Underwhelming: McKinsey’s 2006 Predictions

The nerds at McKinsey are at it again with their sweeping generalities and “big-picture” historical perspectives.
The article – Ten trends to watch in 2006 – is rather underwhelming:
“Those who say that business success is all about execution are wrong. [what?!!] The right product markets, technology, and geography are critical components of long-term economic performance. Bad industries usually trump good management, however: in sectors such as banking, telecommunications, and technology, almost two-thirds of the organic growth of listed Western companies can be attributed to being in the right markets and geographies. Companies that ride the currents succeed; those that swim against them usually struggle. Identifying these currents and developing strategies to navigate them are vital to corporate success.
“What are the currents that will make the world of 2015 a very different place to do business from the world of today? Predicting short-term changes or shocks is often a fool’s errand. But forecasting long-term directional change is possible by identifying trends through an analysis of deep history rather than of the shallow past. Even the Internet took more than 30 years to become an overnight phenomenon.”
Here are the trends they’ve identified. Wow, I’m speechless.
Macroeconomic trends
1. Centers of economic activity will shift profoundly, not just globally, but also regionally.
2. Public-sector activities will balloon, making productivity gains essential.
3. The consumer landscape will change and expand significantly.
Social and environmental trends
4. Technological connectivity will transform the way people live and interact.
5. The battlefield for talent will shift.
6. The role and behavior of big business will come under increasingly sharp scrutiny.
7. Demand for natural resources will grow, as will the strain on the environment.
Business and industry trends
8. New global industry structures are emerging.
9. Management will go from art to science.
10. Ubiquitous access to information is changing the economics of knowledge.
Advice to CEOs – if this is the advice you’re paying McKinsey for, save your money! Just read your Economist and the Global Province every week and you’ll come out ahead!
Poor show, Mr. Davis. If you’re listening, Fred Gluck – it’s time to get back in and take names and kick some …

China’s 5 Surprises + 1

From S+B:
Five facets of business in China may surprise most outsiders:
1. Local entrepreneurs are interested in producing global brands, not just low-cost commodities
2. China has become a hotbed for rapid innovation
3. Executives from around the world are moving to China for the long haul
4. Good management and transparency are starting to count more than patronage, at least in some sectors
5. China is becoming a catalyst for growth in emerging markets throughout the developing world.
Let’s add another surprise:
6: China is becoming a market for high-end luxury items once thought to be “exclusive” for the western elite and Middle-East oil-barons.
Also:
“Because they are in such a hurry to make a place for themselves, and because it is still early in the life cycle of their ambition, Chinese entrepreneurs tend to give the impression that they don’t care much about quality. However, that is not universally true. Many of them recognize the trade-offs among cost, quality, and time that exist for any startup, and they have explicitly chosen designs and processes that sacrifice quality for the sake of speed and cost savings.
“But this doesn’t mean that China will always be a nation of commodity enterprises; indeed, many Chinese businesspeople know the price of a Motorola phone in Chicago or a pair of Nike sneakers in Manhattan. They ask themselves, “If I can make these things, why can’t I sell them for higher prices?” Some of them are already laying the groundwork for the evolution of their industries from low-cost producers of shoes, handsets, and components to branded enterprises.”
Read the entire article here.
This will come back to bite almost all of our western “outsourcers.” See “Innovation Blowback” by JSB and JH3 >>

Who Speaks for the Earth?

Time for a rant…
From the Guardian:
“It is on climate change that Labour has chalked up its worst record since it came to power. Tony Blair may have been good on the rhetoric in the run-up to the G8 last year (though his wobbles on Kyoto did huge damage) but the domestic front has been an abysmal failure of broken promises and backtracking. “Betrayal” doesn’t quite convey the intensity of the environmental movement’s shock at how, despite all the evidence of the urgency of tackling climate change piled up by scientists over 2005, the government has succeeded in doing very little other than reigniting an old (and many can reasonably argue, irrelevant) debate about the nuclear option.
“But the anger and frustration is only intensified by the fact that, frankly, outside a few well-informed environmental activists, nobody is much bothered. The environment was virtually invisible in the 2005 election. Even more galling, environmentalists saw the hundreds of thousands of development campaigners pouring on to the streets of Edinburgh and the millions who watched Live8 and asked themselves: why can’t we match that?
“Looked at objectively it makes no sense. Climate change will dwarf the damage the common agricultural policy subsidies wreak on African farmers; it is already costing at least 150,000 lives a year as warmer temperatures encourage disease, and erratic rainfall will starve millions in coming years. Here is an issue that makes all the aid and debt deals of 2005 look like an afternoon parlour game. Yet such was the momentum of the Make Poverty History campaign that climate change slipped off the public radar and environmental groups felt they couldn’t compete.”
So who speaks for the Earth? Certainly not Exxon. Not Bush or Blair.
Well, the Earth speaks for herself. And we just are beginning to feel her anger:
– The prairie burns, children.
– The ice-caps are melting.
– The frogs are dying.
– Goodbye polar bears.
It doesn’t matter if you’re red or blue, get ready for three or four Katrinas a year.
We may be teaching sustainability to a few kids here and there, but our business leaders are too blind and our political leaders too corrupt.
Will the mainstream media ever cover this?
Grizzly-shooting, anyone?

The Economist Podcast on India

In the coming year India will enjoy greater international prestige than at any time since independence in 1947. With an economy that could grow at more than 7% for the fourth year in succession, that prestige is based in part on sheer clout. Over the next half-century India will emerge as one of the world’s biggest economies and great powers…
Listen to or download this podcast discussion on India’s emerging market with Simon Long, South Asia bureau chief, The Economist.

Wild Rumor: Ballmer Out, Clinton In @Microsoft

This one is so wierd, it could be true. Andy Abramson says that Bill Clinton will replace Ballmer, or perhaps get on the board. I believe it’ll be the latter.
Why? Because Bill Clinton can’t focus on just one thing. After all, he’s gotta fight AIDS, help with the Tsunami+Katrina recovery, build a sustainable energy strategy for the US, get Hilary ready to run for President, his Global Initiative, and his Small Business Initiative… and that’s just in the a.m.
See what I mean? No way he’s going to waste his time as president of Microsoft.
That said, he’ll do great on the board. He can go up against Al Gore who’s on the board at Apple. Frankly, I see Bechtel hiring him as an advisor before Microsoft. Now would that be ironic.
Besides, look for Google to hire him away from Microsoft! 🙂

