Archive for May, 2010


japanese health care

Friday 28 May, 2010

The Japan America Society of Chicago sponsored this event SOME ADVICE ON HEALTH REFORM FROM THE WORLD’S HEALTHIEST PEOPLE – THE JAPANESE featuring Prof. Greg Kasza of Indiana University.  Greg talked about 3 facets of health care in Japan:

features of the health care system

  • it’s a universal & mandatory public health insurance system out of which you may not opt-out
  • it covers a full range of services;  hospital, surgery, dental, maternity, for an unlimited duration of treatment
  • health care providers can be chosen without restriction, but there you may have to wait for the most popular ones
  • a government commission sets all prices which are revised every 2 years
  • all patients get the same treatment @ the same cost
  • doctors (60% private/40% public) are paid only for services provided
  • health care is financed by social insurance which is paid 50%/50% by employers/employees (up to 8% of income with a cap while the poor pay 0)
  • patients co-pay 30% (of lower level prices) capped at $350/month for low income earners & $1100/month for high earners
  • insurance premiums cover 50% of health care costs, employee copayments cover 15%, & the government covers the remaining 35% of health care costs
  • the system is segmented into 8 sub-segments which cross subsidize 1 another, for example, large enterprises do their own paperwork & subsidize SME’s for whom the government does the paperwork

politics & history of Japan’s health care system

  • the political left has never pushed this health care system-it is not a point of political contention
  • by 1944 80% of the population had health insurance;  by the late 1950’s 100% had coverage

why is Japan’s health care system more economical?

  • Japanese administrative costs are 1/2 of what Americans pay per capita
  • American insurance companies each have their own policies & fee schedules which must be negotiated which creates complex paperwork, while Japan has 1 with no negotiation with simple paperwork
  • Japan’s fixed prices (or lack of price competition) forces competition based strictly on quality & early detection/prevention, which increases the number of doctor visits, but results in healthier people
  • Japan’s administrators adjust the fee schedules to make certain services more profitable, such as MRI’s
  • Japanese earn 4X the average local income while American doctors earn 5.4X their average local income, but American also have to pay malpractice insurance, so that difference is less than it appears
  • the Japanese government is a non-profit health insurance provider
  • 48 children are born to every 1000 US mothers 15-19 years old: the same age Japanese women bear 4 children/1000


  • public expenditure on health as % of total spending is higher in a few countries, such as Sweden, but not many
  • encouragement of innovation is difficult to resolve-in some cases the Japanese simply buy new technologies from other countries, i.e. MRI’s.  The US does more cutting edge research, but much of that is on Viagra-like more profitable products & not curing cancer, so more & better research does not necessarily result in healthier people
  • Japanese insurance doesn’t cover some transplants to protect the transplantors-these are OK for the rich in the US, but the poor do not have the same access
  • emerging economies seem to be gravitating more towards a European-like system, for example, Malaysia & Singapore use provident funds
  • differences in culture explain why America can’t replicate Japan’s system.  American insurance companies determine the market in negotiation with doctors.  It’s difficult to compare the 2 systems because they are so different.  US doctors can’t subsidize other segments like the Japanese can.

my take-a government directed health insurance system is essentially a monopoly, which Americans loathe.  Lacking the competitive mechanism to supposedly rein in costs prevents this in the US.  The fact is many state markets are effective monopolies, so we have them, despite railing against them.  At a very basic level, there are huge differences between government bureaucrats from country to country who work in these areas.  They are not respected or paid well comparatively in the US, so the US government doesn’t get the best people.  In many other countries, Japan included, government workers are more respected & better paid relatively, so they get better people to oversee these types of systems, which results in better systems.


global branding & marketing from Interpro

Tuesday 25 May, 2010

The Chicagoland Chamber hosted a program organized by Interpro Translation Solutions:  How to Brand & Market Your Business Globally. Here are the presentations they gave.  Tom Earll of Nexus Business Solutions pretty much just read his presentation, so check that out there.  John Schwartz of Aumne added these tidbits to his presentation:

  • every department should have specific launch lists when launching new products
  • changing the translation for 2 words into 30 languages costs $1000, so get your translations right the 1st time
  • most local employees prefer translations to be done by professionals so they can focus on their real jobs rather than doing translations themselves
  • get foreign URL’s. (ex., etc.)
  • small businesses should still follow the big guys in terms of style guides, etc.

