Debating American competitiveness: the U.S. can keep an edge if it takes the right steps.With apologies to Charles Dickens, is it the best of times, with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. poised for continued strong economic performance, or is it the worst of times, with the U.S. on the brink of being upstaged by China and India? [ILLUSTRATION OMITTED] That was the burning question at the 7th Annual CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Leadership Summit kickoff dinner. It was held Nov. 15 at the former Kennedy Winter White House, now owned by John Castle of private equity firm, Castle Harlan. The answer to the question for the CEOs of United Technologies, Caterpillar, Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation. , International Paper and other major companies was that, yes, there is going to be a narrowing of the gap in incomes and living standards living standards npl → nivel msg de vida living standards living npl → niveau m de vie living standards living npl between the U.S. and the emerging powers. But if the U.S keeps reaping the gains of productivity and stays committed to penetrating those markets with goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , there is little reason that America must lose its overall leadership position. The sharpest exchange was on the subject of where the next generation of engineers is going to come from. The estimates are that China is graduating 10 times more engineers than the U.S. is. "Well, then," said George David George David is the Chairman and Chief Executive Officer of United Technologies Corporation. David was elected UTC’s President in 1992 and Chief Executive Officer in 1994. He joined UTC’s Otis Elevator subsidiary in 1975 and became its President in 1986. , chairman and CEO of United Technologies, "let the work follow that. This is one of these things "These Things" is an EP by She Wants Revenge, released in 2005 by Perfect Kiss, a subsidiary of Geffen Records. Music Video The music video stars Shirley Manson, lead singer of the band Garbage. Track Listing 1. "These Things [Radio Edit]" - 3:17 2. where we say the sky is falling. I don't think it is." "But what happens when the next generation comes of age?" asked Robert Greifeld Robert Greifeld is the current CEO of NASDAQ. Robert Greifeld is President and Chief Executive Officer (CEO) of the Nasdaq Stock Market, Inc., the largest electronic screen-based equity securities market in the United States. , CEO of The Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. . "Is that where the new concepts are going to be developed, as opposed to Silicon Valley or Route 128? They'll be coming out of China because you've ceded that today, and we pay for it a generation hence." "This is like the story of the frog in boiling water," argued Bill Brody, president of Johns Hopkins University Johns Hopkins University, mainly at Baltimore, Md. Johns Hopkins in 1867 had a group of his associates incorporated as the trustees of a university and a hospital, endowing each with $3.5 million. Daniel C. , joining the fray. "You bring up the water slowly and the frog doesn't feel it. I think we're going to wake up 20 years from now and say, 'Boy, did we screw it up.'" David didn't buy the argument. "If the market wants to generate engineers in China, that's fine," he said. "And if it doesn't want to generate them in America, that's fine, too. We'll just hire them in China. What you care about is, does American capital ultimately preside over this world system?" "But you have to create value here," Brody replied. "We can't all be Wall Street fund managers trading stocks to one another. We can't all be hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" managers." These issues are big for Caterpillar as well. "My concern," said CEO Jim Owens For the baseball player, see . Jim Owens was the head football coach at the University of Washington from 1957 to 1974. During his tenure, he compiled a 99-82-6 record. In 1959 and 1960, he led the team to back to back ten win seasons, back to back Rose Bowl wins and a National , "is that the MITs of the future won't be in this country. If you go to our tech center just outside Peoria, it looks like the United Nations. Probably the majority of our masters and doctoral graduates there doing engineering work immigrated to this country. They came to graduate school and stayed here. "In the future, we'll have more research and engineering done in India, China and probably even the United Kingdom than we have had historically," Owens said. "The technical base of competence around the world is shifting away from the United States, which I view as a long-term issue for the standard of living. I think we need a manufacturing base, and we're going to have to do something proactively to keep it." Although CEOs are oriented toward market solutions, some argued that the Bush Administration ought to be doing a better job to enhance U.S. competitiveness. "There are health care costs and structural labor