Michael Porter: The Relationship between Innovation & Living Standards

During the 1990s, Americans found a way to do what seemed no longer possible — grow the economy, create jobs, and increase the standard of living, without driving up inflation. Much of the credit goes to the nation’s ability to develop and commercialize new technology. The result: one of the most robust periods of economic expansion and prosperity of the past century.
Today, the nation is experiencing an economic downturn. While fiscal and monetary policies pump dollars into the economy to boost the level of activity, innovation infuses the economy with growth-incubating new ideas, new products, services, and technologies. National policies and national investment choices have much to do with the growth and capacity of the American economy. For innovation, however, the real locus of innovation is at the regional level. The vitality of the U.S. economy then depends on creating innovation and competitiveness at the regional level.
In healthy regions, competitiveness and innovation are concentrated in clusters, or interrelated industries, in which the region specializes. The nation’s ability to produce high-value products and services that support high wage jobs depends on the creation and strengthening of these regional hubs of competitiveness and innovation.
Led by our buddy Michael Porter, the “Clusters of Innovation Initiative” examined five regions around the country: Atlanta, Pittsburgh, the Research Triangle, San Diego and Wichita.
One key point: “Growth is not the same as prosperity. Growth is only desirable if the standard of living of citizens rises. High growth per se often leads to a rising cost of living that erodes prosperity and degrades natural resources and physical infrastructure that support quality of life.”
My question: are there virtual innovation clusters out there as well? Clusters tied by purpose, but not geography? Is there a way to create and strengthen a virtual innovation cluster?
Read the report, and let’s talk >>

Vijay Govindarajan on Strategy & Getting a Global Mindset

Where American education excels is in critical thinking, imagination, creativity and unstructured problem solving. People from India, and also China and Japan, have the basic skills drilled into them, “and when they acquire the knowledge taught at American business schools, the combination is dynamite.”
That’s Vijay Govindarajan (VG) explaining how East meets West and increasingly how West will have to meet the East.
Govindarajan has taught more than 3,000 students in his 20-year career at Tuck, and he has specific advice for the area’s high school students: “Learn languages, they open up your mind to different possibilities. Take courses in public speaking to build your level of confidence. Really focus on education, especially science, math and technology, and travel,” he said.
Is travel education? VG seems to think it is.
Read this article and listen to this audio interview on strategy.
Note his Box 1-2-3 freamework. According to VG, strategy is a competition for the future, not the present.
Box 1: Manage the Present
Box 2: Selectively Forget the Past
Box 3: Create the Future
Most companies are stuck in the present- Box 1. They spend their time in Box 1 and think they’re doing strategy.
It’s about continuous improvement (linear performance) vs. breakout performance (non-linear). Listen to his example about Hasbro- the family entertainment company. Who has time to play Monopoly for a half a day?
Again, listen to this interview. What happens when children go older younger– a non-linear shift in Hasbro’s market. By focusing on the tweens- learn how Hasbro creates a whole new business with Video Now… Box-3 thinking.
Roots and chains… Fertilize your roots, but break your chains.
Nice language from VG. But how do you re-invent Monopoly?
What about Kodak? VG tells us why Nokia and HP are the biggest player in digital cameras.
How can companies succeed in strategic innovation? See Ten Rules for Strategic Innovators: From Idea to Execution >>

MBA Blowback? The Chinese B-School

B-School’s are booming in China, says BusinessWeek:
“For U.S. companies, the emergence of China’s new managerial class has positive and negative implications. For those seeking to penetrate China’s massive market of 1.3 billion people, the graduates of the nation’s new MBA programs will supply a steady stream of local talent with in-depth knowledge of China, something their Western managers can’t provide. But as Western management ideas take root in the nation’s corner offices, multinationals could find themselves confronting a newly powerful adversary: Chinese companies suddenly in possession of the management knowhow needed to go head to head with global giants. Those same ideas — about efficiency, productivity, profitability, and growth — hold vast potential to ignite China’s already blistering economy, raise living standards, and transform the nation from a low-cost manufacturing center to a make-or-break battleground for the global economy.”
Read the full article: China’s B-School Boom
Is this the MBA Blowback? Read JH3 and JSB’s paper on “Innovation Blowback” to see where I’m coming from.
By contrast, in a BW article earlier this year, here’s what they reported about US B-Schools:
“In 2005, just 19% of full-time programs in the U.S. reported an increase in application volume, down from 21% in 2004 and 84% in 2002, when applications reached an all-time high.”
The news for US B-schools just keeps getting worse. A study from the Graduate Management Admission Council shows applications to full-time U.S. MBA programs down for the third consecutive year.
A tale of two empires? One going up, one down? Or is the world just getting flatter?

Measuring Democracy: The Journalists-in-Jail Index

In 2005, we have 125 journalists sitting in jail (that we know of).
China, Cuba, Eritrea, and Ethiopia are the world’s leading jailers of journalists in 2005, together accounting for two-thirds of the 125 editors, writers, and photojournalists imprisoned around the world, according to a new analysis by the Committee to Protect Journalists.
The United States, which is holding journalists in detention centers in Iraq and Guantánamo Bay, Cuba, rose to sixth among countries jailing journalists, just behind Uzbekistan and tied with Burma, CPJ found.
Is this a good way to measure democracy?
See the numbers here >>

Japan’s Recovery Lies through China: Knowledge@Wharton

Interesting set of articles in the latest Knowledge@Wharton. I was struck by this one: “One Road to Japan’s Recovery Lies through China.”
Wharton management professor John Paul MacDuffie outlines a Japanese theory that describes two major approaches to product architecture: modular and integral. An example of the modular approach to producing a personal computer would have each component designed and manufactured separately in plants around the world. “The integral approach is when all the individual pieces are designed together with [a high degree] of communication and simultaneous engineering.” He says Japan appears to excel at the more integrated approach, while the United States is more modular.
Following this theory, Japan should concentrate on products that benefit most from an integral approach, including automobiles. “Another example is video games,” says MacDuffie. “Unlike other kinds of software, the development of the story, the visuals and the music all have to be done in an integral fashion to end up with a game where everything works and the experience is also satisfying.”
Another professor – Adrian Tschoegl – concludes that “pretty soon, in the next two generations, most of the good ideas will come out of China and India.”
Read the article here >>

Innocentive: Open Source Innovation?