Bill Johnson of Interpro contributed these beyond his presentation:

  • the best brands focus on cultural differences, i.e. even Coca Cola & McDonald’s alter their products to fit local tastes
  • never proof your own translations-hire professional linguists to do that
  • in-country translators are always better than transplants elsewhere because they are the most up-to-date
  • the top 10 localization companies control only 20% of the industry’s revenue in a $25B market, so no few firms have huge advantages over others


  • make global connections through trade & business associations, academics, & government groups, such as foreign trade commissions & the US Dept. of Commerce
  • crowdsourcing & social media are a new sales channel & the future, so use, discussion groups-the marketing mix has now changed into a virtual loop
  • search engine optimization in foreign countries is a different animal & must be done individually for each country/language:  choose key terms 1st, then translate them, keeping in mind that the context changes.  Whereas formerly headers & metatags determined search engine rankings, now it’s a soup of many different determinants, so in-country expertise is required.

As I’ve said many times before, localization is a great way to go global quickly, but I don’t see many firms doing it.  Although as a professional service, it’s not cheap, but the potential returns are great.  It’s also good to see someone in addition to SDL putting on these kinds of events-more information & education about localization can only help spur its growth.

disclaimer:  Interpro did sponsor the columns I contributed to in 2009.


Groupon buys into 18 European countries

Thursday 20 May, 2010

I caught with interest this little diddy in the Chicago Tribune  Groupon expands by acquiring Citydeal of Europe

Hat’s off to a Chicago tech company making a bold move to go after markets outside of the U.S.  It’s mind-boggling that both of these companies are less than 2 years old & are already $B companies.

However, I question whether “Citydeal’s rapid growth across Europe has proven that the Groupon model is truly global,” Andrew Mason, Groupon’s founder and CEO, said in a statement.  1st of all, coupons are not as widely accepted in many other countries throughout the world as they are in the U.S.  Given comments I’ve seen, it appears as if the competitive landscape is different in other places, which will impact on the business model, margins, etc.  I’ll be interested to see how these 2 firms integrate.  I would bet there will a number of unexpected changes.

I have little doubt Citydeal was founded to be acquired by Groupon, which is an indicator of a few things:

  • clever entrepreneurs in the rest of the world do well to copy American innovations.  Apparently the CityDeal guys are master-cloners.
  • this is another example of an American company that failed to approach the world market from the outset & ended up having to buy a copycat @ who-knows-what price.  If they had established themselves in Europe from the start, they could have built a European operation from the start rather than having to pay for it.  The question is “how much did Groupon pay for CityDeal?” which has not been disclosed.  In this case, it’s obviously cheaper to buy than build.
  • it’s encouraging to see globally-oriented investors, venture capitalists, financiers supporting global growth so early & so strongly, especially in today’s market where money is so tight.  Unfortunately, it’s not surprising that the funders of this deal are not local.

German Consul General on the fall of the wall 20 years later

Tuesday 18 May, 2010

The Niagara Foundation hosted another luncheon speech, featuring Onno Hückmann, Counsel General of Germany in Chicago, who spoke about the fall of the Berlin Wall 20 years after the fact.  He still considers it a miracle that such a radical change occurred with the use of no military force.  He also noted it was the 1st global mass media event.  The wall literally fell overnight without a decision from the top.  He called it a peaceful revolutionary process fueled by discontent & economic forces.  East & West Germans met in Hungary & crossed over into Austria.  The majority of East Germans had very little, which is what led to change.  It all started @ a church in Leipzig where the gatherers demanded & marched weekly for change & it spread, shouting “We are 1 people!”  The Stasi were not given orders to shoot.

