globalEDGE Blog Archive March 2009

It was easy to run a profitable outfit when the Chinese economy was booming. Double-digit GDP growth, combined with strong demand for cheap Chinese exports fueled a tidal wave of successful startups. Investors shoveled tremendous amounts of capital into these young companies, but many were more concerned with “getting into China” than with investing in a particular company. As a result, many companies that would not have been financed during low-growth periods were given a shot.

A few days ago, Tata Motors of India introduced the commercial version of the Nano, a tiny ten-foot-long five-foot-high compact car which the company hopes will revolutionize transportation not only in India, but in other parts of the world too. The car will sell for roughly 100,000 rupees ($1,979; £1,366) and goes on sale next month.

A couple of days ago we posted a video on the importance of innovation, but it left me wondering: who's best at it?

Luckily, a survey done by the Boston Consulting Group, working with the National Association of Manufacturers' Manufacturing Institute, seeks to answer just that question. They rank the top 30 most innovation-friendly countries on the basis of government policy and real business results.

Innovation is extremely important in the competitive global business world we live in. Therefore, it significant for business graduates from any university in the world to master this skill. The following video is an interview with Dean Tom Campbell of the Haas School of Business on the importance of innovation and the steps the school has taken to ensure that its graduates obtain the skill to develop strategies for outstanding business ideas.

You may be missing out on a new breed of technology that some experts are heralding as the computing method of the future. Already, many companies use a system where software is offered as a service rather than a good. You don't buy a box with a computer program, you use an online application, hosted elsewhere. The same concept that made these technologies so explosive is also hitting the hardware world.

Passport requirements have been a complicated issue for travelers in North America. Starting June 1, 2009, new travel requirements will be implemented by the USA which will consequently have an effect on Canada, Mexico, Bermuda and 17 nations in the Caribbean region. The WHTI (Western Hemisphere Travel Initiative) will require all persons to present a valid passport when entering the USA by land or sea. As of 2007 these requirements have been in effect for air travel. Because of a friendly border crossing agreement, the Canada Border Services does not require U.S. citizens to present a passport when driving to Canada. This agreement used to be mutual, however the USA wants to strengthen border security and standardize travel documentation.

These new regulations will have a tremendous economic effect on the involved nations. Canada will feel the change more strongly than the USA since a bigger percentage of Canadians have passports compared to Americans. The changes will not affect business travel as much as leisure trips. Niagara Falls, Windsor, Toronto, and Montreal are among some of the most visited places in Canada. Furthermore, the summer is a popular period for many who live close to the border to go on camping trips in Canada. During the summer of 2009, however, there will probably be a huge decrease in travel. The WHTI is expected to lower U.S. travel receipts by close to $800 million (compared to data from five years ago) in the two years following full implementation. Furthermore, according to a report prepared by The Conference Board of Canada, U.S. travel to Canada is expected to fall by approximately 3.2 million trips and the Canada-USA trips by 7.4 million. This report however was prepared at a time when the world was not facing a financial crisis. Consequently, it is now expected that travel would fall by even bigger numbers.   

Tourism in North America will most likely face a not so profitable season this summer while travelers try to find their way through the confusion of new travel documents.

The globalEDGE team is constantly striving to improve our site and develop valuable new content for our users. To that end, we created the first online edition of the International Internships Directory. The Directory is a reference guide for students, faculty, staff, and administrators to help match students with international internship opportunities offered by two- and four-year colleges and universities, governmental agencies, non-profit groups, private organizations, and corporations.

We hope you enjoy this new feature, and please let us know if you have any suggestions on how we can improve globalEDGE.

When the global financial crisis hit, many nations saw a drastic decrease in their national wealth. While Tunisia suffered a slight decline in GDP by the end of 2008, its losses were not even close percentage-wise to those of other developed nations. The key to Tunisia’s economic resilience may be due to the fact that it is still undergoing a period of rapid economic growth and development. It may also be due to the fact that Tunisia’s economic backbone is based primarily on a labor-intensive workforce, and boasts a diversified economy with minimal exposure to the finance industry. Whatever the reason, Tunisia provides a strong example of what steps should be taken in order to get a country on the track to economic growth.

A recent report by the Boston Consulting Group which measures the government policies and corporate performance most encouraging to innovation has Singapore as the number one global leader of innovation, followed by South Korea at number two. Former innovation leaders from the west such as the United States and Germany dropped to numbers eight and nineteen, respectively. What exactly has contributed to this?

Could the winds of globalization be changing course? It’s probably too early to tell, but there are some pretty striking statistics that suggest the global trade climate may be changing.

The global economy has never before been so tightly interwoven between countries, and the current recession is clearly anything but typical. As consumers around the world tighten their belts, producers naturally trim their output. This scenario is playing out in nearly all countries, but the rate of change between exports and imports varies greatly from country to country. The magnitude and direction of these changes could have drastic implications for the future of globalization.

The University of Pennsylvania produces a great publication called Knowledge at Wharton, which provides in-depth analysis of current business topics. They recently came out with a 17-page Special Report on the affects of the oil bust on Middle Eastern economies. It covers several topics ranging from the region’s Sovereign Wealth Funds, to women’s rights, to business transparency.

Airline passengers in North America and Europe have increasingly demanded lower-priced fares, often at the expense of more comfortable accommodations. Our desire to snag the lowest rates has been aided by a proliferation of websites that allow consumers to compare rates between carriers.

Imagine you take a bag of flour from a store shelf. In the time it takes you to make your way through the check-out line, the cost of that flour may have increased 15%. This was the situation in Zimbabwe a few years ago, but unfortunately things have only gotten worse.

In Africa, the diamond industry has become more about helping the development  of countries and less about making a profit. The revenues from diamonds is helping build a stronger economy, increase educational improvements, and help improve healthcare. Since diamonds were discovered in Botswana in 1966, the country’s GDP annual growth rate has averaged 7%. The diamond industry has been especially helpful to previously war-torn countries such as Liberia.

Check out this excellent video synopsis of the new book, "Globality," by Harold Sirkin, James Hemerling, and Arindam Bhattacharya. The subtitle, "competing with everyone from everywhere for everything," gives you a good clue about how the book views the future of global business. The bottom line is that western businesses must adapt in order to stay relevant globally, because there are lots of challengers from emerging markets that are changing the rules of the game.

A recent article in Global By Design discusses the possibility of country and city-based domain names for various businesses. This would mean that a business opened in a various city could possibly have the domain name of that city. For example, a small business that opened in Tokyo, Japan could take the domain name, “smallbusiness.JP” or “smallbusiness.TYO” This could be quite beneficial for global businesses trying to create more distinction with respect to their web brands.

I am a huge fan of pretty much everything that Monocle publishes. They are always on the cutting edge, whether the topic is public affairs, business, or even culture and design. Recently they partnered with UK Trade & Investment to produce a series of videos on the business climate in different sectors and countries around the world. So far the topics have been: Doha, Boston, UK Creative Sector, UK Motorsport, London, São Paulo, Guangzhou, and Sofia.