global midwest clean tech conference

I attended the Global Midwest Clean Tech conference which was sponsored by the Global Midwest Partnership.  There were many sessions given over 2 days, so it’s not possible for me to summarize everything was presented, but here are some snippets of the international aspects covered there:

• Illinois is ranked #44 in entrepreneurial activity.

Chet Culver, the governor of Iowa, pursued foreign investment aggressively by speaking abroad in Germany & Spain on a number of occasions & learning from foreigners experiences in driving public policy by simply mandating it.

The “Show me the money” session, sponsored by the Canadian consulate:  Ontario passed the Green Energy Act which created the 1st feed-in-tariff in North America with standards for certification, labeling, & packaging.  R&D investment tax credits act as a form of subsidy.  Hydro, & nuclear power can get rid of coal.  On the Toronto Stock Exchange (TSX) there are stringent requirements to get listed.  There are typically 5-8 analysts for $50M companies.  It’s easier to access brokers at the TSX.  The annual cost for remaining a publicly traded company is about $10-15,000 annually for a 75M company.  To help small-medium sized entrepreneurs expand globally, they need t0:

• identify strategic partners in foreign countries
• establish credibility
• mine partners’ deep pockets to fund local projects
• leverage partners to access local markets
• industrial companies use debt while software companies do not
• use banks to facilitate partnerships

David Weisberg of the Arava Institute stated Israel is #14 in # of patents issued worldwide

Ed Erickson of Erickson consulting advised using local partners to reach customers in foreign markets.  Linda Lin of FuelTech informed that fossil fuels still dominate power in China & coal plants are upping their capacities.  When marketing products in China, you need to be fast to bringing them to market.  Only contracts signed in China are valid in China.

The US Dept of Commerce sponsored the “How in the world can I do this?”  session.  They estimate clean tech will be a $40B industry & create 50,000 new jobs by 2020.  There are as of yet no SIC codes for clean tech, so it’s difficult to track statistics for it, which crosses 13 industrial sectors.  Worldwide governments have provided $150B in stimulus funds for renewable energies.  Global issues for clean tech are:

• intellectual property
• local content
• transparency
• local procurement
• regulatory uncertainty
• bureaucracy

The World Bank, in which the US is a 27% stakeholder, has a $6.3B multilateral target for Climate Investment funds because climate change is a barrier to investment in developing economies with transnational impact.  They are leveraging their relationships with regional banks to create a Clean Tech fund, Strategic Climate fund, etc.  They will allocate these funds at the country level to lower carbon ouputs & greenhouse gas emissions.

invest in Turkey?

I was invited by the Association for Corporate Growth in Chicago to attend this breakfast briefing Investment Climate of Turkey in the Aftermath of the Global Economic Downturn featuring the President of Turkey’s Investment Support & Promotion Agency, Alpaslan Korkmaz.  He didn’t give a presentation, but here’s what he had to say:

Foreign direct investment has ballooned in Turkey from $1.8B in 2002 to $18B in 2008, & attracted more than India in 2007.  Turkey has the 6th largest economy in Europe & 15th largest in the world.  It has a large population of 72M which is quite young.  The average age is 28 & 50% of the population is 24 years old or younger.  20M are students, so education is Turkey’s top budget item.  The young population is interested in new technologies, so GSM penetration reaches 66M & the internet reaches 30M.  Although Turkey is not part of the BRIC nations, it is part of the N11, or Next 11.  Productivity growth is the highest in Europe @ 7%.  Turkey’s main competition for FDI these days is eastern Europe, but offers other advantages, such as a large market of 72M & per capita incomes of $3-10,000.  They expect growth of 3-4% next year, the highest expectation in Europe.

Q&A

• Turkey has a secular government which is distinctly separate from Islam.
• Turkey is an economic partner with the European Union, but not yet a full member.  This means Turkey’s agricultural products do not work under Europe’s common agricultural policy& Turks require visas to travel in Europe.  Turkey is a logistics hub for the EU & Europe has contributed 70% of FDI in Turkey.
• A SWOT analysis of 400 Turkish companies led to changes in how to set up businesses in Turkey.  A telephone hotline was created to facilitate permits.  Set-up can happen within 1 week in 270 industrial zones, but it takes longer outside of those zones because of land ownership issues
• Inflation is now under control in single digits, so Turkish businesses can finally plan 3-5 years & not worry about plans falling through.
• Private equity/investment bankers are investing in renewable energies (2nd best wind map in Europe) & automotive.  Istanbul airport renovations were 100% privately funded.  Financing is available for middle-market companies.
• Turkey’s biggest challenges are matching the last 6 years’ growth, resisting bureaucracy, & sustaining education.
• Labor laws are more liberal than the European Union & eastern Europe.  They work the most hours/week in Europe, 53, with the lowest absenteeism.  There have been 0 automotive strikes in 30 years.

russian conference in chicago or how not to go global

I attended the 1st day of this Russian National Exhibition @ McCormick Place.  I was invited by & RSVP’ed to World Business Chicago, but when I introduced myself at the registration desk, they had no record of my registration.  They gave me a badge upon which to write my name & sent me on my way.  I attended the 1st conference to give me a feel for the economy in Russia today which started a 1/2 hour late “because of the weather in Chicago.”  I found a sparsely attended session given mostly in Russian, with softly worded simultaneous translation provided.  I walked the barren exhibition floor, spoke briefly with the organizers, & stuck around for the cocktail reception.  They trotted out the typical appetizers as we were greeted with a musical extravaganza right off of a Las Vegas stage.  Scantily clad dancers made many many costume changes & danced to many different styles of music.  I can honestly say this was the 1st time I’ve seen a show quite like this.

My distinct impression is this was an event organized by a foreign group who took very little input from local organizers.  It appeared to be a conference by Russians for Russians, but Chicago is 1000’s of miles from Russia.  Because much was done in Russian, my thought was maybe the organizers were targeting Russians living in Chicago, but according to people with whom I spoke, that wasn’t the case.

Hand-written name badges are not the professional standard at McCormick Place.  Weather in Chicago is not a valid reason to waste people’s time & start late.  Normally simultaneous translators are in a booth so that you can’t hear them.  At the conference they were in the corner of the room & had to speak so softly that we couldn’t hear them well at all through the headsets.  (1 of the translators actually said “I don’t know this business dialogue.”)  The online catalog contains numerous misspellings (can you figure out what “metallutgy,” &  “farmacy” are?) & grammatical errors.  All of the advertising in the hardcopy catalog is in the back, about which I would not be happy if I were an advertiser or even a reader.  The organizers said they had budget constraints in promoting the exhibition, but there’s a lot that can be done for free.

Some decent content was provided in the conference, & I feel a little bad about not writing about it here, but the bigger story is how not to put on an event in a foreign city.  The organizers seem to have run the event just like they would in Moscow, but that’s not the way things are done in Chicago.  I heard Mayor Richard Daley attended an event in Russia earlier this year & this event was supposed to be Chicago’s act of reciprocity.  I fear many American firms do the same thing in other countries & it doesn’t reflect well on us as this doesn’t reflect well on the Russians.  The lesson of this story is:   listen to the locals.  They know best how things are done.

Renewable Energies in Emerging Markets

I checked out this event Renewable Energy in Emerging Markets hosted by the American Chamber of Commerce in South Eastern Europe held @ IIT.   Here are the presentations made that day:  AmSECC slides for IIT event final & RES final.

Nikola Milivojevic and Igor Stamenkovic of RES Technologies didn’t really have much more to say in addition to their slides, so you can check out what they had to say there.  Russell Gilchrist of Skidmore, Owings & Merrill LLP extrapolated a bit beyond his slides:

• The Pearl River Tower has not yet achieved energy self-sufficiency.
• CO2 in China today is like the US 150 years ago.
• Some of their design they learned from the aviation industry.
• Chinese building codes are more stringent than those in the US.
• The building faces the wind directly, so that the wind is sucked through & speeds up the apertures, & this creates negative wind pressure on the leeward side.
• Micro-turbines are the holy grail in renewable energy, but they’re only used 40-50 of 160 hours/week.
• Radiant heating is a better solution than forced air because water is a better medium to conduct heat than air is.
• They’re unable to use geothermal energy because the water temperatures are in not right for it.

