Archive for October, 2010

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Global Cities Index updated-we’re #6!

Friday 29 October, 2010

The Chicago Council on Global Affairs, AT Kearney Consultants, & Foreign Policy Magazine updated their Global Cities Index, which was introduced 2 years ago in Chicago.  As you can see Foreign Policy mag’s Global Cities Index event-we’re #8! Chicago moved up 2 spots from #8 to #6.  A.T. Kearney published The Urban Elite, which provides more details on how the index was created & updated.

Marshall Bouton kicked off by noting that cities are becoming increasingly important because 60 years ago, the world’s population was 30% urban.  By 2050, 70% of the population will live in cities.

Paul Laudicina of A.T. Kearney put cities in perspective.  Despite the Y2K technology boom’s contention that place doesn’t matter, it does.  There is a relationship between size & movement, i.e. the bigger something is, the slower it moves.  But innovation centers differ:  if they get 50X bigger, innovation increases 130X.  Kearney increased the factors for censorship/freedom of the press.  The top 10 are little changed.  5 of the top 10 hail from the Asia Pacific region.  There will be 31 megacities, (with populations of 10M+) by 2020.  Tokyo rose because of culture & policy organizations.  Paris fell because of a lack of information exchange, broadband subscriptions, & international coverage.  Sydney gained because of culture & broadband.  Chicago raised its ranking because of its international conferences, arts, & Kraft’s spinoff.  Chicago’s strengths are in business, human capital, & culture.

Rita Athas of World Business Chicago, the city’s economic development group, finds this index to be a great marketing tool.  But she learned @ the recent Small Business Forum that only 15% of American companies export, & 58% of them export only to 1 country, (most likely Canada).  However 97% of exporting companies are SME’s.  Foreign Direct Magazine ranked Chicago #1 destination for foreign direct investment (I could find most recently in 2007/8:  New York won in 2009/10).  She also mentioned a new city of Chicago office of international affairs, but I couldn’t find it anywhere.  Mayor Daley proposed foreign investors get involved with the O’Hare rail express when he was in Shanghai & Korea recently. This report provides the roadmap for Chicago’s global future.

Dick Longworth, Sr. Fellow @ CCGA explained about the addition of new criteria in the index for the free exchange of information.  He supported the addition by noticing that of the 39 cities that fell in the rankings, 26 of them were judged to be not free by Freedom House, in other words, they fell because of censorship.  Knowledge economies require the free flow of information while globalization requires the free flow of everything.  By working in countries without these freedoms, they risk stifling risk-taking & entrepreneurship.

Q&A

  • Chicago’s vision needs to be further articulated.  Branding a city is a challenge.  Longworth has said Chicago has transitioned from being the city of broad shoulders to the city of big foreheads.
  • Venture capital funding is still a problem in Chicago. The city gets 27% of National Institute of Health grants, but only 4% of venture capital.
  • Like the rest of the world, Chicago needs to invest in its infrastructure.  The question is how to pay for it.  That Chicago is a hub of higher education & transportation keep it in a strong position.
  • Criteria for foreign language speaking capabilities & international travel would be good to add to the index, but it’s been difficult to get comparable data from all geographies.  Travel data is available for countries, but difficult to get for cities.
  • Chicago had a poor information exchange score for a number of reasons:
  1. few foreign bureaus are based in Chicago
  2. Chicago gets little play in foreign media
  3. the local media doesn’t provide much international coverage, for example, no mention of Mayor Daley’s recent trip to Shanghai & Korea.
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a tour around a 4G world

Wednesday 27 October, 2010

I attended the 4G World conference @ McCormick Place to check out sessions on regional operator deployment strategies in Europe, Middle East, Africa, Asia-Pacific, & the Americas, although the only country covered in the last 1 outside of the U.S. was Peru, so that’s all I’ll mention here.

