The Global Human Capital Journal - China, India & Globalization

India Trade Minister Draws Chicago-India Transformation Parallels at Executives' Club

nospam@example.com (Christopher S. Rollyson) — Fri, 22 Feb 2008 22:21:44 -0600

New Global Economic Architecture Presages Economic Realignment—Thinking Beyond the Obvious to Tap Emerging Opportunities

Illinois leaders were addressed by His Excellency Shri Kamal Nath, Minister of Commerce and Industry, Republic of India. True to form, His Excellency struck chords of transformation, partnership, common interests and harmony at the lunch held in his honor at the University Club on 19 February 2008. Attending were Chicago Mayor Richard M. Daley, Mr. Rajinder Bedi, Managing Director of the Illinois Office of Trade and Investment, The Honorable Susan Schwab, U.S. Trade Representative, Craig S. Donohue, Chief Executive Officer, CME Group and John Estey, President & Chief Executive Officer, SC Electric Company.

Reading between the lines, the U.S. and India stand at a significant turning point: India's impressive economic growth is a significant element of the ongoing redistribution of global economic power—which holds excellent opportunities for U.S. businesses and workers that are looking for it.

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Globalization's 21st Century Makeover

nospam@example.com (Christopher S. Rollyson) — Mon, 31 Dec 2007 23:47:00 -0600

"Emerging" Market Companies Rapidly Becoming Global Players—New Owners for Jaguar and Land Rover

Emerging countries have long been regarded by globalizers as targets for exploitation, but 21st century market forces are turning legacy thinking on its head, which produces disruption and its sibling, opportunity.

The conventional thinking goes that emerging countries like Brazil, Russia, India and China (BRIC) have talented knowledge/human capital resources that can be tapped in outsourcing and offshoring arrangements. Moreover, these workers' employment in high value knowledge jobs creates a new consumer class among large populations. Emerging countries' rapidly growing consumer markets stand in sharp contrast to developed countries', which are flat or shrinking. China and India have been relaxing restrictions on foreign ownership, which has increased FDI, especially in China, enabling foreign companies to invest in and buy BRIC companies.

However, the big story in 2007 was the opposite:

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Will China’s Rise Lead to an Environmental Catastrophe?

nospam@example.com (Christopher S. Rollyson) — Sun, 28 Oct 2007 12:07:22 -0500

Examining the Environmental Fallout of the Chinese Economic Supernova—Sibling Rivalry Rears Its Ugly Head

In 2007, nary an RSS feed or the page of a newspaper (for those still inclined ,^) does not mention China's exploding impact on the global stage: China is truly an economic supernova, and it is breaking almost any record for development that is laid before it. However, China's breakneck development is accompanied by grave environmental fallout: for example, as the host of the Beijing 2008 Olympic Games, the city is designing extreme measures to ensure that the air is clean enough for the athletes to breathe. The chief culprit is coal, a key source for China's insatiable need for electric power, and a resource that the country has in abundance. For key facts on China, I suggest The Economist's Country Briefing or Global Human Capital's China category (in depth) or China tag (mentions).

The Economist and WBEZ 91.5 FM presented an Oxford-style debate on the effect that China’s rise would have on the environment at Millennium Park's Harris Theater on 24 October 2007. National Public Radio’s Worldview host, Jerome McDonnell, moderated the session in which two debate teams argued their cases in front of the audience, which then voted on the debate winner. As a baseline, McDonnell polled the several hundred member audience prior to the debate, and we were evenly split and "too close to call."

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Caterpillar CEO Pitches Free Trade Gauntlet to Business Leaders at Executives' Club

nospam@example.com (Christopher S. Rollyson) — Thu, 25 Oct 2007 22:51:11 -0500

U.S. at Turning Point with Global Economy in the Balance—A Lack of Courage?