Q&A

• They started with 36 strategies, such as trying to get as much natural light into the building as possible,  to get the design to net 0 & 22 survived.
• Wind turbines provide a great payback.
• LEED certifiers should now adopt light, medium, & dark green designations to reflect the changes in green building.
• Paybacks vary by location because raw materials & photo-voltaic differ
• Green buildings require an 8-10% premium in additional cost, but there is still a very short payback

what’s up down under

The Business Network Chicago international group hosted the Australian Trade Commissioner based in Chicago Ian Smith who made this presentation: Australia – A Dynamic Economic Partner 1109

Here’s what he had to say in addition to the presentation:

• Foster’s lager is not even available in Australia because the brand is brewed by Miller Coors in Milwaukee.
• 60-85% of the Australian population lives within 30 miles of the coast.
• 30% of Australia’s GDP is exported-2/3 of what they produce is exported.
• Melbourne has the most Greeks outside of Athens, Greece.
• Boat people are creating problems when floating over from Indonesia.
• Australia is proportionately strong:  despite only having .5% of the world population, it accounts for 1.37% of GDP.
• Australia has not suffered from the global recession.  Mining there has contributed to China’s growth.  Their banks had few bad loans, so they’ ve maintained stability.
• Baxter, Caterpillar, & John Deere are successful Illinois companies down under.
• Due to vast experience with droughts, Australia is strong in water conservation.  Boeing is investing in biofuels there.  Wind & solar power are growing.
• YellowTail wine is a great example of an Australian success story.  They’re a small family-owned firm from a town with a population of 600.  They planned on shipping 20,000 cases their 1st year , but did 100,000.  1/3 of all Australian wine comes to the US.

Q&A

• Australia sports a world-class wireless infrastructure, although rural coverage is an issue.

Similarities/differences with Americans:

• Aussies are too modest to mention world changing technologies
• friendship comes before business there, the reverse of America
• while it’s tough to reach decision-makers in the US, Aussies consider it rude not to reply
• Aussies suffer from the fallacy “if I can just get 1% of the market…”
• intellectual property issues are typically bigger in the US than down under.

EBRD is open for business

The International Trade Association of Greater Chicago hosted a talk given by Varel Freeman of the European Bank for Reconstruction & Development (EBRD) @ the offices of Baker McKenzie. Here’s what he had to say:

The EBRD was formed to transition the economies of the former USSR into open market economies & now has offices in 30 countries in  central-eastern Europe to central Asia.  They offer debt & equity financing in the form of guarantees, shares, etc., (but no grants) to finance infrastructure/power projects (25-30%), agribusiness (10%) projects, & 1/3 is with other financial institutions.  They financed 5B Euros last year (30% equity), & are on track to finance 8B Euros this year.  The EBRD has 61 shareholders, including the US (10%), & European Investment Bank.  They are a risk-taking commercial partner who make business decisions, not political ones.  They don’t even deal with politically-connected people.  They don’t displace or compete with local banks, but 20% of their activity is with governments.

Q&A

• The EBRD does do trade financing through commercial banks, but that fell off a cliff with the economic downturn.
• EBRD headquarters are in London & English law applies for legal purposes, but can work with offshore holding companies.
• The EBRD has mainly European clients, but wants more from the US.  They are seeking capital expansion because demand for financing is increasing.
• The EBRD assures they will foreclose against the wishes of a shareholder if need be.  They will be hard-nosed & won’t roll over.  Their goal is to have an enforceable framework.
• They do 150 background checks for 350 transactions each year to ferret out politically connected people.
• They do provide financing to distressed industries, i.e. automobiles, but very carefully.  They financed a JV which is now profitable.  They are open to restructuring troubled loans.
• Bank credit ratings are informal, supplemented by credit ratings.
• The EBRD charges market rates for renewable energy projects & can lend in many currencies.
• The EBRD doesn’t exist just to help Westerners.
• There is some overlap with Export-Import Bank & OPIC-Overseas Private Investment Corp.

They don’t have any offices in the US, but you can contact them directly or through the US Dept. of Commerce.

German Wind conference

I attended the Germany WindEnergy Business Conference & reception.  They are making all of the information that was presented available on their website, so click on to see all of the presentations & video.  I’ll summarize the Q&A so that you don’t have to watch all of the video just to get to those portions.

Wind Energy in Germany:

• The current energy mix includes 15% renewables in Germany.
• Small energy providers compete with the big guys by forming local cooperatives with only a few large banks involved.  Renewable energy is not driven by large utilities.
• Competitive price determination results in ROI’s of 5-10%.
• There are different tariffs for different energy sources which depend on the site & time frame.
• Grid system operators pay for the grid’s expansion.
• Power plant certification only takes weeks rather than months.
• There are few service technicians & little special vocational training, so there are some turbine maintenance issues.  This is complicated by the fact that there are different work standards across Europe.
• R&D focuses on bigger turbines which can work more hours each year.
• Turbines are not permitted on buildings in Germany.
• The key to reduce greenhouse gases by 40% by 2020 is changing consumption by using energy efficiency plus renewables.
• Only Massachusetts & Vermont have feed-in tariffs & California is considering 1.

Wind Energy in the US

• re: key success factors; Europe has better tolerances because they’ve been building their wind industry supply chain for 30 years; GE has 30 casting companies, but none in North America; consistent quality is a given; cash for growth is required; openness & localization help.
• Germany’s feed-in tariff differentiates itself from the US
• States are giving grants to support R&D & manufacturing
• US wind projects are bigger than most others so banking relationships & the size of the projects are key.  It’s easier to sell small projects directly to utilities, but there are extremely large & small projects.  There actually should be small-, medium-, & large-sized wind projects.
• New technologies should bring greater transmission quality to eliminate 7-8% leakages.  Larger, lighter, cleaner, more reliable turbines, with better diagnostics & aesthetics will come.

 

us international trade court speech

I caught The 8th Annual Dominick DiCarlo United States Court of International Trade Lecture featuring The Honorable Timothy C. Stanceu, United States Court of International Trade  LITIGATION OF TRADE-RELATED DISPUTES IN CHALLENGING ECONOMIC TIMES: A JUDGE’S PERSPECTIVE at John Marshall Law School.  The annual DiCarlo Lecture is named for Judge Dominick L. DiCarlo, who served on the US Court of International Trade from 1984-1999 and was chief judge from 1991-1996.  Here are the main points I pulled out:

This court has local jurisdiction-US law applies.  It provides predictability, transparency, & expedience.  Its founding offered resolution through consultation, which led to rules-based litigation.  Tariff classifications are now harmonized.  We have a sound system, but it’s not perfect.  We can get meaningful judicial review which is not always available elsewhere.  It requires equal access, independent judiciary, standards of review, & meaningful remedy (court with power).  The US fulfills all of these.  Anyone can access the court.  Article 3 assures independence & remedy.  The deNovo standard addresses standards.  The court can still be improved like so:

• speed-goal is 90 day resolution
• access for small litigants-need to try to keep costs down
• broad/varied jurisdiction-ex. workers displaced by trade
• they listen intently to the bar & bar association
• citizen-citizen cases in addition to government cases

Q&A

the Michelin tire decision (ref section 421) & China’s ascension to GATT/WTO addresses trade protectionism

deNovo standards on questions of law addresses standards of review re:  Title 7 & the Chevron case.  The principle is agencies fill the gaps.  The court takes 1 of 2 steps

1. dismiss (rarely happens)
2. if 2 conflict, defer to agencies with a checklist

judges can sit on other courts, i.e. 2nd circuit court of appeals.

 

how’s your cultural intelligence?