The answer to your problem lies outside your company. Why? Because there are more smart people outside your company than in it.
That’s the premise behind InnoCentive, a web-based community matching top scientists to relevant R&D challenges facing leading companies from around the globe.
Here’s how it works:
– Companies contract with InnoCentive as “Seekers” to post R&D challenges to the Innocentive web site
– Each Challenge includes a detailed description and requirements, a deadline, and an award amount for the best solution.
– Award amounts are determined by the Seeker and range from $10,000 to $100,000. You can view the list of previous award recipients here.
– The name of the Seeker company posting the Challenge remains confidential and secure.
– Scientists worldwide are eligible to register on the web site as “Solvers.”
– Anyone may view summaries of Challenges at InnoCentive.com. But to view detailed descriptions and actually work on challenges, registration is required.
– To register as a Solver, scientists fill out a short online form, select a username and password, and log in.
– InnoCentive has registered scientists from over 170 countries around the world.
How about that for open source innovation? Vist the site >>

Ram Shriram: On the Rise of India and China

The “fear of failure” is being replaced by the “urge to succeed” – that’s what Ram Shriram says of the cultural change taking place in both India and China. The focus on math and science is finally paying off in these countries.
Read his Stanford presentation ==> “Perspectives on the rise of India and China”
The US has chosen another road. And we are already paying the price… Here’s what Doug Smith says >>

Warming Up: Adidas’ +Teamgeist


Here’s the official spin from adidas:
The +Teamgeist is the Official Matchball of the 2006 FIFA World Cup. It’s the most accurate football ever produced. No other ball reacts so flawlessly shot after dribble after pass, in the air and on the ground.
• Revolutionary panel shape eliminates surface irregularities to create a perfectly round ball for greater accuracy
• Panels are thermally bonded to create a smooth, seamless kicking surface
• Complete underglass print significantly decreases wear of colors and design
• New carcass retains shape better for improved accuracy and power
• FIFA approved with highest FIFA rating
• 100% PU leather
• Imported
Carcass??
BTW- that’s $130.00
Here’s an idea for a true global index: What’s the cost of the average [actually used by kids] soccer ball in your country? In the US it’s $19.95 for a decent kick-about ball. In Europe? China?
UPDATE:: Reaction to the new ball:
“It is the way a ball should be made,” – David Beckham, England
“The balls design is great, it is going to be a success,” – Kaka, Brazil
“I like this ball a lot because of its return to the more traditional colors,” – Alessandro Nesta, Italy
“When you kick it, it goes in the right direction,” – Zinedine Zidane, France

Craig Barrett: Where the Science Nerds At?

“In China engineering accounted for 65% of all science and engineering degrees; in South Korea for 58%; and in Japan for 29%. In the U.S. that figure is less than 5%.”
That’s Craig Barrett talking about the dearth of students signing up for scientific degrees in BusinessWeek.
He goes on:
“While the number of jobs requiring technical skills is increasing, fewer American students are entering — and graduating from — degree programs in science, math, and engineering.
Why does this matter? Science and technology are the engines of economic growth and national security in the U.S., and we are no longer producing enough qualified graduates to keep up with the demand. ”
Intel spends $100 million a year on education programs- to create a deeper pool of qualified talent at home. Is it working?
I wonder how much Microsoft is spending… or Exxon-Mobil?
And when they spend the money, how do they measure performance?
Read the article >>
I posted on this earlier: Have We Given Up on Science?

Edge View: John Hagel’s Visit to Dubai

“Why should business executives care about what is happening in the container port business in Dubai? It provides insight into much more fundamental trends that are re-shaping our global economy at an awesome pace. It shows that countries and companies on the edge have an opportunity to become significant global players by understanding and harnessing the forces at work. It also drives home that our most well-known and well-established companies, even those granted royal charters in 1840, are vulnerable to these same changes and can succumb quickly to the initiatives of more aggressive competitors, even those just formed in 1999.”
read John Hagel’s post here >>

Harold Pinter’s Nobel Lecture: The Pen Against the Sword

From Harold Pinter – Nobel Lecture
Art, Truth & Politics

© THE NOBEL FOUNDATION 2005
In 1958 I wrote the following:
‘There are no hard distinctions between what is real and what is unreal, nor between what is true and what is false. A thing is not necessarily either true or false; it can be both true and false.’
I believe that these assertions still make sense and do still apply to the exploration of reality through art. So as a writer I stand by them but as a citizen I cannot. As a citizen I must ask: What is true? What is false?
Truth in drama is forever elusive. You never quite find it but the search for it is compulsive. The search is clearly what drives the endeavour. The search is your task. More often than not you stumble upon the truth in the dark, colliding with it or just glimpsing an image or a shape which seems to correspond to the truth, often without realising that you have done so. But the real truth is that there never is any such thing as one truth to be found in dramatic art. There are many. These truths challenge each other, recoil from each other, reflect each other, ignore each other, tease each other, are blind to each other. Sometimes you feel you have the truth of a moment in your hand, then it slips through your fingers and is lost.
I have often been asked how my plays come about. I cannot say. Nor can I ever sum up my plays, except to say that this is what happened. That is what they said. That is what they did.
…….
I have said earlier that the United States is now totally frank about putting its cards on the table. That is the case. Its official declared policy is now defined as ‘full spectrum dominance’. That is not my term, it is theirs. ‘Full spectrum dominance’ means control of land, sea, air and space and all attendant resources.
The United States now occupies 702 military installations throughout the world in 132 countries, with the honourable exception of Sweden, of course. We don’t quite know how they got there but they are there all right.
The United States possesses 8,000 active and operational nuclear warheads. Two thousand are on hair trigger alert, ready to be launched with 15 minutes warning. It is developing new systems of nuclear force, known as bunker busters. The British, ever cooperative, are intending to replace their own nuclear missile, Trident. Who, I wonder, are they aiming at? Osama bin Laden? You? Me? Joe Dokes? China? Paris? Who knows? What we do know is that this infantile insanity – the possession and threatened use of nuclear weapons – is at the heart of present American political philosophy. We must remind ourselves that the United States is on a permanent military footing and shows no sign of relaxing it.
Many thousands, if not millions, of people in the United States itself are demonstrably sickened, shamed and angered by their government’s actions, but as things stand they are not a coherent political force – yet. But the anxiety, uncertainty and fear which we can see growing daily in the United States is unlikely to diminish.
I know that President Bush has many extremely competent speech writers but I would like to volunteer for the job myself. I propose the following short address which he can make on television to the nation. I see him grave, hair carefully combed, serious, winning, sincere, often beguiling, sometimes employing a wry smile, curiously attractive, a man’s man.
‘God is good. God is great. God is good. My God is good. Bin Laden’s God is bad. His is a bad God. Saddam’s God was bad, except he didn’t have one. He was a barbarian. We are not barbarians. We don’t chop people’s heads off. We believe in freedom. So does God. I am not a barbarian. I am the democratically elected leader of a freedom-loving democracy. We are a compassionate society. We give compassionate electrocution and compassionate lethal injection. We are a great nation. I am not a dictator. He is. I am not a barbarian. He is. And he is. They all are. I possess moral authority. You see this fist? This is my moral authority. And don’t you forget it.’
A writer’s life is a highly vulnerable, almost naked activity. We don’t have to weep about that. The writer makes his choice and is stuck with it. But it is true to say that you are open to all the winds, some of them icy indeed. You are out on your own, out on a limb. You find no shelter, no protection – unless you lie – in which case of course you have constructed your own protection and, it could be argued, become a politician.
I have referred to death quite a few times this evening. I shall now quote a poem of my own called ‘Death’.
Where was the dead body found?
Who found the dead body?
Was the dead body dead when found?
How was the dead body found?
Who was the dead body?
Who was the father or daughter or brother
Or uncle or sister or mother or son
Of the dead and abandoned body?
Was the body dead when abandoned?
Was the body abandoned?
By whom had it been abandoned?
Was the dead body naked or dressed for a journey?
What made you declare the dead body dead?
Did you declare the dead body dead?
How well did you know the dead body?
How did you know the dead body was dead?
Did you wash the dead body
Did you close both its eyes
Did you bury the body
Did you leave it abandoned
Did you kiss the dead body
When we look into a mirror we think the image that confronts us is accurate. But move a millimetre and the image changes. We are actually looking at a never-ending range of reflections. But sometimes a writer has to smash the mirror – for it is on the other side of that mirror that the truth stares at us.
I believe that despite the enormous odds which exist, unflinching, unswerving, fierce intellectual determination, as citizens, to define the real truth of our lives and our societies is a crucial obligation which devolves upon us all. It is in fact mandatory.
If such a determination is not embodied in our political vision we have no hope of restoring what is so nearly lost to us – the dignity of man.

