you?

The Gates Foundation is all about “catalytic” philanthropy. We spend 600 million dollars a year on education, for example, but that is still only a fraction of overall spending. So if we’re going to have an impact, we have to be catalysts. We’re trying to figure out where we can make innovative interventions in education and find evidence of success or failure. Then we need to show governments or others in the private sector that they should scale up and sustain those private i nnovations. When we meet with government officials, we share what we know works and what doesn’t work. We try and provide them with resources and technical assistance where appropriate.

Yours is the largest foundation in

the world, and there has been a fair bit

of c riticism in some quarters about the

impact you’ve had. How do you respond?

Understanding the politics of philanthropy is part of the game. You have to start with self-awareness, then make sure you have dia-logue and engagement with your partners. Effective philanthropy requires a large degree of transparency and you have to ensure that you’re not crowding out the other sources of funding that are necessary for the things you care about.


Credit Suisse 35

Sir John Major kicked off the three-day program.

The event was hosted by Anthony DeChellis, CEO of Private Banking Americas.

An engaging dialogue between Jeff Raikes, CEO of The Bill & Melinda Gates Foundation, and Sir John Major was a major highlight of the event.

HOLT Lens

Looking Througha New Lens

The year 2012 is set to be a milestone for Credit Suisse HOLT with the widespread rollout of HOLT Lens, the result of a two-year collaborative effort by the HOLT product development and sales teams, IT development and support, external consultants and – most importantly – our clients.

Text: Jack Grone

Credit Suisse HOLT is under-going a transformation that will come into full bloom during 2012. HOLT Lens, the new, web-based incar-nation of HOLT, will debut

on the screens of thousands of Credit Suisse clients, providing a richer and more intuitive experience than the HOLT ValueSearch platform, which is now 15 years old. Used by traditional fund managers, hedge funds, p rivate equity, corporations, credit investors and others, HOLT’s proprietary methodology helps investors gain an objective view of corporate income statements and balance sheets, ironing out the distortions caused by traditional accounting and revealing how fairly the market is valuing a company’s p rospects for growth.

“We saw that the future was going to be online, so we viewed the new-generation HOLT platform as a good opportunity to try and improve the user experience,” said Jim

Ostry, head of HOLT Strategy and Branding. A limited rollout of HOLT Lens began in mid-2011, giving many clients their first taste of HOLT as an online application. Other clients, however, had been involved in the develop-ment of Lens much earlier – linchpins in a process that would evolve into a fundamental rethink of the ways HOLT engaged its users.

Retooling a Formidable Competitor

Soon after Ostry and his global team began taking a hard look at the ValueSearch inter-face in the spring and summer of 2009, they realized things would have to change. The challenges presented by ValueSearch were

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numerous. It was a desktop-based product that had been the object of repeated up-grades spanning a decade and a half, with new features continually grafted onto each version, which were often bewildering to us ers. Clients had been largely left out of the development process. ValueSearch offered HOLT’s unique methodology and capabili-ties, but supporting materials like a user’s handbook and a website were stuffed with dense information that did little to demystify the product or make it accessible to external clients and Credit Suisse staff. In short, HOLT’s light was being hidden under Val-ueSearch’s bushel. “When we looked at the competitive landscape, we realized the potential advantages for HOLT lay not just in the service it provides, but in the user ex-perience with the software,” Ostry recalled. “We knew that if we could get clients to use the software more, and take advantage of the real insights of HOLT, we would be a far more formidable competitor.”

Identifying Areas for Improvement

One of the first people Ostry turned to was Beth Temple, an independent specialist with extensive experience in identifying the via-bility and market potential for Web-based products. When Temple began to make an assessment, she was struck right away by the absence of an internal product team to unite the technical and business sides of HOLT, and serve as a conduit for meaningful cus-tomer feedback. More worryingly, few people inside or outside the organization seemed able to agree on what HOLT really stood for and what set it apart from competitors. “Cli-ents had a wide range of definitions of HOLT. They each had a particular idea,” Temple said. “Some people said it was a database; others said it was an investment tool. Most clients found ValueSearch to be complex and some-times overwhelming. We determined that the 80/20 rule was at work: 80 percent of the clients were using only 20 percent of the product.” As Ostry and other HOLT ex-ecutives worked on a long-term plan, two things became increasingly clear. The new interface would be Web-based. And clients would be central to the development process. “We knew it was all about the clients, and so we asked ourselves: ‘What are the 30 or 40 things we do for our clients?’ And we looked

“The new-generation HOLT platform is an opportunity to improve the user experience.” Jim Ostry, Head of HOLT Strategy


36 Credit Suisse

at that list, and then we said: ‘Let’s take the top 10 and see if we can get this absolutely right,’” Ostry said.

Banking on Clients

To help reforge the links between HOLT and its users, HOLT management assembled a team that included over a dozen IT develop-ment and support staff from Credit Suisse, with Ostry and Temple crafting a road map to guide the overall effort over the next two years. Separately, the Investment Banking marketing team at Credit Suisse began work-ing with external branding and Web con-sultants to take a critical look at the HOLT website and the group’s marketing materials, in order to reimagine and relaunch them. The product development team developed a multistage process designed to capture the most natural and useful opinions from exist-ing clients of HOLT. Roughly 50 clients globally agreed to provide ongoing – and sometimes exhaustive – feedback that was put to immediate use as the foundations for HOLT Lens were laid.

“We’ve always taken client feedback into consideration, but the development process for Lens was particularly client-focused,” said Paul Hackett, manager of HOLT IT. “In some cases our meetings were scripted for the sake of consistency in terms of understand-ing the clients’ views of their own businesses. We would say: ‘Tell me what your investment process is, what types of tools you use. How often do you use our product? Is HOLT cen-tral or peripheral?’” As the discussions with clients became more focused, the product developers began introducing iterations of Lens. These started with boards based on simple drawings; then came a clickable pro-totype allowing clients to interact with it. Next came an alpha version which was tested by about 15 clients, and finally a beta version that was rolled out to a slightly larger group. All the while, the product developers observed clients’ reactions, probed them on specific points and kept collecting feedback.

The entire process relied on validation, meaning clients were not asked blindly to come up with their own ideas for Lens, but were instead asked to validate the function-alities that the development team added to each successive iteration. The user interface team, lead by Alastair Mack in London, then tweaked the product based on the clients’ reactions.

“The best way to see how clients feel about HOLT is to observe them in person. If we put

a new iteration in front of a client, and there was hesitation or no movement on their part, that was a form of validation,” Hackett said. “The majority of users made it clear to us that they preferred the iterations of Lens over the old interface. Lens is more intuitive, and you don’t have to drill down as far to get into the advanced functionality.”

More user-Friendly Platform

Client feedback has left its mark on several places in the Lens interface. Most noticeable is the new Summary page, the entry point for most users which combines key HOLT data such as the familiar Relative Wealth Chart with visuals and links covering valuation, risk and momentum, giving users a concise yet meaningful snapshot of each of the 20,000 companies in the HOLT database. It was client input that also gave rise to the Peer Analysis function, which lets users compare key metrics for firms across standard and custom peer groups. Client feedback also prompted the inclusion of the Information Tags that provide pop-up descriptions of tabs and links on each page. “This process was

not a ‘big bang’; it was a series of incremen-tal steps in which we were continuously pre-senting iterations and gathering feedback,” said Steve Harr, IT project manager for HOLT Lens. “The business really had a seat at the table with IT. The result for clients is that they will now have a collaborative platform that encourages ongoing feedback. The whole thing is more proactive than observatory.” This proactive aspect is embodied in the Feedback button, which appears on each page of Lens.

“We’ve had around 2,000 items of feed-back, much of it coming via the button, but also from the discussions that sales staff have had with clients,” Harr said. “Lens is a big improvement over the ValueSearch prod-uct. The new interface lives up to its name,” said one client following the rollout. “It fo-cuses your attention immediately on the ar-eas where portfolio managers focus.” Under the ongoing schedule for the rollout of Lens, Ostry hopes to have around 80 percent of clients migrated to the new interface during the first half of 2012. Later in the year will come the turn of clients who use HOLT’s most advanced functions, and who have it embed ded in their own platforms, creating special challenges for the transition team. “Clients have been very generous with their time; many of them already have a big invest-ment in HOLT,” Ostry said. “The entire pro-cess has been humbling for everyone. It’s strengthened our partnerships with clients, and it’s also changed the way our own man-agement team looks at HOLT. These kinds of changes aren’t easy, but now we realize more than ever that HOLa work in progress.”

T should always be

A series of incremental steps ledto the introduction of many new functions and improved existing

ones, making for a more intuitive process. A concise snapshot of

20,000 different companies is easier to access thanks to these

improvements to HOLT Lens.

