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.

is networlding the solution to marketing in tough times?

I attended this luncheon presentation Marketing in tough times organized by Akumi Software & featuring Melissa Giavagnoli of Networlding fame.  Here are the presentations they made TechGYRLSPresentationSocialNetworkingNetworlding & Akumi Software TechGYRLS 082409

8th grader Shadayah Gray opened by describing how she designed t-shirts with Photoshop & Office software.  7th grader Adinah Gray told us about her dream to combine her interests in ophthalmology & robotics to create a robotic eye.  I’m all for supporting school-aged girls learning to use technology.  Tech Gyrls is sponsored by the YWCA.

Like most presenters, they pretty much just read their presentation slides.  I e-mailed Melissa a couple of times to follow-up on her offer to provide some feedback on my social networking, but haven’t heard back from her yet.

why save Greenlandic?

I read with interest this article in the Chicago Tribune Sunday section Saving world’s words by Jason George. The reason I’m highlighting this article is that Americans tend to minimize the importance of learning foreign languages because English is so predominant in the world today.  They refuse to localize their websites into different languages, yet expect foreign buyers to feel comfortable buying in a language that’s not their own.  Some would say, “Let foundering languages die.”  My response would be, to quote from the article, “language is much more than words-it’s our culture, our history.  It’s what connects people to one another.”  By failing to learn others’ languages & expecting others to communicate with us in our language, we are missing prime opportunities to learn about other cultures, which can make big differences in negotiating with foreigners.

In learning German, it occurred to me that there is a chicken & egg relationship between languages & how people think.  German is a very structured language, with sentence elements in specific positions, nouns taking certain forms, etc.  In turn, Germans are typically methodical & precise, a direct reflection of their language.  I don’t know if the language teaches them how to think or if how they think determines how they speak;  it just seems to me the 2 are inextricably linked.  In trying to learn French while working @ the Canadian consulate to work better with the Quebecers, the differences between French & German became apparent, just like the differences in people.  German for the most part is pronounced as it’s spelled.  French leaves a lot more open, just as the French are a lot more laissez faire than the Germans.

Americans need to learn foreign languages to address the world in its terms rather than expecting the world to accede to our terms.  It’s generally ethnocentric to assume that all businesspeople speak English well-some don’t.  It’s simply wrong to assume that intelligence is reflected by the ability to speak English, which Americans assume all the time.  There are many many foreign business people who don’t speak English very well, but do a great job of leading their local organizations.  Americans limit their opportunities to do business in places where they can’t speak the language.   Although other English-speaking countries can be a good place to start, citizens of those countries typically suffer from the same blinders that Americans do, missing opportunities in places where they don’t speak the language.  Languages provide insights into values & decision-making, which can be immensely helpful when dealing with foreigners.  Again, German reflects how the Germans think, so keeping that in mind when working with them makes things much easier.  Respect other languages by encouraging & learning them.

Energy financing in Turkey

I attended this last minute presentation organized by Central Asian Productivity Center at the International Visitors Center by Hacettepe University’s Prof. Dr. Hasan KAZDAGLI.  Here’s his presentation:   sunum chicago

And here’s what was not contained in the presentation:  Despite all of the oil flowing through Turkey, as a fast-growing country, it still has too little energy.  Turkey recently signed agreements with the European Union to transport oil through Austria via Nabuko, which will avoid transporting oil from Russia through Ukraine.  It’s already reached Tbilisi.  Turkey also recently signed an agreement with Russia to create a link on the Black Sea.  Turkey signed the Kyoto Protocol last year & are negotiating with the Russians to build a nuclear plant.  Turkey is the 2nd fastest growing energy market after China.  The Turkish gas market is no longer under state control.  Turkey has a goal of producing 2000 megawatts of wind power by the year 2020 & is offering special incentives for renewables.

Q&A

• Asians, Germans, Italians, & others are investing in Turkey.
• Human resources are strong in Turkey.  A law was passed 5 years ago granting tax exemptions to technoparks, resulting in 19 technoparks in Turkey, with 3 in the capital Ankara, which house 142 companies.  Turkey is home to 150 universities, many of which teach in English, which educate engineers, many of whom specialize in automotive.  1.5M apply to Turkish universities, but they only take the top 1% to maintain high quality.  200K graduate each year.