costs and tort reform," said International Paper CEO John Faraci. "I get pessimistic because I thought, maybe naively, that the Administration was going to get something done after the election, and they just lost control of the agenda. So nothing is going to happen." Still, however, Faraci's factories in the U.S. are the most productive in the world, as the company has found in benchmarking studies. "We're not suffering from an inability to be innovative and productive," said Faraci. How does it all play out? Clearly, the gap in living standards and technology base between the U.S. and other countries is going to narrow. But that doesn't mean the U.S. has to lose its edge altogether. "I think the standard of living is going to come up rapidly in the rest of the world," said Cat's Owens. "China has grown at 10 percent per annum Per annum Yearly. for 20 years. Today, we can build a world-class hydraulic excavator ex·ca·va·tor n. An instrument, such as a sharp spoon or curette, used in scraping out pathological tissue. excavator (eks´k in China. We're developing a supply base and bringing in a lot of our technology." Participants argued that the emergence of China and India will follow a different pattern than that of Japan, which maintained barriers against many foreign businesses. China's growth "will create opportunities," said UTC's David. "As they gain prosperity, they want houses, they want roads, and they want airports. Pretty soon, they'll want rental cars at the airports." Freddie Mac's chairman and CEO Richard Syron Dr. Richard Francis Syron was born in Boston on October 25, 1943. Richard F. Syron is chairman and chief executive officer of Federal Home Loan Mortgage Corporation (Freddie Mac), a New York Stock Exchange traded company and the second largest source of mortgage financing in also predicted that the Chinese will start spending more of their money, rather than buying U.S. government debt. "At some point," he said, "all these people in China are going to decide they don't want to save 25 percent of their income. They'd like to have a TV and a VCR VCR: see videocassette recorder. VCR in full videocassette recorder Electromechanical device that records, stores on a videotape cassette, and plays back on a TV set recorded images and sound. and a car." All of which means that successful strategies for penetrating the emerging markets will be critical to determining the outcome of the grand debate about U.S. competitiveness. RELATED ARTICLE: Relationships on the Ground Are Key to Winning China Strategies Winning in China is a lot about people. Chief executives need to cultivate relationships with people in government who make decisions. And they need to find the right kind of people to run their businesses. [ILLUSTRATION OMITTED] If that sounds simple, it isn't. And it takes years to get the equation right. One key is establishing relationships with mayors and provincial leaders before they are elevated into key positions in Beijing. United Technologies launched its first foray into Verb 1. foray into - enter someone else's territory and take spoils; "The pirates raided the coastal villages regularly" raid encroach upon, intrude on, obtrude upon, invade - to intrude upon, infringe, encroach on, violate; "This new colleague invades my the China market following its historic opening in the early 1980s with an Otis elevator joint venture. The mayor with whom George David negotiated the deal, Li Ruihuan
or Chu Jung-chi (born Oct. 23, 1928, Changsha, Hunan province, China) Premier of the State Council of China (1998–2003). In the 1950s he was denounced as a rightist, and he was purged again in the 1970s, but, once his Communist Party . He rose to become premier, in charge of managing the nation's economy. "The Chinese political leadership is remarkably stable," David says. "They stay in their jobs for a long time, and when they get promoted they don't forget their old jobs." The strategy for a CEO should be helping these officials accomplish their goals. "If you're good citizens, doing the right things, being a reasonable employer, raising environmental and living standards and offering benefit plans and health and welfare, you get really good, loyal friends in China," David explained. Provincial leaders are another key source of connections, said Robert Kuhn, an advisor to Citigroup China and author of a best-selling biography in China of former President Jiang Zemin. He visited 32 cities in 19 provinces in 2005. "The senior leaders of these provinces are some very smart people: Ph.D.'s in economics from Beijing University; people in their early to mid-fifties at the most senior [levels of] leadership--dynamic, creative and almost every one is fluent in English," said Kuhn. "These will begin to be the leaders in 2007, and surely will be the leaders by 2012." Simply going to China and having a formal meeting with a top official doesn't carry nearly as much weight. "If you go in, as many people do, to see current President Hu Jintao, it doesn't mean