Sean Bolger of  Imagine is a strategic investor in Ireland with 120K residential customers & 17K business customers.  Historically Ireland had the lowest broadband speeds @ the highest prices in Europe.  Their strategic opportunity was cost-effectively replacing fixed lines in rural areas.  In considering LTE vs. Wimax, their take is get whatever capacity you can get. 70K preregistered for their service since April & takeup has been 3X faster than anticipated.  Intel & Motorola invested €100M into Imagine.  They’ve achieved 35% rural penetration.

Annti Toskala of Nokia-Siemens said demand for data services is 20X that for voice services in Finland.  Spectrum availability @ a reasonable cost, equipment availability, & maturity are required for LTE success.  In 1 case study in Stockholm, they found that a 5X increase in sites led to a 2.5X increase in site density.  Keeping the 3 specifications mentioned stable reduces the frequency of change orders.

Keith Cornell of  Clearwire / Motorola noted that upstarts create wildcat networks which causes incumbent networks to either impose a smooth evolution or disrupt the whole system.

Panel 1 Q&A

  • Investors are still waiting for a return on their investment in 3G
  • In comparing/contrasting 3g vs. 4g, it’s simply understood that the end user gets _ megabits
  • Incumbent operators do new network operators a favor when their networks don’t work.  It hurts their brands & helps those of the competition.

Mike Wright of Telstra covers 99% of the population of Australia in a country of 2.1M km2, of which 50% is rural.  50% get 42 MB; 90% get 21MB.  Different devices have impacted upon network efficiency & cost.   They are planning for LTE with 3 trials, which will complicate burst rates & antennae forms. They will install high frequency bands 1st.  Decisions are driven by demand optimization & the investment required.

Dr. Dawei Zhang of China Mobile has 564M subscribers using 505K basestations in China & will be adding 200K basestations by the end of the year.  They are partnering with Vodaphone & Verizon in synchronized development.  He predicts TD-LTE is the next global mobile technology because it requires a single chip, uses a unified terminal, & enables global roaming.  Their end-to-end product was released in mid-2010.  They are highlighting the network @ the World Expo in Shanghai & they’re doing large scale trials in 4 big cities next year.

Sadayuki Abeta of Docomo sees a smooth path from 3g to 4g in Japan.  They are launching LTE as 1 of the leading operators in the world.  Their deployment overlays 36 areas with legacy 3g functionality along the same evolutionary path with the same spectrum.

Madan Jagernauth of Chinese firm  Huawei Technologies indicated India is different from other countries in that as applications are evolving rapidly in hot spot coverage, they have lower costs/bit.

Panel 2 Q&A

  • 4g networks should be about the user experience, which depends on density.  Japan’s imode & imovies enhance the user experience with new services.    India can do HD video.  Capable devices can change user behavior.
  • New content, value-added services, & applications will all add new revenue streams.
  • Pricing is an issue when calculating the revenue/bit vs. cost/bit vs. all you can eat plans.  Basestation costs are not related to volume.
  • Innovations beyond voice depend on each customer.  No 1 depends exclusively on Skype for voice because carrier grade voice is better.  More embedded applications are desired too.

Augusto de la Jara of  Movistar Peru , which is a brand of Telefonica , said despite a high wireless penetration of 90%, Peru has only a 2% penetration rate for 3g because of cost. Growth of broadband depends on growth in the number of terminals & devices.  Although wifi is not nationwide yet, video chat is growing there.  Operators must adapt their networks in emerging markets to keep costs/bit low.

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invest in eastern Poland?

Friday 22 October, 2010

I had a Business Magnet Luncheon/Conference with the Poles @ on the 44th floor of the John Hancock building where they were encouraging investment in eastern Poland, dubbed “the biggest construction site in Europe.”  They were promoting Business Magnet:  Local Investor Services Centres (Lokalne Centra Obsługi Inwestrów) which is essentially a free business matchmaking “vortal” based in Kielce.  The purpose of the vortal is to attract foreign investment, while the means is by creating this online resource.  The trade departments of each governor’s office is involved & they claim to provide data with transparency & accountability.  It already includes 28 member countries with an additional 20 to be added in the future.  I registered & created my profile but was not able to post an offer for my consulting services yet.  Now there appear to be a handful of parcels of land up on offer.  A number of the sections on the website are still under construction, so it is not ready for prime-time just yet.  Check back on a regular basis to see when it’s fully ready to go.