US-China CEO matchmaking networking mixer

I checked out this US-China CEO matchmaking networking mixer hosted by MeetChinaBiz Here is Shawn He Yuxun’s presentation:  MCBC09s & here’s the presentation made by George Mui of the Minority Business Development Agency of the U.S. Department of Commerce Access to Global Economy China_final_8_13_2009 Unbeknownst to me, there was a program delivered earlier in the morning before I arrived in the afternoon, so I missed most of this content.  Normally I’d add my contribution, but soon after I arrived the networking portion of this event commenced.  There were tables set around the perimeter of the room where Chinese visitors would sit while local potential partners would rotate among them every 15 minutes. For the record, I do think it’s good that the US government is supporting minority businesses pursuing these kinds of opportunities.  On the other hand, it appeared as if there would be lots of visitors from China, but many were actually local representatives of Chinese companies.  I spoke with a few people who were disappointed they were forced to deal with an intermediary when they were under the impression they would be meeting Chinese businesspeople directly.

railroad infrastructure in North America

I attended this luncheon presentation PAY THE FREIGHT: RAIL INFRASTRUCTURE INVESTMENTS IN CANADA AND U.S. hosted by the Canadian Consulate General, Metropolitan Planning Council, & Union League Club of Chicago.  Here are the presentations the panel made:  Combined Presentations

Mary Sue Barrett, President of the Metropolitan Planning Council opened with few statistics:

• freight is increasing 350% by 2020
• 500 trains travel on 2800 miles of track every day
• Transportation creates $2B in economic output & 70,000 jobs
• all on a 19th century system.

US Representative fromWisconsin Tom Petri didn’t make a presentation, so I’ll summarize what he said here.  The Midwest-Canadian relationship is crucial.  Wisconsin exporters hip out of Montreal.  Baltimore & New York want that business, but are not cost-competitive.  Canadian railroads are now North/South in addition to East/West.  Statistics from WI. company Schneider Logistics indicate transportation costs dropping from 16% to 8.8% of GDP in past years, but there have been no savings since 2004.  China now invests 9% of its GDP into transportation, while Europe invests 5%.  China will spend $730B on railroads, which exceeds the capital expenditures of the US.  We’ve lost momuentum-increasing the gas tax is not sustainable.  We need to continue borrowing from the Chinese to pay for rebuilding our infrastructure.

Q&A

• grade crossings are still a challenge for efficiencies, with big impacts on local communities as people wait @ crossings
• Germany imposes a road tax implemented by satellite to pay for infrastructure because Poles would not pay for gas when delivering to Germany
• it’s a big problem to muster political will in Canada-the private sector is 10 years behind.

German M&A specialist on complex projects

I caught Kai Lucks presentation on the complexity of M&A @ the Alliance of Merger & Acquisition Advisors summer conference.  Kai was in charge of mergers & acquistions for Siemens AG for many years & is now the president of the German Federal M&A Association & CEO of the Merger Management Institute.  He declined my offer to post his presentation, so I’ll summarize:

Siemens invested 32B Euros in acquiring companies in energy/environment, health systems, & automation/control of industrial/public infrastructure over the last 10 years.

With the acquisitions of Dade Behring, Bayer Diagnostics, & DPC, Siemens created a world-leading medical diagnostics company.

Siemens has a structured/phased integration process:

1. preparation/id key positions
2. set goals
3. integrate/transfer to line management
4. benchmarking

Mechanical & control design will converge in the next 10 years.

Integration success is measured in 3 dimensions:

1. customer financials
2. milestones
3. attrition rates

The acquisition of the Danish firm Bonus wind power offered superproportional growth by expanding to international markets.

M&A performance is the key challenge-big M&A performance is even weaker.

Siemens’ closed loop approach works like this:

• strategic planning makes the business case in the preparatory phase
• deal details & integration preparation are worked out during the transaction phase
• contract management & implementation/controlling are installed in the implementation phase
• business management transfers know-how back to strategic planning

Professional management can strongly improve results.

Knowledge/experience management of 12 drivers based on volume, complexity, & restructuring, is key to success:

1. Sales volume-own unit
2. sales volume-candidate
3. own employees
4. candidate employees
5. countries
6. locations
7. businesses
8. value chain
9. improvement
10. manufacturing heads reduction
11. locations reduction
12. cultural change

There are 4 M&A project types:

1. acquisition only
2. cost cutting
3. complementary technology
4. integrated acquisition/re-engineering

Acquisitions of Sylvania lamps, Westinghouse power generation systems, & Huntsville automotive components provided different examples of experience management.

