Archive for May, 2008

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foreign students study in Illinois event

Friday 30 May, 2008

I attended this event last week sponsored by Study Illinois  It featured presentations by academic officials from Thailand, Brazil, Pakistan, & Jamaica.  There was supposed to be someone from India, but they were held up over visa issues.  The presentations should be available on the website.  This is the 3rd or 4th time this event has been held & I’ve attended annually.  It’s featured speakers from different countries each year.  It’s  better & better attended every year.  Education USA seems to be the overarching organization that sponsors these tours.  Apparently there is a NASCON conference which takes place in the US & these reps fly all over the country making these presentations around the conference.

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China-India Panel @ UChicago Management Conference

Friday 23 May, 2008

I attended this panel discussion China, India and the Global Economy last week @ the Gleacher Center.  The panel consisted of 3 GSB profs & 1 GSB grad who earned his degree almost 20 years ago.

Prof. Mian presented his latest research on differences in credit related to income inequality & how China played a role. i.e. the poor borrowed more while we imported more inexpensive goods from China, which the poor bought, thus, the open credit fueled purchasing by the poor which was supplied by China.  The open questions are :  Can China’s dilapidated financial system absorb our financial worries? & how will the US respond to the budget & trade deficits?

Prof. Barry pointed out some significant differences in demographics (IN workers 6-7 years younger) & business sector focus (export/mfg vs. services) between in China & India.   India’s fragmented labor markets make it tough to fire people while creating a corporate bond market in China would help their antiquated banking system.  He provided some real world examples from his experiences which were very illustrative.

Miranda is a financier who focuses specifically on infrastructure projects, which a good place to be in India & China these days, noting they account for 40% of the economic growth today according to the World Bank.  They’ve taken different paths to achieve that growth, but face many of the same challenges.  In terms of infrastructure, China is way ahead, partly because China finances more creatively while India simply subsidizes.  China has provided electricity for 100% of its houses, India is better @ protecting the environment.

To me, this event provided a great example of the start contrast between UC GSB & other schools with which I’m familiar.  The #’s were @ the core of everything, which ignores some issues.  The discussion was quite theoretical & policy-oriented, & didn’t offer much practical tactical detail.  I don’t mean to sound overly critical, rather simply to make the observation.  I sat in on the beginning of the following presentation Building Cross-Border Businesses but wasn’t able to stay for the whole thing.  It seemed to offer more of a hands-on approach to international topics.  These panelists were all GSB alumni, aside from the moderator, who each offered a different model for approaching international markets; sales channels, investment, services partners,  & acquiring outsourcing competencies.  The interest in both panels was high, because the rooms were filled with 100+ people & standing room only for each panel.

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US-Poland Business Forum

Wednesday 21 May, 2008

I attended this event last week, which took me back awhile US Poland Business Forum I spent 7 months in Poland in 1994-1995 on 3 tours when I traveled to 12 cities over 12 weeks on the 1st trip, & 10 cities over 10 weeks the 2nd time, putting on seminars, training sessions, & advising 65 individual businesses on how to improve their sales & marketing. I worked with local interpreters everywhere I went, so everything was translated from English into Polish & back. This event reminded me of that. It could have been held in Poland-there was more Polish spoken than English. (I also taught @ Bielsko Biala Business Academy on my 3rd trip-where class was conducted in English).

This event is the successor to earlier Trade Targi (trade shows) held on the northwest side of Chicago in the Spring of the last few years. The thought is to deepen the information exchange, & this event certainly did that.

Zbigniew Kubacki, Head of the Trade & Investment section of the Embassy of the Republic of Poland in Washington, D.C., formerly posted in Chicago, kicked off with a presentation on Poland’s economy today. I’ve contacted him to post a copy of his presentation here.

A number of voivodeships (~counties) in Poland made presentations on investment opportunities in their regions. Here are the presentations from Swietokrzyskie-kielce, Silesian Region-katowice, & Lodz-lodz-sez-presentation-usa. I never made it to Lodz, passed through the Katowice rail station (& can verify it is a transportation hub), but did visit Kielce. When I was there, there was not much going on. They’re now doing a much better job of identifying their strengths & focusing on them.

Lucas Fuksa made a presentation to the Americans on doing business in Poland, which consisted essentially of different business structures which can be used in Poland. Here it is: businessinpolandchart

A couple of other things came out of the conversation:

-the economic freedom act of 2004 assured property rights & OK’ed merger & acquisition activities

-the management board manages day-to-day operations, while the supervisory board oversees the management board

-corporate income taxes have dropped from 40% to 27% & now 19% to stimulate investment

-foreigners need permission to own real estate in Poland

-part of the reason for higher capital requirements is there are different provisions for bankruptcy, which require higher capitalizations
The event was also covered extensively by Polvision, so check there for video of the event.