This event was a change without precedent.  Change was already underway in Poland, following Lech Walensa.  Hungary was being cut free.  The USSR was focusing on glasnost & perestroika.  Germany’s neighbors expressed concerns about its reunification, but consent was secured regardless, even in NATO, despite Russia.  It was the finest hour in German-US friendship.  It was a peaceful change, achieved by being flexible & firm.  We need to recognize how precious freedom is-we’ll never know how many victims died trying to escape the Berlin Wall.

We now need a new vision for the future.  We’re in uncharted waters.  All dogmas have been banished.  It’s all gray now.


  • There was no premonition of what it would cost to unify-they tab is now 8TR Euros to date.  Germans still pay a Solidarity Tax of 70 Euros/month.
  • East Germany did not disappear-it’s better to think of it as a merger.
  • The Korean peninsula is a very different situation & not comparable to East & West Germany 20 years ago.
  • Vladimir Putin was  a spy in East Berlin when the wall fell.
  • His daughter has friends from the east, so the differences between east & west are fading, although there are still differences.
  • Erich Honecker not placing an order to shoot was a reflection of weakness in being unprepared for what happened.  They did not understand the enormity of their decisions & lacked confirmation of what was happening.  They were badly organized, so actually all that happened occurred by accident.
  • Capitalism is difficult because different things change every day.  Communism is easier by comparison.  This has resulted in more than just economic progress-East Germans couldn’t even get passports to travel.  There have been huge investments in new industries in Dresden & Leipzig.

new middle class key to islamic capitalism

Friday 14 May, 2010

The Chicago Council on Global Affairs sponsored this event THE RISE OF ISLAMIC CAPITALISM: WHY THE NEW MIDDLE CLASS IS KEY TO DEFEATING EXTREMISM featuring Vali Nasr @ Tufts U.  Here’s what he had to say:

Is changing religion necessary for Islamic reform?  If so, does everything else change too?  Nasr is not convinced.  Early Protestantism was very rigid, not unlike the Taliban today.  Economics is at the heart of the problem.  Closed systems don’t create jobs, & keep the few @ the top & many @ the bottom.  It’s not that Muslims have too many poor as much as they have too little middle class.  Trade & commerce in the forms of market reforms & entrepreneurship, not reformation, will lead to change.  No other religion is outside of the global economy (excluding oil) & not a part of global supply chains.

A couple of countries are adopting some western values which could serve as examples for other countries, Dubai & Turkey.  Dubai, which is a cross between Las Vegas, Rodeo Dr., & Disneyland,  has grown by opening to the world, accepting foreign direct investment,  & creating a business-friendly environment.  Part of the reason for Dubai’s success was they had the least oil of all Arab Emirates, so they had to figure out other ways to make money.   They created the right regulatory environment & provided a proof-of-concept for capitalism for Muslims.  Their failures today are failures of management, not faith or culture.  Dubai was the most desired country to visit up until 2009-there they can pray @ 5-star mosques.

Turkey grows through old-school secularism, although religion is returning.  Turkey is integrated into the European Union economically if not politically, & hence into the global economy.  The country is like Greece many years ago-they got an IMF package & made some big changes then too.  The Anatoli tigers outside of Istambul are religious capitalists-1 small town in Turkey makes 7% of the world’s denim blue jeans.  Pious businessmen line up their Mercedes outside of the mosques to pray.  Religion is creating value, not jihad.  Market forces have forced change in religion & business from the bottom-up.

The middle class is growing in Pakistan as well.  It owns industry, the media, & politics.  The military has taken action against leaders who focused too much on religion.  The government now must listen to the middle class.

Education is moving from seminaries to other middle class locations.  Cultural consumption is changing & catering to the middle class.  Self-help evangelists now preach in halls in London, while they were too threatening in Egypt.  Problems will disappear with market forces & a middle class anchor.  Tony Blair said Muslims will learn to share our values as they become part of the global economy.