“Clients will now have a collaborative platform that encourages ongoing feedback.” Steve Harr, IT Project Manager for HOLT Lens


Credit Suisse 37

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Hedge Fund Conference

O pportunities in Uncertain TimesSome 170 investors and industry specialists turned out for the third hedge fund event sponsored by Credit Suisse Private Banking, held in Zurich this past November. The global industry is back to just above its pre-crisis peak, totaling about 2 trillion US dollars, a clear sign that investors are still attracted to these funds.

Text: Alice Ratcliffe

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Selection is key, according to Patrick Schwyzer, Head of Pri-vate Banking Hedge Fund Invest-ments at Credit Suisse. Speaking

at the start of a one-day event in Zurich aimedat bringing investors more insight into hedgefunds, he noted growth in the industry andremarked that “now more than ever it is im-portant to know with whom you are dealing.”

Hedge funds are typically lightly regulatedvehicles for well-heeled investors that canemploy many different strategies to gethigher returns. “The industry has learned alot of lessons” from the 2008 financial crisis,Michael Cohen, Head of European Investingat Och-Ziff Capital, told attendees. Greatertransparency and disclosure have emerged

as a result. “We think this is a good develop-ment,” he added. Och-Ziff oversees close to 30 billion US dollars, much of it invested in a flagship hedge fund. One of the lessons the industry has learned is the need to be more transparent. Meanwhile, investors are looking more closely at fees and are more risk-conscious, preferring to sacrifice return in exchange for lower volatility and lower leverage. Leverage refers to the level of borrowed capital used. Liquidity is equally in focus, while funds that can demonstrate strong internal compliance and risk controls are at a clear advantage.

Continuity, too, is key: “The real hedge funds are going to be here in 10 or 20 years’ time,” Cohen said. Regulation is affecting the industry as well. Today many funds are offer-ing European investors products compliant with “UCITS III,” the latest version of a Euro-pean Commission directive outlining the frame work for investment funds.

Difficult Market Environment

Recent market turmoil is complicating the job of investors and fund managers alike. Nanette Hechler-Fayd’herbe, Head of Global Financial Markets Research at Credit Suisse, told the conference that “we are not in a universe that is very favorable to risky assets.” Yet some in the industry actually welcome this. “The

current environment for alternatives is posi-tive because traditional markets are so chal-lenging,” said Andreas Fröhlich of BlackRock

Asset Management. “There is uncertainty; if you have an alternative solution where you can be very opportunistic, that is what investors are looking for. We’ve experienced a

pickup in interest this year for such alterna-tive investments.”

To allow conference-goers to meet hedge fund managers and familiarize themselves directly with different strategies, the conference ended with breakout sessions where attendees could meet managers in small groups. Besides Och-Ziff and BlackRock, Credit Suisse Asset Management’s Insur- ance-Linked Securities team, and GLG, part

of Man Group, were present. The next Hedge Fund Conference is planned for the spring of 2012.

The reference to specific securities is for illustrative purposes only. This material should not be regarded as an offer or solicitation of an offer to invest in any security.

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38 Credit Suisse

“Selection is key. It is important to know with whom you are dealing.” Patrick Schwyzer Credit Suisse

“The industry has learned a lot of lessons.” Michael Cohen, Och-Ziff

Michael Cohen, Head of European Investing at Och-Ziff Capital.

Patrick Schwyzer, Head of Private Banking Hedge Fund Investments at Credit Suisse.

Nanette Hechler-Fayd’herbe, Head of Global Financial Markets Research at Credit Suisse.

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Global Ad Campaign

Success Stories in Pictures

Text: Julia Hancock

Scan this code to watch a making-of video of the Oxygen visual, part of Credit Suisse’s new advertising campaign. For more videos and further information, please visit credit-suisse.com

Credit Suisse’s new global advertising campaign breaks with the traditional style of financial services adverts by putting clients and their achievements at the forefront.

Credit Suisse 39


A scooter zips through a prehistoric landscape. A few dinosaurs look on. The scooter is a lightweight electric model made by Oxygen

S.p.A. It’s bringing an important message to the world: Oxygen is leaving the fossil fuel era behind. And Credit Suisse is helping the company evolve. The photo is one of a se-ries of striking advertisements that tell in-triguing stories as part of a global campaign launched by Credit Suisse in September. The idea marks a break with traditional advertis-ing that relies on text-heavy messages about financial services. Instead, the focus is more on individuals. Powerful images highlight success stories of these clients, noting that Credit Suisse has provided all of them with crucial behind-the-scenes support.

Making Ambitions a Reality

At first glance, the ads resemble those of luxury goods companies, with their unusual and artistic style. “That is what we wanted; to break out of the traditional financial services advertising genre – to be different,”says Libby Hills, Global Head of Advertising.The strategy is based on Credit Suisse’s commitment to helping clients thrive. “The advertisements demonstrate how we focus on being a trusted financial partner to our

clients and on helping them achieve their ambitions and dreams,” says Pamela Thomas-Graham, Chief Talent,

Branding and Communications Officer at Credit Suisse. The bank’s proven strategy of investing in its business and brand across all market cycles, including during challenging times, confirms the strength of the bank’s business model and its confidence in the future, Thomas-Graham adds.

Right Time for a New Approach

Despite an uncertain economic environment, Credit Suisse’s top executives believe this is exactly the right time to highlight the bank’s role as a partner – one ready to help clients every step of the way. “We are experiencing a challenging business environment, impact-ing virtually all of our clients’ business. But one thing remains constant: our clients need us – now more than ever,” says Credit Suisse Chief Executive Officer Brady Dougan. Be-sides raising the awareness of the Credit Suisse brand in both good times and bad, it is important to stress that the bank is always there for its clients. The manager of the campaign’s creative development, Michael

Bürgin, notes that those who created the campaign wanted to take

this thought one

step further. “It was all about the clients, so it was clear we had to show the client and not us,” he adds. “Banks do not create their clients’ ambitions. But we help to make those ambitions a reality.”

More to Come

To achieve the original and premium feel of each ad, the creative team worked with photographers from advertising and fashion. A second set of ads is being developed and will be launched next year. The campaign targets key markets across Asia, Europe and the US. After an initial six weeks, it will resume again next year. Other Credit Suisse clients currently starring in it include Swiss chocolate maker Lindt & Sprüngli, US fashion designer Jen Kao, Chinese search engine Baidu and Zermatt Bergbahnen, the Swiss company operating aerial trams in the alpine resort at the base of the Matterhorn. The ads will run in print and online in selected global business, lifestyle and leisure publications, complemented by advertising at internation-al airports. It is the first time that such a campaign will not only be carried in the financial media, but also in luxury magazines such as Vanity Fair, Monocle and Tatler. In addition, Credit Suisse has created an Inter-net site with information about the campaign including making-of videos and background information about the individual clients.

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C orporate Responsibility News

Compliance Academy

40 Credit Suisse


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Credit Suisse is offering graduates and young professionals an opportunity to gain knowledge and expertise in compliance through an innovative pro-gram that began this year. The Compli-ance Academy based in Singapore provides a new approach to meeting challenges in this area of expertise. T he two-year program includes a class-room cur riculum and hands-on job rota-tion. As such, it provides Credit Suisse

with the possibility of gaining motivated staff, while creating goodwill and building the brand. The program aligns with the objectives of the Monetary Authority of Singapore. Upon comple-tion, successful candidates receive both a formal internal certification from Credit Suisse’s highly-regarded Busi-ness School and a diploma in compli-ance certification from the International Compliance Association.

A Win-Win Situation“You choose. We match. They win.” The motto of the Credit Suisse America’s Holiday Charity Initiative, an annual employee giving cam-paign supported by the Credit S uisse Americas Foundation, tells it all. Participating employees can choose from a list of charity part-ners focused on three global pillars of education, engagement and microfinance. The three with the largest amounts pledged, the three with the most donors and those in five cities with greatest employee participation also win “prizes” in the form of extra donations. Last year over 5,500 employees participated, raising 2.7 million US dollars, the most ever since the launch in 2004. In total, the program has generated nearly 10 million US dol-lars in support for over 100 impor-tant projects and charities.

Time and Time Again

A new exhibition at the Musée Interna-tional d’Horlogerie in La Chaux-de-Fonds, Switzerland, features a highly comprehensive history of non-mechan-ical ways to measure time – thanks in part to support from the Credit Suisse Foundation. The exhibition “L’homme et le Temps” includes an hourglass to mark how long a lawyer in ancient Greece could argue and a functional reproduc-tion of an Egyptian Kamak clock, the oldest variety of water clock known. “Without Credit Suisse’s contribution, an exhibition of this quality and scale could never have been realized,” Nicole Bosshart, the museum’s assis-tant director, told bulletin.

