Category Archives: Globalization

Emerging markets are growing at more than double the rate of developed economies like the U.S., Japan, or Western Europe. The economic statistics are impressive, but to walk the streets of places like China, India, and Eastern Europe and feel the growth on the streets makes an even bigger impression.

I’m interested in emerging markets not only from a business or investing perspective (I have some money in an index fund with this emphasis). The cultural and political changes which accompany massive growth are equally interesting. They’re at times disheartening (witness the millions of Chinese who have been displaced by their government) but they never fail to excite and surprise.

Last week I had coffee in Moscow with Tom Nastas, a local VC there, who gave me a good overview of the emerging markets and how Russia / Eastern Europe fits in.

After reflecting on our conversation, I concluded that I’m much more interested — from a business perspective — in Eastern Europe, Latin America, Dubai, Israel, and Southeast Asia than I am in China and India. From my limited perspective and experiences, I see China and India as overhyped and crowded. India sorely lacks physical infrastructure and China lacks sustainable political infrastructure, among other things. Both problems can and will be overcome in time. But there’s a larger problem for the enterprising individual or small business who’s getting into the game now as opposed to 10 years ago: western entrepreneurs are swarming both countries, driving up prices and crowding the battle for genuine opportunities. Be cautious where others are greedy, goes the saying.

Today I read a solid, brief essay of the state of emerging markets hosted by my publisher Wiley as part of its "Directions" series (where the future is going). The author, Mark Mobius, identifies the potential of Eastern Europe:

Within the emerging markets realm, Eastern Europe in particular has undergone significant developments. A major event was the accession of 10 additional countries into the European Union (EU), which expanded the trade bloc to 25 members in May 2004; the addition of Bulgaria and Romania this year has brought the total number to 27. Improved corporate governance, robust earnings growth, consolidation and M&A activities in the region as a result of EU convergence, a reduction in sovereign risk, and a stronger macroeconomic environment have all contributed to the stock price appreciation and the re-rating of Eastern European equities over the last five years. While the correction in oil prices from the high in 2006 has impacted oil-exporting markets such as Russia, we expect oil prices to remain firm because of geopolitical and bottleneck problems. The 12 Eastern European markets which gained entry into the EU in 2004 and 2007 are expected to continue to benefit from EU convergence, access to funds, relatively lower labor costs, business-friendly tax laws, cost competitiveness, higher GDP growth, and foreign direct investment inflows.

The entire essay is worth a read.

Thomas Friedman, author of World is Flat, is apparently starting an online venture where he will post video interviews with newsmakers such as Bill Gates. Every interview will start with the question, "When did you realize the world is flat?"

I love it.

(hat tip: Nick Owchar/LA Times)

When asked to do something, Americans ask what’s in it for them. Germans ask if the request complies with rules and regulations. Spaniards consider whether or not the person asking the favor is a friend. And Chinese consider the status and connections of the requester.

– Yeh’s summary of this interesting multi-cultural perspective on persuasion.

Dan Drezner links to a David Ignatius column in the Post about America’s high education dominance, and then excerpts a counterpoint from this Foreign Affairs piece ($) by Johns Hopkins president William Brody who says continued U.S. preeminence in education will be neither easy nor likely. Below, he notes the "free agent" trend encroaching on the academy — just like entrepreneurs can now operate from anywhere in the world, never work on a 9-5 schedule, and are known for who they are more than their strict professional affiliations, public intellectuals are following.

The loosening of the affiliation between faculty and universities is an inevitable consequence of the globalization of knowledge. In the quantum physics model, faculty obey a kind of uncertainty principle: you may know where a professor is at any given time or you may know his institutional affiliation. But the more you try to ascertain the former, the less sure you may be about the latter, and vice versa. This phenomenon prompted the former president of Boston University, John Silber, to actually propose taking roll call to see whether faculty members were on campus. But such a measure would go against the grain of how knowledge is generated and diffused in today’s information-sharing environment, and Silber’s proposal unsurprisingly has come to nothing.

One consequence of these changes is that the relationship between faculty and universities has become more and more one-sided. Tenure provides a lifetime, no-cut contract for faculty. But professors’ and researchers’ allegiance is linked to their research, and they have no requirement to stay until retirement with the university that granted them tenure. At the same time, faculty whose field of study becomes obsolete or is no longer within the primary purview of the university’s mission cannot be removed. This is a potential Achilles’ heel for world-class universities bent on remaining relevant in an environment that places a premium on research and development and evolves at a rapid pace…

My friend David Cummins, a young American ex-pat working in Shanghai, has started a new blog titled "This is China". Based on his first few posts, I expect this will be a great read for anyone looking for on-the-ground insights into what it’s like to live and do business in China.

I spent six nights in Shanghai last fall, thanks to the hospitality of blog reader and now friend Eisen Yeo. I met at least a dozen VCs, entrepreneurs, and technologists in Shanghai, and I kept asking the same question over and over again: What is really going on here? We read the stories about China, but what’s it really like? (Here’s what I learned.)

One of my favorite days was dinner with David and his partner Brian Yu, both of JL McGregor, at a restaurant in the hip part of Shanghai. It lasted for a couple hours, spanned many topics, and I came away feeling excited at how much I had learned in just a single dinner.

David is very much a deep thinker and is on the front lines analyzing and investing in companies in China. David — welcome to the blogosphere!