anything," said Kuhn. "But if you get to know [people] in the provinces, where they're working on very specific issues, the difference is incalculable." Caterpillar, which entered the Chinese market soon after President Nixon cracked open the Bamboo Curtain, takes the market so seriously that it has shaped the experience base of top management. "One of our challenges is we've got to find ways to keep some of our senior executives truly plugged in, in terms of business relationships," CEO Jim Owens said. "I lived and worked in Asia for eight, nine years. I travel there two or three times a year now. I probably go to China more than most other countries. Two of my other group executives--so three out of six of us--have lived and worked extensively in Asia, and spent a lot of time in China." At the same time, the company has identified talented Chinese employees and sought to develop them by moving them to different countries, including stints back at headquarters in Peoria. The most promising of these employees receive stock options as a way of securing their long-term loyalty. These Chinese nationals with international experience are particularly useful in managing Cat's operations in China, said Owens. These Chinese, sometimes called "returnees," are playing an increasingly important role in how all foreign companies are managing their operations, said Tom Neff, chairman of Spencer Stuart U.S., an executive search firm. "Ten years ago, most of the management talent were expats, either Westerners or Chinese from the other nearby countries," said Neff. "Now, Westerners are less visible. They're much more expensive relative to other choices." The returnees "are less expensive, they speak very good English, they're multi-cultural, they know the markets, and particularly important, they have local connections." The competition for talent has intensified as more Western companies have shifted their China regional headquarters from Hong Kong to Shanghai or Beijing, which has resulted in some "poaching poaching: see cooking. " of talent, said Neff. There are many other elements of getting the right China strategy in place. Some CEOs insist on wholly owned ventures; others accept joint ventures. And, of course, protecting one's intellectual property is critical. Putting the right people in place, however, seems to be the cornerstone.--W.J.H. RELATED ARTICLE: Who's Who Steven Barton Benchmark Electronics Gary Berman SiChange Consulting Saul Berman IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) William Brody Johns Hopkins University Robert Carter FedEx John Castle Castle Harlan Marc Chapman IBM Murray Dalziel Hay Group Andrew Daniels Concentra George David United Technologies John Faraci International Paper Scott Farmer Cintas John Foley Balanced Brand James Greenwood Concentra Robert Greifeld Nasdaq Leonard Harlan Castle Harlan Clare Hart Factiva Christine Hefner Playboy Enterprises Kevin Hickey Concentra Preferred Systems Suzanne Hogan Lippincott Mercer Rick Hundley Snecma USA Farooq Kathwari Ethan Allen Interiors Edward Kopko Butler International Ron Kubera Manugistics Robert Kuhn Kuhn Global Capital Walter LeCroy LeCroy Industries David Lewin UCLA Anderson School of Management UCLA Anderson School of Management is one of eleven professional schools at the University of California, Los Angeles. The school is consistently ranked among the country’s top-tier programs (currently #16 by US News and World Reporthttp://www.usnews. Christopher Lofgren Schneider National James Long III Wackenhut Services Robert Marston Marston Associates Andy Mattes Siemens Communications (U.S.) Chris Matthews Hay Group W. Alan McCollough Circuit City Stores Donald McCrea UCLA Anderson School of Management Stuart Moore Sapient sa·pi·ent adj. Having great wisdom and discernment. [Middle English, from Old French, from Latin sapi Clarke Murphy Russell Reynolds Thomas Neff Spencer Stuart U.S. James Owens Caterpillar Harvey Pierce American Family Insurance American Family Insurance Group (aka "AmFam") is a private mutual company which focuses on property, casualty and auto insurance, but also offers commercial insurance, life, health, and homeowners coverage, as well as investment and retirement-planning products. Group John Potter U.S. Postal Service The U.S. Postal Service (USPS) processes and delivers mail to individuals and businesses within the United States. The service seeks to improve its performance through the development of efficient mail-handling systems and operates its own planning and engineering programs. James Quigley Deloitte & Touche Dennis Shaughnessy FTI FTI Free thyroxine index, see there Consulting Steven Shaw Volt Information Sciences Joyce Shields Hay Group Brian Sullivan Christian & Timbers Richard Syron Freddie Mac Mark Thimmig White Hat Ventures Daniel Thomas Concentra David Tilford Medica medica (māˑ·dē·k Cathy Wooley-Brown White Hat Ventures Harold Yoh III Day & Zimmerman Paul Zeven Royal Philips Electronics |
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