Corporate Responsibility at IBM:
a Foreword by IBM’s Chairman

In the first decade of the 21st century, we have been confronted with a series of crises, each of which has caused us to rethink major aspects of how our world works. The 9/11 terrorist attacks and their aftermath caused us to reexamine our frameworks for global security. Catastrophic hurricanes and tsunamis have raised questions about the preparedness of our coastlines and cities. Concerns about the safety of our food, our medicine, even our toys, have led to questioning of our increasingly global supply chains. The growing recognition of global warming has driven an intense focus on everything from how we move people and things, to how we build our houses and offices, to how we generate the energy to power it all. Most recently, we have seen how seemingly simple financial instruments such as mortgages can be packaged, leveraged and traded in ways that threaten the world’s financial system.

Appearances to the contrary, these are not, I believe, unrelated events. They constitute a series of wake-up calls on a single subject: the reality of global integration. We have become accustomed to referring to these jolts as system failures or breakdowns. Taken together, they tell us that our planet is becoming integrated into a system of systems.

That is wonderful news—if we are wise enough to take advantage of it.

Technology isn’t the issue. For the first time in history, almost anything can become digitally aware and interconnected. Enormous computational power can be delivered in forms so small, abundant and inexpensive that it is being put into things no one would recognize as computers: phones, cars, appliances, roadways, power lines, clothes—and even natural systems, such as livestock and rivers. All of these digital devices—soon to number in the trillions—are being connected through the Internet. And all of that data—the knowledge of the world, the flow of markets, the pulse of societies—can be turned into intelligence, because we now have the computing power and advanced analytics to make sense of it all.

The challenge we face is to figure out how to use this vast new capability to make the world work better, especially for those most in need.

Today, around the world, we see the infusion of intelligence into companies, entire industries and natural ecosystems, which is why you may have been hearing about “smart power grids,” “smart healthcare,” “smart supply chains,” “smart bays” and the like.

In these pages, you will read about IBM’s multifaceted response to this shift in the global arena for work, society and community. It is a shift we foresaw several years ago, causing us to reexamine and transform IBM in fundamental ways, in order to be in a position to seize upon its potential. We remade our portfolio of businesses, globally integrated our operations (and mindset) and changed the way we manage our company, pushing decision making out and down. Most importantly, we took a fresh look at our essential reason for being, and collectively renewed the core values of IBMers for a new era.

This report is a description of our progress. But it is also an invitation to you to join us in seizing this unique moment in history.

The time for action is now. From cabinet rooms, to board rooms, to kitchen tables around the world, people are ready and eager for new approaches. We are witnessing a global consensus in favor of major change. And such a mandate doesn’t come around very often—perhaps once in a generation, or once in a century. I and my fellow IBMers do not intend to waste it. We believe that if the world seizes this moment to address our most critical challenges, and does so in a truly systemic way, enormous and lasting progress can be achieved.

Certainly, this is no time to retreat into our shells. Quite the contrary, it’s time to go on the offense. Although some companies are reacting to the present crisis by hunkering down and hoping to ride out the storm, from both a business and a societal standpoint, we are taking a different approach, across every aspect of our company’s existence and our relationships with all communities and constituencies. In the broadest of IBM’s roles, as a global citizen, we believe that the issues facing the world are too critical and far too urgent—and the opportunities to make meaningful progress on them too immediate—not to act now.

Indeed, the most interesting result of our smarter planet initiative, to me, is how it is causing our business strategy and citizenship strategy to merge. The issues we are addressing—from clean water, to safe food, to sustainable and vibrant cities, to green energy, to better schools, to smarter work, and an empowered workforce—are not a choice between one and the other. They are both. And because the complex systems that make up our world today are inherently multi-stakeholder—because they cross the old lines of “public sector,” “private sector” and “voluntary sector,” spanning all of civil society—the solutions we devise will require the most advanced intelligence from business, from science, from policy and from communities around the world.

Again, the barrier is no longer technology. What we make of this new reality will depend, rather, on how we pursue the timeless goals of all social and economic systems—reliability, trust, fairness, inclusion, sustainability, human rights, prosperity and individual empowerment. I believe we must do so in very new ways.

Building a smarter planet isn’t simply a recipe for economic growth; it’s also a recipe for radically expanded economic and societal opportunity. It’s not just a way to make the planet more efficient, but also to make it more sustainable. It’s not just a way to do well by doing good; it’s also a way to do good by helping all the world’s regions and people do well.

I believe that's something for which it's worth going on the offense.

Samuel J. Palmisano Chairman, President and Chief Executive Officer, IBM

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