Achievement AwardRecognizing its dedication to microfinance and its partnership with Opportunity International, Credit Suisse was bestowed with an Achievement Award at a conference held this year by Opportunity Inter-national, whose regulated banks provide access to savings accounts, small business loans, insurance and training to 2.5 million people in more than 20 countries in the developing world. As a strategic partner of several microfinance organizations and as a part of its global Micro-finance Capacity Building Initiative, Credit Suisse helps Opportunity International develop innovative technology solutions. Anessa Chui, a Vice President of Credit Suisse based in Hong Kong, was selected in 2010 for Credit Suisse’s Global Citizens Program to work alongside Opportunity International’s bank in uganda for three months. “It’s the simplest solutions that make the greatest impact,” Chui said. To strength-en the initiative and take it to the next level, Credit Suisse has named PlaNet Finance and Women’s World Banking as additional partners.

One project realized by the Holiday Charity

Initiative, a playground built on public land.

Displays at the Musée International d’Horlogerie.

a small loan put

margaret In BusIness

It took courage, hard work and an Opportunity International business loan for Margaret Wangui

to open Mama Oscar’s Café and create a thriving business. Now, as a successful entrepreneur,

Margaret is changing her own world and securing a better future for her family.

Through innovative delivery channels, like cell phone banking and mobile banks, three million

entrepreneurs have access to Opportunity savings, loans and insurance products. Our clients

use these powerful financial tools to build their livelihoods and break the cycle of poverty.

Will you partner with us to bring this opportunity to more women like Margaret?

empower an entrepreneur today visit opportunity.org

This advert was made possible with the support of Credit Suisse.

Malawi / Microfinance

Banking O n Wheels

Credit Suisse has been committed to microfinance since 2003, supporting and working with a variety of specialized partner organizations. bulletin paid a visit to two microfinance clients in southern Malawi, in the company of credit advisors from Opportunity International.

Text: Daniel Huber

42 Corporate Responsibility


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Early in the morning, Ellen Patrick and the youngest of her four children greet us out-side her house in Mathambi, a small village in the Mulanje District hinterland in southern

Malawi. The district is named after the Mulanje Massif, whose 3,002-meter (9,850-foot) peak makes it the highest mountain range in central Africa, dominating the land-scape of southern Malawi. Ellen takes us on a short tour of her modest home with its smoke-blackened walls. She’s running late and is impatient to start her day. The red clay soil road on the back of her house leads past small shops, tailors’ stalls, through to a vegetable market and eventually to E llen’s small bakery. Her one employee has already begun making the day’s dough. The boss quickly washes her hands and sets to work herself. On a normal day the two of them bake around 600 rolls and then sell them at the market for 10 kwachas each, an amount equal to only a few cents. On a good day they can earn the equivalent of about 34 US dollars.

Loan From a Trust Group

Ellen visibly enjoys talking about how her circumstances have changed for the better. Today, as a 30-year-old single mother, she supports three children of her own. An orphan herself, her life was transformed by the opportunity afforded by her first loan. Two years ago she was accepted as a mem-ber of the Tisaiwale trust group. Tisaiwale means “not forgotten” in the local Chichewa language. For individuals lacking collateral, trust groups act as borrowers vis-à-vis the bank and the collective vouches for the indi-vidual members. In this way Ellen received an initial loan just of over 5,000 kwachas, or 28 dollars. She used it to buy oil, salt and a 50-kilo (110-pound) sack of flour, and set herself up baking and selling rolls. This investment earned her 9,500 kwachas, 3,000 of which she deposited in a newly


Corporate Responsibility 43

In villages such as Mathambi in southern Malawi, the bank’s branch operates out of the back of a truck. Microfinance efforts including this one operated by Opportunity International, use modern technology to give owners of small businesses in remote areas access to vital services such as business loans, while also offering them the opportunity to open personal savings accounts.

opened savings account. The foundations ofa successful small business had been laid. Thanks to the Opportunity Internationalmicrofinance bank, Ellen can access thesefinancial services in her small village in theinterior of Malawi, several hours by foot fromthe nearest bank. This organization aims touse sophisticated technology to deliver banking services to people who can’t get to abank. In Ellen’s case, the “bank” is actuallyan old red truck that rolls into the villageevery Monday and provides financial servicesfrom Opportunity International. This meansthat the owners of microbusinesses don’thave to embark in what would otherwise bea long journey to the nearest bank. Insteadthe bank comes to them in a truck holding asmall but fully equipped branch office. Theclerks identify their clients, who very seldomhave identity documents and often cannotread or write, by means of smart cards andfingerprints. This way of identifying people isalso used in the small branches at town markets, whether at the bank itself or at cashdispensers.

A Safe Place for Savings

Ellen tells her story: “In the past I couldn’tafford to buy food or clothes for myself or mychildren. The start-up package from Opportunity International has enabled me to buildup a successful business.” Now, howeverthe key factor for her is not that she is ableto borrow money, but that she has a safeplace for her savings. “Before the bank truckstarted coming to the village, I used to spendany money that I earned straight away. Nowadays I put it into my savings account everyMonday and only withdraw it when I need it,explains Ellen. She’s also very happy with hergroup’s loan advisor, Antony Musonzo, whoalways has lots of time for his clients and offers practical advice and support, not justwith regards to financial matters but also fortheir businesses. Antony has worked forOpportunity International for three years. As

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far as he is concerned, Ellen is an ideal cli-ent. She always makes her payments on time and is now on her fifth loan. Apart from that, he’s delighted to see how Ellen’s personality has changed since she took out her first loan. “In the past Ellen came across as very shy and lacking in confidence,” Antony says. “To-day she is confident and self-assured and plays an active role at group meetings.” Her standing in the community has also risen no-ticeably, demonstrated by the fact that she is often invited to sit on wedding committees and church planning groups, and to give ad-vice to other women in the village.

Fund Transfers by Mobile Phone

Martha Chawanda runs her business at the market in Mulanje, about an hour away by car at the base of the mountain. She sets up her stall at the side of the road, surrounded by piles of secondhand clothes, directly oppo-site the new branch of Opportunity Interna-tional. On her lap sits a small child, one of two orphans she has adopted. When her hus-band died five years ago, Martha was sud-denly left all alone with two small children and no income of any kind. As a member of

Top to bottom

The truck operates as a mobile branch providing various financial services. Modern technology gives account holders swift access to funds via smart cards. Thanks to modern technology, accounts can be accessed using bio-metric scanning devices. A fingerprint often serves as a way to sign necessary documents.

The bank comes directly to its clients, rolling

into town every Monday in the truck that gives

those in remote areas in Malawi easy access

to vital financial services.

“I used to spend any money that I earned straight away. Nowadays I put it into my savings account.” Ellen Patrick



the Maganizo Abwino (“Good Thoughts”)trust group she received an initial loan of20,000 kwachas (112 dollars). She used thismoney to buy the stock for a small secondhand clothes shop. After repaying her initialloan, she still had around 30,000 kwachasleft in her savings account. She invested thismoney plus another loan of 30,000 kwachasin a bigger business in the Mulanje marketShe’s now paying off her fifth loan.

What’s more, business is good. Sheregularly pays money into her account at theOpportunity branch across the road. Thisweek it was more than 30,000 kwachas“With this money in my account, it’s easy forme to pay my running costs,” explainsMartha. “I often do it on my mobile phone viathe Opportunity mobile banking servicewhich is very practical. There are no longqueues and even at night, when all the banksare closed, I can send money to my motherwho lives in the capital city Lilongwe.”

The success of Martha’s business enablesher to send her children to private schoolsto support her mother and to put money asideto buy her own home. So it’s no surprise tosee the content look on Martha’s face as shepacks her inventory into massive bags. Asthe sun sets gently over Mount Mulanje, sheseems confident and ready for her next business day at the market.

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Credit Suisse Microfinance Initiative

Credit Suisse has been engaged in microfinance for close to a decade and today has an industry-leading microfinance franchise across all divisions of the bank. Launched in 2008, the Microfinance Capacity Building Initiative contributes to the quality training of thousands of staff at MFIs through its best-in-class partners and also fosters research, innovation and constructive dialogue to spread best practices in the industry. As part of the initiative, Credit Suisse works with seven carefully selected partner organizations: ACCION International, FINCA International, Opportunity International, PlaNet Finance, Swisscontact, Swiss Capacity Building Facility and Woman’s World Banking. Opportunity International

With more than 800,000 savings clients, 1.5 million borrowers and 1.4 million microinsurance clients, O pportunity International is one of the world’s major microfinance organizations. Opportunity International is a world leader in developing, owning and operating regulated banks for the world’s poor. It also offers financial products and training. Credit Suisse supports Oppor tunity International’s E-wallet project. This brings banking to clients by way of mobile banks, ATMs, smart cards and small sales outlets. Moreover, the use of biometric technologies enables en trepreneurs lacking formal identity documents to ac cess banking services for the very first time.