Read the whole thing and weep.

Innovation: inversely proportional to size of budget


BAH gives us a “special report” on innovation by Barry Jaruzelski, Kevin Dehoff, and Rakesh Bordia: “Money Isn’t Everything.”
“The myth that higher R&D spend translates into competitive advantage has been around for decades, but it appears to be particularly strong now. Pick up any business magazine or newspaper. You’ll find ample evidence of the belief in the effectiveness of larger budgets, for both corporate and national competitiveness:
“U.S. spending on R&D will also have to increase if the country wants to remain technologically dominant.” —Fortune, July 2005
“We need at NEC to increase our R&D spending by as much as 50 percent to keep ahead of the competition.” —NEC Corporation (#41 on the list of 1000) senior vice president, quoted in The Age, July 2005
“The European Commission will today appeal to E.U. countries to increase spending on research and development, or face being out-paced by competitors such as China.” —Financial Times, July 2005
“[Yahoo] spends as heavily on product development and R&D as Google and Microsoft…falling behind in this arms race would spell big trouble.” —Fortune, August 2005

The results of the recent study of the Booz Allen Hamilton Global Innovation 1000 — the 1,000 publicly held companies from around the world that spent the most on research and development in 2004 — may provoke a crisis of faith. The study, which may be the most comprehensive effort to date to assess the influence of R&D on corporate performance, suggests that nonmonetary factors may be the most important drivers of a company’s return on innovation investment.
The major findings:
Money doesn’t buy results. There is no relationship between R&D spending and the primary measures of economic or corporate success, such as growth, enterprise profitability, and shareholder return.
Size matters. Scale leads to advantage. Larger organizations can spend a smaller proportion of revenue on R&D than can smaller organizations, and take no discernible performance hit.
You can be too rich or too thin. Spending more does not necessarily help, but spending too little will hurt.
There isn’t clarity on how much is enough. Instead of clustering into any coherent pattern, R&D budget levels vary substantially, even within industries. This suggests that no single approach to spending money on innovation development is universally recognized as the most effective strategy.
It’s the process, not the pocketbook. Superior results, in most cases, seem to be a function of the quality of an organization’s innovation process — the bets it makes and how it pursues them — rather than the magnitude of its innovation spending.
Collaboration is key. The link between spending and performance tends to be strongest in those areas most under the control of the R&D silo, such as product design, and weakest in those areas where cross-functional collaboration is most difficult, such as commercialization.
Meanwhile, the big boys keep flushing their money down the toilet:

Read the full report. Take notes. Forward it to your CEO.
see my post: “Have We Given Up on Science?”

The Globalization Index: How Global is Your Country?


The Global Top 20
1. Singapore
2. Ireland
3. Switzerland
4. United States
5. Netherlands
6. Canada
7. Denmark
8. Sweden
9. Austria
10. Finland
11. New Zealand
12. United Kingdom
13. Australia
14. Norway
15. Czech Republic
16. Croatia
17. Israel
18. France
19. Malaysia
20. Slovenia
The A.T. Kearney/FOREIGN POLICY Globalization Index™ explores the relationships between a country’s global integration and its levels of public education spending, political freedom, perceived corruption, and susceptibility to terrorism. The results show that:
– On average, more globally integrated countries spend more on public education. This relationship was particularly strong in developing countries.
– Citizens of globally integrated countries also enjoy greater political rights and civil liberties. And globalization may keep politicians honest, as the adoption of higher international standards for transparency tends to discourage corruption and increase government efficiency.
– Opening a country’s borders alone does not make the country more vulnerable to terrorism. Little correlation was found between a country’s level of global integration and the number of significant terrorist attacks on its soil.
Sounds to me like the US is going backwards not forwards in this area. Funny- we’re global when it comes to military incursions and insular when it comes to business.
The study finds that the United States rose on the strength of its growth in Internet hosts and secure servers, which are enabling factors for continued technological integration. But it was much less open in the economic realm, lagging behind in trade and foreign direct investment (FDI), due in part to a large and vibrant domestic market.
Another finding: in political and diplomatic terms the United States ranked 57th of the 62 ranked countries when it comes to signing international treaties.
About the Index: The A.T. Kearney/FOREIGN POLICY Magazine Globalization Index ranks 62 countries representing 85 percent of the world’s population, based on 12 variables grouped in four categories: economic integration, personal contact, technological connectivity, and political engagement.
How it Works: The index quantifies economic integration by combining data on trade and foreign direct investment. Technological connectedness is gauged by counting Internet users, Internet hosts, and secure servers. Political engagement is assessed by taking stock of the number of selected international organizations and the number of selected international treaties that each country signs, as well as each country’s financial and personnel contributions to U.N. peacekeeping missions and levels of governmental transfers. Personal contact is charted by looking at a country’s international travel and tourism, international telephone traffic and cross-border transfers, including remittances.
FREE FOOD: Download the report here. Get the detailed data here.