Utilities & power generation are in opposite phases of the merger endgame (opening, scale, focus, balance/alliance).

In 2007:

• Europe bought $35.8B in America
• America bought $27B in Europe
• Asia bought $9.6B in America
• America bought $5B in Asia
• Europe bought $.5B in Asia

My take:  it’s a shame Dr. Lucks chose not to allow his presentation to be published because he puts together some of the best presentations I’ve seen.  In some ways they are typically German, i.e. very structured & organized, but in many ways that’s a very good thing.

international negotiation competition

I was lucky to be invited to the closing dinner of the International Negotiation Competition which was sponsored by the  Center for Advocacy & Dispute Resolution @ John Marshall Law School.  All of the participants & judges were there to witness the awards to the winners.  Competing teams came from 15 foreign countries, although the winners were from UC-Davis.  The judges seemed to be lawyers & law professors from in & around Chicago who specialise in negotiations, some in an international context.

The reason I’m writing about this is to pat the competing teams on the back.  Teams came from 11 countries where English is the commonly used language, (Australia, Canada, England/Wales, Hong Kong, India, Ireland, New Zealand, Northern Ireland, Singapore, South Africa, & the US).   However, teams from Denmark, Japan, Nigeria, Puerto Rico, & South Korea had to compete in English-imagine how hard it would be to negotiate in a language that’s not your own.  Pretty tough.  The Danes came in 2nd place, & they speak excellent English, so that’s not so great a surprise, but the Koreans came in 3rd, & I think that is a fine accomplishment.

In addition, the legal systems are different, to varying degrees, in every country.  Some are code law, some are common law, as it is here in the United States.  3 of the 5 goals of the conference encourage international collaboration:

1. focus on international disputes/transactions
2. meet students & lawyers from other countries
3. it helps students become aware of & experience the special aspects of international legal negotiations, including differences in negotiating styles, ethical & social norms & business practices, as well as enhanced difficulties of cross-cultural communication.

I can’t encourage these enough  To travel to a foreign country & compete on local terms with locals is a very difficult task.

This competition travels to different sites each year (2008-London, 2007-Singapore, 2006-Orlando, 2005-Dublin, 2004-Paris, 2003-Calgary, 2002-London, 2001-Orange County, CA, 2000-New South Wales, AU, 1999-London, 1998-Malibu, CA), interestingly all but Paris, English-speaking countries.  I think they should mix that up a bit.  Non-English speakers have only won twice, Koreans in 2008 & Danes in 2004.  I wonder how much bias there is in favor of English-speakers & against non-English-speakers.

Regardless, I think this is a great competition & we should try to encourage more of these kinds of competitions in many other disciplines.  When I attended Thunderbird, upper-level classses offered real-life simulations in international finance while marketing classes took on actual global advertising & B2B marketing competitions on behalf of sponsoring firms.  There are no better learning activities to apply school-fed theory to the real world, literally.  We can’t get enough of them.  (special thanks to Patricia Gill)

what’s new @ the WTO?

I munched @ lunch to this lecture WTO and International Trade Agreements:  Under Pressure in Light of a Global Economic Downturn @ John Marshall law school by Mark Nguyen of MDN Trade LLC Here’s his presentation WTO-Protectionism-Chicago-June30-09 & the handouts to go along with the presentation WTO-March09-Handouts

Here are some additional points he made not included in his presentation:

• countries are trying to prevent “job leakage”
• export restraints are the focus of high-tech companies
• developed vs. developing country issues are arising
• the decline in global output is the 1st in 60 years
• because supply chains are globally integrated, we won’t see a return to the depression of the 1930’s, at least not @ that same level
• Free Trade Agreements (FTA) have been more effective than the WTO since 1994
• Dispute settlements are pretty straightforward:  9 months, with 3-4 months for appeals
• in Europe, computer monitors were equated with TV’s which required higher tariffs
• the US Fast Track process has expired
• an FTA of Asia Pacific would include 21 countries
• Despite no Doha agreement, the WTO still moves forward
• China produces 60% of the coke required for making steel;  the price is higher outside of China than inside China, which results in an effective subsidy
• China’s internet filtering is blatant protectionism with a lack of notification & transparency

Q&A

• It’s critical to get Russia to join the WTO, but depends on the price of oil
• Regional Trade Agreements get exceptions on enforcement provisions when they create more trade;  specific quotas can be attacked
• don’t bring intellectual property to China;  the Chamber of Commerce is looking @ certification;  the government wants developers to turn over source code
• look to Europe for approaches to carbon emissions;  if they are not part of the treaty, Brazil, China, & India will be penalized-if the US loses, it can lead to retaliation from China.

should US computer companies censor in China?

