I assume, or sure hope, that everyone with even a remote interest in business and the global world at large has been loosely monitoring the recent WWF pissing match between the Chinese CCP government and US firm Google. 

See/read the below January 30, 2010 Wall Street Journal article on this topic (be sure to click on the “Comments” link at the top of the article and peruse some of the comments that were posted in response to this article):

Battling the Information Barbarians: China Often Views the Ideas of Foreigners, from Missionaries in the 17th Century to 21st-Century Internet Entrepreneurs, as Subversive Imports.  The Tumultuous History Behind the Clash with Google.

Ring a bell from your admission essay question when you applied to the program?  

Were you aware of this historical tension between China and the West?

See also/read this nice blog post from David Wolf of the always insightful Silicon Hutong blog, based in Beijing, Why Global Internet Companies Fail in China and his really, really good Ad Age article cited therein, The Internet Does Not Rise Above Nations and Cultures.

Books will be written on this dispute and much dust still needs to settle before any sane writer takes on this subject and starts to write these chapters, but what are your early thoughts on this dispute for now?  Did Google to the right thing?  Did it take the right approach?  Why did it do what it did?  How do you predict this will all end?

- Professor Carr

Not really.  But a title like this always grabs the reader’s attention.  Worked on you, didn’t it?

American’s can be pretty naive, overly trusting and even downright lazy in their due diligence when doing business in an emerging market like China and India and in addressing some of the commercial/corporate espionage risks involved.

See/read this China Law Blog post, China: Do The Walls Have Ears? See also this Times of India article, Corporate Espionage: India Inc. Means Business and this Asia Times article, India’s Growing Corporate Spy Threat.

Your thoughts?

Did you know and appreciate how big of a deal corporate espionage has become not only in China and India but right here at home/in the West?   See, e.g., this recent Wall Street Journal article on this very topic, Hugger-Mugger in the Executive Suite.   Don’t think this stuff does not happen here/in the US.  It does.  All the time.  In my other life as a practicing attorney, I worked on several civil cases that involved commercial dumpster diving allegations.  At times I felt that I was in an Austin Powers movie.  Yeeeeaahhh  Baaabbbyyyy!

– Professor Carr

Professor Carr post:

I hope each of you as a graduate student regularly read business news in outlets such as the Wall Street Journal, Financial Times, The Economist, etc.  If I owned a company and you interviewed with me, one of the first questions I would ask you to verify if you were truly interested and passionate about business in general would be a current events type of a question along the lines of, “It’s great to be able to interview you.  What have you been reading about in the Wall Street Journal or Financial Times or other that has peeked your interest?  How does that relate to my company and industry and/or what you studied in your MBA program?”

If you were silent, stumbled or babbled … not good … and I might move on the the other five people I brought in to interview for the position.  Don’t shoot the messenger, and on that note …

Please see/read this week’s Wall Street Journal article, Expanding Abroad?  Avoid Cultural Gaffes.  A nice article that will come to life even more when you visit India (and China).  But also be thinking above and beyond the “don’t look like a fool” issue that this article raises.    That is, ask yourself, “What business opportunities do I see not being met or satisfied that exist due the cultural differences I am seeing?  Could I build a business around them?  If so, how?”   This is not an meaningless academic exercise.  Many of you will work for firms that do or one day will do business in or with markets like China, India, Brazil, Russia, etc., have clients based there, work with colleagues or clients from those markets, etc.

HAVE A GREAT TIME THIS YEAR IN INDIA!!

Greetings and a check in from Professor Carr, the fellow who launched this blog 5 years ago.  China and India are a big part of the future, in my view, and for you to see India this year with Dr. Singh is very important.   Your experience in India is an important investment in your education and future.  I have been following with interest some of your blog posts and insights this year.  I am a big fan of James Fallows, who now writes for The Atlantic.  Fallows has written some great stuff on China over the years (e.g., “Postcards from Tomorrow’s Square”), but his latest piece that I just came across, “How America Can Rise Again”, is one of his best works and well worth reading.  It applies to what you will see in emerging economies and emerging markets such as India, China, Russia, Brazil.  Click HERE to read it.  The 6 minute video interview that accompanies the article is also worth watching.

What are your take-aways from this article?    Your trip to India is important, in that it will help you test some of Fallow’s arguments.  Can’t do that if you stay home and only read about it in a book, and never visit the business future in a places like India, China, Brazil, Russia, etc.

China and India have a lot in common; they both have long and great histories. Today, there is no doubt that China and India are becoming major players in the world. As an overseas Chinese student, I hear lots of interesting things about how Americans perceive these two countries. Today let me share my view points about China and India.