James W. Owens, Chairman & Chief Executive Officer of Caterpillar Inc., beseeched U.S. business and government leaders to find the courage to save free trade. The speaker at the Executives' Club of Chicago's Global Leaders Series, Owens addressed a packed house at the Hilton Chicago on 16 October 2007. His speech was immediately followed by the Club's Technology Conference at which CIOs advised their peers on the emerging role of the CIO in the "networked economy 2.0."

A Ph.D. economist with extensive global management experience, Owens made a very convincing argument that the U.S. and the global economy are at a turning point. It is time for the U.S. to lead by example to assure the continuance of the free trade juggernaut that has produced so much wealth in the world. If it fails, the world stands before the prospect of sharply curtailed trade.

Following a summary of his remarks, I will offer conclusions and analysis of related market developments. Although he limited his remarks to business leadership, I will also argue that the U.S.'s lack of resolve and leadership is multidimensional, notably with respect to the environment. Moreover, economic and social forces are going to confront the definition of the sovereignty of the nation state due to the collective destiny of all nations due to trade and the environment. In other words, Owens' remarks may be far more applicable than he suggested.

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China Analysis and Outlook 2007

nospam@example.com (Christopher S. Rollyson) — Wed, 17 Jan 2007 15:05:36 -0600

Political Insight into the Global Knowledge Market

The Strategic Management Association, the Harvard Business School and the CDMA sponsored the 2007 China Outlook, which was given by Lyric Hughes-Hale, Founder China Online in Chicago 9 January 2007. Her presentation was preceded by David Hale's 2007 Economic Forecast. As a long-time China watcher and analyst, Lyric has rare and unusual insights to which I'll try to do justice before giving my observations. The Global Human Capital Journal also covered the 2006 China Outlook.

Lyric's China Outlook reflected global political transformation and how yesterday's Cold War politics are becoming more outmoded with each passing quarter. She didn't say it directly, but her comment about increasingly irrelevant organizations like the World Bank could easily apply to governments as well. Democracies and legal agreements increasingly lag technology development, and the gulf between them is accelerating. Are they becoming less relevant or effective? China is not burdened by dissent, which currently seems to add to its competitive advantage because it can move quickly and decisively.

Refreshingly, Lyric sees that the biggest threat to the U.S. is its leaders' own limited thinking, which is causing them to lose tremendous opportunities to engage the world. Here are her remarks, from my notes:

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Chinese Prescription for Healthcare Providers

nospam@example.com (Christopher S. Rollyson) — Thu, 04 Jan 2007 22:05:00 -0600

In an example which I'll prophecy will become increasingly commonplace, China is showing itself to be very innovative in health care by implementing market-based offerings. The TEDA International Cardiovascular Hospital, just outside Beijing, offers six levels of service, ranging from $6.70 to $3,200 per night, as reported in "Hospital Caters to China's Wealthy and Poor" in The Wall Street Journal or the hospital website. The lowest class of service has patients sharing a small room with other patients while "first class" includes a suite with a private gym, a garden, massage chair and other amenities.

China has an aging population of 1.3 billion to whom the government is struggling to provide health care. It regulates the prices of medicine and subsidizes basic services at public hospitals, but most people do not have western-type insurance and end up paying a major portion of their health care. The stakes are high today to solve the health care problem, and they are getting higher as the population ages.

This experiment is enlightening for what may be possible in western countries if they can improve pricing transparency and digitize work processes.

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The Silver Lining in India's "Infrastructure" Gap

nospam@example.com (Christopher S. Rollyson) — Sat, 12 Aug 2006 14:04:25 -0500

India is often described as a mixed proposition with respect to its future promise. Although few would question its brilliance as a "burgeoning technology economy," most people temper this with somber remarks about its lack of "infrastructure." However, I will argue that India's limitations with physical infrastructure will actually help India get further ahead than if it didn't have such problems.

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China Analysis and Outlook 2006

nospam@example.com (Christopher S. Rollyson) — Sun, 19 Mar 2006 14:49:00 -0600

Emerging Opportunity to Rebalance Economic and Political Influence

Part II of the 2006 Economic Forecast featuring David Hale (presented Part I) and Lyric Hughes-Hale. Here, I present my notes of Lyric's talk, followed by my observations.

