In looking at China’s economy, one of the notable trends in recent years is that it is increasingly looking outside its national borders for new growth. But such ventures hold new perils for China that it needs to manage.

China has had considerable success with two forms of globalisation – becoming a global exporter, and more recently by undertaking overseas direct investment (ODI) through which the next wave of Chinese companies will embrace corporate globalisation.

Chinese companies will need to overcome four major challenges in pursuing this type of globalisation. First, they will have to develop world-class financial skills and risk management; second, they have to develop the human skills needed to manage information flows in horizontal organisations which currently are not recognised in their hierarchical command and control systems; third, the new firms will have to compete through product differentiation, not only on low costs; and fourth, they will have to overcome political barriers to global acquisitions since outsiders perceive the real owner of the Chinese firm to be the state and so will be reluctant to cede control to a foreign government.
Peter Buckley, a British professor, undertook a persuasive analysis of the behaviour of Chinese firms. The results may seem critical of China, but are not meant to be; they simply reflect the fact that China is distinctive from other emerging economies due partly to many of its multinational enterprises remaining in state hands – even though they are corporatised in order to focus on commercial objectives.

State direction means that these firms still align their operations, whether at home or abroad, with the country’s five-year plans and national imperatives. This is a model that is not prevalent in any of the other leading emerging economies.

Noting this fact, critics point out that Chinese firms are able to enter markets deemed risky only because they have ‘infinite’ financial backing from the state. At a recent meeting organised by Horasis in Valencia in early November, we heard that the manner of Chinese ODI is sometimes unsettling to African managers. They note that the Chinese essentially offer a barter plan – for example, building roads and hospitals in return for extracting raw materials.

There is also a lot of angst about the fact that Chinese firms tend to employ mostly Chinese workers instead of helping develop local skills.If the Chinese use equipment that is dismantled at home and re-assembled overseas, it is highly likely they need Chinese operators to do the job, especially if the instructions are written in Chinese. Nevertheless, the deployment of too many Chinese operators is meeting with opposition in host countries.

In some industries, such as banking, where there is considerable local talent, the reliance of Chinese entities on Chinese staff is a matter of particular concern to locals. Françoise Nicolas, a French professor, concluded from a study of Chinese firms in France that ‘ . . . Chinese enterprises are still at a trial and error stage in their foreign ventures’. ‘They are still learning, sometimes the hard way, and cross-border acquisitions remain daunting to many Chinese companies. Most of their executives have little experience with M&A, and even less trying to manage across cultures . . . they also lack experience in assessing the potential costs and benefits of a cross-border acquisition.’ And Valeria Gattai, a professor from Italy, found that Chinese companies in Italy ‘. . . lament (the) cultural distance, bureaucracy and the lack of flexibility in the Italian market’. Thus, successful ODI is not simply a matter of money. The human side is also important, as is the capacity to adapt to local cultures. As Buckley noted, the Chinese ODI seems to concentrate on regions that have similar characteristics to China – which are unconstrained by the ethical and governance obligations that are expected of western firms investing abroad.

However, unlike western firms, Chinese firms are comfortable operating in highly regulated and controlled local markets (as they do back in China). While Chinese firms are in many ways successful with their ODI, they need to be more sensitive to the fact that they cannot ride rough-shod over local systems and cultures simply because a host country is looking for inward investment. Their ventures abroad are joint ventures and need to be pursued in a spirit of partnership in which both Chinese firms and their hosts are winners, and seen to be so.

The writer is founder and chairman of Horasis, which hosts the annual Global China Business Meeting.

This article first appeared in Business Times on December 14, 2011.

If businesses did not make a profit they would, in effect, be giving away their money, and would fail – putting many associated people out of work: their staff, suppliers and customers. But some firms are accused of profiteering – making unreasonably large profits.

In the western world the service industries and the oil firms spring to mind. Yet in the case of the water, telephones and electricity sectors they have a huge expenditure programme to meet – in terms of maintenance, renewal and expansion of their reach. The oil firms must explore, spending vast amounts on ventures that while likely to produce oil (or gas) may eventually have no yield. Pharmaceutical firms are likewise hampered – research on new drugs is very costly and may not develop a useful product.
No business, however, can justify a vast salary regime. Managers after all are just bosses as in your corner shop- they ought to be prudent entrepreneurs, mindful of their customers´ needs and the costs of goods to fill the shelves: the wrong goods will not sell, and too many errors will lead to a change of manager, or to the failure of the business since no profit is created to expand future business.

On July 30th 2011 there was a call to gather in Datran, Kuala Lumpur to `occupy´ and protest against increasing economic and social inequality. By November 4th there were said to be 2,500 “Occupy” communities spread round the globe all acting mainly peacefully and asking their governments and businesses to become more socially conscious and not to be profiteers. There is a collective judgement that a few people are undemocratic, commanding obscene salaries and having no fear of legal repercussions if they fail in their management tasks.