Considering the 5,000 year journey of Chinese civilization, what is the core concept of the traditional Chinese culture? To answer this question, we need to consider the extensive and profound contributions of three pillars of traditional Chinese culture - the Confucianism, Taoism and Buddhism. The thought process is called the “he wei gui” (和为贵) thought. “贵(gui)” translates to ‘more precious’. This Chinese character includes the quintessence of traditional Chinese culture. When trying to translate into English, I found that it is difficult to translate because，the words have so much meaning. “和(he)” when translated into English means harmony, peace, amalgamation, friendship, kindness, and harmonization… It is about finding the common ground. That’s seeking the harmony between people and people, the harmony of people and the society, harmonization of people and nature. The culture of India has been shaped by its long history, unique geography, diverse demographics and the absorption of customs, traditions and ideas from some of its neighbors as well as by preserving its ancient heritages, which were formed during the Indus Valley Civilization and evolved further during the Vedic age, followed by the rise and decline of Buddhism, Golden age, Muslim conquests and European colonization. India’s great diversity of religious practices, languages, customs, and traditions are examples of this unique co-mingling over the past five millennia. The various religions and traditions of India that were created by these amalgamations have influenced other parts of the world too.

Due to better educational programs and many more overseas graduates, more Indians speak English than do Chinese, giving them a distinct advantage in the international marketplace, particularly in the rapidly emerging informational sciences and service industries. It also augurs well in the business meetings, where the ability to communicate with planners and delegates in what has emerged as the international language of business confers a big advantage.

There are also major differences in the respective business environments of these two countries. Selling to the Chinese, particularly in our own market, remains a real challenge for most foreigners. The rules are unique, and in many respects the norms or ethics expected by those more familiar with other western economies go out of the window. In addition, to be successful in China a local Chinese partner is necessary, and this adds another layer of complexity. Once you get past this initial obstacle however, the paybacks are exceptional – but it takes a lot of experience and expertise to get it right.

When I did some research for this paper, I found an interesting new word—Chindia. Chindia is a portmanteau word that refers to China and India together in general and their economies in particular. The credit of coining the now popular term goes to Jairam Ramesh, the Environment minister of India. China and India are geographically proximate; are both regarded as growing countries; and are both among the fastest growing major economies in the world. Together, they have about one-third of the world’s population, and have been named as countries with the highest potential for growth in the next 50 years according to a BRIC report.

The economic strengths of these two countries are widely considered complementary - China is perceived to be strong in manufacturing and infrastructure, while India is perceived to be strong in services and information technology. China is stronger in hardware while India is stronger in software. China is stronger in physical markets while India is stronger in financial markets. In fact, the strengths of India are very often the weaknesses of China and the strengths of China are the weaknesses of India.

The countries also share certain historical interactions - the spread of Buddhism from India to China, and trade through the Silk route are the prime examples of such interactions. As I described above, there are too many connections between these two countries; and I am looking forward to see what exactly India looks like next summer.

-Yuxiang Gao

According to an article in the New York Times article (Click Here), India announced a plan on December 4^th to slow emissions. Global warming has been a hotly debated topic in the international community with many actors cautious about reaching an agreement. Many countries, including China and India, are waiting for the United States to take action on this issue before making any kind of pledge of their own.

Due to India’s vulnerability to the effects of climate change, they have become a major player in climate change talks. India is said to rank fifth globally in overall emissions with total emissions likely to continue growing as the country continues to develop.

On Thursday, India announced that it would attempt to reduce the nations greenhouse gas emissions by 2020 by improving energy efficiency rather than accepting mandatory limits on emissions. The idea is to slow the growth by reducing the levels of carbon intensity. However, India refused to sign any pact that would stunt the country’s growth.

Additionally India announced that it was prepared to do even more if an equitable agreement can be reached in Copenhagen. The big question is, should they have to? Since the majority of emissions currently in the atmosphere are a result of developed nations it could be considered unfair to compel India and other developing nations to take action, especially if it has the possibility of slowing the growth. Shouldn’t India and China get their own opportunities for development similar to the way West did? Is it right for India to clean up a mess it didn’t make, especially when the United States won’t even commit to a position?

On the other hand, I think that making the efforts to reduce the problem of global warming now, might be more beneficial than if it waits till it is a fully developed country. There is much more information available today then there was when the West was developing. As a result, India and other developing countries are aware of the possible negative consequences global warming might have. It could thus be considered irresponsible to develop in a manner in which these problems can be exacerbated. Furthermore, finding a way to develop while avoiding these problems might save the country from having to fix the problem after it has already developed. The West is a good example of the challenges associated with dealing with the problem after the fact, it might be smart to learn from this lesson.

Regardless of what the international community chooses to do about climate change issues, development in a socially responsible fashion might be more beneficial in the long run. It could reduce the likelihood of problems that accompany global warming, such as rising sea levels, and allow India to become leader in the international community.

In my opinion the West should provide leadership and assistance to developing countries; however it is uncertain if this will ever fully come about. Even if the responsibility does not fall on developing nations, should they make it their responsibility? Is the politics of climate change more important than the possibility of a brighter and cleaner future for the country?