Big Frontier hosted this event Leading with Cultural intelligence featuring David Livermore, a specialist in this area.  Here’s his presentation Livermore Big Frontier Ldg CQ Test your CG here & check out his video here.  Here are the highlights:  He defines cultural intelligence as the capability to function effectively across cultural, ethnic, & organizational cultures.  It can be likened to emotional intelligence, recognizing that you can’t know everything about all cultures.  CI’s strengths are it fits in any context, it’s not 1 size fits all/accepts individual personalities, & recognizes that assumptions & stereotypes go both ways.  There are a number of important reasons to increase CI:

• better decision-making, especially in consumer & customer-focused activities
• more employee satisfaction/ less burnout
• higher performance
• greater profitability
• 70% of international ventures fail, at least partly due to cultural differences
• foreigners are coming here

To develop CI:

1. define the drive/motivation
2. define knowledge to be learned
3. develop a strategic plan
4. implement an action plan for adoption

To enhance CI:

1. make a commitment to reading, immersion, become more aware
2. create diverse teams
3. hire trainers/consultants in these areas
4. use CI in hiring/promoting employees
5. weave CI values into the organization

Mobium conducted a survey which found that 83% of North American & 93% of foreigners felt the US has a foreign policy problem.  Further, 20% of foreigners are moving away from American brands, 30% of them because of foreign policy issues.

Q&A

• there is constant demand for CI consulting in Asia, India, & China
• this is becoming required training for federal employees
• although “people are still people,” starting with what we all have in common helps, but the difference in levels of humility varies across countries.
• Lula was in Kopnhagen for the whole week campaigning for Rio in the 2016 Olympics-Obama was there for less than a day.  What does that say?

My take:  I wholeheartedly endorse all this stuff.  My only criticism is that this doesn’t go far enough.  Americans are encultured to be insular & parochial.  In school, English & state history are required.  We  need to encourage the study of foreign languages & world history.  We need to emulate big cities in small countries like Amsterdam, Kopnhagen, Hong Kong, & Singapore.  In these places, they must learn about the rest of the world because their home markets are small.  Residents learn foreign languages from a very young age, & are able to travel to foreign countries that are close by, creating opportunities to learn about other cultures.  The biggest problem in the US is everybody recognizes it’s a problem, but no one is willing to spend any money to solve it.  Until we adopt a more open educational system & culture, we’ll always remain a close-minded society.

the wall’s fall

The Chicago Council on Global Affairs hosted this event THE LEGACY OF 1989 which was a trip for me.  I lived in Germany for 2 years up until a year before the Berlin Wall fell, so this topic was near & dear to my heart.  Here’s what they had to say:

Archie Brown:  Gorbachev let Central Europe follow the Sinatra doctrine & “do it its own way” which led to change.  350,000 Soviet troops stayed in their barracks on 9 Nov.  Had they been roused, history would be very different.

J.D. Bindenagel:  Gorbachev gave a speech in December, 1988 which spelled out glasnost & perestroika, which presaged future events.  The biggest question was “Would the Soviets intervene?”  At a diplomatic reception the night the wall fell, no 1 had a clue what would happen that night.  Egon Krenz changed the travel laws on 6 Nov. which contributed greatly to the change.  No one could understand a particular DDR (Deutsche Demokratische Republik-German Democratic Republic) statement.  Tom Brokaw posed the question, “Is the Berlin Wall open?”  The answer came back, “Yes,” but visas were still needed, which were supposed to have been started to be administered on 10 Nov.  Then the question became, “Would guards defend the checkpoint?”  That night the checkpoint was simply overwhelmed.

Kori Schake:  She did not report that the DDR would change when working in security for the US government.  To provide a frame of reference, Helmut Kohl was in a race against the clock to unify Germany.  He positioned it as better for the USSR, while being a good deal for Germany in a short period of time.  He was dismissive of central European fears, but approached the Russians differently.  There were 3 policy issues:

1. James Baker made it a prerequisite for a reunified Germany  to be a NATO member-the Germans would trade anything to unify
2. a European Union-wide centric strategy was necessary to prevent fears of creating an overbearing Germany again
3. exchanging west German Deutschmarks on a 1-to-1 basis for east German Reichsmarks “assured parity” in a statement of political equality.

Q&A

Boris Yeltsin wasted many opportunities post-reunification.

The Germans are still timid in some foreign relations.

Vladimir Putin was in the DDR embassy the night the wall fell & described it as the worst night of his life.  He was prepared to call in the troops.  Kohl was pushing because DDR citizens were marching in Hungary & elsewhere.  Actual unification talks didn’t begin until the following February, but change was so fast it was like watching video on fast-forward.  The choice was simply between funding a bankrupt DDR or go counter to glasnost & perestroika.

Margaret Thatcher was actually opposed to German reunification because she was suspicious of the Germans.

The panelists differed on the role economics played in the upheaval.  Bindenagel said it was critical in driving people to leave because they saw no future.  Keeping currencies on par kept the Ossies in the East.  Schake cited the deeply corrupt & repressive regime as bigger reasons than economics for the change.  Brown thought lack of freedom was the most important motivator for change.

My take:  Given my history in Germany, I freely admit I’m biased in placing these events in historical context.  The Poles claim their strikes for Solidarity in the early 198o’s set the table for these changes, but they were so far removed, they’re not as significant.  You could argue the ratchet effect on Russia was even bigger, but that didn’t happen as dramatically.  On a longer time horizon, I don’t think there’s any question the Soviet economic system was breaking down, so change was inevitable.  But the singular event of the wall falling created the impetus for the whole system to come down.  Regardless of how you see it, these events 9 November, 1989 changed the world for the better, & it was the long reviled Germans who initiated it.  Hats off to them.

finance & manufacturing in Brazil

The Chicago Council on Global Affairs hosted this breakfast presentation Brazil’s Moment in the Spotlight? Here’s a summary of what Paulo Vieira da Cunha said:

strengths

1. Brazil emerged from the crisis with its banking system intact & entrenched as an institution.
2. a historical break in policy-making occurred in 1999 when a new” holy trinity” was established:  stable exchange rates, fiscal responsibility, inflation targeting.
3. a decade of fiscal adjustment led to Brazil becoming a net creditor of foreign exchange
4. it shed its external sin, so now can take on more external debt
5. a stronger central bank leads to stronger financial institutions
6. policy can be counter-cyclical-i.e. an enlarged safety net can reduce reserve requirements

negative aspects

• Brazil is a large insulated closed economy
• it’s difficult to increase productivity & reduce competition
• it still has an overblown public sector-42% of GDP, (& spending is up 14% this year) making it more comparable to economies in Europe rather than in the Americas
• the “holy trinity” was accomplished on the back of 10% higher taxes over a decade from 26%>36%

Now Brazil’s economy is recovering rapidly with increases in consumption, exports, currency appreciation.  The yield curve is steep, so there is worry about inflation kicking up in the 2nd or 3rd quarter.  Elections are coming in 2010.  There is still a need for fiscal adjustments.  The Lula legacy is:

• the expansion of the safety net to include the new middle class
• the transition to an economy with a large state
• Brazil is becoming more like Europe, but doesn’t have the same efficiency yet.

Luis Mateus noted:

There have been big changes in Brazil since the 1990’s.  The middle class has emerged to fuel consumption & demand.  Automation has increased productivity & cut into the informal economy.  There are still many challenges:

• high & complex taxes (differs by state)
• becoming a high cost country-ex. raw materials & electricity
• labor laws make it costly to right-size in Brazil
• bureaucracy bogs things down.

Q&A

• Exports are growing to the US & EU, but with different composition
• Brazil is now the world’s largest exporter of food
• Lula has been a surprise on monetary policy, although there has been no progress in making the central bank an independent entity.
• There is a need for better energy infrastructure-green laws exist, but enforcement is lax.
• It’s tough to find qualified people in Brazil.  The quality of schooling is poor.  The system can’t differentiate between good & bad universities, so they spend a lot, but get back very little.
• Physical security can still be a problem, but isn’t as bad as in Mexico City
• Brazil is open for foreign direct investment with no foreign exchange restrictions, but there is still lots of protectionism.  Import duties are high on steel making it uncompetitive.  This is bad for the long-term because none of the inefficiencies are taken out.  Import subsistution distorts production structure.

invest in bosnia herzegovina?