Visit Kooaba Paperinformation and a p

Top Ellen Patrick has built up a

successful small bakery selling around 600 rolls a

day, enough to support her three children, thanks to a

small loan provided via microfinance specialists at

Opportunity International.

Bottom left Martha Chawanda sells

second-hand clothes. A small loan allowed her

to kick-start her business that allows her to send

both her children to school.

Bottom right Antony Musonzo provides

lending assistance as a staff member of Opportu-nity International, helping

Ellen and Martha to get their businesses up and running with small loans.

“I ofterunnion mvia OIntermobiserviMartha C

n pay my ng costs y phone pportunity national’sle banking ce.”hawanda

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To order the White please visit:credit-suisse.co

To stream a film aboin Malawi directly to please scan this QR

Corporate

boy for additional hoto album.

Paper on microfinance,

m/publications

ut microfinance your smartphone, code.


Responsibility 45

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Two Times Christmas

Twice the CheerThe idea behind “2× Christmas” is simple. Donations of food and daily necessities that more fortunate people have a surplus of are donated to the needy. With some 400 tons of gifts to be distributed by the Swiss Red Cross, volunteers from Credit Suisse are helping to sort the parcels. By doing so, they learn about the plight of the less fortunate in Switzerland and Eastern Europe.

Text: Bernard van Dierendonck

The idea originated 14 years ago with Swiss radio station DRS. Since then, “2× Christmas” has grown significantly popular. Over a couple of weeks each year, Swiss Post agrees to con-

vey the parcels handed over at its counters to the Swiss Red Cross (SRC) free of charge. The SRC then sorts the gifts and distributes them to people in Switzerland, and Eastern Europe. The SRC logistics center located in the town of Wabern, Switzerland is expect-ing about 72,000 parcels this year, weighing a total of 400 tons, to be donated at the end of the year.

Solidarity with Europe’s Poorest

“It’s unusual for charities to organize dona-tions in kind,” says Josef Reinhardt, head of the SRC’s Swiss emergency relief organiza-tion and coordinator of the program. Although no long-term solution to fighting hunger or poverty, gifts help those living on the margins of society to get through a tough winter. The campaign is also viewed by recipients, who

sometimes seem invisible in society, as a sign of solidarity. In the previous campaign, 40 volunteers gathered at the SRC logistics center to help out. Some of the gifts being sorted were sent to Moldova. The country that was once described as the wine cellar and bread basket of the former Soviet Union, is one of Europe’s poorest nations today. Ev-ery third adult citizen of this country border-ing on Romania works in another European country – and not always legally. Those who stay behind are mostly the elderly, or children sometimes referred to as “Euro-orphans.”

Many of these are left with their grandpar-ents (themselves sometimes in need of care) or shunted into overcrowded children’shomes. They are not true orphans, but these children may suffer the same sort of psycho-logical trauma as a result of being aban doned by their parents. The money earned by emi-grants, often illegally, is not necessarily sent back to families at home. Even so, the total of these remittances exceeds the country’s GDP. Without this flow of money, Moldova would be in even worse straits. So the elder-ly who stay behind tend to grandchildren, and themselves, on a pension that is equal to just 50 Swiss francs per month (56 US dollars): hardly enough to pay for medicine, or to heat a home through the winter. Sanitary facilities are a rarity: Only one house in ten is linked to a sewer line, and water comes from the village fountain.

Getting a First-Hand View

At the beginning of June, a delegation from the SRC and Credit Suisse traveled to Mol-dova and Romania, visiting needy families

Moldova was once described as the wine cellar and bread basket of the former Soviet union – it is now one of Europe’s poorest countries. Josef Reinhardt



Children left behind by their parents are sometimes referred to as “Euro-orphans.”

Additional information

For more information or to donate, please visit: www.2xweihnachten.ch. To watch a video on the “2× Christmas” program, please scan this code with your smartphone:

and institutions to see whether the gifts from the previous year’s campaigns had actually been delivered to the intended destinations. On-site distribution is carried out in close co-operation with the Moldovan Red Cross. One Red Cross coordinator told visitors that the cooperation with the SRC worked well, add-ing that conditions in the country remained very difficult. Few people can find work and alcohol consumption presents another com-mon problem. Visitors regularly provided a precise picture of what is needed by which families, allowing the SRC to see who has children in which age group so that the distri-bution of clothes, school supplies and toys can go to the right places.

The delegation from Switzerland visited families and elderly citizens living alone in a number of different villages. Zahra Darvishi, Head of Corporate Citizenship Switzerland, was deeply affected by what she saw. A chil-dren’s home at Larga in northern Moldova, close to the border with Romania, made a particularly lasting impression: “The children who live here have experienced some terrible things. They were more or less dumped here by their parents. Only two couples have in-quired about how their children are doing. The father of one seven-year-old girl – the girl is now in this home – wanted to sell her. The director of the children’s home and her staff are doing a great job, and are trying to give the traumatized children some of the warmth and sense of security they lack.” That is a formidable undertaking, given the scar-city of resources. Having seen how things are motivates those involved to do even more to alleviate the hardships. For example, the 30 children and adolescents at the home the group visited were eager for a few bicycles. During the summer, Credit Suisse launched a campaign among its staff to round up some. As a result, 28 bicycles were sent via the SRC to the children’s home in Moldova.

Focus on Europe

The SRC’s work has included installing a soup kitchen in Tuzla, near Srebrenica in Bosnia and Herzegovina. “By offering soup, we enabled elderly people to at last get something hot to eat. It is always children and the elderly who suffer most,” says Josef Reinhardt, the SRC’s Swiss emergency relief program head. Outside of regions in Europe, those farther afield the SRC buy food local-ly, meaning about half of the gifts donated in the program are taken by truck to Eastern European countries Belarus, Bosnia and

Herzegovina, and Moldova. The other halfgoes to needy people in Switzerland. Thisgroup includes pensioners living below thepoverty line, families dependent on socialbenefits, single mothers, children’s homesand asylum seekers’ homes.

From T-Shirts to Fur Coats

The participants in the Credit Suisse Corporate Volunteers Program include RomanaWood and Mirjam Beeler from the group’sGlobal Knowledge Management area, andChristophe Kuenzler, an investment bankerThe three are sorting through clothes thathave been donated, wearing face maskso ffering protection from dust. They separatethe useful from the junk, throw threadbareT-shirts into a trash bag, fold up children’sgarments and place them in the appropriatebox. The majority of clothes are as good asnew, including hand-knit items. Even two furcoats turn up. “Taking action is not justworthwhile, it’s also fun. In fact, they shouldmake it compulsory for all staff,” says Christophe Kuenzler.

The hall where the gifts are delivered ishumming with activity. The volunteers openparcels with sharp knives and spread theitems on a conveyor belt. Soft toys are placed

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in a crate while others are put on an inspec-tion table. The shelf life of each pack of pas-ta, chocolate bar, and the contents of canned goods is checked before the item is placed in the appropriate cardboard box. As home-made foodstuffs cannot be checked and therefore pose a risk to the recipient, they have to be thrown away. “The donors are very quality-conscious,” says Jürg Zbinden, the SRC worker who coordinates the sorting operation. “Only six percent of items are un-usable. But even that amounts to two tons per week,” he says. It is striking that most of the gifts – about 70 percent, in fact – were bought specifically for the program “2× Christmas.”

Virtual Christmas

To facilitate the dialogue with interested donors, an online platform allows users to create a virtual shopping basket. With the donated total, SRC go shopping locally. The aim is to appeal to donors who prefer to give to a charity from their homes or at work, rath-er than going to the post office. It makes it less costly for the Post. While the original idea of giving directly out of one’s own per-sonal surfeit of goods fades into the back-ground, the idea remains the same: Everyone can help, directly and in a very real way.

Although no long-term solution to fighting hunger or poverty, gifts help those living on the margins of so ciety to get through a tough winter.


Corporate Responsibility 47

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Children’s Trust

Building BridgesSome of the world’s greatest paintings inspired a group of disabled youngsters to create original artworks. The program represents one aspect of a project funded by Credit Suisse, supporting the Children’s Trust as part of its UK Charity of the Year program.

Text: Tracy Jones

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The group arriving one October morning at London’s National Gallery was in some ways not much different from most: sev-en children accompanied by families, friends and minders.

