globalEDGE Blog - By Author: Brian Small

Recently, we've discussed a lot about oil prices and the factors that drive those prices up.   Increased commodity prices are not just isolated to oil or to the Middle East region.  According to a recent article in the Washington Post, Japan is getting ready for jumps in food prices as well.

Thanks to significant global price increases in wheat and corn, Japan is likely to take a significant hit.  The issue is further complicated by high tariffs imposed by Japan on agricultural imports.  The dynamics of global commodities have taken on new facets with the increased interdependence of regional economies.

Over the last 100 years, transportation has taken some significant leaps.  With the invention of the car and its proliferation to countries around the world, individuals were empowered to go where they wanted, when they wanted.  However, as the boundaries of distance decreased with an increase in vehicle quality and reliability, so did the world’s desire to travel even further and at greater speeds.  The latest potential advance in human transportation is the proliferation of high-speed rail.

Did you know that only 14% of children who live in Latin America receive a private education? As with many parts of the world, education and economic status go hand-in-hand in this region. Recently, large companies have viewed Latin America as a unique test bed to join business with social issues for the benefit of children’s education. Microsoft has come alongside organizations whose goal is to provide one laptop per child throughout Latin America. This is just the tip of the iceberg in growing education, technology and human capital concurrently in a part of the world that is considered an emerging market.

As a result of the economic crisis, countries around the world are attacking their own debt problems with austerity measures. A mixture of culture, value systems and tradition play a role in how these measures actually are received by the citizens. Based on the fact that both the U.K. and France have adopted changes in their pension systems, how are these changes being received in the context of each country’s cultural values?

Although somewhat unknown in everyday international business language, a new term is being coined by investors everywhere: Frontier Markets. Most of us have heard of emerging markets, which are known to be very promising markets where investments carry great potential, but are not quite as stable as in developed countries. There are many articles being published about this relatively new category of market investments.  But what are frontier markets? This week’s blog series will not only establish what they are, but also provide some insight into their implications on the future.

“Never waste a good crisis…” Many politicians have said these words touting the benefits of the hysteria and urgency introduced by difficult situations. When people are under extraordinary pressure or panic, decisions are made quickly and with less resistance than under normal circumstances. In Chile, miners had been trapped a half mile below the surface for 69 days, thanks to a collapse in one of the mining shafts. This has generated news coverage around the world and over 1,000 reporters on the scene to share updates to their audiences. For some, this real-life drama demonstrates the human ability to endure difficult circumstances. For others, this creates a commercial opportunity.

Let’s begin by contrasting two different medical experiences intended to diagnose heartburn: 1) A catheter is inserted into your body through the nasal cavity and left there for several hours while a measure of acidity is taken or 2) You swallow a pill and wait two hours while a measure of acidity is taken. Although the results of these different procedures are the same, the comfort of the patient and skills required to administer the tests vary significantly. Welcome to the age of wireless health!

In the last few days, news of yet another product recall was released. Abbott Labs, a global pharmaceutical company, informed customers that one of their baby formulas called Similac was contaminated with small beetles. This time, the damage is limited and the worst of the symptoms is a sick tummy. In other recall cases, there are serious consequences for errors in judgment on the part of the manufacturer. Case in point: Toyota. Product recalls are on the rise – Why? In the flurry of new quality management techniques such as “six sigma”, what is causing companies to miss the mark and release potentially dangerous products to the unsuspecting public?

This talk by Dan Cobley, a Director of Marketing at Google, brings great insight into the parallels between Newton’s Law and marketing. Specifically, why are new brands created instead of just extending current brands? He demonstrates that inertia can work for you or against you depending on the circumstances.

Did you know that by creating a building with a “green” design you can save 72% more energy, compared to a standard design? There is a great opportunity happening in China with green energy and building design. Of all the markets in the world, China is one which can leverage green building design more than most others. With the amount of new construction occurring over the next ten years, the country is poised to take advantage of significant overall energy savings, while reducing their carbon footprint. In fact, it is projected the China will add 20 billion square meters of buildings in the next ten years.