The American SouthEast Europe Chamber of Commerce hosted this event  INVESTMENT OPPORTUNITIES IN BOSNIA AND HERZEGOVINA’S DEVELOPING SECTORS, which featured a presentation by Consul General Eldin Kajevic, (here’s his presentation  Invest in BiH) & a presentation by John Freeborn of Freeborn Development Group which was basically a commercial for opportunities they uncovered in Bosnia-Herzegovina.  To learn more about the potential of investing in this part of the world, check out the Foreign Investment Promotion Agency of BH. Little known fact:  BH is a land of beautiful bridges.  For ex., there is an Eifel Bridge (like the tower) in Sarajevo.  Some were destroyed in the 1990’s.  They are on the path to membership in the European Union & will submit their candidacy in 2010.  They’ve signed the Adriatic Charter, will join NATO, & are already a member of the Security Council of the United Nations.  Bosnia is 1/3 the size of the state of Illinois & there are 300,000 Bosnians in the US.  IT opportunities are very political because the government controls the networks & they are heavily regulated.  Labor costs vary by region & industry, but $4-5,000/year is average & the minimum salary is 160 Euros/month.  The GDP/per capita is 3600 Euros per person.  Skilled labor earns $3-7/hour.

manpower hr exec on world labour markets

The Chicagoland Chamber of Commerce seems to be beefing up its international resources to pick up the slack of their recently departed officemates from the now closed World Trade Center Illinois.  In that vein, the CCC hosted a luncheon featuring David Arkess, Manpower’s President of Corporate & Government Affairs who discussed Understanding And Developing Labour Market Strategies,Here And Abroad Here’s what he had to say.

The recession hasn’t really changed anything:  it just accelerated attention on the financial sector.  Connectivity has risen & people are moving, resulting in social shifts & economic imbalances which are causing divergences everywhere.

On a quick tour around the world, in the Asia-Pacific region, China will dominate in 30 years.  The low value of their currency allows the to export with impunity.  These days they are really seeking access to global talent.  China loves the fact that India is democratic because democracies move more slowly.  Japan is still a disaster.  Europe is to socialistic & becoming more so as a result of bad policy decisions.  There is a correlation between the facts that it’s the most difficult to fire an employee in France & France has shown the least growth since WWII.  Germany & Switzerland are accelerating out of the recession with exports.  The new UK Prime Minister will forge closer ties to the US.  Unemployed youth are the problem in Middle Eastern countries.  Central Africa is drawing aid, but it’s not working.  In North America, the stimulus worked in Canada, but the US needs Stimulus Package #2 creating grants & rebates to create new jobs.

There are 3 global HR issues:

1. scarcity of talent-the US has 2M unfilled jobs, while Europe has 3.2M.  There is a mismatch of supply & demand in labor markets & demographics (losing 20M workers with retiring baby boomers) are killing the G20 countries.
2. globalization-forget work/life balance:  it’s too competitive today.  Everyone’s work day/week/month/year is getting longer.
3. productivity-is increasing in our virtual world as we focus more on skills rather than tenure.  Performance is a result of work, discipline, & practice.

Q&A

Global labor mobility could solve some of these supply & demand mismatches but local politicians get in the way.  The International Organization of Migration a UN organization, is the only organization that focuses on immigration.  Otherwise individual states control immigration with multi-& bi-lateral agreements.  The alternative is black/gray labor markets, i.e. criminal activity.

fyi-I interviewed Manpower CEO Jeff Joerres awhile ago part 1 part 2

hire an international intern?

I caught this presentation @ the Chicagoland Chamber of Commerce, former location of the World Trade Center Illinois How to Lead in a Global Economy: Why You Can’t Afford Not to Hire International Interns Here’s the presentation that Larry sent over J-1 International Intern and Trainee from Interexchange.  Like most presenters these days, Larry simply read his slides, so I can’t add much to that.  I can lend my personal experience.

When I ventured abroad for the 1st time many years ago, it was under the auspices of a professional internship program focused specifically on Germany, which was then known as the Carl Duisberg Gesellschaft, now called CDS International.  Their role is to arrange visas & work permits for foreign interns in Germany in exchange for visas & work permits for Germans in foreign countries. I still had to find a position on my own, but this was extremely helpful for me because I could apply to German firms in Germany & say, “I’m well educated from Thunderbird.  I have good experience with Xerox.  My work permit is taken care of.  What can I do for you?”  This enabled me to get a good position with Deutsche Bank & an even better position with Siemens, both in Muenchen.  I still had to deal with the bureaucrats at the Aufenthaltserlaubnisamt (residence permit office) & Arbeitserlaubnisamt (work permit office) from time-to-time, but otherwise my experience was pretty transparent.

If you know me at all, you know that I’m a deep believer in deep & meaningful international experiences.  International internships are a great way to acquire these experiences.  They’re great for employers because they accrue all of the benefits Larry’s presentation mentions.  They’re just as great for interns because they learn an incredible amount by living & working in a foreign culture as I did many years ago.  I wholeheartedly endorse these kinds of experiences because the learning that goes on for both sides provides immeasurable value to both.

I provide 1 caveat though.  The University of South Carolina International MBA program requires all candidates to complete an international internship, which is fine.  The only thing is, these internships are only 3 months & you can’t learn much about a country, culture, or business in just 3 months.  My suggestion is if you’re going to pursue/hire an intern, don’t do it for less than 12-18 months.  Everyone will get much more out of it in those timeframes.

US China global brand summit

I was invited to attend this event US China global brand summit which I could only attend the 2nd of 2 days.  At the close, we were told that the presentations would be made available on the website, but I haven’t seen them you, so I’ll summarize what I saw.

Michael Morley, formerly of Edelman Worldwide on “living the brand” which consists of 6 V’s:

1. (I missed it)
2. values-no bribes
3. vitality-HKSB is the world’s local bank
4. veracity-truthful & honest, but cultural differences distort these
5. victory-& have an edge
6. volunteerism-be a part of the social network

As an example, Lenovo @ the 2008 Beijing Olympics mirrored Sony @ the 1964 in Tokyo & Samsung in Korea in 1988, but with an international team instead of a local one.

Chen Fukuo of Interbrand on “Chinese brand development trends” highlighted the balance between tradition & modernity.  China has changed a lot in 30 years:

• GDP $305B->$25TR
• urban population 18%->45%
• rural Gini coefficient .2->.5
• overseas travelers 0->40M
• internet users 0->338M
• credit cards 0-> 150M cards for 40M people
• credit consumption 42%/$1.2TR

1/2 of Chinese brands in the 1990’s have now diminished.  The influence of the internet is rising.  IT companies like sina.com are changing the social structure.  State-owned enterprises now have more competitors, although the government still exerts significant influence.  The Chinese are strong in verbal PR & propoganda but weak in the visual.

Wu Xiao Bo of Ping Cheng Advertising Co. on “New media, new idea, new brand” noted that 35 year olds are the biggest internet users & 100M shop online.

Gao Jun of Meikao Advertising Co. on “Chinese elements & Chinese brands” intimated Easterners & Westerners use different ends of the quill pen to write.  Our gods & goddesses differ.  We have different definitions of beauty & rituals.  We eat differently-in the east they mix lots of foods together, while in the west we eat each portion separately.  Medicine is practiced differently:  ying/yang vs. diagnosis  & use herbs vs. drugs. So brand success is very culturally dependent.  Symbols like dragons & tigers are deeply rooted in people’s minds & people respond to them instinctively.

Panel discussion

Scott Markman of the Monogram Group researched US perceptions of Chinese brands & found Americans don’t know them (5% recognition).  When they were given western names, they were remembered 3X more.

Bridget Lee of the Hong Kong Trade Development Council informed China has:

• 45% mobile phone penetration
• 100M tourists by 2010
• 600M consumed wine in 2009
• sold 9.8M cars (vs. 9.6M in US)

Ma Quan of Tsinghua U. said the Chinese lack the ability to manage rapid change & Chinese artists/designers have difficulty balancing the conflict between creativity & commerce.

Michael Teng of HDT noted Baidu is #1 in Chinese search, but there are 56 ethnicities which speak 100 dialects, e.g. 7-UP is supposed to mean 7-happiness but means “go to hell” in Shanghai.   Nestle preferred a Chinese account rep instead of 1 from Hong Kong.  Our accounting systems differ-we send accounts to bad debt after 3 months, but Chinese companies pay in 6-9 months.