Country Branding: The Futurebrand Version

Why do so many PR and branding companies have the worst websites? Because they don’t understand how branding works online.
In spite of their website, they’ve done some interesting work at Futurebrand. I’m talking about their Country Brand Index.
Apparently Italy ranks as the top overall destination, according to a global survey that identifies countries as brands… Australia and the U.S. take the second and third positions.
China is the “most improved” country brand, the U.S. is “best country brand for business travel” and Italy is the “best country brand for art and culture.”
“If a ‘brand’ is defined as an experience, then some of the world’s most powerful and recognizable brands should be countries. The challenge the industry faces is that it must move away from the traditional reactive and tactical marketing approaches and instead, create and deliver an overall brand experience that drives sales and turns visitors into country-brand evangelists,” says Rene A. Mack of Weber Shandwick, the agency involved in the creation of the index.
He’s right and wrong. Your travel experience in a country is not the same as the country’s brand. These days its important how you act in public. Like children, some countries behave better than others. Some are unruly, some loud, some mild-mannered…
A better survey is the Anholt-GMI Nation Brands Index. I talked about it in a previous post – The Rise and Fall of Brand America.
Also: see what Peter Drucker thinks. You have to listen to the whole thing!

Neil French: The Strategy Interview

November 2005 – Strategy Magazine
One is enough
Q’s and cocktails with…Neil French, outgoing worldwide CD, WPP Group
by Lisa D’Innocenzo
By now, you surely must have heard about the Neil French kerfuffle. The short version: Last month, he resigned his post at WPP because of reaction to controversial comments he made about female CDs during a Toronto event, organized by ad site ihaveanidea.org.
Strategy interviewed French a day before that fateful night and felt he made some salient points about the state of the industry, as well as what it takes to be brilliant. So, despite the fact that he called said reporter “Sweetpea,” we thought this was still worth a read.
LD: What do you think of the state of the ad industry?
NF: What in Canada? Please don’t ask me, because I don’t know. I could have got somebody to brief me about Canadian advertising. That would have been wrong, because it’s like a politician being told what to say. I don’t do that shit. I’ve never been to Canada before – what the hell would I know about Canada? I like the place – I love the weather. [Spoken on a 28 degree day in late September.]
LD: How about overall?
NF: There’s this hysteria on at the moment about how television is dead and it’s all going to interactive. That’s such bollocks. Yes, in the Western World there are a lot of computers out there and interactive thingy-bobs. But actually 90% of the population of the earth is not sitting in front of an Apple tonight. You go to some huge shack city in Brazil, or Thailand, and that light from the shack is a television. Why is everybody panicking? I remember when radio was dead. I remember when newspapers were dead. They’re fine. Now television is dead. No it’s bloody not. It’s just a lot of inept people who think that with the next thing, there might be some good ads. There won’t be of course, because they are genetically inept.
LD: What do you think of the fact that more money is going into interactive then?
NF: If you put everything into mobile, it’s going to piss people off much more than the television ads. Mostly mobile’s used by kids. They are going to make the phone calls, they are going to text their mates, they do not want to be interrupted by some jerk who wants to sell them a soft drink. So this is more likely to burn out very quickly. They will watch the stuff they want to see, and that’s when you get them. Yes, TiVo can make sure you don’t watch the ads, but if it’s a really good ad that appears during the moto racing or the soccer, you’ll leave it on to hope the ad comes on. I’ve heard people say this: “I love this one. I’m not going out for a pee.” It’s human nature. If the media buyer’s clever enough, it’s going to always be in the same program. Having your ad liked by the consumer, that’s the Holy Grail. No more conversation needed on that subject; move on.
LD: So what does it take to make a good ad?
NF: Talk to people. That’s all it is. When Winston Churchill said: “We shall fight them on the beaches,” he was talking to one bloke. Every single person in his little house in the middle of England saw himself standing shoulder to shoulder with Winston, with a pitchfork in his hand on the seashore. And when Hitler said: “We’re going to take over the world; we’ve had a rough deal,” every soldier at Nuremberg, said: “He’s talking to me, and I must not let him down.” So good or evil, the great communicators talk to one person. That’s what advertising does – I’m talking to you, this is the right car for you, or beer, or insurance company, or whatever the hell it is. Only for you. Luckily, there are millions of people like you and they will all buy it, but you don’t say that in the ad. There’s no you plural in advertising, it’s you singular.
LD: How come more advertisers don’t get that?
NF: Because 95% of the people in this business are buffoons. They’re clowns. The creatives blame the clients and the suits, and that’s only because the suits frequently come into advertising because they couldn’t get into banking or retail, so you get an awful lot of those. But the client has every right to make his own decision on his own product. It is our responsibility to explain to him why this will work better than that, and if we fail to do that, we don’t deserve to do good advertising.
LD: What work have you seen recently that gets it right?
NF: I have to bring this one up, because it’s a great example of talking to the audience. It was an ad [I did] for [Panadol] in China. They researched aspirins and the Chinese got a bit upset that it said: “Take two,” because they thought: “It seems like such a waste, using all these aspirins up.” So they brought out the single pill.
If you want to talk to people, tell them something that’s relevant to them, and then twist it in the direction of your product. So I wrote the line of “One is enough,” and the picture was a picture of George Bush and George Bush. It was huge.
Next year’s big winner is going to be the Big Ad from Australia [for Carlton Draught]. It is the heaviest irony possibly ever used in advertising and utterly hilarious. If you look at it and deconstruct it, it’s the perfect ad for beer, without having to show a lot of people in the public going “yo-ho-ho.”
LD: Why do so many ads in categories like beer look the same?
NF: Why? I’ll tell you why, and this is where the client is to blame. He sees an ad, and says: “Oh, that’s good, can we have one like that?” And it’s the very thing he shouldn’t say. He should say: “Can we have one not like that.” Otherwise, how can a consumer, who doesn’t really care, ever differentiate? The client’s problem is only that his widget means to him his house, his wife, their kids, their education, their retirement and his funeral. Whereas to anyone in the street, it doesn’t come in the top million of things to worry about. Our job is to say: “This might be irrelevant, this widget,” but of course the client’s saying “No, no it’s really important; this is the best widget in the world.” But actually, they don’t care, mate. All we can say is: “When you need a widget, we do good ones.” So our job is to bridge the gap between the client’s enthusiasm and the audience’s apathy.
LD: How hard is that to do?
NF: It can be extremely difficult. The whole trick is to explain gently to the client why this is so. There are stupid people, but generally speaking the guy that runs the client is highly intelligent and highly motivated and a bit of a pirate. You don’t get to run a big brewery or big car company without being a little ballsy. Unfortunately for the hewers of wood and fetchers of water, further down the hierarchy, their interest is keeping their job.
I can’t remember a single occasion I’ve sold a decent campaign to anyone but the top guy. I did a campaign for Martel brandy, which was long copy and nobody had ever done long copy for brandy before. People down the line weren’t sure about it, but I made them let me present it to Edgar Bronfman, who in those days was the head of Seagram’s. The suits put me up front with great trepidation and I explained the ad. Edgar got it before I explained it to him. He understood the whole concept. He said: “Yeah, that’s great. We’ll go there. Looks like nothing we’ve ever seen before.” All the racks of suits sighed with relief because they didn’t have to make any decisions. At the end, he walked all the way down to the far end of the table, and said: “Neil, when these guys screw this up, you call me.” And I said: “You mean if?” And he said: “No, I mean when.”
LD: Are presidents getting more involved in marketing?
NF: No. I wish they bloody did. The only benefit of being old and wizened, like myself, is I can generally see the top man. Because I’ve been around forever, longer than God. The guy they want to see is the superstar, somebody like Bogusky, or an old bozo like me.
LD: How do you convince marketers to take a risk?
NF: Something I say to clients a lot is: “Are you actually just spending this money to mark time, or do you really want to make a difference? And how much of a difference do you want to make specifically? How much do you want sales to go up? How much can you supply if this was successful?” Ask all those questions and then you can say: “Now I know how brave you’re going to be. Not at all or very.” And of course, all bravery is risky, and so is safety.
LD: When do you know you can’t work with a marketer?
NF: There are three things important when running an ad agency. Someone called it the three F’s: fun, funds and fame. If a client gives you money and fame, that’s great. If he gives you fun and fame, but not much money, that’s still great. If he gives you lots of money and lots of fun, that’s ok. But if there’s no money in it, and no fun, but it will make you famous, you have to think about it. If it’s just fun, then you should have left years ago. One is bad. Two is ok, three is unbearably wonderful. After all, it is your life. The client doesn’t own you; you’re not a slave; you can say uncle.
LD: Why are boutique agencies becoming increasingly popular?
NF: The boutiques are attractive to big clients because they have a personal stake in the success of this relationship. The client joins and asks a smaller agency to help them in the knowledge that there might be a few moments of stress in this relationship, but in the end they will succeed. These are the mistresses, not the wives. The mistresses get the jewelry, the wives get the washing machine. It’s sad but true.
I was once talking to a boss of another very, very big agency. And I said: “You’ve had these clients so long. How do you do it?” He said: “Because they can’t be bothered to fire us.” It’s too much hassle.
LD: Like a divorce?
NF: Absolutely. “God, this is a problem. Oh, well, stick with it. It could be worse, not much, but it could be worse.” How sad is that? There comes a time, where you’re going to say: “Actually, screw this.” Or go get yourself a mistress, for just part of the time. And that’s what these big clients do. “We’re tied up to the teeth with these people, but I hate the bloody work, so I’m going to get a babe, and go out to dinner with a babe a lot, which will be great. It’s much more fun, makes us feel good, and hey, then we’ve got to get back to the sodding wife again.”
There will be more and more boutiques. There was a point where it was just about the big, big blocks taking over, but then the big, big blocks [started] buying the boutiques. Why do they buy the boutiques? Not for the money they’re making. They buy them to give themselves a certain sexiness – a nice set of legs, or high heels.
LD: A boob job?
NF: A boob job! Very good. Absolutely. That’s exactly it. Let’s stick them on to the front and it looks like we have big boobs. It doesn’t work.
LD: Does it help to have an ego in the ad business?
NF: I taught myself self confidence in my early teens. I was very shy. Pain and agony, and beating down embarrassment, teaching myself not to blush and all those awful things. Ego is really: “Do you really believe in yourself?”
[In Canada], there’s a cringe factor. There’s the permanent apology. I mean, I love the fact that people on the street are all saying “sorry” all the time. But, come on guys. Politeness is great, but sometimes it’s not said in a politeness way, as much as a “Please don’t hit me” way. That’s sad. I remember a young guy, saying: “You’re an egomaniac. You’re all ego and no talent.” That may be true. I said: “Do you have an ego?” “No,” he says. “Do you bathe? Then you have an ego. You care about what people think about you. You take a shower, you care.”