As a second-year MBA student, I am constantly scanning the internet for articles and opinions about the future hiring prospects of people who earn a graduate degree in business. I recently came across a particularly interesting opinion about veterans of the Israeli army. The article asserted that veterans of the Israeli Defense Forces (IDF) not only have skills for combat, but are equipped to address everyday problems of regular consumers. Many of these veterans are valued for their strong values and ethics in the private sector. So, how is the MBA viewed out there in the international community? Is it worth the time and money?

Last week I had a unique opportunity to hear the Korean Ambassador to the United States, Han Duk-soo, speak at a luncheon in East Lansing, Michigan. The event was sponsored by the Global Business Club of Mid-Michigan. The ambassador has been traveling to various locations throughout the Midwest to tout the benefits of passing a Free Trade Agreement (FTA) between the United States and Korea. Currently, the agreement has been tabled by Congress due to other higher priority matters.

Over the past 10 years, China has had a significant impact on the world economy. Many businesses in the United States, especially those whose success has been dependent upon manufacturing, have felt the effects the most. Although many feel that the shift in Chinese economic power has adversely impacted the United States, it is also important to highlight the positive aspects of these changes. One of the great success stories comes from Michigan, in the heart of the Midwest.

Recent research performed by Harvard business professors demonstrates that bribery can actually make businesses more efficient.  When the red tape is removed, it is amazing how much can be accomplished in a short amount of time.  Although there is an element of efficiency introduced by bribery, it is important to understand the implications it has on you and your business. Meet Gagan Sign, a young Indian businessman.  When he started his first business at the age of 22, he discovered the hard way that bribery was part of his success, and hated it. 

Are you hedging your bets in this economy?  Singapore is!  A recent blog post triggered some curiousity about how the country is expanding.  The country has permitted the development of a casino which has been designed to attract tourists from around the world.  With an eye for expanding its economic base, the country is proceeding cautiously into relatively uncharted territory.  This new development demonstrates an effort to bring in new money to the country, while attempting to maintain the clean and safe image Singapore has worked hard to build.

Do you want to go out to eat? People around the world are saying “yes” to this answer, but are finding different venues to satisfy their hunger. In fact, you might be surprised to hear that 20% of the world’s food venues are street vendors! Did you know that of the 10 largest markets in the world in the food services industry, five are in East Asia? The industry is making some major shifts which are also specific to geographic location.

Just over six years ago, a “state of the art” free trade agreement (FTA) was signed between the United States and Chile. Since that time, a nearly perfect model of bilateral trade has ensued. In fact, the projected growth between the two countries was between 18% and 52%. Would you believe that the actual growth over this period is over 345%?! Free trade agreements have often been a source of debate because of the potential environmental and human rights impacts they have had in the past. How has this FTA impacted each country?

Greece has made top headlines across the world recently as a result of significant financial problems. Similar to what has happened across the globe, the government is yet another victim of the difficult financial times. What has caused this problem? What events led up to it? How do the events in Greece impact you and your international business?

Imagine a scene that many of us carry out everyday: You are driving through a remote part of town, and you approach an intersection. At the intersection, there is a traffic signal where you stop and wait. As you look around, you see no traffic for miles! Wouldn’t it be great if the traffic signal knew the current traffic and changed the light to green? Welcome to the concept of Intelligent Transportation Systems (ITS).

Approaching business challenges requires an open mind and willingness to take a fresh look. This couldn’t apply better than to opening new export markets. An interview with the U.S. Ambassador to the Kingdom of Saudi Arabia shed light on the opportunities opening in the Middle East. The Ambassador provided an insightful view of Saudi Arabia which presents great opportunities for businesspeople to view the country as a place to export.

It all began in 1945 with a renewed relationship between the United States and the King of Saudi Arabia, King Abdul Aziz. Since then, the country has experienced significant population growth as well as improved social and political climates. In fact, Saudi Arabia is in the process of creating 250,000 graduates of a vocational school. Education is paramount to the country’s development and will fundamentally change it from a purely oil driven economy to one that is more diverse moving ahead into the future.