Background: China's development and situation are far more complex than U.S. news sources report. It has seen significant economic liberalization during the past 25 years, and it shows every sign of continuing on that trajectory. However, the country is politically conservative. There is no freedom of the press. That said, the authoritarian government may produce reform much more quickly than if China had been democratic because the democratic process often slows reform. China is far more open and engaged on the world stage than it has been in many years.
Social issues: more than half of China's population work in the agrarian economy, and China spends 45% of GDP on investment. Building and infrastructure investment are tremendous in scale and scope. Many people are being forced off their land to make way for high tech centers, roads and other projects, and protests are growing. There is a veritable middle class rebellion underway, as those who did well under the Communist regime still want the status quo. Younger people are moving to the cities, and they are breaking with traditions, which is producing social turmoil. It's difficult to predict how this will be resolved. Mao was a peasant, and the possibility of revolution exists, although it is by no means probable.

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Surprises in Emerging Chinese Consumer Market

nospam@example.com (Christopher S. Rollyson) — Thu, 09 Mar 2006 00:53:00 -0600

"Chinese Consumers Overwhelm Retailers with Team Tactics," The Wall Street Journal, February 28, 2006 is a perfect example of how mature market assumptions can lead to surprises in emerging markets. Chinese consumers increasingly meet on the Internet chat rooms to plan and coordinate a group buying strategy for a type of good or even brand. Then they go to the retailer as a group to extract significant group discounts. This practice is known as tuangou, or team purchase, and can play havoc with companies' pricing strategies and margins, to say the least.

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Insight about Human Resources in China

nospam@example.com (Christopher S. Rollyson) — Sat, 18 Feb 2006 00:22:00 -0600

The GSB's International Round Table hosted two Asia and cross-cultural experts 16 February 2006 at Gleacher Center, "Human Resource Challenges for Multinational Corporations in China." As is my custom, I will summarize the salient facts of the session first, which will be followed by my analysis.

This discussion was led by Deborah Lauer, former VP Global Talent Supply at Motorola who spent six years in China, and Jeffrey Reed, a 20 year veteran of Asia who headed up Unilever-Best Foods joint ventures in Pakistan and China. The talk focused on MNCs' (multinational corporations) human resource challenges in China, both from expatriate and local talent perspectives. Many of the ideas presented corresponded to the ITA Round Table led by Dr. Wolfgang Fürniß (see China: The New Economy).

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A Focus on Offshore Countries and Regions

nospam@example.com (Christopher S. Rollyson) — Fri, 06 Jan 2006 23:55:00 -0600

Depending on your business strategy, it may make sense to explore offshoring to several regions of the world to mitigate the risk that your partner might be affected by natural disasters or political upheaval. In fact, many offshore experts recommend a portfolio strategy for risk mitigation or operational effectiveness (follow the sun operations can reduce time to market) while meeting cost objectives.

One reliable source for country information that I can recommend is Baker & McKenzie's Global Sourcing: Destination webinar series in which they partner with neoIT, the global outsourcing consultancy. neoIT gives a business climate summary of the country or region, which is followed by Baker attorneys from the region who present nuts and bolts legal issues of offshoring. These webinars are led by Mike Mensik in Chicago, and they are roughly 60 minutes long. I have been impressed by neoIT's presentations and with the attorneys' consistent presentations of key issues in a time-compressed format. Obviously, any and all are available for follow-up questions.

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China: The New Economy

nospam@example.com (Christopher S. Rollyson) — Mon, 12 Dec 2005 23:48:00 -0600

By any measure, China is a juggernaut in the early stages of flowering on the global stage: As a consumer market, it has the potential to be the largest in the world as the country is the most populous. As a hub of human capital in a knowledge economy, it will become an epicenter of service-based knowledge workers. As an ambassador of Southeast Asia, it will influence what will arguably be the deepest talent pool in the world. This will cause a reconfiguration of the world's knowledge network.

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