Do you Speak Soccer?

Emerson Ferreira da Rosa in the Economist:
I am increasingly aware of how football has become an effective and universally known “language” that can project images of pure sport, beautiful play and enjoyment: a “language” that is used and appreciated all over the world. I am amazed at the number of dads who play football with their kids in Central Park on Sunday morning. In the United States soccer is starting to compete with baseball, American football and basketball. There is also a “desire for football” in China, in Japan—where Juventus recently played in a tournament—and in the Middle East. This shows us unequivocally that football can “speak” with the greatest simplicity—through different media, but above all through television—to millions of fans.
Read the article here >>

Ratan Tata: The $2,200 “People’s Car”


Tata speaks about the Indian group’s international strategy, his plan to create a $2,200 “people’s car,” his vision of India as a knowledge center for the world, and his dedication to the social responsibilities required from companies operating in developing markets.
On the car:
“Today we’re producing a $7,000 car, the Indica. Here we’re talking about a $2,200 car, which will be smaller and will be produced in larger volumes, with all the high-volume parts manufactured in one plant. We’re also looking at more use of plastics on the body and at a very low-cost assembly operation, with some use of modern-day adhesives instead of welding. But the car is in every way a car, with an engine, a suspension, and a steering system designed for its size. We will meet all the emissions requirements. We now have some issues concerning safety, mainly because of the car’s modest size, but we will resolve them before the car reaches the market, in about three years’ time.
“In addition—and this again touches on the social dimension—we’re looking at small satellite units, with very low breakeven points, where some of the cars could be assembled, sold, and serviced. We would encourage local entrepreneurs to invest in these units, and we would train these entrepreneurs to assemble the fully knocked-down or semi-knocked-down components that we would send to them, and they would also sell the assembled vehicles and arrange for their servicing. This approach would replace the dealer, and therefore the dealer’s margin, with an assembly-cum-retail operation that would be combined with very low-cost service facilities.
On India:
“If we play our cards right as a country, we could be a supplier of IT services and IT solutions to the world. We could also be a product-development center for pharmaceuticals. We could be a very good global R&D center in biotechnology and in some of the emerging technologies, such as nanotechnology, provided we really give them the focus they would need.
On bringing talent back to India:
“Indians coming back to India really go through a cultural shock. They give up a lot in terms of the quality of life, the education of their children, the availability of medical facilities. This will also have an impact when we want to hire people who are not Indians, as we will have to do in a world without boundaries. Even if we start only with pockets of the country and make those pockets less of a cultural shock, the benefits will spread. In some ways, this is what China did with the economic zones.
On values:
“What I feel most proud of is that we have been able to grow without compromising any of the values or ethical standards that we consider important. And I am not harping on this hypocritically. It was a major decision to uphold these values and ethics in an environment that is deteriorating around you. If we had compromised them, we could have done much better, grown much faster, and perhaps been regarded as much more successful in the pure business sense. But we would have lost the one differentiation that this group has against others in the country. We would have been just another venal business house.
“I think it is wrong for a company in India to operate in exactly the same way, without any additional responsibilities, as if it were operating in the United States, let’s say. And even in the United States, I think if you had an enlightened corporation that went into the Deep South, you would see more of a sense of social responsibility, of doing more for the community, than the company might accept in New York City or Boston. Because it is inevitable that you need to be a good corporate citizen in that kind of environment. And companies that are not good corporate citizens—those that don’t hold to standards and that allow the environment and the community to suffer—are really criminals in today’s world.”
Read the McKinsey Quarterly article >>

The Birth of Internet TV: Finally!