But one thing set them apart: The children,ages ranging from six-year-old Charlie to 18 -year-old Catherine, most in wheelchairs,were visiting from The Children’s Trust at Tadworth in Surrey, which provides care, edu-cation, therapy and rehabilitation to young-sters with multiple disabilities. Their visit marked the culmination of workshops cen-tering on Jan van Huysum’s painting, “Flow-ers in a Terracotta Vase,” a highly realistic still life of grapes, peaches and a bird’s nest beneath a vase filled with peonies, poppies,iris, marigolds, apple blossoms, tulips, ros es and other flowers. The children already had familiarized themselves with the work by plaster casting, printmaking and wire and paper sculpture. They worked while listening to recordings of birds, insects, trickling water and rustling leaves. Such experiences help children with disabilities to recover percep-tions and awareness.

Multisensory Workshops for Children

“Children with acquired brain injury have to work so hard to regain the skills they have lost through illness and accident,” according to the Children’s Trust Activities and Leisure Coordinator Rosemarie Glithero. At the start of the visit, the young museum-goers were given bags containing samples of fabric and other items, allowing them to “touch” art and the rooms where works are displayed. “Some children work at a more sensory level,” says Jackie Winter, a teacher with the Children’s

Trust. Just feeling a swatch of red fabric similar to that on the walls in one of the Gallery’s rooms is enough to send a child into rapture. Understandably for this audience,the elaborate interior floors and marble col-umns proved enough to regale them, even in a room including paintings by Turner. Clutch-ing squares with the same checkerboard pattern as the floor, the children were urged to imagine shapes and to feel the coolness of marble on their faces.

Building Bridges

Sculptor Guy Portelli, also Vice-President of The Children’s Trust, shared his personal

thoughts on the work the charity does. “My son was there 20 years ago and so I know

how the parents feel … Quite often these kids are severely handicapped, so it is mostly a one-way conversation. Art is a bridge and if your child can create something and you can work with them on it, then that is a form of communication that you can both build on.” The climax came when the group arrived at what they ultimately had come to see:

“Flowers in a Terracotta Vase.” To heighten their experience the Gallery closed the room, allowing the group a private viewing while savoring a special experience: What would this painting sound like? What sort of noises might one hear if it came to life ? As they re-garded the masterpiece, over speakers came the sounds of falling rain, gusts of wind, birds, a bee buzzing and children’s laughter. Each child was given a paper butterfly to hold. The children fell silent, under the spell of the sounds, colors and fragility of the butterflies in their hands. And then each insisted on get-ting a photo taken in front of “their” painting. It was nearly lunchtime, but beforehand, a final task awaited the group. The children donned plastic aprons and got to work making their own mixed media montage of “Flowers in a Terracotta Vase.” When put on display back home in Tadworth, their creations will no doubt be treasured by the day’s participants as much, if not more than van Huysum’s original.

A completed painting from the Children’s Trust workshop



Catherine and her carer with Guy Portelli (center) and Marc.

Guy Portelli helps Charlie cut out leaf shapes at the National Gallery.

LES AMIS DU

WhItE tUrf cAptIvAtES US yEAr AftEr yEAr.

credit Suisse has supported these spectacular horse races for more than 20 years.

credit-suisse.com/sponsorship

Premier horse racing against a one-of-a-kind backdrop: that is the hallmark of White Turf. Outstanding riders vie to break the record on the frozen surface of Lake St. Moritz, thrilling thousands of spectators. Credit Suisse is pleased to support White Turf again this year.

SS ppononsosorrsshhiipp N Neewwss

Emerging Artists in Hong KongCredit Suisse is proud to be the exclusive title sponsor of the Hong Kong Arts Festival’s Emerging Artists Series for the fourth consecutive year, which offers a platform for budding musicians and artists from around the world. The partnership with the festival underscores Credit Suisse’s goal to nurture young talent and emerging artists. The 2012 series will include two evenings with the extraordinary Pavel Haas Quartet, whose album “Dvořák String Quartets Nos. 12 and 13” won the prestigious Gramophone Awards Recording of the Year last October. The 40th annual festival will present a total of 166 performances in 17 different venues. The Hong Kong Arts Festival runs from January 28 to March 8, 2012.

Da Vinci’s Studio TourA brilliant new app has been created especially for the National Gallery’s landmark exhibition, “Leonardo da Vinci: Painter at the Court of M ilan,” sponsored by Credit Suisse. Inspired by the paintings and literature of the era, the Studio Tour is a detailed and informative recreation of Da Vinci’s Milan studio circa 1490. Since the exhibition is already entirely sold out, this could be a nice way to get some insight into Leonar-do’s work, with additional information and inter-views with the curator and a video tour of the exhibition available online on the Credit Suisse corporate page. For the app, please visit www.cs-app.com/en

Tour de Force As the New York Philharmonic’s global sponsor, Credit Suisse is proud to announce the orchestra’s Europe-an winter tour 2012. Led by Music Director Alan Gilbert, the tour will feature outstanding highlights, includ-ing the Philharmonic’s 2011–12 Mary and James G. Wallach Artist-in-Resi-dence Frank Peter Zimmermann, pia-nist Lang Lang and mezzo-soprano Joyce DiDonato. “We are delighted that the orchestra will visit countries so important to Credit Suisse, namely Germany, Luxembourg, France, the Netherlands and the UK,” said Anto-nio Quintella, Chief Executive Officer, Credit Suisse Americas. The final stop in Great Britain will mark the inauguration of the Philharmonic’s In-ternational Associates Residency at the Barbican Centre in London.

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The Sunday afternoon, November 20, 5 pm, far beneath the gigantic O2 arena in London is a moment Pierpaolo Prazzoli will probably never forget. He was finally meeting his idol, Roger Federer, face to face. When the tennis champ arrived with a wide grin on his face, the electrifying energy inside the so called Chairman’s VIP room was palpable. Amongst more than 25,000 participants, the lucky duo, Pierpaolo and his partner Valentina, were selected to fly to London on an all-inclusive luxury weekend and, of course, to meet Federer. The competition on Facebook allowed users to vote on their favorite advertising film endings and has drawn hordes of Federer fans to vote, discuss and engage with the content on Credit Suisse’s social media pages in what has been a record-breaking competition.

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Spreading the Pa ssion

Text: Celeste Neill

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This autumn, the UK-based foundation Vocal Futures broke down barriers that keep younger people from enjoying classical music. Targeting those aged 16 to 21, the foundation staged an ambitious series of large-scale choral music concerts in con-temporary spaces, bringing a new experience of this art form to an audience more a ttuned to urban pop trends.

Classical music for a new generation


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The concerts held at the art space Ambika P3 at the University of Westminster in London were ar-ranged around three consecutive

performances of Bach’s St. Matthew Pas-sion. They quickly sold out. The driving force behind the concerts and the foundation called Vocal Futures that led them is Suzi Digby, a woman on a determined mission to inspire a new generation to enjoy classical music. Digby, a judge on the BBC1 program Last Choir Standing is also Acting Director of Music at Queen’s College, Cambridge. She was awarded an OBE by HM Queen Elizabeth II in 2007 that recognized Digby’s outstanding contributions to music education. Her latest venture with Vocal Futures aims

to inspire an audience that would seem among the least likely to frequent classical music concerts: urban youth, including gifted children from disadvantaged backgrounds.

St. Matthew Passion

The first project focused on Johann Sebas-tian Bach’s St. Matthew Passion – a choral work widely regarded as one of the major masterpieces of classical music. To make certain the dramatic elements came across, both music director and director/designer worked in close cooperation: Digby as music director collaborated with artist, writer and designer Patrick Kinmonth. The result was a fully staged production of Bach’s work that set a world class standard. Working togeth-er with up to 300 young Londoners, Vocal Futures has run workshops exploring the world of classical music, led by experts and professionals. These sessions used Bach’s St. Matthew Passion to unlock the mysteries of classical music for audiences of novices. Los Angeles, Cologne, Shanghai and Johan-nesburg are also in line to receive the Vocal Futures experience during the next two years. Suzi Digby hopes to recruit 1,500 young “ambassadors” worldwide over the next 12 months. www.vocalfutures.org

Vocal Futures founder Suzi Digby (Lady Eatwell, OBE)

Vocal Futures brings young people closer to classical music.

The Ambika P3 location at the University of Westminster.

Nurturing Young Talent

Credit Suisse is also intently commited to the support of young artists by sponsoring the Young Singers Project at the Salzburg Festival, the Credit Suisse Young Artist Awards in collabora-tion with the Lucerne Festival, and the Sydney Symphony Fellowship and Associate Conductor programs – all geared towards fostering young and emerging talent. For more information, please visit:

credit-suisse.com/sponsorship

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White Turf

High & Mighty Text: Stefan Behmer

For more than 100 years, crowds have been gathering in St. Moritz to attend one of Switzerland’s most spectacular horseracing events. On the valley floor, surrounded by the imposing snow-covered mountains of the Upper Engadine, the frozen lake of St. Moritz features as the site of this top-end event, bringing together equestrian racing aficionados from all over the globe.

