The slowdown in international trade and the digital revolution converge to shake up global value chains, a paradigm for international trade since approximately 25 years. A value chain, it should be recalled, encompasses all of the activities that form a product or service, from its conception to its use by the end consumer. The globalization of value chains that began in the early 1990s opened a cycle that now seems to bend. On these different links, the way value is created changes greatly. Western companies draw lessons by changing their business model. But emerging countries have also entered the game. Ultimately, maybe only a few winners with a global corporate status will be left.
The sinking of the British steel industry has resulted in confusing, and sometimes contradictory debates. The politicization of these challenges tends to obscure questions having primarily to do with industrial strategies. Strategies of the concerned companies of course, but also those of States and Europe.
Since Reform and Opening Up began in 1978, China has witnessed exponential double-digit GDP growth. While the coastal regions provided most of China's GDP growth, central and western China were quickly outpaced, as they lacked both the openness and the infrastructure needed to adopt this model. Coastal-inland inequalities are now closing the gap.
Clextral is an engineering company located in Firminy near Saint-Etienne, France. It employs 275 people including 80 engineers, sells its machines in 88 countries and has subsidiaries and offices on every continent. What's the secret?
Today, manufacturers operate in a harsh competitive environment. How can they maintain and develop their competitive edges? What kind of industrial policy can help them when facing this challenge?
It's 2025, a Digital Earth where continuous connections are everywhere, yet it's a planet where infectious disease outbreaks can erupt anywhere and spread worldwide in days. To provide a strategic health care firewall against medical crises and bio-terror, the Centers for Disease Control have matured digitally into a global, real-time e-CDC. New medical threats are identified, responded to and contained 24 x 365. As a real-time partner of health services around the world, the e-CDC's digital presence is everywhere. In this continuously connected future, it uses the best specialists to deliver the best medical protection everywhere, instantly, all the time.
This is the other side of globalization: more and more cases of misunderstanding. However, it is not impossible to avoid them. All you need are a few keys that allow you to step into the other person's shoes. Here are ten such keys, covering some especially sensitive points met in the business world.
Is the global crisis behind us? The divergent development of major emerging countries, Europe and the United States reminds us that despite a strong tendency for unification during the past two decades, despite our growing interdependence, the world economy is still highly fragmented. Under the circumstance, it doesn't make sense to draw a general picture without taking a closer look at these differences: between emerging and advanced countries, between the United States and Europe, and even within Europe itself.
Delocalization and automation are now impacting the service sector, with noteworthy consequences on employment in developed countries. Even in the case of highly intellectual activities, a number of inherent tasks can be codified and pre-programmed; some of the processes involved can be automated just like similar industrial applications. The tasks can be automated or executed remotely. Notwithstanding, not all services can be delocalised. It is in the interest of any territorial entity (conurbation, region, city…) seeking to define its strategy for future development or reconversion, to identify and indeed reinforce those services that offer clear competitive edges.
You may not know Hon Hai, but it is to produce 70% of all iPhones 6. It also operates the largest factories on Earth. Terry Gou, founder and chairman, based his success on cheap labor costs as well as audacious merging strategies. Will the rise of automated factories mean the end of this success story, and more broadly the end of China as the world factory? As a matter of fact, Mr. Gou is fond of robots, and he won't be the last to launch an automated factory. But he may need Chinese arms for a while. Here is why.
A few decades ago, when Africa was crumbling under the burden of debt, economic forecasts were very pessimistic. But the vigorous growth of African economies has proven them wrong. Where does the African growth come from? What are its specificities? What does Africa need to be able to race with other great emerging countries?
Is the globalization wave starting to wane? Various recent indicators suggest that Western companies have started reshoring manufacturing jobs, those qualified and well-paid jobs that provided a social platform for the development of industrialized countries. But experts disagree on both the magnitude and the meaning of this phenomenon. Only on one fact do they agree: the United States will be the largest lab of the reshoring process.
Has international trade come to a standstill with the crisis that started in 2008? Things are not that simple, says the Director-General of the WTO. While protectionist pressures may appear here and there, the real question revolves around the growing complexity of trade and the structural limits inherent to the technique of negotiation rounds undertaken by member states.
Developing the Chinese market is a top priority for many multinational companies. Across industry sectors, however, they face a common obstacle: attracting, developing and retaining the local Chinese talent needed to accomplish this goal. Lack of supply is not the only issue.
The global economy is becoming increasingly interconnected, and innovative businesses are harnessing the power of this network.
In any discussion of strategic thinking in contemporary China, western consultants always cite the wisdom of one towering figure: Sun Zi, author of the celebrated Art of War. Yet when enquiries are made into the principles guiding Lenovo boss Liu Chuanzi he is quick to proffer Mao's Little Red Book. He is not alone. Is this a nod of respect toward the tutelary figure of the current regime? No, Mao Zedong thought remains an enduring influence from Beijing to Shenzhen and revising some of its concepts is of immense value in any attempt to understand the tactical and strategical practices in contemporary China.
Peter Drucker dreamed of an idealized "plant community". With his disappearance in 2005 has the moment arrived to anoint a new successor to the respected management guru? With the publication of "Employees First, Customers Second", Vineet Nayar could be mistaken for a dreamer were it not for his status as the head of one of the most respected firms in India, one recognized by Fortune as possessing managerial methods among the "most modern in the world". He was among the attendees of the recent Rencontres internationales du management 2011 held under the auspices of ParisTech Alumni in partnership with Intermines.
Parker's guide, the Shanghai ranking, and the ratings of Moody's are all global points of reference. For dining, the bible remains the Michelin guide. How has an institution so French gained a foothold in distant climes? The example of Japan illustrates that besides universal qualities such as objectivity and independence, cultural features can be key assets for market penetration. Gwendal Poullennec, the Director of international development at the Michelin guide provided his insight on the occasion of a conference held on 1 December 2010 at the Ecole de Paris du management.
The less heralded consequence of globalization is the emergence of crises of expanding magnitude which test our ability to coordinate and swiftly execute a response. Truly global institutions such as the World Health Organization govern only specific domains and in most areas of human activity such bodies exist little, if at all. We are stuck with the question of how to respond to the new reality and it was with these stakes in mind that HEC Paris convened a workshop last November to discuss the way forward following the paralysis of European airspace in April 2010 as a result of volcanic activity in Iceland.
The furor over the WikiLeaks affair graced headlines of newspapers across the globe and illuminated the nebulous world of hackers and internet pirates. Questions have been raised over the unseen threads that connect actors on both sides of the law. What links do they have with states and large corporations? Are they completely outside the capitalist system? Piracy has a storied history with lessons for the current situation that Rodolphe Durand, Professor of strategy at HEC and co-author of The Pirate Organization (Harvard Business Press, 2012), recently discussed.