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ACG Investment and Sourcing in India event

Wednesday 14 May, 2008

I attended this breakfast roundtable discussion hosted by the Chicago chapter of the Association for Corporate Growth, which included a few contributors with a wealth of experience in India who expounded upon the past & future of the country.  It seemed like the group was evenly divided between those who’ve worked in India & those interested in learning about how things work there.

Pradeep Nedungadi, Principal of Visthar, suggested choosing a headquarters location based on skills located in that region.  He compared India with it’s neighbor in saying China has advanced because of it’s government, while India has depite it’s government, although it’s expected the Indian government will play a decreasing role in the econonmy in the next 10 years.  IT has grown so tremoundously because the government couldn’t control it.  There are still lots of hoops to jump through to found a business there, so he recommended finding a local partner to deal with problems, but he sifted through 1000 companies to find the handful that could get the job done.  There are some states in India where he won’t recommend manufacturing because the population is too intelligent for that there.

James Pavlik of Baird Venture Partners gave a short presentation which included these interesting tidbits:

-cited the offshore nation which showed India has advantages in labor costs, size of labor pool, language, & government support over China, the Phillippines, Eastern Europe, Latin America, & Russia.

-a 2005 McKinsey survey indicated India was the leading offshore destination in IT, 
call centers/help desks, human resources, finance & admin, business 
research/analytics, & just barely in R&D

Venture Intelligence India informed that private equity investment in India has skyrocketed from $2.2B in 2005 to $7.5B in 2006, & $14.2B in 2007

Krrishan Singhania of Singhania & Co. provided some of the legal background 
on why/how India has opened up so much in the last 10-15 years. Government use of IT is driving some growth in IT.  There are still caps on investments in insurance & defense industries in India.  The new airport in Bangalore is completed but not open only because the infrastructure leading to it is not yet finished.  Profits can be repatriated, but taxes must be paid on them.  The legal market is still 100% closed to foreigners, so locals like Krrishan are invaluable.

Attorney David Laverty distributed an couple of insightful articles ( indiaacquisitions1 indiaacqusitions2 ) on acquiring Indian companies.

My take is events like these where you can get 1st hand stories from people 
who’ve been there are of great help, especially in someplace as complex as 
India.  I  wish we could have had a bit more input from those desiring to learn more about India in what they’re seeking & the obstacles they’re confronting in attempting to do business there.

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Euronext speech

Monday 12 May, 2008

I attended a luncheon sponsored by the National Investor Relations Institute featuring a speaker from NYSE Euronext, the exchange which merged with Archipelago in Chicago, who was speaking on the globalization of financial markets.

Up until 2004 each of the exchanges were essentially single asset classes. The NYSE then changed its strategy to use globalization, diversity asset classes, & leverage technology. In 2006, the NYSE & Archipelago holdings hooked up & went public. In 2007, NYSE merged with Euronext which had 4 exchanges in Europe, to create the 1st “global markets,” & started their asset diversification in derivatives. They trade $141 B daily, which is 1/3 of the cash trade in the world. They own 5% of the Indian exchange (capped by the government), & 1% in Brazil. They have interests in Tokyo, (which is not yet publicly traded), Malaysia, & the Philippines

There is increasing global competition for capital formation. In 1995, 57% of global proceeds were listed in the U.S. That # has dropped to 18% in 2006. In 1999, private placements were $57B. In 2006, that had risen to $137B. Europeans no longer need to access capital in the US. Brazil is getting deeper & more liquid. Of 64 public exchanges worldwide, only 2 are in the US. Growth in derivatives is 30% to $450B dwarfs others. American holdings overseas was in $7.2B in 59 funds 5 years ago to $87B in 217 funds now. Foreign investment is up 90% in the US.

In the future, consolidation into 5-6 groups is inevitable. Regulation is becoming more global & there will be more convergence with consolidation. Europe offers “fast path” listings for US companies which are already listed with SEC documents instead of European listings.

My purpose in attending was to find out what was left of Archipelago in Chicago.  It seems as if only those responsible directly for the Arca Trading Platform.  Everyone else has relocated to New York.

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British-American Transatlantic Business Conference

Friday 9 May, 2008

I attended the British-American Transatlantic Business Conference-Connectivity in a Transatlantic World conference, organized by the British-American Business Council-Chicago, & title sponsor British Airways for a couple of days recently.  I believe this was BABC’s annual conference which moves around the US & UK each year.

Rhian Chilocott, head of Confederation of British Industry‘s Washington office presented a briefing on UK investments in the US babc2008cbibritish-investment Her most amusing comments were on a couple of alternative titles for her presentation, either “with your wussy $, we can buy anything we want,” or “Sterling assets,” since highlighting British breasts should result in more downloads.