This initiative received the largest subsidy in the European Union for infrastructure improvement & investor support as part of the Project of Development of Eastern Europe/Structural Funds, 3M euros/$4M to fund the 700-800 employees, (including offices in Chicago, Toronto, China, & Brussels) required for this project for the next few years, so it will be around for awhile.  Eastern Poland forms the eastern border of the EU, so it is a strategically important geographic area.

I spent 5 months in eastern Poland after the wall fell counseling all-sized businesses on how to improve their sales & marketing, so I’m generally familiar with it’s risks & opportunities.  I’ve traveled to many of the principal cities in each of the provinces that are being promoted, Lublin, Rzeszow, Bialystok, Kielce, & Olstyn at least once for a minimum of a few days in each.  At the time, Poland was conceptually broken down into Poland A, in the west which was more closely allied with Germany, & Poland B, in the east which was more closely allied with Russia.  Given this dichotomy, it’s not surprising that Poland A was considered to be better educated, technologically advanced, & more primed for economic opportunity than Poland B.  That’s why Poland B is now seeking investment capital to catch up with Poland A.  Please contact me if you have specific questions.  I wrote a few articles on my experiences which also might be of interest:

Polish icon Lech Walesa will be in town next week.  For information about how you can meet him, click here.

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the current state of global real estate

Tuesday 19 October, 2010

I attended this event recently JUMP START YOUR GLOBAL REAL ESTATE BUSINESS which was organized by the Chicago chapter of FIABCI, the international real estate organization.  FIABCI’s goal is to make all real estate transactions transparent world-wide.  The presentation was made by Michael Bauknect of the local Coldwell Banker office.  ProxioPro is another network which allows real estate brokers connect globally.  ProxioPro also offer computer-generated translations which allow listings to be able to be displayed locally in the “native” (as good as computer-generated can be) language.

Much of this presentation focused on the internal mechanics of working with the coldwellbankeronline.com website (which feeds realtor.com, which is for the US only) to internationalize listings.  WorldProperties.com, the official site of the International Consortium of Real Estate Associations,  is in beta as the global equivalent of realtor.com .   Apparently MLS Area 1000 is the place for international listings on realtor.com, but of the 26 listings posted there, only 14 had the correct local address.  The rest had local (Downers Grove) addresses for foreign (Costa Rica) listings.  2 years ago, it took 2 weeks to get international listings up-now it takes a matter or hours or days to get them up.  Geocoding & the ability to enter longitude & latitude are becoming ubiquitous.  Apparently this must be an antiquated system because realtors can’t input data the 1st 9 minutes of certain hours or when the system is “feeding.”

Q&A

  • US properties are listed in $US & the system is being adapted so that foreign properties will be listed in $US too-the only problem is foreign exchange rates change every minute of every day, so these prices change right along with them
  • when commissions aren’t available for foreign sales, alternative compensation is available & %’s are negotiable.  Bauknecht was able to increase a 2% commission to 4%, although you must still track it
  • Bauknecht got 1000 e-mail addresses & telephone numbers as leads from people who clicked on Costa Rican real estate
  • Europe is a bigger market than Asia for these types of properties
  • When a local client inherited a property in Rome, Italy, by going through FIABCI, Bauknecht found 6 agents in Rome in 2 hours
  • Consumers can find properties simply through search engines, but the advantage of working through FIABCI is that you’re working with local professionals in each market
  • Some foreign developers are providing local marketing dollars
  • local realtors can market their properties globally via e-mail through FIABCI & Proxio to reach 1.4M brokers world-wide
  • This is still in its infancy, so there are still a number of details which require attention:
  1. you can’t negotiate the deal/contract in-country
  2. you must find broker reciprocity terms on a state-by-state basis
  3. you must set up with the same professionals locally as here, real estate attorneys, mortgage lenders, title professionals, etc.
  4. you need to find trusted advocates
  5. Agent Shield helps protect your sales leads

The presenter said he would forward his presentation to me, but hasn’t done that yet.