AOL, Warner Bros Team for Online TV– In2TV.
The channels are:
– LOL TV (comedies such as Welcome Back Kotter, Perfect Strangers and Hangin’ With Mr. Cooper),
– Dramarama (Falcon Crest, Sisters and Eight Is Enough)
– Toontopia (animated shows like Beetlejuice and Pinky and the Brain)
– Heroes and Horrors (Wonder Woman, Lois & Clark: The Adventures of Superman and Babylon 5)
– Rush (action shows such as La Femme Nikita, Kung Fu and The Fugitive)
– Vintage (Growing Pains, F-Troop and Maverick)
Soon this will go global, and we’ll be able to watch TV from other countries on our “Internets.” Cricket, anyone?

Mckinsey: Don’t blame trade for US job losses

Via outsourcingstrategy.org– from the McKinsey Quarterly:
“Many people in the United States have looked at the enormous US trade deficit and concluded that a flood of imported goods from China and the offshoring of services to India are to blame for the loss of US jobs. CNN’s Lou Dobbs has called the problem “a clear call to our business and political leaders that our trade policies simply are not working.”1 The issue isn’t the concern solely of US policy makers: the same fears about trade are rampant throughout Europe and Japan, while protectionist sentiment is rising around the world.
“But trade, particularly rising imports of goods and services, didn’t destroy the vast majority of the jobs lost in the United States since 2000. We analyzed detailed trade and industry data to estimate the extent of job dislocation due to offshoring in the manufacturing and service sectors from 2000 to 2003. This work was the first complete analysis of how the economic downturn, imports, exports, and global competition interact—directly and indirectly—to affect employment.
So who or what’s to blame? Read the article >>

Global Culture: Steel Pulse


How does a band like Steel Pulse make it?
Word-of-mouth plus quality…
They’ve been around forever [over 25 years], nobody plays them on the radio, and yet they’re everywhere. We do live in a global village. And David Hinds is a global voice.
Here’s a Steel Pulse history from NPR >> Check it!

Have We Given Up on Science?

Are U.S. Innovators Losing Their Competitive Edge? asks as article in today’s New York Times.
The article cites a report from the National Academy of Sciences which tries to ring the alarm: “Although many people assume that the United States will always be a world leader in science and technology, this may not continue to be the case inasmuch as great minds and ideas exist throughout the world. We fear the abruptness with which a lead in science and technology can be lost – and the difficulty of recovering a lead once lost, if indeed it can be regained at all.”
The report cites China and India among a number of economically promising countries that may be poised to usurp America’s leadership in innovation and job growth.
“For the first time in generations, the nation’s children could face poorer prospects than their parents and grandparents did,” the report said. “We owe our current prosperity, security and good health to the investments of past generations, and we are obliged to renew those commitments.”
The Industrial Research Institute, an organization in Arlington, Va., that represents some of the nation’s largest corporations, is also concerned that the academic and financial support for scientific innovation is lagging in the United States. The group’s most recent data indicate that from 1986 to 2001, China, Taiwan, South Korea and Japan all awarded more doctoral degrees in science and engineering than did the United States. Between 1991 and 2003, research and development spending in America trailed that of China, Singapore, South Korea and Taiwan – in China’s case by billions of dollars.
Read the report. Here’s the TOC:
1 A Disturbing Mosaic
2 Why Are Science and Technology Critical to America\’s Prosperity in the 21st Century
3 How is America Doing Now in Science and Technology
4 What Actions Should America Take to Remain Prosperous in the 21st Century
5 Ten Thousand Teachers-Ten Million Minds
6 Sowing the Seeds
7 Best and the Brightest
8 Innovation Incentives
9 What Might the United States Be Like if it is Not Competitive in Science and Technology
Ouch!
BTW, the National Academy of Sciences also has this report available online: Science and Creationism: A View from the National Academy of Sciences, Second Edition (1999)
Heck, just listen to what Peter Drucker had to say.
All is not lost, yet. But we took a wrong turn somewhere.
The article raises another point:
“The inventiveness of individuals depends on the context, including sociopolitical, economic, cultural and institutional factors,” said Merton C. Flemings, a professor emeritus at M.I.T. who holds 28 patents and oversees the Lemelson-M.I.T. Program for inventors. “We remain one of the most inventive countries in the world. But all the signs suggest that we won’t retain that pre-eminence much longer. The future is very bleak, I’m afraid.”
Mr. Flemings said that private and public capital was not being adequately funneled to the kinds of projects and people that foster invention. The study of science is not valued in enough homes, he observed, and science education in grade school and high school is sorely lacking.
But quantitative goals, he said, are not enough. Singapore posts high national scores in mathematics, he said, but does not have a reputation for churning out new inventions. In fact, he added, researchers from Singapore have studied school systems in America to try to glean the source of something ineffable and not really quantifiable: creativity.
“In addition to openness, tolerance is essential in an inventive modern society,” a report sponsored by the Lemelson-M.I.T. Program said last year. “Creative people, whether artists or inventive engineers, are often nonconformists and rebels. Indeed, invention itself can be perceived as an act of rebellion against the status quo.”
Which brings us to Richard Florida

Trying to Understand the Riots in France

Two articles from BusinessWeek on the trouble in France:
– “Sarkozy Googles as Paris Riots” and
– “The Economics Fueling the French Riots
The articles are written from a “US viewpoint.” A comment left behind the second article is worth noting:
I did not expect BusinessWeek to come out with such a biased article, very pro-American. Very hypocritical as well. France’s social politics is set up to not “leave people behind” and give them an opportunity instead of straight poverty. The only thing that America does offer unemployed youngsters a job in the Army to support their own politics/shake-up/disrespect of Muslim countries; that attitude fuels Muslims worldwide with anger towards all Western societies, including France. The problem isn’t just unemployment but it’s more about France’s ancient “social class differences” and the non-white immigrant population doesn’t like to be called “scum” (a French minister’s outraged response to the first riots). This was written by a white guy from the Netherlands.
Another view from Parapundit: French Muslim Rioting Hits Yet Another High
I’m not sure what to think about all this craziness. The “white guy” in the Netherlands pretends he lives in a color-blind society. The BusinessWeek folk think it’s about unemployment rates. And the french politician is just covering his behind. I should ask Doug Smith.
UPDATE: Economist article