I read with interest this article in the Chicago Tribune by David Greising Computer-makers should help skirt China’s censors. It brings up a tough issue to which there are no easy answers.  Greising scolds US computer makers for acquiescing to Chinese demands that they provide software that censors access to anti-Chinese government websites.  He criticizes computer manufacturers with sizable operations in China for caving in too easily, ostensibly in search of profits, as opposed to confronting the government & potentially putting future revenues at risk.

I certainly don’t endorse Chinese censorship, nor American companies giving in to that extortion.  However, the alternative of exiting is not a viable option either.  Standing up for principle is 1 thing, but retreating when 1 can still have sway doesn’t make sense either.  American computer companies have more power when they are actively engaged.  If they leave the market, competitors from other countries move in to replace them.  The voice they had with the government is extinguished & they play no role in future decisions.  Lambasting American companies for pursuing profits makes no sense-it’s what aggressive companies do.  My question is how much are these companies going to lobby the government from the inside, behind closed doors?  That’s where they can wield far more influence & perhaps change policy going forward.  The best thing for American computer companies to do is build profitable businesses to give them the economic clout to get a seat @ the table when these kinds of discussions take place.

There are greater risks in China.  The impetus behind the government’s mandate is to maintain control of information.  At some point, that may become fruitless.  They are trying to grow the economy to keep as many people as possible content with their lives so that they can stay in power.  There may come a point where the people gain enough power that the government plays a much smaller role than it does now.  How that dynamic plays out will determine tons for China’s future.

Whether or not information is censored is a vitally important issue.  Information feeds the digital economy today.  The wars these days are economic, & they’re fought with data, which when it’s free-flowing, provides ample ammunition for all sides.  We can’t endorse closing off that information flow, but need to remain engaged to make sure it doesn’t get any worse.

branding America?

The Chicago Council on Global Affairs hosted this event Rebooting America’s Global Image featuring Keith Reinhard, Pres./founder of Business for Diplomatic Action , Chairman emeritus of DDB Worldwide, & Ted Pincus, who is a director @ BDA.  They’ve partnered with Thunderbird to provide Culturespan workshops, which is laudable. The BDA together with the National Business Travel Assn. publishes a World Citizens Guide with 16 suggestions for American students & businesspeople  when traveling abroad.

They did some research in 17 countries on what foreigners like/dislike about Americans.  So what?  Who cares?  This is important for 3 reasons:

1. security needs, cooperation, intelligence
2. the economy
3. world citizens should lead climate change

Obama’s election caused a bit of a turnaround in anti-US sentiment, but others question whether his rhetoric will reflect his policy.

The United States Information Agency (USIA) was disbanded in 1998, so what do we do now?  STARS:

• Sensitize to the needs of others
• Transform our attitudes & behavior to promote understanding
• Accentuate/amplify the good in America
• Reach out to others
• Serve as a connection between the government & private sector

This is the kind of event & organization which rile me up a bit.  While the sentiments are good & I’m in agreement we need to get corporate America involved to help solve America’s image problem abroad, it’s far too superficial to be effective.  America’s engagement with the world is far too big a problem for it to be solved by an advertising campaign.  Suggestions like adding a Ministry of Tourism/office of international visitors, & jazz diplomacy just don’t cut it. American egotism doesn’t help us in the rest of the world.  In my mind, education is key to change how Americans work in the world.  We need to teach world history in addition to/instead of US history.  Foreign languages need to be required, as they are in many other countries, for graduation.  Students need to learn geography to understand the issues in different regions of the world.  When questioned about education, Reinhard indicated Arne Duncan, Chicagoan & Secretary of Education, supports UN-level language fluency.  Otherwise he didn’t comment on any greater role, which to me indicates a lack of awareness of the problem.  It’s for these kinds of light & fluffy solutions to our problems that we’re criticized, & justly so.  It’s not until we engage with the world on its terms & not try to dictate to others what to do & how to do it, that we’ll be greeted as leader instead of being resented as the fading superpower.