There is a similar unrest expressed against the laissez-faire capitalist movement run by some governments. Ministers determine what projects will be undertaken by the people´s elected Parliament `for the good of the people´, and they often spend a vast fortune on tasks that ultimately are failures. Failures because of many factors, but most being poor specification, meddling during the project so varying the goals and simply poor management of a project that had not been properly evaluated. The government is, like banks and some major firms, unconcerned by the downside risk of a project as no one is seen to be the manager responsible, and no one gets sacked.

The people are thus angry at all forms of unevaluated expenditure, especially in these austere times – they would prefer to dispense with much direct taxation. They wish to have low levels of direct tax (yet still support some obvious public services like the police, military, education and perhaps health service) so they would have more cash in their pockets to spend on goods carrying indirect taxation. If an individual wished to buy bread or a luxury item it is their choice, and would be taxed accordingly. But if they have little cash to spend, through being made redundant for instance, they may not even be able to buy any bread. It is said that we, as individuals, may be better decision makers than governments or managers of large firms as we evaluate risk at each operation: we are spending our limited savings. Academically we know we do not do this efficiently, but surely we will be better than governments who seem not to consider risk at all?

What can we do about this? Well, in fact, nothing much rapidly. It is said that the top 10 per cent owns 70 per cent of the world´s capital -and this is not going to change overnight. The inequality is measured by economists as the Gini Coefficient and shows the worst country as Namibia (0.847 – with 1.00 being the theoretical worst). As we said, it will take a long time to alter national stereotypes or national inclinations to saving or wealth management – which in the case of the Orient often goes back as far as the edits of Confucius. However, that is too facile an argument – as Ireland, Italy, Finland and Australia are relatively equal (all under 0.622), and they do not carry implicit Confucian values. However, Italy and Ireland, although `egalitarian´ nations, suffer in the European banking crisis.

So again, what do we do about this? One of the complexities of modern life is money or more precisely, the borrowing of money for projects that may not perform well leaving us in debt: which we can´t pay except by further borrowing and betting that bit harder on future winnings. The whole thing becomes untenable without lifting the levels of trust in each other, as we did in the days before much cash circulated-we bartered our way through life, trusting the others to pay in the future. It will be tough on everyone if we collectively wipe out our debts by defaulting. But somehow we must begin again; we must trust deeply, to get the cash circulating and to pay a reasonable salary at each level of society. Then the `bread winners´ will be able to hold up their heads and indeed buy bread once more.

Frank-Jürgen Richter is founder and chairman of Horasis that hosts the yearly Global Arab Business Meeting held in Ras Al Khaimah.

This commentary first appeared in the Khaleej Times on November 27, 2011.

InMobi

However, Nokia and Symbian still combine for 47 percent of the market, followed by Android at 17 percent, iPhone at 6 percent, and RIM at 1 percent.

Read the full article at sgentrepreneurs.

So, these men work in the field of idea and innovation generation, a gray area untouched by many.  Measurement of results is indiscernible by the layman’s metric eye and usually requires long-term strategy and planning. Thorough projects of their sort take from six months to a year’s work of dedication and analysis.

“Define Innovation.” asked Alan. All of us, trying our best to find the most awe-inducing answer left him with a chuckle. He said in simple terms, “the introduction of a new product, process or service.” And that began the session.

The innovation process was broken down into four aspects; Identification, Insight, Ideation and Activation. As simply put by Alan, turning the innovation process into execution is an entirely different thing altogether.

Let’s break it down:

Identification begins with the framing of achievable targets. Not some boundless wandering into discussion unknown, but with an aim of the discussion to reach a ‘Eureka’ moment. In order to achieve this, a clear description and understanding of the challenge is needed, as well as mutual agreements amongst all about standards, participants, timing, and action.

Insights can be found everywhere; it stems from a need or motivation. Through immersion, one can gain plenty of behavioural insights and observations in relation to the challenge in mind. Insights are your answers and reasons to a ‘Why?’ It also expresses opportunity; a challenge proves a gaping hole but an insight allows a solution to fill it up.

Ideation seems like a Big Word, but in actuality, has an even bigger definition. Nothing of a technical sort, but rather, it is about having or providing the right environment to promote the wave of ideas. It is the use of stimuli to add inspiration. Three steps are all it takes for ideation; describe, explain and draw. We embarked upon a round of impromptu storytelling, using a bunch of absolutely random words to conjure up a story, punctuated by uproarious laughter. Rightly explained by Laurenz, “a creative environment opens your mind.’ It sure did apply to us, with words like ‘underpants’, ‘crazy’, ‘green’, ‘chocolate’ and ‘sexual’ emerging from our collective vocabulary, what a bunch of individuals we are!

Activation Alan shared that the toughest part of this function is that the implementing of the idea is almost as difficult as thinking it up. Plenty of obstacles arise at this last stage, real world situations, budget, technology; the list goes on. The only way to overcome this is to set the detractors aside and never trash any ideas away until all corners are fully explored.