For China fans, I’m sure this was a good conference.

strategic overview of the global financial crisis today

The Chicago Counicil on Global Affairs hosted this event NAVIGATING GLOBAL BUSINESS IN THE NEW ECONOMY featuring David Nelms, CEO of Discover, Carlos Cabrera, former CEO of UOP, & moderated by Paul Laudicina, Chairman of the Board of A.T. Kearney.  They had some interesting insights on how the world is fairing in the global financial crisis.  Laudicina led off by noting there have been 120 actions by WTO countries to battle the financial crisis since the WTO’s November, 2008 meetings, so the world has been working on getting its finances back in order.  AT Kearney’s framework looks @ 5 drivers:

1. globalization
2. demographics
3. natural resources/environment
4. changes in consumer preferences
5. activism/regulation

He noted there has been an explosion in productivity, which is what happens when you fire lots of people & force those who remain to do the same work.  Also for every 5 years baby boomers work rather than retiring, it contributes $1T of economic benefit to the economy.

Nelms offered a few interesting tidbits:

• American savings has risen from 0 in 2004 to 7%
• debit card use is up 50%
• lending capacity has been cut so there is less credit available @ higher prices, resulting in less debt & risk:  the new normal should result in lower interest rates

Cabrera posited:

• there is a standstill in investment in oil, resulting in supply problems
• since fossil fuels provide 95% of energy world-wide & there is a “cap” of 10-15% for non-fossil fuels, the argument isn’t about carbon, rather “how do we change our energy diet?”-substitution or diversity?
• China is worried about its environment, but 80% of its energy comes from coal & they have no scale in distribution/transportation.

issues are:

• sources of lithium for electric cars
• wind turbines require magnets of which the raw materials come from China
• the US is the biggest supplier of natural gas in the world, but all oil reservoirs only use 30% of capacity
• electricity users will see relief if nuclear power comes online
• demand in the future is coming from the developing world
• think diesel, not gas

Q&A

short/medium/long-term outlooks-

• Nelms-most worried about Fannie Mae/Freddie Mac
• Cabrera-worried about a China intervention to securing energy sources

Nelms-the fed has done a fine job, but mortgage rates will rise to bite us again & holiday spending will be flat

Cabrera-new energy discoveries are coming:  technology will create opportunities

My last word-Nelms really only addressed domestic issues, but why host a speaker who only talks about the US @ a GLOBAL affairs event?

is world unemployment or a worker shortage the issue?

I saw this presentation by Dr. Edward Gordon organized by the Independent Writers of Chicago (IWOC): Taming the Talent Revolution: Thriving in the Brave World of Work.  He posited that despite rising unemployment in much of the world, the most pressing problem is an impending labor shortage.  The bottom line is the future is in technology & our workforce is not yet trained to handle many technology jobs.  There are 3 trends at work which create a jobs paradox:

1. technology raises the bar for skills & we are missing the middle layer of technicians trained by career academies/trade schools
2. baby boomers can no longer afford to retire (15% of college graduates are functionally illiterate, but the #1 major these days is communications)
3. globalization is leading employers to export good jobs abroad.   Intel couldn’t find 2000 qualified engineers in California & Texas, so they had to go to Dresden, Germany to find the talent they sought.  Ironically, the dual education system in Germany is dying so that now German students can more easily change academic tracks.  1/2 million workers are returning to India & China, but only 60 of 600 engineers in China & 100 out of every 400 in India are well-qualified.

There are currently 3 million vacant jobs for which there are no qualified applicants, which will balloon to 12-24 million in years to come.  Gordon gave the example of Santa Ana California, which lost many jobs in the 1990’s.  The local chamber of commerce organized a Community Based Organization (CBO) of 300 public & private organizations to work together to solve the employment problem.   He proposes these CBO’s as the bridge to the future.

Q&A

• overeducated applicants is not the problem because there will be labor shortages soon.
• while 20,000 journalists are out of work, the future lies in tech writing.
• despite the number of authors writing books is increasing, we are creating an anti-writing culture.
• breakthroughs in green technologies will create opportunties
• better teaching is needed
• potential new markets are:

1. repairing bad websites
2. working with foreign businesses
3. writing for corporate training

 

global midwest alliance sets up shop & hosts clean-tech conference

I checked out Business Network Chicago international group ’s meeting featuring the Global Midwest Alliance, (GMA) a new organization formed by by Gail Longmore, formerly of the Illinois Global Partnership, under the auspices of the Economic Development Council.  Apparently the World Bank has ignored the US, in that up until the GMA roped them in, the World Bank’s Private Sector Liaison Program had no representation in the US.  GMA has rectified that.  Here’s her presentation:  Business Network Club Final 100809

They are hosting the Midwest Clean Tech Conference the last week of November.  Here are the details:  Midwest Clean Tech 2009 Summary This is an expansion of last year’s smaller 1/2 day event.  I’d like to add more comments, but pretty much everything is contained in the presentations.

international panel @ Human Resources Technology conference

I attended this panel discussion Going Global Panel: Lessons From Executives Who’ve Been There at the Human Resources Technology Conference which was more interesting than I thought it would be.  Here are some of the points they brought out:

• Interpretation of HR feedback varies across countries.
• There is a variation of extremes in orientation from a focus that is all local to all headquarters oriented, but it’s even more complex than that.  Google tests user feedback on all sorts of orientations.
• Language is an issue because going beyond English only opens a multilingual can of worms.  For Kelly Services, it depends on the level of the employee & media employed. HP goes even further to say it varies by individual.  Their engineers speak better English than employees @ Citigroup (where she was employed prior to HP).  Regardless, Americans should do a better job of learning local languages.
• Global performance measures are hard to come by.  For Google, in-country performance measures vary.  It’s difficult for foreign managers to know whether to be critical or praiseworthy.  Different leadership styles complicate evaluation, but are predictable on a country-by-country basis.  HP seeks quantifiable goals, while Google warns that focusing on either extreme of qualitative vs. quantitative measures is destined for failure.  You really need some combination of both.
• In working with vendors, Google builds everything themselves, so they “can’t eat others’ cooking,” but notes that what business wants isn’t always what business needs.
• HP is cutting costs by making all HR employees report to 1 global HR department & not individual business units to that they can leverage the function.  Global processes are leveraged by technology.  Others have 1 global center for HR plus local organizations or 1/2 & 1/2 split between HR & business units.
• Kelly Services agreed that American workforce development for the global economy is woefully inadequate.  It’s a huge issue & affects how we are perceived around the world.  We don’t socialize & educate to be globally-oriented.  However this is changing with younger, more digitally engaged generations.  Google noted they seek international things out.  Google seeks this kind of experience in their leadership teams.  They embrace those who know cultures & languages with recognition of the importance of relationships & respect.

another SDL Global Information Management conference

I attended another SDL Global Information Management Conference which was a bit of a disappointment because some of the material presented was a rehash of their events earlier in the year.  Anyway, there are some new tidbits, so there is still some value in checking it out.  Here are links to the presentations that were presented:

• SDL’s GIM evangelist Andrew Thomas’  introduction
• They did take my suggestion after their last event & add a small-business example, Jason Arnsparger of Caridian BCT.
• Larry Arnold was back from Garmin with an updated presentation from what he presented earlier this year.

The most substantial trend which came out of this is the advent of DITA, (Darwin Information Typing Architecture), which uses .xml to design, write, manage, publish information by topic rather than by document, etc.  This is significant because it unhooks content from traditional sources & makes it more easily accessible in other formats, media, etc.

My assumption is SDL invited a new & different set of attendees to this event, but still, I would think they have enough customers that they should be able to find someone else to present who hasn’t presented before.  That way they can engage the same attendees with new material.  SDL is good & big, & good at what they do.  I expected more, & was disappointed I didn’t have the opportunity to learn more new stuff instead of what we saw a number of months ago.

