From the loneliest blog to popular websites like YouTube, Flickr, Facebook and Second Life, the Internet has become host to a brave new world of services that use the network as a canvas upon which customers create their own masterpieces, establish new identities and carve out new communities that transcend geography. "It changes how we view human interaction," said John Gage, Chief Researcher and Vice-President at Sun Microsystems.

For industry incumbents, this is a confusing new landscape, with shifting consumer patterns; no one is sure whether it is best to concentrate on providing infrastructure, content or both. The music industry has been perhaps most profoundly affected, thanks to the portability of digital recordings. As faster network speeds become more common, television and film are undoubtedly the next in line for the Internet invasion (see Figure 7).

Converging on a Digital Future

In a joint session of the Governors Meetings for Information Technologies & Telecommunications and Media & Entertainment, the World Economic Forum presented the results of the first half of its two-year Digital Ecosystem Project. Digital Ecosystem: Convergence between IT, Telecom, Media and Entertainment - Scenarios to 2015 constructs a set of three scenarios for the convergence of the IT, telecoms and media & entertainment industries until 2015. The Forum also created a video, which was extremely well received by the Governors at Davos, to illustrate the alternate futures. The launch in the first half of 2007 of the Digital Ecosystem interactive platform will enhance the work done so far. It will serve as a repository for project materials and will enable partners and experts to showcase new content, interact with peers and stay abreast of the Forum's Digital Ecosystem-related activities and results. The service will ensure that the Digital Ecosystem initiative endures beyond the life of the project. In the coming year, Governors will work with Forum partners and other key stakeholders to develop a charter for best practices and standards of behaviour in the digital market. The Project Steering Committee will set the exact area of focus. Potential topics include data privacy, intellectual property rights and industry-government relations.

But for many, these new arenas represent a tantalizing new business opportunity – a virtual marketplace where one can generate very real revenues and profits. According to some estimates, revenues tied to user-generated video alone are expected to exceed US$850 million by 2010. Real businesses now use virtual markets to advertise and sell their goods and services; likewise, members of virtual communities have learned how to earn real money selling virtual goods. There is now a billion-dollar-a-year market for products that exist only in online games such as Second Life. Some 100,000 people in China meanwhile are playing World of Warcraft in 12-hour shifts, then selling their hard-won game assets and powers to clients.

Many predict that such virtual worlds will eventually become the common interface for all Internet communications. "The virtual world will grow up to be a 'low-res' version of reality," said Mitchell Kapor, President of Kapor Enterprises.

In the same way that the spread of e-mail, chat rooms and the Web did a decade ago, the growth of online communities (see Figure 8) is spawning interesting debates about the ability of the Internet to break down barriers based on geography, nationality, sex or appearance. The Internet's capacity as a limitless warehouse for information and user-generated encyclopaedia – or "wiki" – has made tracing an individual's past as simple as a Google search, turning almost everyone into a public figure. No longer can one escape his past by moving to a new town, or even a new country. "With technology comes the long tail of infamy," noted Young Global Leader Shai Agassi, President of the Product and Technology Group at SAP

Conversely, the ability to take on an anonymous identity using an avatar can be liberating. But the increasingly real social interactions afforded by online venues such as Second Life are also causing debate on the impact of these virtual communities on our psychological health and community life. One-third of those who play the online game Second Life report that they spend more time in the game than in the real world. "We should be aware that we may be modifying ourselves as well as our online personas," said Baroness Susan Greenfield, Director, The Royal Institution of Great Britain.

Online anonymity can also harbour malicious intentions, sexual predators, white-collar criminals and even terrorists. The rise of online crime has sparked calls for a system that tracks the real identity and even location of anyone using the Internet. "The police will love it and we will love it. It will be a business opportunity," said John Gage, Sun Microsystems' Chief Researcher and Vice-President. Opponents of such a system argue that it would only reduce online privacy, giving authorities too much control over public communications and reduce the Internet's power as an outlet for political dissidence and uncensored debate. Many already fear that the growing amount of information we supply over the Internet, or to devices that connect to it, are creating a virtual surveillance network that could be abused by governments or hijacked by criminals.

Grave concerns about privacy, security and online fraud threaten to derail the very future of Internet commerce. The explosion of unwanted spam e-mail is a vivid example of how online miscreants are jeopardizing the future of this new sector. Most spam is generated by malicious programs that enter personal computers over the Internet and then surreptitiously collect and disseminate private information from e-mail addresses to bank account passwords. Linked together over the Internet, these remote spy programs form virtual computing networks that can be used to commit even more sophisticated crimes. Companies registering domain names need to make greater efforts to ensure that they know the true identity of their owners. And computer operating systems should be reconstructed so that the information received over the Internet cannot also be used to execute programs. "The operating systems of the computers we're using are so vulnerable," said Vinton G. Cerf, Chairman of the Board of Internet Corporation for Assigned Names and Numbers (ICANN). "We need to get the people who make the cars not to leave the keys in the car."

The spread of collaborative knowledge building among online communities was an unexpected part of the Internet's evolution, even if in hindsight it seems an inevitable progression of the Internet's original function of exchanging information among scientific researchers. Now, the ability to facilitate borderless collaboration is altering the very concept of how institutions and companies conduct R&D. Companies, and even financial institutions, can now spread problem solving across a broad universe of diverse intelligence. How such collaborative models of innovation will shape the world of patents and intellectual property rights is still unclear. But companies are already trying to devise new commercial techniques for harvesting and mining the wealth of information that exists on the Internet.

Step Up Action on Education
Given that basic education is a right for every child, there is a compelling moral, social and economic case for setting education as the top priority on the development agenda. This is the motivation behind the World Economic Forum Global Education Initiative (GEI).

At the World Economic Forum Annual Meeting 2007, key stakeholders met privately to step up efforts to meet the considerable challenges in education, notably the Millennium Development Goal of universal primary education. Among the leaders participating in the discussions were Prime Minister Ahmed Mahmoud Nazif of Egypt, UK Chancellor of the Exchequer Gordon Brown, H.M. Queen Rania of the Hashemite Kingdom of Jordan, as well as the leaders of several international and donor organizations and the CEOs of companies that are partners in the Forum's Global Education Initiative (GEI) including Cisco, Intel and Microsoft. Young people from around the world gave their views in a session on youth. "We challenge you, the economic powerbrokers, to put your words and our hopes into action," said Yoo-Sun Andrea Choi, a student from South Korea.

Building on the success of the Jordan Education Initiative, launched during the Annual Meeting 2003, and similar initiatives in Egypt and the Indian State of Rajasthan, the meetings on education at Davos signal the start of the second phase of the GEI. The partnerships between government, civil society and the private sector at the local and international levels have been catalysts for education reform. They have also demonstrated how effective multistakeholder collaboration can be. This has widened interest in expanding the model to other sectors such as healthcare. At the Annual Meeting, for example, Tarek Kamel, the Egyptian Minister of Communications and Information Technology, led preliminary discussions to establish the Egyptian Health Initiative.

A cornerstone of the second stage of the Global Education Initiative will be a new partnership with UNESCO, which was launched during the Annual Meeting 2007. Business leaders stressed the importance of moving quickly to ramp up efforts. An immediate outcome will be a major conference between leading donor countries and organizations this year. Key agenda items will include how to secure long-term sustainable funding for education reform and the role of multistakeholder partnerships.