During these unique race-meetings held over the first three Saturdays in February each year, visitors enjoy the very best of alpine horse racing in a cosmo-politan environment. White Turf is also home to the unique Skijöring contests. In this riderless race, thoroughbreds pull daredevil skiers across a course at speeds of up to 50 kilometers (31 miles) per hour. In addition to winning a substantial cash prize, the winner is also crowned “King of the Engadine” for the year.

RACES

For an overview of all races, please visit www.whiteturf.ch

Sunday, February 5, 2012

13:45 Skijöring Credit Suisse GP of Samedan


13:45 Skijöring Credit Suisse GP of Silvaplana


13: 35 Skijöring Grand Prix Credit Suisse

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On the SpotAs St. Moritz prepares to welcome visitors from all four corners of the globe, Silvio Martin Staub – President and CEO of White Turf – shares his favorite spots in and around St. Moritz.


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DRINK

Zoo Bar

A meeting place for guests and locals, the Zoo Bar is also a favorite among Cresta riders and other winter sport enthusiasts. Sports memorabilia adorn the walls, while the atmosphere remains intimate and inviting. www.hotel-soldanella.ch

VIEW

Muottas Muragl

One of the most beautiful vantage points in the Engadin region, the hotel boasts magnific panoramic views in addition to its century-old history. The hotel is also the first energy-plus property in the Alpine region as its solar power and bio insulationmake sure it produces more energy it ac tually needs! www.muottasmuragl.ch

DINNER

Chesa Veglia

The 1658 chalet pendant to the famous Badrutt’s Palace Hotel has seen a host of the world’s personalities wine and dine under its ancient wooden beams. In addition to three dining rooms, it also hosts the Club Privé, available exclusively to Chesa Veglia’s lifetime members. www.badruttspalace.com

SUITE

Hans Badrutt

This gigantic suite is an homage to the long and eventful history of the legendary Badrutt’s Palace Hotel. Italian marble and Engadin woods come together to create an authentic environment, and with a steam bath and a panoramic Jacuzzi, any snow storm is a good excuse to stay in. www.badruttspalace.com

DANCING

Dracula Club

Founded by Gunter Sachs, the Dracula Club is a social institution in St. Moritz. Home to legendary parties in the winter season, it also plays host to the city’s yearly “Festival da Jazz” during summer, with live performances of some of the genre’s finest. www.festivaldajazz.ch

ART

Mili Weber House

Displaying a comprehensive collection of the artist’s life work, picture stories, paintings,

sketches and studies are showcased in the Valais-style brick base construction, built

almost entirely by Mili Weber’s father and brother. Mili Weber Foundation – Via Dim Lej 20

SUNDAYS

White Turf

Prix d’Honneur at White Turf, followed by some serious mingling at one of the many VIP tents dotted around the race track. In addition to the races, gourmet catering, live music and art exhibitions round up the White Turf experience held on the frozen lake of St. Moritz.

www.whiteturf.ch

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Zurich Film Festival

Green CarpetText: Schirin Razavi

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Masthead

117th year of publication, issues published regularly in English, German, French and Italian

PublisherCredit Suisse AGP.O. Box 2CH-8070 ZurichPhone +41 (0)44 333-1111

Editorial TeamDaniel Huber Head of Print Publications

Stefan Behmer Editor-in-Chief bulletin / International Editions

Andreas Schiendorfer (Editor), Regula Brechbühl (Front of Book), Claudia Hager (ch), Alice Ratclif-fe (air), Dorothée Enskog (de), Schirin Razavi (sr)

Contributors to this IssueJoël Luc Cachelin, Marco Falbo, Jack Grone, Julia Hancock, Terri James, Tracy Jones, Celeste Neill, Michael O’Sullivan, Claudia Steinberg, Katrin Zeug

Editorial CommitteeNicole Brändle Schlegel, René Buholzer, Urs P. Gauch, Anja Hochberg, Angelika Jahn, Bettina Junker Kränzle, Hanspeter Kurzmeyer, Andrés Luther

ISSN registration: ISSN 1423-1360

Design / Layout / Project Management: www.arnold.inhaltundform.com

Proofreading: Text Control AG Translations: Credit Suisse Language Services Printing: Swissprinters Zürich AG, Switzerland

Contact / AdvertisingE-mail: [email protected]: www.credit-suisse.com/bulletin

Changes of AddressPlease send a notifi cation in writing, accom panied by the original envelope, to your Credit Suisse branch or to: Credit Suisse AG, SULA 213, P.O. Box 100, CH-8070, Zurich

Reprints of Articles: Permitted with acknowl-edgment of source (Credit Suisse bulletin)

This publication is for information purposes only. It does

not constitute an offer and is not a recommendation by

Credit Suisse to buy or sell securities. Indications of past

performance are no guarantee of a positive performance

in the future. The analysis and conclusions contained in

this publication were established by Credit Suisse and may

already have been used for transactions by Credit Suisse

Group companies prior to being made known to clients

of Credit Suisse. The opinions expressed in this document

are those of Credit Suisse at the time of going to press.

We reserve the right to make amendments. Credit Suisse

is a Swiss bank.

bulletin is available in print, for the iPad and online.

Sean Penn, Laurence Fishburne and Roman Polanski were only a few of the celebrities who attend-ed this year’s Zurich Film Festival.

For once, however, not just the stars but also the carpet itself was in the spotlight: A Green Carpet, instead of the usual red one, sym-bolized the festival’s focus on key challenges facing the environment.

Alongside Credit Suisse, global travel ser-vice provider Kuoni also sponsored the 10-day cinematic event in Zurich. As part of its engagement in topics surrounding sustain-ability, Kuoni has partnered up with the Swiss nonprofit foundation myClimate to bring all invited guests to the festival on a climate-neutral basis. As a symbolic gesture and set-ting a strong sign for a sustainable future,Kuoni and the Zurich Film Festival have rolled out green carpets at all the festival’s events.

To bring even more attention to the issue, a special screening of “Climate Refugees,”Michael Nash’s multiple award-winning doc-umentary film on climate change, was in-cluded in the program. After the film, the ex-ecutive producer Stephen Nemeth engaged in an interactive exchange with the audience, reflecting on what companies and individuals can do to mitigate climate change. The film’s title refers to people who have been dis-placed by the effects of climate change, of-ten due to disasters that have forced millions to flee their homelands. Even for those who stay put, the dramatic impacts are being felt in places ranging from Bang ladesh to the Tuvalu Islands in the South Pacific. Climate change has been blamed for catastrophic

storms and rising ocean levels, while in Af-rica water is growing scarce. Deserts are expanding and droughts in the sub-Saharan region have led to famines, giving rise to an increasing number of conflicts over scarcer resources.

The Zurich Film Festival’s partners, Credit Suisse and Kuoni, work closely with myCli-mate on various projects as the nonprofit or-ganization promotes the use of alternative energy sources and organizes projects for offsetting carbon emissions. “As a festival, we too are small-scale environmental villains, because every year we invite 200 guests who travel here from almost every corner of the world,” noted Karl Spoerri, the festival’s co-founder and Artistic Director. “Thanks to our collaboration with our partners, we ar-range for our guests to take carbon-neutral flights. In this way, we attempt to compen-sate as much as possible for the negative impact.” The Green Carpet and other initia-tives around environmental issues are essen-tial as solutions for current and future issues arise out of the combined efforts between corporations and the general public.

Roman Polanski on the green carpet.

Actor Sean Penn and friend Shannon Costello arrive on the green carpet at the Zurich Film Festival.

Further Information:

Credit Suisse has been a main partner of the Zurich Film Festival since 2007. The festival was established in 2005 and has quickly established itself as a major platform for films by seasoned and up-and-coming directors. The festival takes place every fall, attracting over 30,000 silver screen enthusiasts to Zurich’s cinemas during a 10-day packed program. For more information on Credit Suisse’s commitments around environ-mental issues, please download our Credit Suisse Cares for Climate brochure on visit credit-suisse.com/responsibility. To view a photo album with images of the Zurich Film Festival, please scan this QR code:

Here you will find additional information on the Zurich Film Festival.


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more bulletinA QR code connects your smartphone directly to videos and other additional content on the web in three easy steps.

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ulletinPaperboy by kooaba gives you access to further links, picture galleries

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56 Leader Roger Federer

Everybody’s FavoriteIt’s offi cial. Everyone really likes Roger Federer. According to a global study by the Reputation Institute, the company that looks into things like why Canada ranks highest in “trust, esteem, admiration and good feelings,” the Swiss tennis champion came in behind only Nelson Mandela among those top fi gures the world likes and trusts.