European & emerging markets presentations @ global supply chain conference

I attended these sessions to see the attached presentations  at the Council of Supply Chain Management Professionals (CSCMP) Global Conference:

• Global Supply Chain Developments presentation: Logistic Trends in Europe V1 090922 Q&A:  Globalization is closing the gaps between the have- & have-not countries.  Despite the fact that most top-level managers speak English, demanding citizens still prefer to communicate in their local language.  It’s still difficult to penetrate Europe from the outside.  Even working from the UK is not enough.
• Where in the World? presentation:  CSCMP Where in the World Q&A:  opportunities in China in some ways are limited because land titles were burned long ago, so land can only be leased.  Evaluating total landed cost vs. least cost is always an issue.  Discrete inventories, depending on which modeling tools you use, are not always cost-optimal.

• Why Multi-layered distribution works best in Europe presentation: GWfinalCSCMP Annual Global Conference sep 2009 abe4 no time for Q&A

• Eastern European Infrastructure I requested the presentation of the presenter, but haven’t received it yet, so I’ll summarize briefly here.  The 5 largest ports, (all of which are expanding, btw),  handle 80% of Europe’s cargo traffic.  Hamburg relies on Asia.  It’s difficult to serve continental Europe from the UK as well as the reverse.  Central/Eastern Europe is getting more congested.  Distribution centers are expensive, but make sense there.  Russia is another dilemma.  You can’t bring product to the customer’s doorstep, so you don’t know where it ends up.  You can’t simply transplant your US system in Europe.  It requires study & planning.  Turkey offers incentives for product coming in & going out.  Recommendations:  do your homework-learn the tariff & non-tariff barriers.  Eastern Europe is not North America-there are differences in infrastructure, Value-Added-Taxes, etc.  Rivers are big & key transport means.  North American assumptions don’t hold.  Get professional help from freight forwarders-an auto parts company set up a distribution center in Antwerp, Belgium, only to find all of their customers were in Germany.  Q&A:  Because all European countries maintain their autonomy, security can be a problem.  Antwerp can be a better gateway to France than LeHarve.  Digital infrastructure now pervades, but companies don’t share information up & down the supply chain.  Despite the fact that the Soviets invested nothing for years, infrastructure in Central/Eastern Europe is catching up to western Europe.

Global sourcing panel @ supply chain conference

I caught this panel Global Sourcing Panel: Making It Happen at the Council of Supply Chain Management Professionals (CSCMP) Global Conference:

James Lewis, EVP/Chief Supply Chain Office, Fellowes Inc (F) led off.  Fellowes has offices in 15 countries, works with 130 customer countries, 500 supply chain partners, & $500M spend.  Their keys are total cost management & supplier risk assessment.

Gregory Rake, Sr VP, SC-Pier 1 Imports (P1)was 1 of the world’s 1st global importers…it’s in their name.  Their international buying department is 1st in class.  90% of Pier 1 product is imported with a $200M spend.  Importing with secure social responsiblity is a core competency for them.  Cottage industry sourcing, flexibility, & security are keys for them.

Farzad Khaledan, Director, ITW works in 2000 locations in 52 countries.  50% of their revenues come from outside of the US.  They started an international sourcing team in 2007 based in Europe.  They implemented small parcel & fleet management programs world-wide.    ITW saved $1B by cutting 200 freight forwarders/customs brokers down to 15.

Q&A

What changes have you made in reaction to changes in the economy, fuel prices, & financing?

• P1-terminate @ the coasts & ship own inland, waiting until Walmart & Target set rates for marine
• F-this is our biggest opportunity ever-challenge everything
• ITW-acquisitions are dead, so they are focusing on driving operations costs down

How do you conduct supplier risk management?

• ITW-rely on local management & intuition
• P1-65 factories closed in China resulting in unemployment of 1M.  They are building the equivalent of the US highway system every 5 years.
• F-use KPI’s to monitor & track local employees

Have you used international procurement organizations?

• F-a few in Asia didn’t work, so F had to build own (1 ex-pat out of 2000 employees in China)

Has nearshoring resulted in lower total costs?

• ITW-buy closest to the customer, ex. Vietnam & India are now viable markets & Africa is coming, but there are infrastructure issues

What modeling/analysis do you use?

• ITW-scanalytics
• F-global data warehouse & Oracle TMS
• P1-interns crunch supply chain data

How are you dealing with the 10+2 requirements/ensure CTPat compliance?

• P1-we’ll be OK by 2010.  It’s easy to get the information, except they have 5000 vendors.  Use buying agents.

What new approaches are you using to work with partners?

• F-qualify them
• P1-negotiate sustainable business relationships
• ITW-can’t change often-take a long-term partnership approach

How fully automated are your organizations?

• P1-use own internal systems
• F-use own operating platform with standards of expectations
• ITW-focus on 10+2 standards

How are you reducing your carbon footprints?

• F-recycle packaging
• ITW-focus on more efficient operations & curtail energy use in the summer

managing intercultural negotiations

I walked in on the end of this presentation by Dalip Raheja, Pres./CEO of the MPower Group, on international negotiations@ the Council of Supply Chain Management Professionals (CSCMP) Global Conference. It’s really a primer on considering cultural context in international negotiations & does a good job at that.  Her’s his presentation CSCMP 2009 – International Negotiation Issues in Challenging Times – DR

Because I walked in late, I wasn’t able to take notes so I’ll just give my take:  on the 1 hand, many consultants make too much of cultural differences.  I think it’s been very rare that a deal has blown up because someone used the wrong fork at dinner.  It’s great if you can learn all you can about foreigners with whom you’re working, but not all of it is relevant.

On the other hand, there are a couple of cultural variables that are vitally important in international business that are under-appreciated & not studied enough, & they are business values & decision-making structures.  The former is less researched than the latter, but we still have a lot to learn in these areas.  Both determine how things are sold & generally how business is conducted, but most Americans are more concerned with etiquette lessons than getting inside the heads of their customers/partners/counterparts.  Business values aren’t always necessarily apparent in the general cultural setting, & thus need to be uncovered.  Decision-making structures generally have been documented throughout the world, but there are many refinements which have not been uncovered.  These 2 items are vastly different everywhere you go, & can vary subtly between supposedly similar countries.   While the Austrians, Germans, & Swiss all speak German, there are distinct differences between each of these cultures, & you risk falling on your face if you don’t recognize them.  Many assume Scandanavians are similar to the German-speakers because they share many cultural origins, but they are just as vastly different.  Dig deeper-you’ll benefit from what you find.

4th generation telecom networks in Europe

I checked out 4G World, the successor to Wimax World telecom show in the past @ McCormick Place.  The 1st panel I attended 4G Network Deployments in Americas was very disappointing because the only panelist from outside of the United States was from Jamaica, not necessarily a good representation of Latin America.  Needless to say, there’s not much to note there.

I also attended the panel on 4G Network Deployments in Europe:

Spain just got digital TV last summer.

From Maravedis, there are 500 wimax deployments world-wide & 10 in Europe.  Europe is biggest in fixed wimax:  fixed 49; mobile 28; i6e 21.

Here are growth projections for Europe:

• LTE trials/Metro coverage
• 2010-18%/2%
• 2012-47%/14%
• 2014-55%/38%
• 2016-?%/69%

Spectrum in Europe is allocated like so:

• 21-42 MHz 63%
• 42+ MHz 34%
• <21 MHz 3%

Check 4G counts for more data.

Average Revenue per User worldwide breaks down like this:

• Europe $47
• US-$40
• Latin America-$36
• Asia-$35

From Yota, why are operators installing LTE in Russia?

• 37%-bandwidth capacity
• 26%-leverage 3G
• 15%-flexibility to use different spectrum
• 15%-declining capacity expectations & operations expenditures

Norway is sparsely populated so coverage is expensive.  There are 2 mobile players with national GSM networks.  LTE is coming next year.  Wimax is replacing rural coverage.  All bands of spectrum are available for 3G & Wimax.

France is a mature fixed & mobile market.  30 Euro bundles are good for consumers but bad for network operators.  Conversely, high prices for mobile are good for operators but bad for consumers.  Consumption has changed in a move to fully-enabled internet.  Operators focus on densely populated urban areas.