The next question on your mind: But isn’t it hard to get started in the Middle East? Actually, Saudi Arabia is a capital rich environment where companies feel comfortable both manufacturing and selling products that are highly sensitive to intellectual property (IP) rights protection. As part of the current administration, IP protection has gone up because of the educational initiatives. Instead of stealing technology, the country is able to create its own.

If you are considering new countries in which to export your products, keep an open mind. Saudi Arabia is an example of a great opportunity for the right company to come in and provide solutions. China, India and Russia have recently earned over $19 billion in business that has traditionally gone to American firms. This is the time to regain confidence in the partnership that originated over 50 years ago.
 

“Fast and growing” is how the Turkish market is described by Jim Fluker, Senior Commercial Officer of the United States Foreign Commercial Service.  With a population of over 72 million and a growing middle class, Turkey is poised to be an ideal export market.  The country is uniquely positioned between Eastern Europe and the Middle East, where the political climate is relatively mild in comparison to many of its neighbors.

Business is booming for suppliers of basic materials, food and medical supplies.  Due to the earthquake disaster in Haiti, businesses around the world are seeing huge spikes in sales thanks to relief funds coming from the around the world.  Rebuilding infrastructure is a significant component to disaster relief, but so is rebuilding local economies.

Is “off-grid” the new “on-grid”?  Bloom Energy thinks so. The company is a start-up based in Silicon Valley, California and it claims to have found a solution to both reducing harmful byproducts and providing energy at lower costs than the current average market rate.  Their compact power plants are run on everyday elements such as oxygen and can be as small as a lunchbox.

A recent blog triggered some thoughts about how the Olympics today now represent a a joining of countries and economies in a rather harmonious ritual in which people put aside differences to compete under a common set of rules.

Lately, Qatar has been working hard to become a distinct country with a refreshed vision. As a matter of fact, its leadership has begun implementing a plan which will help the country arrive at significant goals and transform by the year 2030. In a conversation between Doug Barry, a U.S.-based International Trade Specialist at the Commercial Service and Dao Le, a Qatar-based U.S. diplomat, some of the opportunities for United States Businesses were outlined.

In recent news, the world’s second largest retailer, Carrefour, has elected to invest further in its international investment.  Known for stringent regulations in the retail industry, India has traditionally protected the smaller, independent markets and local communities that run them. Carrefour’s entrance provides a great case study of the importance of understanding the international market where a firm expands. Lets take a brief look at the conditions in India that Carrefour became familiar with before “cracking the code."

With the earthquake disaster in Haiti a few weeks ago, a tremendous outpouring of various forms of aide from around the world has been deployed to the country. Organizations and individuals alike have devoted financial and human resources to help get the country back on its feet. In light of the disaster, technology has come to the forefront and demonstrated the power of world networks. In this case, the use of technology has been paramount in raising financial support for the disaster.

Now is the time to think about ways to expand your international sales!  The United States Department of Commerce, International Trade Administration has just started a new series of webinars to help businesspeople learn about topics ranging from identifying new international markets to understanding export controls.

Facebook? Myspace? Twitter? Which one of these websites have you heard of?  Thanks to a study provided through marketingtechie.com, findings show that most of the developing world has not only heard of these social networking sites, but they are spending an extraordinary amount of time on them.  Without a doubt, social media has evolved from a way to simply connect with friends and share ideas, to a commercial opportunity for corporations to connect with people in new and different ways.  However, there is another important aspect to consider in this exploding industry: How have social media websites impacted the work culture around the world?

International expansion is certainly no small task for companies around the world.  Recently a success story of a Dome manufacturer highlights a few lessons that can be applied to any product or industry.  Domes International is a United States-based firm that manufactures round structures molded out of fiberglass.  They are used in a variety of applications including housing, offices, schools, military barracks, and warehouses.