Saab sold back to Swedes

Pardon me for the indulgence, but I have to write about the Swedes when they come up in the local press.  I caught this article by Ken Bensinger in the Chicago Tribune: GM secures Saab sale to Swedish carmaker

I question whether Koenigsegg Group, a small niche ultra-high performance automaker, is a great fit for Saab, but I assume this was simply a deal motivated by the Swedish government to save jobs.  Maybe they’re looking to ramp up more volume production-otherwise I don’t see the sense of it.

The quote by GM-Europe Pres. Carl-Peter Forster is somewhat specious in saying, “This is yet another significant step in the reinvention of GM & its European operations.”  More accurately, he should have said this completes the dismantling of GM in Europe, probably at fire sale prices.  I can see, when he says, “Closing this deal represents the best chance for Saab to emerge a stronger company.”  I question how much stronger it made GM, other than simply being able to get out of a losing business.

When I lived in Sweden for 6 months a number of years ago, I met with a few representatives of Saab & Scania & was surprised to find how socialistic their approach was.  They were still wary of competition & favored cooperation, which is great when you can do it.  But today, I think global hypercompetition is all the rage.  Wallowing in outdated business paradigms will only hinder competition & not allow companies & economies to move forward.  I hope the Swedes have recognized the situation all developed nations face & are figuring out how to compete with much more cost-competitive countries.

telecom, aviation, & retail in India

The US-India Chamber of Commerce-Midwest organized the 5th annual  conference U.S. INDIA BUSINESS CONFERENCE – FOCUS ON TELECOM, AVIATION AND RETAIL Illinois Governor Pat Quinn made an appearance to kick-off the event & indicated he’d be more like former Governor Jim Thompson & open more foreign trade offices rather than close them down like Jim Edgar did.

Douglas Adler of Vedder Price opened with his presentation on Indian aviation. 06-25-09 USICC FINAL The panel consisted of Raj Sidhu of American Airlines, Sami Khaja of Jet Airways,  Sanjay Tiwari of KLM, & Savio Dias of Kingfisher Airlines.  The panel yielded this SWOT analysis:

• Strengths-India is a growing economy, is a leader in manufacturing of commodities (garments & pharma), & India comes back well
• Weaknesses-infrastructure is not keeping up with growth & logistics in cargo takes days rather than hours
• Opportunities-many are bullish on India, the volume of Indian flyers & codeshare agreements with US airlines are increasing, the US-India neclear deal is reassuring,
• T-India is surrounded by unstable neighbors & terrorism

Jack Ablin’s (Chief Investment Officer, Harris Private Bank) global markets update offered the following:

• Indian markets follow global trade
• emerging markets are doing well relative to S&P, but valuations are an issue
• the # of cell phones sold in India indicates the emerging middle class

Aradhana Goel of Ideo moderated the retail panel of Gaurav Bhuwan of Tanishq USA, L.N. Balajii, ITC Infotech, & Gunjan Bagla of Amritt:

• consumer demand-while in the US & Europe a few spend more, in India many spend a little.  Culture is important, which is driven by tradition (ex. weddings).  India has many dual-income couples who can’t cook & don’t have microwaves, so they outsource their food preparation to someone else in the neighborhood.
• rural segment-$1TR market, 2/3 of private consumption, 70% of population.  There are 3.5 M retail outlets in 600K villages, 87% of which have populations of 2000 or fewer.
• Indian consumers are not American consumers.  The western veneer surrounds an Indian core, so product must be modifed to reflect this.

The telecom panel of Dr. Surech Borkar & IIT-Chicago & Dr. Vikram Saksena of Tellabs, (moderated by Anil Kimar-Virtus Global Partners) was held during lunch, so it wasn’t quite as focused as the other panels:

• India had 30M wireless subscribers in Y2K, are adding 15M/month (the populations of New York City) to 450M now, & expects 1B by 2012.
• Cell phones have changed the social fabric-fishermen now earn twice as much by finding better prices with mobile phones.
• India offers the lowest RPU-(revenue per user) in the world, perhaps because Indian consumers are more concerned about prices than dropped calls.
• Rather than all-you-can-eat like here in the US, Indians pay per use, so services can be monetized.
• India adheres to a relationship selling model, so foreigners can’t get an audience with buyers-use local partners to leverage local talent.