Q&A:

• The biggest issue is capacity:  there is a difference between 2.5 & 3.5 ghz.  Lower frequencies (700 MHz) are better in rural areas.
• Wimax operators do work together on roaming.
• Wimax does play a role in M2M communications, but it’s quite different from residential service.
• 60% of consumers have access in Russia.
• Differentiation from the big operators in France is bringing fixed to mobile.  They’ll either work with or against them.  VOIP is coming to rural areas.

my take on the 2016 Olympics

1st of all, hats off to Rio de Janiero, a choice that should have been a surprise to no one. It was a historic decision, naming the 1st Olympic site in South America.

However what did surprise me is Chicago being the 1st out of the running.  On the 1 hand, there is no way you can convince me that the Chicago bid was the worst of the lot & worse than Tokyo’s.  That Chicago received fewer votes than New York did in its bid for the 2012 bid is equally ridiculous, but at least partly indicative of the greater problem.

On the other hand, there are a number of reasons Chicago should have lasted only 1 more round.

• In  the past American Olympic cities were the choice when the IOC needed/wanted the absolute maximum financial return.  That’s no longer the case.  The IOC believes they can make as much money regardless of where they go, & they might be right.  Regardless, we’ve lost our financial advantage.
• I pass a good part of the responsibility for the IOC’s decision on to the US Olympic Committee.  There are a number of lingering issues that supposedly were not relevant, but with a secret vote, they most certainly played a role.  2 are particularly important.

1. 1.  the dispute over distribution of advertising revenues is still unresolved,
2. 2.  the decision to launch the Olympic TV network, despite IOC objections & rescinded shortly after it was introduced for that reason, did not endear the US choice to IOC voters. New York’s rejection 4 years ago can no longer be blamed on their stadium plan falling through.  The IOC membership has issues with how the USOC works together with the IOC & this needs to be resolved before another US candidate city has a chance.

• Finally, part of Chicago’s failure is due to at least a small bit of parochialism & insularity.  We assumed it was a rational & reasonable process.  It’s not.  It’s intensely political & we don’t play very well in those circles.  Americans admitted to not knowing how the Olympic system works.  Rio supporters hypothesized that Madrid was the bigger rival because they recognized the political power of Juan Antonio Samarach.  They were correct when Madrid came in 1st after the 1st round.  I fault the US members of the IOC too.  There is much talk of all the back-room bargaining which goes on in these “negotiations.”  Where were the US representatives when this horsetrading was going on?  They certainly didn’t do a very good job.  The Pakistani IOC rep asked about visa issues entering the US, & the response was sloughed off to Pres. Obama, who answered with a vaguely general response which said nothing.  We ignored issues relevant to this constituency which should have been duly addressed.  We missed the boat since this was an issue.

So what can be done?  The IOC/USOC rift needs to be addressed.  The current system begs for more transparency.  Too much money is at stake for there not to be some accountability for each IOC representative’s decision to be divulged.  We could encourage American advertisers to boycott the Olympics, but they won’t do that because they’re global players & can’t risk alienating the rest of the world.

I’m disappointed but not surprised Chicago didn’t win the bid because the Olympics would have been great for the city.  I can’t believe the number of people who couldn’t see the benefits Seoul & Barcelona have enjoyed since they hosted Olympics. If I had to have made a prediction, it would have been for Rio because of the significance of the decision, but I was still rooting for Chicago.

renewable German energy

The Germans were at it again: the GACCoM’s Annual Renewables & Energy Efficiency Roadshow took place almost all the way out in Rosemont.  Everything you need/want to know can be found here.  There’s very little left for me to do, as long as they leave these files up.  They have posted the presentations as well as the audio/video of the event, so I could post my notes, but you can see all of the original content there.

Alternatively, I’ll provide a little history of the Germans & renewable energy.  I attended an event entitled International Perspectives on Sustainability: The Western European Example in May, 2006 hosted by Chicago Green Drinks (& no, this organization doesn’t have anything to do with the Irish in Chicago).  There it was explained to me that the German government took a leadership position by creating a level playing field for new entrants into the electricity markets so that the incumbent vested interests/utility companies  couldn’t buy/crowd/squash innovative firms out of the marketplace.  Thus alternative energies such as solar, wind, & geothermal received a much-needed boost without having to worry about huge utility companies breathing down their necks.  Consequently, since then, the companies that formed at that time have grown to produce up to 20% of Germany’s electricity, a figure which most nations can only envy.  According to the Green Drinkers at the time, there was no other nation on Earth which can touch Germany’s progress & scale in renewable energies.

Since then, I’ve learned the Germans are leaders in energy efficiency as well, for example by building passive solar houses that require little/no electricity from external sources & in some cases actually returning electricity to the grid.  By using super-insulation & triple-pane  instead of even double-pane glass windows, they create well-enclosed environments that leak little/no heat/energy, etc.  We would do well to learn from the Germans.  They’re farther along the learning curve than we are & we can benefit from their knowledge & experience in these areas.

Korea-US Business Partnership Forum

I checked out this event KORUS (Korea-U.S.) Business Partnership Forum & KOREA EXPO 2009 at Navy Pier organized by Kotra, the Korean Office of Trade & Investment, Invest Korea, & the Korean Ministry of Knowledge & Economy.  Here’s what I learned:

from Jongtae Chung, Trade Commissioner, Kotra-Chicago:

• Korea’s 2009 growth is 2.3-2.5% & unemployment of 3.8%, despite the recessionary economy & exports shrinking 22.3%
• The US (11%) is Korea’s 2nd largest export destination after China (21.7%), & 3rd biggest source of imports (9.45%) after China, (16.53%) & Japan (14.29%).
• Due to a smaller decline in exports compared to other countries, Korea’s trade ranking has improved from #12 to #9 during the crisis.
• Korea is managing the crisis well by stockpiling foreign reserves, maintaining low debt ratios & fiscal surpluses.
• Korea’s credit ratings have increased from B to A, & GNI per capita has tripled from $7300 to $20,000 from 1997 to 2007.
• Korea ranks #13 in terms of global competitiveness & #9 in terms of innovation according the the WEF.
• In terms of information technologies, Korea ranks #3 in broadband subscribers, #6 in investment in telecommunications as % of GDP, & #14 in technological infrastructure, all according to IMD.

from Prof. Sungjoon Cho of Chicago Kent College of Law:

• Korea is the 2nd largest export destination in Asia for US services.
• Korea leads the world in household broadband penetration (95%).
• Korea’s labor productivity lags the US in many services (US=100; Korean wholesale/retail=22.1, business support=42.3, transportation=46.7, finance=63.6, telecom=73.7), which creates opportunity for Americans.

from Civa Yam, of the US-China Chamber of Commerce:

• US companies can leverage Korean companies successes in China
• Korean & US companies are complementary in approaching China

Representatives from 3M & Parker-Hannifin described their successes in Korea while speakers from Korean companies Hyundai, YS-Thermatech, & Unison talked about their successes in Korea, the US, & the world.  The Korean Products show was very well-organized-each industry pavilion was color-coded so attendees knew what product groups they were seeing. They assured me they would send over the presentations, but haven’t yet.

A German Jew reconnects & recollects

I sat in on this lecture My Germany: A Jewish Writer Returns to the World His Parents Escaped by Lev Raphael @ the Goethe Institute.  Contemporary relations between Germans & Jews was a frequent topic of conversation when I lived/worked in Germany, & this is the 1st time I’ve seen an event with this focus, so I was quite interested.

Lev freely admits his book is a memoir, travelogue, & mystery.  He grew up in a German-speaking neighborhood of New York thinking Germany was the source of all evil, & given his family’s past, that’s understandable.  He fantasized about what would happen if he crashed on a plane in Germany, (the only way he’d ever land there).

Then his mother died & he sought to answer a lot of unresolved questions.  He made a wonderful trip to Magdeburg, when the Germans gave him access to everything he requested.  Soon his books on Judaism were translated into German.  As Lev unabashedly followed-up, if you’d like to know how the story turns out, you’ll have to read the book.

Q&A-Lev defines all European jews as survivors.