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Kraft & 5-10 Group honored @ British dinner

Friday 15 October, 2010

Kraft Foods & FiveTen Group were honored @ the British American Business Council awards dinner. Since the BABC was founded in 1990, that makes this year the 20th anniversary of the council.

Five-Ten, which won the small company award,  is a recruiting company established in 1976 & was established in the US in 2000 in Chicago. CEO Paul Taylor said they were the 15th-fastest growing private equity company in 2009 because of their new recruitment model.

Kraft, which won the large company award, has had a long & prosperous history in the UK since 1925.  Nancy Daigler, SVP, Corporate Affairs said that with the acquisition of Cadbury, Warrenville, England is now the center of their chocolate R&D science & technology center.  Union officials were nervous, but they seem to be appeased.  Kraft admired Cadbury’s brands, heritage, & employees.  Kraft now operates in 170 countries & 50%+ of their revenues come from outside of the US.  They’re not just a cheese company anymore-they’re now #1 in chocolate too (they owned a legacy brand Toblerone before they bought Cadbury) .  Kraft is honoring Cadbury’s commitment to the 2012 Olympics in 2012 & Cadbury’s commitments to help rainforests in Ghana.  For Kraft, their borders are blurring as they build bridges & brands cross borders.

Baker & McKenzie (next year will be B&M’s 50th anniversary year of having an office in London), Boeing, Wells Fargo, Intercontinental Hotel, Strategic Hotel Capital, & American Airlines were sponsors.

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UPS’ small business approach to going global

Tuesday 12 October, 2010

I attended this seminar organized by UPS:  Growth Through Global Trade The presentation was made by Jim Beach of the Entrepreneur School & Chris Hanks of the University of Georgia.  Here is the presentation they gave Growth Through Global Trade Presentation .  You can see the presentation for yourself.  Here’s other information they said that was not contained in their slides:

  • 97% of all US exports are made by small businesses, but only 30% of the $ value of exports are made by small businesses
  • exporting is simply a way to add another revenue stream
  • an appropriate question for all business people to ask is “What have you done to increase your price this month?” because price is irrelevant:  value is what matters
  • the corridor principle simply says, “walk the hallways to open doors of opportunity,” but you must constantly focus on your value proposition
  • there are potential problems with entering each of the fastest-growing economies;
  1. Brazil is very protective
  2. Russia is very corrupt
  3. Infrastructure in India is insufficient
  4. Intellectual property is not well-protected in China
  • For consumer products, an ad on Facebook costs 15% of that on Google & is more targeted
  • these guys have gotten 70-80% unsolicited e-mail response rates contacting prospects on LinkedIn
  • AliBaba contains lots of 3rd party middlemen, so be careful
  • credit risk insurance can replace letters of credit & allow open accounts so that you can then borrow against your accounts receivable, all of which improves your balance sheet
  • search keywords must be in the local language of the search engine you’re targeting

This was a good event, & I endorse a lot of the content they presented, but  I do have a few qualms about their approach:

  • while I agree a lot more companies can & should export, I don’t agree that everyone can or should-it’s not the best use of resources for everyone
  • they seem to promote the notion of “just find a product & export it.”  A better approach would be to target small businesses with export potential & bring them through the process
  • as Americans, we have a technological bent.  The rest of the world generally does not embrace technology the way we do.  Therefore, while using online social media can be a help, most of the rest of the world prefers to deal with human beings as opposed to bits & bytes
  • while most small businesses need help with their presence on the internet, I question the appropriateness of the primer on search engine marketing.  To sell globally, your foreign partners should be doing the search engine marketing in their languages
  • the focus of this event was just as much on importing as on exporting, & while I understand it doesn’t make any difference to the main sponsor UPS, the US government, as represented by the US Foreign Commercial Service @ this event, only promotes export.  This event was supposed to be in support of the National Export Initiative, but promoting imports hurts our trade deficit & export-led job growth rather than improving them.
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can going Beyond Sport change lives?