In India today, there is a plentiful supply of up-and-coming entrepreneurs. With the advent of microfinance, less privileged communities throughout the world are given opportunities to start businesses in conditions that would otherwise be impossible. So, what is microfinance? Microfinance is the practice of making credit available to individuals in the form of small loans, who would otherwise not have the required income or collateral. The loans generally require in-depth involvement by both the lender and other community members.

One of the fastest growing technologies in the world has been the cellular telephone. Interestingly, this apparatus has come to represent more than just a convenient, universal solution. The use of a cell phone, or as some call it, the “mobile”, has been used differently in different cultures.

The global impact of our individual actions in society today is more than most of us know. The reach a single person can have has grown exponentially with the advent of the Internet and accompanying decrease in technology costs. The question becomes, how have people used this historical improvement in our ability to communicate across the world? One professor from the University of Oxford began inventing solutions for the less privileged people of the world. His idea began with the concept of user-adjustable spectacles. Check out a demo of his invention:

On December 3, 1984, the lives of 15,000 people in Bhopal, India, ended unexpectedly with a catastrophic chemical plant accident.  On March 24, 1989, an oil barge, the Exxon Valdez, ran aground and created one of the worlds largest ecological disasters.  Events like these are cemented into history because they have marked important turning points for enhanced levels of corporate social responsibility and their impact on the environment.  On this topic we’ll approach the subject from two different vantage points:

Unfortunately, the global economic crisis was not biased when it struck industries across the world.  Driven by high-rolling, high-ego aficionados, the art industry was impacted more than one would have expected.  With artworks ranging from just $500,000 to well into the millions of dollars, buyers who take interest in these unique items also felt the burn from the instability of the world markets and significant decrease in personal wealth.  As a matter of fact, in 2007 the art market was valued at $65 billion, down from $113 billion just five years before.  Today it is estimated to be as low as $50 billion.

“Sustainable Development” has quickly become a term used by companies across the world to explain efforts addressing the use of natural resources.  Generally speaking, the concept describes how a company can increase its efficiency, thereby reducing its overall impact on mother earth.  The demand in the marketplace to solve energy-related issues is growing, based on recent changes in global governmental policy.

How are filmmakers from developing countries helping students learn about strife and poverty across the globe?  How can a student in India earn a Masters degree in America without ever setting foot on campus?  The answer to these questions is the same: Technology.  Technological capabilities are improving at a break-neck pace.  At the same time, the demand for personal cultural awareness, advanced degrees and lower costs are more prevalent than ever.  International education now means much more than studying abroad.  In today’s society, new technological capabilities are allowing more people to develop skills at a lower cost.

One of the critical factors of having a large, successful international operation is having “feet on the street” in the country where multinational companies do business.  Recently, an article from ChinaDaily.com featured some staggering statistics about expatriates and the duration of their stay in the country.  Although business demands often dictate relocation by executives and their families, is this the most efficient use of resources?

For the second consecutive time, the International Olympic Committee has rejected Madrid as the site of the Olympic Games. Despite this minor set back, Madrid has an enormous amount of positive factors that make it a great place to do business.

India is becoming known today as an economic powerhouse for sectors ranging from manufacturing to outsourced business services.  The diversity of capabilities is unique and varies from one part of the country to another.  Today, the focus will be on Southern India, where industries include automotive components, textiles, IT, chemicals, and many more.

Gary Locke, now a prominent figure in the U.S. Government is charged with the responsibility of forming U.S. Commercial policy across the globe.  Gary is a recent appointee into the Obama administration and career politician.  Prior to his current position, Mr. Locke served two terms as the governor of Washington.  Given his new role, the obvious question becomes: How will Mr. Locke’s policies impact global trade?  Here are two points to consider:

The Trade North America Conference, happening in Detroit this week, is a great opportunity for the Midwest regional business community to learn about today’s trade climate. Underscoring the importance of the event, Undersecretary of Commerce, Dennis Hightower and former Governor of Michigan, John Engler will be speaking. The focus of the conference is to equip businesspeople with information which will enhance their ability to successfully export products to Canada and Mexico.