Everyone treated him & most authors like royalty in Germany.

Lev credits the Germans for owning up to their past  while observing that the Japanese still haven’t taken responsibility for their atrocities during World
War II & noting that, of course, ALL the French were members of the resistance (wink wink).

During his recent visits to Germany, he felt anti-Americanism, but little antisemitism.

My take-this was an interesting & thought-provoking event, fraught with danger of saying the wrong thing.  He brings up a still very touchy subject for which there are no easy answers.  I was a bit disappointed that he didn’t answer all questions directly & not even insinuate, rather demand, that we buy the book, but Raphael’s willingness to tackle a tough topic is admirable.

what’s new from IL Dir of Trade & Investment

I attended this event WHAT IS THE STATE OFFICE OF TRADE AND INVESTMENT DOING TO ENCOURAGE AND HELP ILLINOIS BUSINESSES SUCCESSFULLY COMPETE IN TODAY’S INTERNATIONAL MARKETPLACE? hosted by Business Network Chicago.  Mary Roberts was recently named interim director of the Office of Trade & Investment office of the Illinois Department of Commerce & Economic Opportunity.  She has certainly been making the rounds, as we have crossed paths on a number of occasions lately.

Here’s her presentation ILIntlPresentation & here’s what she had to say:

• The state of IL has 10 foreign trade offices, the services of which are all available to IL firms for free  There are 6 International Trade Centers to work with businesses in the state.
• Why should foreign firms open offices in IL?

The cost/ft2 for office space is comparatively cheap when compared to the world’s big cities.  Taxes are relatively cheap too, & incentives are available.

• IL exported $54B in 2008 & was the 6th rank state for exports.  Exports comprise 8.4% of GDP of the state & are responsible for 540K jobs.
• 1523 foreign companies work out of 5312 locations & employ 275K in Illinois.
• Chicago is still a logistics hub.  It’s the only place on the continent where all 6 major railroads intersect.  IL has 1118 miles of waterways.  It’s the #1 container hub.
• In addition Mary shared what she’s learned about international business in her time on the job, i.e., in the U.S., the contract is the focal point of a business relationship.  In the rest of the world, it’s just the last step/consummation  in the process.
• Gov. Pat Quinn’s goal is to become the #1 green state.

Q&A:

• to take advantage of international opportunities, give Mary your card & she’ll put your contact information in her database.
• the state of IL collaborates with the US Dept of Commerce & foreign consulates, depending on the resources available by each.

My take-Illinois does well, but there are other states which have been much more consistent with their international representation.  Gov. Jim Thompson had 12 international offices.  Jim Edgar cut them down to less than a handful.  George Ryan started beefing them up.  Rod Blagojovich continued the trend, & Pat Quinn seems to want to continue it.  But if I’m an Illinois or foreign business person considering working with state of Illinois representatives, I’m not sure how long they’re going to be around.  That’s a big no-no.  Commitment is a big part of the equation.

trade with/invest in Uganda

I attended this function US-Uganda Trade and Investment Forum which was sponsored by the Uganda consulate in Chicago, Uganda embassy in Washington, D.C., & Uganda Investment Authority.

1 of the best presentations given of the day was given by the African Alliance.  Here it is:  AFRICAN ALLIANCE BUSINESS FORM PRESENTATION.  I requested the other presentations from the organizers, but haven’t received them yet.  There were also presentations made by Ugandan companies working in the US, such as Akright Projects Ltd./real estate developers, Luba International Relations/Language Consultants, & Uganda Coffee Development Authority, & American companies doing/seeking business in Uganda, like Elfi Wall Systems, & Renew Strategies.

The Director of the Bank of Uganda, Uganda’s central bank, said Uganda’s long-term macroeconomic record is good with 6-7% annual growth, a sovereign rating of B, & S&P rating of B+.  Inflation dropped from14% to 10% last year & is now less than 5%.  7 commercial banks have opened in the last year to bring the total of 21.  Their team of 6 was seeking portfolio investment.  Equity & fixed income investments in Uganda can offer returns of 14 1/2%, which are simply not available here.  Uganda’s Speaker of the Parliament indicated their priority is to protect their environment.

The Executive Director of the Uganda Investment Authority noted that Uganda’s economy is #4 in Africa & received $700+M in foreign direct investment 2005-9.  The US is #8 in FDI in terms of $, & #7 in number of projects.  Citibank & Unilever are success stories.  Uganda has a population of 30M that is eager for US products.  Priority sectors are manufacturing, organic agriculture, transportation, energy, mines, petroleum, information technologies, services, & tourism.  IT includes business process outsourcing, software development, testing, SANS, & hardware assembly.  There are 20 ISP’s & 7 mobile providers.  Constraints are infrastructure, access to finance, & government administration/bureaucracy.

This was somewhat of a high-falutin’ affair.  The ambassador to Uganda was supposed to be there, as well as ministers of State for Investments, Information, & Tourism, who I think did make it.  Representatives from the city of Chicago & State of Illinois attended, & the IL Trade & Investment dept. made a presentation as well.  For me this was a very interesting contrast-on the same day I attended a German function.  That was tight, organized, & punctual.  This event was a lot more loose, open, & free-flowing.  It was an interesting day.

Alderman for & local organizer against the Olympics

I attended another Chicago Olympics event, Chicago 2016: The Thrill of Victory or the Agony of Defeat? this time @ the Chicago Historical Museum.  It featured Alderman Toni Preckwinkle, in whose ward much of the development for the Olympics would fall, & Jay Travis, the executive director of the Kenwood Oakland Community Organization (KOCO), which represents neighborhoods where much Olympic construction would happen as well.  The handouts included the documents created by The Civic Federation which reviewed the Chicago 2016 Olympic bid, which can be found here & the summary here.

Here’s what was said that’s not contained in those documents:

• the US federal government makes no investments before an Olympic city is named, only afterwards
• an MOU is not legally binding, but an ordinance is the law
• Jay is still concerned about displacement, rising prices, long-term employment, & eminent domain issues
• 1/4-ly reports to the city council will provide transparency
• the bottom line is the alderman believes that with the financial guarantees & insurance, the finances for the Chicago 2016 Olympics are secure.
• Q&A resulted in typical Chicago town-hall fashion being reduced to incendiary accusations of the alderman’s husband benefiting from real-estate deals coming out of the Olympics.

What surprises me is that the community organizers fail to recognize the long-term economic benefits gained by hosting the Summer Olympics.  There are risks, & they are correct to have them addressed, but if Chicago can get the Olympics, I don’t think there’s any question it will be good for the city.

baseball in japan & around the world

I popped into this breakfast talk Baseball in Japan and the U.S. Persevering Through Difficult Times featuring Trey Hillman, the manager of the Kansas City Royals major league baseball team.  He was invited to speak by the Japan America Society of Chicago because he took a losing team to the playoffs 3 times & won the Japan Series while managing 5 years in Japan.

The focus was much more on persevering through difficult times than on baseball in Japan & the world.  Apparently he & his family have had a rough go of it lately, so he can relate.  His main message was that we all overestimate the the importance of our own problems & it’s better to be an energy-giver rather than an energy- sucker.  We listen to the wrong people & need to seek wise counsel.  He tracks these links:  presence->positive energy->ego->thoughts->words->action->habits->character->destiny  He’s a pretty religious guy, so he gave out a sheet with some inspirational sayings from the Bible.

His story:  he found he was a good ego manager @ the age of 24, so he moved from the field to the dugout when he realized the latter held more potential than the former.  To illustrate Japan’s passion for sports, Trey noted they have 7 sports daily newspapers, & athletes there have a tremendous work ethic.

Q&A

Japan has better ego management because 99% of Japanese players accede to the team.

To prepare to live & work in Japan, he simply did research on the internet, called fellow manager Bobby Valentine who coached in Japan as well, & took a visitor’s attitude of respecting his hosts.

My take:  I can see that Trey is a pretty inspirational guy, but I do wonder how much he’s able to relive his times in Japan in Kansas City.  I was disappointed he spoke so little about his time in Japan in favor of focusing on quoting the Bible, but I guess that’s just me.