Thursday 7 October, 2010

I attended this conference Beyond Sport Summit, which brought together groups from all over the world to promote sports as a way to create positive social change.  Here are the award winners which were announced @ the event.  Jim Clancy of CNN hosted the event & featured some reports CNN had done on the winners:

The agenda contained a pre-summit which included many symposia, break out discussion groups, & workshops in 3 different strands:

  1. ideas & expertise exchange
  2. using sport to advance girls’ education
  3. sport’s role in urban communities

These appeared to contain a lot of the nuts & bolts “how to…” best practices that small non-profit sporting organizations need.  The day & 1/2 event I attended was very much a feel good event, designed to inspire & invigorate the global attendees to go back home & do great things.  I took 10+ pages of notes over the 1 1/2 days, so it’s not possible to summarize everything, but I’ll mention the top 20 highlights:

  • NHL President Gary Bettman brought the Stanley Cup to the opening luncheon.
  • A lasting legacy of Chicago’s Olympic bid is World Sport Chicago
  • London hosted the 1st summit last year-Chicago is again the 2nd City
  • Beyond Sport received 400 entries from 120 countries for its awards, which included cash grants of up to $50,000
  • Beyond Sport summits will break up next year to an American event in Denver & international event in South Africa
  • World Cup 2010 earned $1.6B, but ended up costing South Africa
  • Unicef, which is working together with the London 2012 Olympic committee, taught 26,000 children to swim in Bangladesh, which saves 1000’s of lives, since floods are a major menace there
  • 22K children die every day, which could be stopped
  • Tim Leiweke of AEG worldwide noted that only sports & music are able to break through cultural barriers unimpeded
  • Arthur Ashe was hailed as a hero, because even when he was afflicted from HIV/Aids, he wanted to help others as he suffered from it
  • Muhammad Ali’s wife Lonnie quoted her husband “Your service to others is the rent you pay on this Earth.”
  • Chicago Mayor Richard Daley on the Chicago Olympic bid:  “It was an adventure.  By extension, the Olympics will now have to go to the Middle East, Africa, & India.  The Olympics are all about money, not the Olympians & Paraolympians.”
  • 250K died in the earthquake in Haiti & 1.5M are still homeless
  • Daniel Varner of Think Detroit (which has depopulated from 2M to 800K) PAL noted that 80% of urban young men grow up without fathers, so coaches act as role models (“sports don’t build character-coaches do”)
  • Since Title IX was implemented in the US in 1972 when 1M women participated in sports, 12M now take part, but women comprise 51% of university students, but only 43% of athletes, so equality has not yet been reached
  • 15% of girls are now going to school in Namibia
  • In Colombia, of the 4000 surveyed girls who participate in sports, 98% go to school
  • changing the American educational system may be the biggest civil rights issue of this generation in the US
  • to promote these kinds of things, business partnerships are essential.  Ethan Zohn of Grassroots Soccer noted that when Sony had 50K World Cup tickets, they had to use 45 partners to distribute them
  • Surprisingly, the country that hosted the most jews after world war II was Albania because their Muslim creed led them to invite jews into their homes

my $.02-I am a huge advocate for sports because it affects many other parts of peoples lives.  I played basketball & football in junior high school, football in high school, lacrosse in college, & done sprint triathlons for the last 18 years.  Athletics have made almost every day better for me.  I can’t get going mentally until after I’ve had my endorphin rush physically.  Individually it teaches many great values:  hard work, discipline, perseverance, setting & achieving goals.  Being a teammate instills teamwork, understanding of roles, & leadership.  Competition teaches mutual respect, fairness, & resourcefulness.   The conference emphasized all of these points.  It blows my mind that a lot of the rest of the world suffers from malnutrition while 1 of America’s biggest problems is obesity.  Sports can & should be a vehicle to support change for good.

I’m also writing an article on how business, sport, & philanthropy should work together.  Look for it soon.