[Editor's Note: Jones Lang LaSalle CEO Colin Dyer attended the World Economic Forum's 40 annual meeting in Davos. He blogged for his company’s website, where the original version of the post below appeared. It is reprinted with permission.]

Well, what about that lofty conference theme, “Rethink, Redesign, Rebuild”? The one-line answer: It stayed in Rethink, with brief examples of Redesign.

But even that is worthwhile, because after the economic crisis, getting opinions and challenges from different viewpoints on the table, and having them widely heard, is valuable in itself.

A year ago the conference mood was "controlled fear and cautious optimism." I’ll confirm what I said on day one, that this year the mood is "cautious optimism." But I would qualify that by saying that it relates to optimism that we will not slip back into recession, and that short term economic growth will be restored.

Two Areas of Concern

As the days passed, I got a clearer sense that there is still concern and remorse on two scores in Europe, Japan and the U.S.:

1. A sense that there could be a period of slow growth in those areas due to the twin effects of removing stimulus spending and then cutting government spending to reduce deficits. This combination will remove growth potential from economies.
2. A concern that the world financial system, in its present form, is capable of unwinding again and doing great damage. Which is why even the bankers agree that reform and better regulation is needed (nothing to do with bonuses, all about protection).

The implications for us? Well if (1) holds, we will see only a slow recovery in demand for space. The market will not "come to us," so we’ll need to continue to fight hard for market share gains if we want to put growth back into our own revenues. We’ve been very successful, so we have the formula.

You can be sure that regulation on (2) will happen, and that it will mean that banks and lenders are going to be unclear and uncertain about their future rules. Like any business, that will make them cautious. That caution has already been clear in their recent lending policies, which will continue, because whatever regulations emerge, it’s 90 percent certain that the regulators will force banks to hold more capital. That means they will mechanically have to shrink their loan books back to the level their depleted capital and higher imposed reserves will support.

For us, that means our capital markets clients will continue to need help with new debt and debt renewals. It also means that the pace of workout on non-performing loans will remain limited by the speed that banks can take the strain on their capital.

A 'Western' Event and Problem

It also became clear that, except for Japan, the whole of Asia Pacific now sees the Great Financial Crisis as a ‘"Western" event and problem. From Australia to India to China, a brief period of illiquidity has been followed by rapid growth: 8 percent forecast for 2010, and Asian banks and national finances are all in great shape. Some quotes from Asian panelists, said without arrogance or malice: 

• “This will be a LUV shaped recovery: L in Europe, U in the US, and V in Asia.”
•  “I’m really pleased that banks get more regulated; it brings the rules up to Indian standards.” (Former head of the Indian Central Bank.) And a comment from me, it’s true, they are very strict.
•  “We realize in China we will have to switch structurally from export growth to domestic growth, because American demand is not coming back to past levels. It will take us time to do this.” (China Central Bank deputy governor)
• “China grew while the West shrank, so after two years, China’s GDP now equals Japan’s, it exports more than Germany, and has the world’s largest car market. (IMF Deputy MD)