It was, all in all, an awesome Fishtank session. To sum it up, Alan Fairnington and Laurenz Koehler are idea geniuses, game-changing revolutionaries. They challenge the way corporations should view idea generation and innovation as a long-term initiative instead of a ‘success now’ solution. They believe that it should be embedded in the corporate culture to ensure that the same concept and approach is embraced through all the various functions of the business.

As individuals, they are both approachable and witty; there was never a dull moment throughout the session. Duxton Consulting was known to us as the ‘company at the start of the street’, but through this session, we have been provided with more insight on what makes their business tick. Their business involves engaging people and organizations through creative thinking and reworking the internal processes on ideas that have been generated through the creative thinking process.

Global and regional industry leaders to share best practices and celebrate achievements in media innovation within the Asian context

November 02, 2011, Singapore – The Festival of Media Asia, the world’s first festival of media creativity and innovation will be held from November 13 to November 15 at the Marina Bay Sands Expo and Convention Center in Singapore. With its first Asian chapter, The Festival aims to address the immediate challenges facing the Asian media and marketing industry and will feature 40 global and regional leaders in branding, marketing and communications.

The Festival of Media Asia will comprise of an exhibition and a two-day conference before culminating in the celebration of the best in media and communications with The Festival of Media Asia Awards.

Some of the key speakers at the conference include Xuhui Li, General Manager of International Client Sales, Youku; Jayant Murty, Director of Strategy and Integrated Marketing, Intel; D N Prasad, Head – People Technology and Operations & People Brand, APAC Google; Carolyn Everson, Vice-President Global Marketing Solutions, Facebook and Rahul Welde, Vice-President – Media, Unilever Asia, Africa, Middle East, Turkey and Russia.

“The event will connect brands from inside and outside Asia, covering topics of relevance to Asian companies looking at the global market as well as international companies who are intrigued by the rapidly changing face of Asia,” said Charlie Crowe, Founder of the Festival and CEO of C Squared.

Delegates will be treated to insights and observations on a spectrum of topics covering issues such as global change; Asian companies in an international marketplace; the recruitment, development and retention of Asian talent; going beyond advertising and the most important communications innovations of the past year.

The Festival is backed by more than 50 esteemed partners in various industries including BBC World News, CNN, Facebook, Google, StarHub and Universal McCann.

Companies regularly in attendance at other Festival of Media events include AOL, AT&T, Cadbury, Cisco, Facebook, Fox, Google, L’Oreal, Mastercard,  Microsoft, News Corp., Nike, Nokia, Omnicom, Orange, P&G, Philips, Publicis, Santander, Shell, T Mobile, Turner, Twitter, Unilever, WPP and many more.

“With Asia’s business resilience driving global growth in the next few decades, many international brands are looking to Asia. Delegates who have attended other Festival of Media events can look forward to understanding the Asian perspective and come away with insights on how best to leverage the exciting regional media landscape,” added Crowe.

More than 500 delegates, the majority of whom are key decision makers in their organizations are expected to attend.

The Festival of Media Asia Awards Ceremony will follow after the close of the conference. 81 nominees chosen out of over 400 entries will be vying for honours in categories such as Best Use of Emerging Technology and Best Event/Experiential. The campaigns will be judged on insight, strategy, execution and results from the judge’s panel comprised of the industry’s leading voices.

Since its inception five years ago, The Festival of Media has doubled in size and established itself firmly on the media industry’s calendar. The Festival of Media Asia is jointly organised by C Squared and Lighthouse Independent Media, the publishers of Marketing Magazine in Asia.

For more information, visit the website at www.festivalofmedia.com/asia/.

About C Squared

C Squared is a business publishing and information company that serves the global media and marketing industry. Since the launch of its first international industry publication – Cream – in 2005, C Squared has grown twelve-fold and, though still headquartered in London, over half the Group’s turnover now comes from outside the UK. Across C Squared’s portfolio of market-leading magazines, websites and conferences, it has readers, subscribers, visitors and clients from over 50 countries and produces successful events on every continent – from New York to New Delhi; from Valencia to Vilnius and from Amsterdam to Accra.

www.csquared.cc

About Lighthouse Independent Media

Lighthouse Independent Media is the publisher of Marketing magazine, the highest circulating, widest reaching, most read and longest running publication for advertising and marketing professionals in Asia Pacific. With magazines, websites, e-news bulletins, event services and a print readership of more than 100,000, Marketing is trusted across Asia Pacific for its innovation, editorial integrity and accuracy. Launched in Singapore in 2002, the publication now operates in three key markets across Asia Pacific; Singapore, Hong Kong, and Malaysia. With localised content and event formats designed for a regionally connected audience, Marketing magazine is the authority on advertising, marketing and media intelligence in Asia Pacific, reaching more advertising and marketing professionals in the region than any other competitor publication.

www.marketing-interactive.com

Media Contacts

Donna Garcia / Shruti Soni

Rice Communications for The Festival of Media Asia

Tel: +65 6221 8045

Email: donna.garcia@ricecomms.com / shruti.soni@ricecomms.com