I requested the presentations of the organizers but haven’t received them yet.

should you go local?

I read this article in the Chicago Tribune by Rick Steves a while ago Become a Temporary European & it brought back a lot of memories.  When I lived & worked in Germany, I tried to experience the old world in the way he describes & it was wonderful.  But as I think about it, a lot of what he talks about applies to international business as well.

His basic message is engagement & immersion.  Get outside of your own personal box & go native.  Let go of your American inhibitions & encumbrances & participate as a local.  The 1st step is to willingly express interest in how things are done somewhere else.  Many times we unknowingly assume that we know the best way to do everything & lose out on opportunities to learn & fit in better with local business methods, customs, & practices.  Get off that American “Bigger is better” mentality & consider other options.

To take part, you need to be able to communicate, which means learning at least a few of the niceties of the language of the country (ies) you’ll be visiting.  I wouldn’t expect that many would be able to conduct a detailed negotiation in a foreign language during a short trip, but when I was in Poland, I learned Polish well -enough to occasionally correct my translators when they misspoke for me  If you’re traveling on a multi-country trip over a short time span, it’s more difficult, but it really helps to be able to deal with others on their own basis & gains you lots of goowill.

Abiding by some of the author’s suggestions, don’t travel abroad to hang out with other American businesspeople where they hang out, say @ an American Chamber of Commerce.  Rather seek out local businesspeople @ the local chamber of commerce.  At foreign trade shows, don’t seek out Americans just because we’re the easiest to converse with.  Get involved in discussions with exhibitors @ booths from other countries who do things differently from how you do so that you can learn a different approach to your business.  Even if they’re not direct prospects, talk with people up & down your supply chain in different countries to see how they work.

I’d love to be able to relate some of my personal experiences the article conjures up, but that’s another topic altogether.  To much of the rest of the world, life is not just business.  We’d do well to learn about those other parts of life to help us in our businesses.

Canadian building technologies conference

I checked out this Building Technologies conference organized by Ann Rosen from the Canadian Consulate in Chicago.  Here are the presentations made that the presenters decided to send over to me:

Sustainable  forest products were addressed byJoel Neuheimer of FPAC, who made this presentation:  Chicago_AIA_FPAC FPAC issues a sustainable initiative report every 2 years.  Canada is the world’s leading forest products exporter, sourcing from 30% of the world’s intact forest, 70% of which is uninhabited.  Canada is 3rd in total forest area behind Russia & Brazil.  The provinces have the most jurisdiction, owning 71%; the federal government exerts indirect responsibility by owning 23%; & private owners speak for 6% of Canada’s forests.  Canada’s regulation of forests is the most stringent in the world, which is verified by 3rd parties.  Forests lose more to natural causes than to harvests.  300 Canadian communities rely on forestry for their livelihoods.

Here are a few issues they are confronting:

• legal harvests?
• regeneration
• reduce/re-use/recycle-to recover 65% of paper, 90% of fibre, & return 10% to biomass
• reduce greenhouse gases to become carbon neutral  by 2015 without carbon credits (20% of greenhouse gases come from deforestation)
• independent scrutiny/certification
• green procurement
• informational tools (see their website)
• the Athena Institute claims that wood creates the smallest environmental footprint.

CMHC Chicago presentation

Q&A brought out:

• The use of wood is restricted in Chicago, which has a building code “from hell.”  A representative from Wood Works Chicago said they are trying to enlist support of the unions.  New York has moved to the international code-Chicago is doing a study on it.
• Engineered wood preserves & performs.  Yellow/Alaskan cedar actually kills termites.
• Younger trees remove more CO2 when they are 20-80 years old, so there is good sense to replacing old forests with new ones.

My take:  there’s not a lot of high technology here, but it is important as environmental concerns are becoming more important.  It’s apparent we need to change building codes not to just reflect safety/PR concerns, (reknowned Chicago deck collapse a few years ago), but simply change with the times to reflect new technologies & methods.  I’m not sure wood is the end-all/be-all the Canadians purport it to be because new materials sciences are coming up with lots of innovative products as well.