Talent War: China’s Woes

JSB and JH3 are right:
“Where value originates and who captures it will increasingly depend on the evolution of talent markets and the relative capability of firms (and nations) to rapidly develop and amplify the value of this talent. Product markets and financial markets will of course still matter, but the center of gravity for value creation and capture will inexorably migrate to global talent markets…” see The Only Sustainable Edge
The global talent war continues. Now, a McKinsey Quarterly article “China’s looming talent shortage” backs up Seely Brown and Hagel, making the following points:
– If China’s economy is to go on growing and its base is to evolve from manufacturing to services, it will require a huge number of qualified university graduates.
– While university graduates are plentiful there, new research shows that only a small proportion of them have the skills required for jobs further up the value chain—and competition for these graduates is becoming fierce.
– China must undertake a long-term effort to raise the quality of its graduates by changing the way it finances its universities, revamping curriculums to meet the needs of industry, and improving the quality of English-language instruction.
– China could emerge as a base for IT and business process offshoring, but unless the country addresses its looming labor shortage now the global ambitions of Chinese companies will probably be stymied.
It’s all about quality! The paradox:
China’s pool of potential talent is enormous. In 2003 China had roughly 8.5 million young professional graduates with up to seven years’ work experience and an additional 97 million people that would qualify for support-staff positions. Despite this apparently vast supply, multinational companies are finding that few graduates have the necessary skills for service occupations. According to interviews with 83 human-resources professionals involved with hiring local graduates in low-wage countries, fewer than 10 percent of Chinese job candidates, on average, would be suitable for work in a foreign company in the nine occupations we studied: engineers, finance workers, accountants, quantitative analysts, generalists, life science researchers, doctors, nurses, and support staff.
Read the article here. (registration required)

The Rise and Fall of Brand America

When we express a preference for French holidays, German cars or Italian opera, when we instinctively trust the policies of the Swedish government, comment on the ambition of the Japanese, the bluntness of the Americans or the courtesy of the British, when we avoid investing in Russia, favor Turkey’s entry into Europe or admire the heritage of China and India, we are responding to brand images in exactly the same way as when we’re shopping for clothing or food. But these are far bigger brands than Nike or Nestlé. They are the brands of nations.
Nation brand is an important concept in today’s world. Globalization means that countries compete with each other for the attention, respect and trust of investors, tourists, consumers, donors, immigrants, the media, and the governments of other nations: so a powerful and positive nation brand provides a crucial competitive advantage. It is essential for countries to understand how they are seen by publics around the world; how their achievements and failures, their assets and their liabilities, their people and their products are reflected in their brand image.
Simon Anholt has developed the Anholt-GMI Nation Brands Index – the first analytical ranking of the world’s nation brands. This report: Nation Brands Index – Q3 Report, 2005 tells us how nations view each other. Good stuff.
But even more critical, perhaps, is Anholt’s book: Brand America: The Mother of All Brands.
Here’s how the book is advertised on Anholt’s website:
Q: When is a country like a brand?
A: When it’s the United States of America.
America is more than just a country: it’s the biggest brand in history. Launched as a global brand, managed like a global brand and advertised like a global brand since the Declaration of Independence, America has deliberately marketed itself – as well as its products and culture – with skill, determination and sheer, hardnosed salesmanship.
But today, it’s a brand in trouble. Brand America shows, for the first time in print, how the world’s most successful brand grew to greatness, how close it now is to throwing it all away, and how it might win back those disillusioned ‘consumers’.
For anybody who has ever wondered what was the secret behind America’s greatness, and what happens next to the world’s sole superpower, Brand America is essential reading.
It’ll change your mind about brands, about countries and about America for ever.
Here’s what Phil Kotler had to say about the book:
“Anholt and Hildreth are to be congratulated for raising the issue of why Brand America is suffering a strong decline around the world. They trace American history, the values of Brand America and the growth of anti-Americanism, and offer stimulating suggestions for how to repair our broken image.”
Read it. That’s Brand America: The Mother of All Brands.

The Fortune Under the Pyramid


From the Economist:
“For workers from poor countries who venture abroad to earn a better living, sending money home to relatives can be hugely expensive. Such remittances have become an important source of income in many developing countries, dwarfing other inflows of capital from overseas such as foreign direct investment and multilateral aid. But if the money is being sent, say, from America to Venezuela, charges can amount to as much as 34% of the sum involved, according to Dilip Ratha of the World Bank.
“Why are the poor so badly served? The easy answer, that people who have little money do not make suitable clients for sophisticated financial services, is at most a half-truth. A better explanation, this survey will argue, is that the poor have been hurt by massive market and regulatory failure. Fortunately that failure can be, and increasingly is being, remedied.”
Read the article here.
All I know is that when money trickles down to the poor, it usually gets siphoned off by a middleman, or the neighborhood mafia.

Diego Maradona vs. George Bush?

The lead article in this week’s Economist: “Tired of globalisation” has a skewed view of what’s happening in Latin America. The article even takes a pot shot at Maradona (maybe they’re still upset at that “hand of god” goal in the World Cup).
Globalization cannot ignore the consequences and effects on people. This is the lesson that business never learns. That’s a fact. And so Maradona and Hugo Chavez have fun at the expense of the US.

Dragon, Tiger and Mouse: China, India and Me


A while back BusinessWeek devoted an issue to the issue of China and India.
I particularly liked “Asking The Right Questions” because it looked at new non-western business models being built in India. In India, that’s called being non-aligned!
John Hagel has an instructive blog post on China and India titled: “Patterns of Business Innovation in China and India”. Read it!
Where does this leave us? You, me, and our kids? What are we going to do for a living? What options are there for kids who go through our stellar educational system?
I decided to look up the high school curriculum in a) Kansas and b) India. Here’s what I found:
– Kansas: A Guide to Kansas Curricular Standards [high school]
– India: CBSE [12th grade] – Mathematics, Physics, Chemistry, Biology, Political Science, History, and more.
Looks like we lost the race before we even got started!
So, what are our kids going to be doing? Are we destined to be a nation of used-car salesmen? One nation-under-E-bay…
What would poor Ben Franklin say if he saw us now? How would he earn his living today? Join the military? Wal-Mart? a band? a gang? an evangelical church?