  • Economic reform must preclude democratization.
  • Extracting minerals & oil does not help the middle class.
  • Although a few terrorists came from the middle class in the U.S., the key is to get the middle class as a whole to be less interested in terrorism.
  • Islamic finance is growing, but not everyplace @ once.
  • Indonesia is leaving OPEC because their oil exports are down, but as they are opening up, their economy is continuing to grow.
  • Although more Turkeys will create a bandwagon effect, there will be reversals.
  • Muslims are large & diverse-we tend to help the poorest:  maybe we should help the successful become more successful & set better examples.
  • Saudi Arabia is not a trendsetter:  Egypt, Morocco, Jordan are better examples.
  • A middle class has developed in 15 years, & Turkey’s & India’s middle classes started in the 1980’s.
  • While there is political resistance to a growing middle class in some countries, international pressure helps.  We don’t understand Islam, but we do understand capitalism & business.
  • There are distribution of wealth & environmental issues with a rising middle class.
  • Ideology is not unchangeable.  India used to be an opponent-now they are a partner.

US-Poland Bio Business Forum

Wednesday 12 May, 2010

The Polish American Chamber of Commerce in partnership with the Lifescience Cluster in Krakow & Depaul University put on the US-Poland Bio Business Forum, which provided a good update on what’s going on in biotechnology in Poland.

  • Zbigniew Kubacki, Minister Counselor Head of Trade & Investment section @ the Embassy of Poland in Washington, D.C. gave a summary of Poland’s general trade & investment opportunities:  Kubacki_Poland Presentation 30042010
  • Pawel Blachno, Pres./CEO of the Jagiellonian Centre of Innovation made a presentation on how their center is growing in leaps & bounds JCIen_FORUM
  • Kazimierz Murzyn, Managing Director of LifeScience Cluster, Krakow presented the strengths of his organization Klaster LifeScience Krakow – 5 maja 2010

Tomasz Mroczkowski, Prof. of International Business @ the Kogod School of Business @ American University in Washington, D.C. talked about options for collaboration between US & Polish biotech companies.  He didn’t make a presentation, so here’s what he said:

2000 marked the transition to an innovation/R&D/knowledge-based economy.  Emerging markets are growing twice as fast as G8 countries.  In terms of growth, Russia, Turkey, Poland, & others will rise to #2 behind China by 2020.  Pharma will double by 2020.  Astra Zeneca has outsourced all of its production to Asia.  Glaxo Smith Klein has invested heavily in Posnan, Poland.  Outsourcing of discovery & clinical trials is a form of R&D outsourcing that cuts costs, speeds development, & allows companies to enter new markets.  McKinsey consultants estimate that 10-15% is being outsourced now, but that will grow to $20B or 50% in the future.  Companies gain access to patients in clinical trials in Poland.  Poland has experience in biologics manufacturing & success in biosimilars.  Poland boasts 20 startups, but require changes in financing.  There are emerging bioclusters in Krakow, Wroclaw, Lodz, Gdansk, & Warsaw.  There are unexploited R&D collaboration opportunities in basic research with the US National Institute for Health.

Rick Walawender of Miller Canfield noted that Polish companies still have difficulties getting access to financing, but that the American approach, (National Venture Capital Assn documents), are very 1-sided & based on common law.  Poland uses a civil law & court system, so it’s somewhat incompatible.


Success stories from Poland are:  A UK company conducted trials for vascular diseases in Krakow; & a professor from Poznan, who had not secured patent rights, licensed his medical instruments to Baxter; 2 Polish biotech companies have gone public, including 1 tissue engineering company.

There are many angel investor organizations in Poland, but few specialize in biotech because many invest more in information technologies to earn quicker ROI’s.  Some investment restrictions can be circumvented by bringing in private investors as long as the firm is organized in Poland.

I requested presentations from Dr. Tadeusz Pietrucha of BioTech Consulting & Prof. Jozef Dulak of Jagiellonian University, but haven’t received them yet.