Transatlantic UK-US trade relations was addressed by government officials from both sides of the pond.  I don’t have enough space to even summarize, so contact me for details.

“Current trends in customer global communications needs” was essentially a commercial for/by British Telecom-Americas.

Lunch Keynote speaker-Woody Harford, Sr. VP-Commercial for North America, British Airways provided a comprehensive & humorous look @ BA.

“Generation X & Y-will they be your future employees?” babc2008generationxandy The conference utilized real-time surveys of the audience which were determined by hand-held devices-(I didn’t track the results).  The panel differentiated between digital pioneers & natives, & that younger generations seek autonomy & control while baby boomers seek 1 career with multiple companies.   Also we boomers keep making the recurring mistake of assuming others want what we want.

“The evolving trust landscape: what it means for business & stakeholder relationships” was presented by Mark Shadle, Exec VP/Pres-Central Region, Edelman Public Relations babc2008edelmantrustbarometerukus I found this to be the most interesting & valuable presentation.  I can’t add any more than what was presented.

The gala reception @ Adler Planetarium proved to be a lovely evening.

The 5 minute welcome by Mayor Richard M. Daley brought out that Tony Blair is 1 of his idols.  He stuck around so that we could wish him Happy Birthday, but I was surprised he didn’t stick around for the Olympics presentations.

The “Impact of Olympic Host on a Finanacial Center City” offered in interesting comparison/contrast between an upcoming Olympic city with an aspiring 1.

“Tailoring the Cord Brand Idea to be relevant around the world” showed a few great examples from LifeFitness & Dyson of different approaches to global branding, either complete revamp to make them consistent across countries, or keep it simple from country-to-country.  I’m still working on getting at least 1 of the presentations.

“The impact of emerging technologies & social media” was presented by Terry McKenzie, Sr. Dir., Employee communications & Change Management @ Sun Microsystems babc2008sunmicrosystems I spoke with Terry on the bus on the way to & from the Adler Planetarium for the gala dinner.  She’s quite a character.  Look for her tmac blog @ blogs.sun.com

I missed the presentation “2 countries separated by a common language?,” featuring 2 principals from Mintel Intl.

BAGOL-British American Group of Lawyers meeting addressed such topics as risk reduction in litigation, patent law changes, audit letter issues, employment, Sarbanes-Oxley.

According to the attendees list, 227 attended the event, of which 81 appeared to be speakers or sponsors, & 10 seemed to be visiting from BABC’s in the UK.

My only criticism of the conference is that there wasn’t enough US-UK interplay:  only 6 out of the 10 presentations dealt directly with British-American business topics.  Further, as important as the Brits are in Chicago & America, we seem to see/hear relatively little from them.  A number of other smaller countries are more active in the local international scene.  I’d like to see more local events from our most important European trading partner.

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real estate services expanding internationally

Wednesday 7 May, 2008

Robert Manor contributed this article to the Chicago Tribune U.S. real estate expertise helps lead international developments which describes how US real estate firms are lending their expertise all over the globe. This is just another example of services leading the way in international trade. It’s a great way for Americans to leverage specific knowledge throughout the world.

I’m not sure I buy the REIT proliferation reasoning for this expansion as much as the realization of the rest of the world that real estate is a very basic investment & that pride of ownership betters whole economies. With the tax deductions the US government gives for mortgage interest, it’s what’s built America. Few of my friends/colleagues in Germany owned their homes, but have since learned their value. While residential real estate is 1 of the most locally-oriented businesses of which I know, commercial/industrial is increasingly international, as this article demonstrates. Especially with the high value of the Euro & other foreign currencies, foreigners are contributing greatly to the construction of the US.

While partnerships with local firms work well when selling products in foreign countries, I question their long-term viability for services companies. As long as there is a continuing need for product, there will be a need for international partners. But for services companies, the relationship with the client is as much if not more important than the service itself, & the client often will turn to the local partner before the global one because those are the people with whom they find the most affinity. Personally I often hear of services firms with international partners & think that these partners are just a convenient means to not learn & invest in other places where their customers are doing business.

Interestingly, while attending the British American Business Council event the day this article came out, I met Edward Lewis, (a scarily similar name to a dear old college roommate of mine), of Jones Lang LaSalle, whose firm was mentioned in the article. Edward had lived & worked in London for a number of years & even obtained a UK equivalent to a green card. If I remember correctly, I believe he also lived/worked in Zurich, Switzerland, but didn’t get so deeply embedded that he learned Suisse-Deutsch, the swiss bastardized version of German. It’s great to see that there are some globally aware people working in Chicago. 1 of my sales managers from Xerox many years ago (Frank…something I believe, help me if you can) moved on to what was then LaSalle Partners. I wonder where he is today?