Archive for July, 2009


should US computer companies censor in China?

Thursday 30 July, 2009

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?

Tuesday 28 July, 2009

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

Friday 24 July, 2009

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

Tuesday 21 July, 2009

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?

Friday 17 July, 2009

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

Tuesday 14 July, 2009

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.


a high school student who gets it

Thursday 9 July, 2009

At the end of each school year, the Chicago Tribune doles out academic scholarships to Illinois’ best high school students.  This student impressed the heck out of me Tom Tasche: Elk Grove High School-Linguist squeezed every opportunity out of school ( a t2-a student after my own heart) who was written up by Megan Twohey in the newspaper that gave out the awards.  He learned Japanese, a very difficult language to learn, essentially on his own, an even more difficult way to learn.  He was motivated by 2 visits to Japan in which he was able to immerse himself in the language & culture, the best way to learn.

He’ll be attending Princeton’s Woodrow Wilson School of Public & International Affairs, which says to me he aspires to be a diplomat rather than a linguist.  The language is simply the means to the end of communicating with people on their level as opposed to expecting them to work with you on yours.  He’s right when he says, “Being abroad gives you a new perspective on life.”  Not enough people I know take advantage of the opportunities to be abroad to get those new perspectives.

I recruit as an alumni student recruiter from my alma mater, the University of Michigan.  That consists mostly of answering questions at college fairs at a few local high schools each year.  What I’ve noticed in speaking with many high school students is they are much more worldly than when I was in high school.  They’re speaking more foreign languages, visiting different countries, communicating on a regular basis with fellow students all over the world, in our language & others.   I just hope that their global interests aren’t beaten down by small-minded managers when they get jobs after they graduate from college.  This generation is our future, & I hope they’re able to create more of a real global village than we have up to this point.  People like t2 can be hugely valuable assets, if only given the chance to prove their value.


Austrian plastics presentation

Tuesday 7 July, 2009

I attended this presentation & reception hosted by the Austrian Trade Office in Chicago during the plastics show @ McCormick Place:INNOVATIVE AUSTRIA: STRATEGIES FOR U.S. COMPANIES TO CONQUER THE EUROPEAN MARKET.  Here’s the presentation: 090624 SPI≡_Upper Austria_presentation_final version

Since you can read the presentation yourself, here are a few notes:

  • Upper Austria is northeast of Salzburg
  • this is the economic development organization’s 10 year anniversary
  • demand for parts is down 35%
  • assembly time in the example given has been reduced from 30 minutes to 4 minutes
  • they have a budget of 120M Euros to subsidize R&D
  • although Upper Austria is due West of Lower Austria, the name has nothing to do with location, rather with elevation.  Upper Austria is closer to the mountains, while Lower Austria lies closer to the Danube River valley.

Here are 6 reasons given to consider working in plastics in Upper Austria:

  1. highly qualified workforce
  2. 1st class education & training
  3. plastics cluster of 400 companies
  4. investment in R&D
  5. opportunities in plastics processing, raw material/recyclate production & trading, mold/toolmaking, mechanical engineering
  6. location

I won’t claim to know the plastics industry well, but I have spent a fair amount of time in Austria.  If they’re as good in plastics as they are in other industries, you should check them out.