-Jordan Wente

If you’ve ever come across the former CNN commentator Lou Dobb’s views on the offshore  outsourcing issue, you’d get the idea that the U.S. was going down the tubes because of offshore outsourcing.  He has even called business leaders who use offshore outsourcing “Benedict Arnold CEO’s.”

I think there’s a lot of emotion involved in discussions on offshore outsourcing that cloud the discussion. Instead of trying to gain a real understanding of the impact of global outsourcing (Click here) and  focusing on a strategy to combat the real  threats, there are calls for more tariffs, taxes and laws against the practice.

Why is offshore outsourcing considered bad? On a macro scale, outsourcing is good for the economy. Customers and investors drive businesses, and customers demand lower prices and investors demand higher profits. In order to lower their costs, companies outsource non-core activities and tasks to places where they can get the most value for their money. That’s the upside.  The downside is that factories that don’t adapt or use advanced manufacturing techniques or outsource themselves, will be less competitive, less profitable and may be more likely to fail, then people lose jobs.

I think the question should be, How can the U.S maintain and increase it’s global competitiveness and maintain a low unemployment rate while still outsourcing ?

The U.S. is the acknowledged leader in many ways.  In spite of the economic catastrophe that we are in the midst of, the U.S. is still the safest place to invest.  The U.S. is known for the quality of it’s educational institutions and it’s pace of Innovation.  It is also the acknowledged leader in Information Technology and Biotechnology.   The US is also a huge consumer of goods. This the framework that the U.S. must work within to maintain and increase it’s presence in the world economy.

To maximize a company’s profitability, they should focus on their core competencies.  What do they do best?  Which activity performed where adds the most value?  Keep those skills and activities at home, but outsource where it makes sense.   Companies in India are presently outsourcing to the US on a larger scale following the same reasoning.  The Indian Plug-in EV company Reva is collaborating with the New York automotive parts company to build a plant in New York. The Indian IT company Wipro is finding a greater value added by having software written in the U.S. rather than in India…. Why?  If the contract is U.S. defense related it may be a requirement.  If it’s a new concept or interface that’s being developed and if it’s being targeted for the U.S. market, it’s more efficient to have it done in the U.S. than in India.

I recently attended an MIT sponsored forum in Santa Barbara that discussed the issue of turning research and innovation into a greater economic advantage. I enjoyed and got the most out of a presentation by William Jeffrey, CEO of Hughes Research Lab.  He was the first speaker and set the stage for the rest of the speakers.  He had gathered data and presented charts to show the realities of the state of pure research vs commercial development in the US.  His summation essentially was that we need to have a shared vision in this country of the importance of spending money on pure research and then have the motivation to transfer the innovations resulting from this to products that we need.  He compared and contrasted the “old” serial method of development, publishing, then “casting it out”  to see if anyone liked it enough to commercialize it, to a more focused NRC “Tire Track Model” method, where you try to match up applications while innovating and removing the time lags inherent in the “old” methodology.

In summary,  I believe if we refine our method of turning research into products, focus on our strengths like education, innovation, IT and biotechnology, and outsource where it makes sense, the U.S. can maintain and increase economic advantage over the rest of the globe.

-Jeff Severn

And to see him come at this from a bit different angle, also/listen to Kaiser’s presentation at TEDx Honolulu.  Click HERE.

Check out this video presentation (click HERE) of Kaiser Kuo at my undergrad alma mater, the University of Nebraska - Lincoln.  An excellent, excellent piece, and well worth the investment of your time.   It is a 1 hour and 18 minute broadcast (includes Q&A).  His talk is titled, Shouting Across the Chasm: Chinese and American Netizens Clash in Cyberspace.

FYI, Kaiser is a UC Berkeley grad and two years ago he spoke to our MBAs during our trip to China.  Below is a more beefy bio for Kaiser.  

Your thoughts and takeaways from his talk?

Kaiser Kuo:  Born in the U. S. to Chinese parents, Kuo lives in China and identifies equally as American and Chinese. Formerly director of digital strategy for the Beijing office of a global advertising agency, Kuo has worked as a technology and business writer for publications such as Time, TimeAsia, China Economic Review, Asia Inc., and the South China Morning Post, and currently serves as an advisor for Youku.com, a leading video sharing company in China. Kuo co-founded China’s most famous rock band, Tang Dynasty, and continues to be active in the Chinese music scene.

I recently finished James Fallows terrific book,  Postcards From Tomorrow Square: Reports From China. Can’t recommend it enough.  It will be required reading for our next China trip.

I also just came across his most recent article in The Atlantic, How I Survived China.  Also a great read.  

Regardless of whether one agrees with what Fallow’s sees and/or concludes, the guy can flat out write, and I have to utmost respect for those who can do so.