1Nelson Mandela, former president of South Africa

2Roger Federer, tennis player

3Bill Gates, founder of Microsoft and philanthropist

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To carry out the survey, a private group compiled a list of 54 of the most visible leaders and public personalities in politics, business, culture and sports. Then 51,055 people were selected in 25 countries, a group that was balanced according to factors including age and gender. They were asked to rank how liked, respected, admired and trusted they believed each person on the list was. The results confirm it. Swiss tennis star Roger Federer is second only to South Afri-can leader Nelson Mandela in terms of pop-ularity. Of course, some tennis aficionados may ask, why didn’t Federer come in first ? After all, he’s got a long history of winning. But on the other hand, look at those people he did beat. The roster included “top seeds” like Microsoft cofounder and billionaire phi-lanthropist Bill Gates and Warren Buffett, a man who made billions through astute invest-ments and also has pledged his wealth to worthy causes.

Federer beat some stiff competition in the form of Queen Elizabeth II and the Dalai Lama – even Pope Benedict XVI. Yes, many of these others may be liked, even loved. But none of them have won 16 Grand Slam titles. Federer handily beat the other sports stars on the list, including baseball player Derek Jeter, basketball player Lebron James and footballer David Beckham, as well as golfer Tiger Woods. In the case of the latter, Federer may be popular as well for what he doesn’t do. He enjoys a quiet family life.

Federer Is Number One in Our Hearts

“The whole world loves Roger Federer,” the main Swiss broadcaster declared when the survey was published. Well, the fact that Basel -born Federer was popular in his home country came as no surprise. The 2011 Leader RepTrak Study, as the independent survey by the US-based Reputation Institute is known, merely makes official what most of the world’s citizens suspected anyway. Roger Federer is esteemed and respected well beyond the frontiers of sports. And it’s not just RepTrak’s survey that confirms it, either.

Federer was voted Swiss Personality of the Year by television viewers back in Janu-ary 2004. Mind you, that was when he had only one Wimbledon Cup to his name. It’s since become hard to keep track of all the accolades. In 2006, there was hardly a sports personality vote that he failed to cap-ture. He consistently topped the charts, even of media groups like USA Today (US), the

BBC (United Kingdom), L’Equipe (France), and La Gazzetta dello Sport ( Italy). Still, most of these honors were limited to the world of sports. The most important was the nomina-tion and subsequent win of the Laureus Foundation title of World Sportsman of the Year. Federer is the only sportsman so far to win the distinction four times. And, then again, it’s not just about sports: In 2006, People magazine included Federer in its list of the “Sexiest Men Alive.”

Giving Back to the Community

Not only is he popular and handsome: US publisher Forbes estimated that the “Federer Brand” earned him record amounts of prize money. This would make a lesser man vain and pompous. But there is also the Roger Federer Foundation. Not only a good athlete, likeable, friendly, trustworthy and highly pho-togenic, Federer gives generously both of his time and money to social causes through his foundation.

People “get praise for their efforts when they donate time and money to the bet-terment of a region,” Reputation Institute Chairman Dr Charles Fombrun said in a statement. A top ranking is a nice thing to have, especially as Federer is no longer the undisputed king and serial Grand Slam w inner he used to be. But as he matures, it almost seems that dropping in the tennis ranks makes us like him even more. Federer, whose Facebook page has over nine million friends, garners the kind of adulation that money and trophies can’t buy. The world loves not just a winner, but also a guy who does the right things. “You will be loved and admired by people all over the world through-out your whole life. You are a ray of light and a source of joy wherever you are,” writes one adoring fan. And, there’s actually another reason why the world loves Federer.

Commenting to the press about his Grand Slam titles in 2007, he said, “I never would have thought there was any chance of doing something like that. I would have signed up for just one, you know.” Which is another r eason why we like him. After getting all those awards, and all that acclaim, he’s so terrifically modest. He’s so – dare we say it ? – human. But, as future surveys likely will confirm, he manages to be human in a very super-human sort of way. Marco Falbo

The Reputation Institute’s Global RankingThe 15 top-ranking personalities in the popularity survey of the globally active Reputation Institute:

4Warren Buffett, CEO of Berkshire Hathaway

and philanthropist

5Richard Branson, CEO of the Virgin Group

6Steve Jobs, founder of Apple

7Oprah Winfrey, talk show presenter/

entertainer

8Bono, lead singer of U2 and philanthropist

9Ratan Tata, CEO of Tata Group

10Elizabeth II, Queen of the United Kingdom

11Ban Ki-moon, UNO General Secretary

12Angelina Jolie, actress

13Tenzin Gyatso, Dalai Lama

14Barack Obama, President of the United States

15Satoru Iwata, CEO of Nintendo

“We are seeing an implosion rather than an explosion of population growth.”

“In five years time, we will be able to grow the first liver.”

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“By 2050, space solar will be a possibility.”

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Leader 59

D r Michio Kaku, Physicist

“ Do We Want to L ive Forever?”Medicine will be revolutionized in the coming decade, as a result of breakthroughs in genetic and molecular medicine, predicts futurist and physicist Michio Kaku. Our energy issues will be resolved, and we will increasingly be using nanotechnology, notably in the next generation of laptops.

“We do not yet have the Fountain of Youth, but it is in sight.”

“We currently depend on fossil fuels, but we are entering the age of hydrogen.”

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Mr Kaku, how does one study time as a physicist ?

Michio Kaku: We know that time is a measurement of change, so we try to write down equations and establish a model of a galaxy, a planet, an atom… Then we hit the fast forward button to see how it evolves with time. With global warming, for example, we have models of the weather and equations that govern it. We hit the fast forward button to see how it evolves, but also hit the reverse button, because you also have to be able to assess or calculate the past correctly. We know the past. If your theory cannot calculate the past, then it’s obviously wrong.

As a futurist, predicting future trends, which are the major

breakthroughs you foresee in the next decade?

If you take a look at medicine, it has evolved from what we consider witchcraft, into a model of antibiotics, vaccines and sanitation. This understanding has increased our life span by about 30 years. We are now entering the third era of medicine: molecular and genetic medicine, where everything is reduced to proteins, DNA and RNA. We may eventually even solve the aging process. Today, we can nearly double the life span of most organisms, ranging from yeast and spiders, to dogs and monkeys.

How exactly are we able to do that ?

If you feed an animal 30 percent less, it lives 30 percent longer. This has been proven for every single life form on earth except for humans, because we live too long. But nobody wants to eat 30 percent less. So what we want to do is to find the genes that con-trol the aging process. We also know that aging is the building-up of genetic and cellular errors. We are currently trying to unravel the cell repair mechanisms, which could stop aging. We do not yet have the Fountain of Youth, but it is in sight.

Could this mean we might live forever?

Alligators and crocodiles apparently live forever and do not get older. In the wild, they die of starvation, accidents and disease. But in zoos, they live so long that we have not been able to measure it. So the point I’m raising is that we do not have to age. We cannot do it yet, but we are now beginning to unravel the genes and the molecular mechanisms. Cells, for example, have a biological clock. Skin cells divide 60 times and then get old and eventually die. We can now stop the clock using an enzyme called telomerase. If we put skin cells in a petri dish and hit them with telomerase, they divide thousands of times and are immortalized. Now we have to be careful because cancer cells are also immortal, that’s why they kill you. However, if we can immortalize skin cells that so far

“Silicon Valley could become the next rust belt.”

Leader 61


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don’t seem to be cancerous, that is quite an encouraging devel-opment. We are now beginning to unravel the aging process on many fronts.

But this could lead to a massive overpopulation of the planet !

The problem is not overpopulation. The problem is underpopula-tion! The world population is currently slowing down as a result of prosperity (when people get rich, they do not want to have lots of children), urbanization (when peasants urbanize, children become expensive, while on the countryside they are an asset because they work in the fields) and the education of women (as women get educated, they take control over their future). We are seeing an implosion rather than an explosion of population growth, at least in the developed nations. And even in the third world, the education of women and urbanization are slowing down the population growth. So as far as the future of humanity is concerned, it is not so bleak.

What are other upcoming breakthroughs in medicine?

The human “body shop.” We are going to grow organs from your own cells, avoiding rejection. Today, we can already grow skin, blood, bone, cartilage, noses, ears, blood vessels, heart valves and bladders from our own cells. In five years time, we will be able to grow the first liver.

Will we eventually be able to replace all organs?

There are limitations, particularly with regard to the brain. However, in the future we may just inject embryonic stem cells into the brain, and you will simply have to relearn certain tasks, for example, like riding a bicycle.

Do you predict any significant breakthroughs

in the fight against cancer?

The word tumor will probably disappear from our language, as we will no longer suffer from them. Firstly, your toilet will have a chip in it that detects fragments of DNA and protein from cancerous cells 10 years before a tumor forms. This is going to revolutionize cancer research diagnosis. Now to kill cancer once you develop it, we are right now developing nanoparticles – molecules that zero in and attack cancer cells, leaving ordinary cells intact, but killing the cancer cells. This new technology was 90 percent effective in a recent clinical trial against tumors. We are going to attack cancer at the molecular level. This is going to significantly amelio-rate cancer therapy. Gene therapy is another area moving very fast. There is one gene called P53. When broken or mutated, it is involved in 50 percent of all common cancers. It is the master cancer gene. An experiment was carried out to repair P53, and the doctors succeeded curing a very specific form of leukemia. We have also isolated the gene responsible for bigger bulk – muscle mass, for example.

This could have massive implications for the sports industry.

Yes, the Olympic Committee is fearful that athletes will soon be artificially bulked up and basically cheat. This could affect soccer, baseball and any other professional sport. Would you pay to see two teams that have been genetically enhanced, just because the best team has a better geneticist ? Right now we pay trainers to make athletes have the best diet, the best exercise. So why not hire a geneticist so that these athletes can get the best genes? That is going to be an ethical question in the very near future!

What else will these geneticists be able to carry out ?

I suspect that by the middle of the century we will probably be able to bring back extinct animals such as mammoths and possibly

even the Neanderthal man. The Neanderthal genome has already been sequenced.

How about the sequencing of our own genes?

Right now it costs 50,000 US dollars to sequence every single gene in your body, down from 3 billion dollars when the first human had his genes read. This amount will be brought down to about 100 dollars. I personally had my genes scanned and my ancestry was tracked back 20,000 years.

Could science predict what you will die of?

he results of gene sequencing gives you your predispositions, not an exact death cause.

What are the future trends with regard to energy ?

We are currently dependent on fossil fuels, but we are gradually entering the age of hydrogen. Let me explain: All energy comes from the sun, and the sun gets its energy from hydrogen. Oil and gas are the results of concentrated sunlight, concentrated since the dawn of times. But in the next decade I think there is going to be a mix of fossil fuels and renewable energies. The price of gasoline on average is going up, while the price of renewables on average is going down. In about 10 years, the lines of the two curves will cross.

Why are renewable energies still so expensive?

Efficiencies are low and storage is a problem. When the sun does not shine and the winds do not blow you have no energy, so you have to have stored electricity. This storage is still very inefficient. So we will always use oil. We will never run out of oil, but to keep up with the rising Chinese and Indian demand we would have to have to discover a new Saudi Arabia every decade. That will not happen, so oil prices are inevitably going to rise. In 10 years, however, wind and solar energy will be competitive because of tax breaks and mass production.

And in the more distant future?

If we look 20 years ahead, another possibility opens up: fusion. he French are betting the store on the ITER fusion reactor based

in southern France. It will be operational in 2019. So in eight years the reactor should be in operation and extract more energy than you put into it. Commercialization may take another 10 years. So we’re talking about 2030 at the earliest.

Can we assume that the world’s energy problems

will be solved around 2030 then?

I tend to be an optimist when it comes to energy because of the declining costs of renewables and the initiation of a fusion era. Let us take a look at global warming. Some people think it is a permanent problem, because we will be wedded to fossil fuels for decades. I don’t think so. Global warming is a real problem, but a temporary one that does not go beyond 2050 or 2100 in terms of new carbon dioxide emission levels. Old carbon dioxide will of >

Dr Michio Kaku was born in California in 1947 and went on to study physics at Harvard university, before receiving his PhD from the university of California. He is a theoretical physicist, best-selling author and popularizer of science. He is the cofounder of string field theory (a branch of string theory), and continues Albert Einstein’s search to unite the four fundamental forces of nature – the strong force, the weak force, gravity and electromagnetism – into one unified theory. Kaku has been teaching at the City College of New York for more than 25 years, where he currently holds the Henry Semat Chair and Professorship in theoreti-cal physics. He is also a visiting professor at the Institute for Advanced Study at Princeton and a Fellow of the American Physical Society.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>Book tips / more on this topic >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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TTaMAI

course still stay in the atmosphere for decades. So certain cities such as New Orleans or Venice will likely be submerged by then.

How does fusion actually work?

Fusion uses seawater as a basic fuel. We have unlimited seawater. Fusion also creates very little waste. The only problem is: It does not exist yet. So it is still hypothetical. But as mentioned, the French are seriously investing in it. So are the US, Russia, Japan and South Korea. The plant existing in California is called the National Ignition Facility, and it uses laser beams rather than magnetic fields to energize the fusion plants. By 2050, space so-lar will be a possibility. Space solar is the beaming-down of solar power from outer space. You convert solar energy to microwaves, beaming these back down to earth. The plus is that in outer space, sunlight is 10 times greater than on the surface of the earth as our planet literally screens out 90 percent of sunlight. So in outer space, sunlight has 10 times more energy than on the surface of the earth. That’s the good news. The bad news is, it costs 10,000 dollars to put a pound of anything into near-earth orbit. That is equivalent to your weight in gold. It is really expensive!

Why would we need space solar as an energy source,

if we have unlimited access to fusion power?

I believe that we will use a mix of these two technologies. There is a good chance that fusion will be introduced in about 20 years and it could represent the bulk of our energy source. And remember, fusion is what Mother Nature uses. Fission (used by nuclear power plants) is artificial and unnatural.

What other major advances do you foresee, apart

from these breakthroughs in medicine and energy ?

There will be massive improvements in information technology. In 10 years time, computer chips will cost about a penny, so i nformation in that sense will be pretty much for free. We will

eventually be moving to the post-silicon era. Silicon Valley could become the next rust belt, as transistor technology slows down. The growth of computer power is already slowing down and will probably flatten out in 10 years. Why would you buy a computer knowing that it has just the same power as last year’s model? There are two reasons driving this development. The first is heat. Transistors are going to get so hot you can fry an egg on them. And secondly, there is the quantum mechanics aspect, where you do not even know where the electron is anymore.

What will we be instead then?

We will probably move on to molecular computers, quantum com-puters, atomic computers – atoms basically. And atoms are very hard to work with. The next step could be molecular transistors, atomic transistors and quantum transistors. This is also called nanotechnology. Speaking about nanotechnology, graphene is the strongest material known today, stronger than diamonds and made out of one atomic layer of carbon. The good news is that graphene conducts electricity, so laptops may be using graphene to com-pute in the future. The bad news is that it is very difficult to make.

What else could you make with graphene?

You could perform miracles, such as constructing a space elevator, if you were able to make thousands of miles of graphene. A space elevator means you go into an elevator, hit the up button and shoot into outer space on a cable held up by centrifugal force. That could reduce the cost of space travel by a factor of thousands. That could be the future of the space program late in this century. Access to outer space may almost be for free when we have a space elevator. NASA is currently sponsoring competitions, trying to lay the groundwork for such a space elevator, a device that can ride up a cable into outer space.

You mentioned that graphene is very difficult to make.

How come, if it is just composed of a single layer of carbon?

Graphene is actually found naturally in graphite. So scientists got sticky tape, put it on graphite and peeled off a very thin layer, and another, and yet another until they got to one layer of atoms. Electron microscopes prove that it is one atom thick. It is incredi-bly tough because the bonds are covalent, pure bonds. Such technology could eventually give us laptops, the space elevators just mentioned, etc. In principle you could hold up a whole bridge using fibers thinner than a pencil lead, if these are carbon fibers. Graphene could be the wonder material of the future! Dorothée Enskog

This interview was conducted during the Credit Suisse Thoughtleadership Conference 2011.

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Physics of the Future How Science Will Shape Human Destiny and Our Daily Lives by the Year 2100 Author: Michio Kaku, 416 pages ISBN-13: 978-0385530804

Physics of the Impossible A Scientific Exploration of the World of Phasers, Force Fields, Teleportation, and Time Travel Author: Michio Kaku, 352 pages ISBN-13: 978-0307278821

The Future of Medicine Megatrends in Health Care Author: Stephen C. Schimpff, 288 pages ISBN-13: 978-0785221715

he $1,000 Genome he Revolution in DNA Sequencing nd the New Era of Personalized edicine uthor: Kevin Davies, 352 pages

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Powering the Future How We Will (Eventually) Solve the Energy Crisis and Fuel the Civilization of Tomorrow Author: Robert B. Laughlin, 232 pages ISBN-13: 978-0465022199

Graphene and Its Fascinating Attributes Authors: Swapan K. Pati, Toshiaki Enoki, C.N.R. Rao, 270 pages ISBN-13: 978-9814329354

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