Kaushal

Gates to team up with China to build a nuclear reactor

admin — Mon, 05 Dec 2011 05:39:01 +0000

Earlier today, after attending the first deliberative poll of Macau, conducted by the Center for Deliberative Democracy of Stanford University , I was on the turbojet ferry to Hong Kong International airport from Macau. On the ferry I picked up the South China Morning Post, a Hong Kong newspaper, which had a headline about Terra Power. Terra Power has smaller, cleaner, nuclear reactors that would create less nuclear waste and they could be used for years without refueling. Bill Gates is the Chairman of this company.

Interestingly this company has been trying to find a country willing to host the first TWR nuclear reactor. It looks like they have found the partner country, China. This is a good example of innovative companies in US who can get their initial breakthrough in emerging markets and then piggy back on their success in international markets for marketing back home. In the US, our legacy and abundance of everything makes adoption of new technology slower. Emerging markets are ready to try new technologies to meet with their growth.

Communism and Democracy

admin — Sat, 03 Dec 2011 23:14:23 +0000

I have been visiting ex-communist countries and current communist countries regularly. It gives me a perspective of America from the outside.

I heard something funny from someone who lives in an ex communist country. ”During communist government, whatever they talked about communism turned out to be a lie and whatever they talked about democracy turned out to be true.”

Gap expanding overseas

admin — Thu, 20 Oct 2011 14:05:55 +0000

“Gap Inc., the clothing retailer that runs the Gap, Old Navy and Banana Republic retail chains, announced Thursday that it would be closing 189 Gap locations across North America by the end of 2013. At the same time, Gap is expanding its footprint overseas, opening a flagship store in Hong Kong and tripling its locations in China from 15 to 45.” as reported in Christian Science Monitor.

Something can be learned from this. Emerging markets are exploding with consumer market potential. If you visit any Hong Kong retail store, you will know that prices are much higher than the US store prices. In the short term, the US market is frozen, but in a few years it will be back. While maintaining a US presence, companies should focus on rapidly expanding their markets. In a few years, companies like Gap will not only have a profitable market penetration in foreign markets but they will also be stronger in the US market whenever the local market bounces back.

Invest in the US

admin — Wed, 12 Oct 2011 23:44:23 +0000

I have discussed in an earlier blog that the US is one of the best destination to invest. The world’s largest market has flattened its costs due to the financial meltdown of the last few years. When the National Export Initiative was being launched, I argued that one of the most potential export sector was the US itself. Now, the US Department of Commerce has launched the Select USA program for attracting foreign direct investment. This is definitely a step in the right direction. I hope each State and city will develop the right environment to attract more investment, which on the long run will create more jobs.

Canada for emerging countries

admin — Mon, 10 Oct 2011 21:03:15 +0000

Early last week I attended the Micro and Nano Conference Wave 2011 in beautiful Lake Louise in Banff National Park, Canada. Later in the week, I was a panelist at the Banff Venture Forum. At both the conferences I was impressed with the quality of the companies which I met with. It was a nice change from Silicon Valley’s obsession with social media companies who would like to sell their companies to the new “big five” of the valley. The Canadian companies which I met with were innovative and the majority of them had revenue!! What a concept compared to most of the valley companies.

I believe that Canadian companies can take their products and technology to emerging countries. Canada has the right business environment for doing business. Recently Forbes rated Canada as the number one country for doing business. Canada has vast resources including energy and agriculture to drive the innovation engine. Canada’s pragmatic immigration policy has created a multi-cultured population which can be part of product development teams for emerging markets. Canadian companies should develop a global mind set to tap into the world’s largest expansion of consumer markets.

Mission Impossible Goes to India

admin — Mon, 10 Oct 2011 20:56:04 +0000

Watch this video of Fareed Zakaria’s GPS.

It is interesting to note that the next Mission Impossible movie is being launched in India before it is being launched in USA. Dell is launching their thinnest laptop in China first as China is the largest PC market in the world.

I have been suggesting this sort of strategy now for a few years. US and Canadian companies can innovate and launch their products, services or business models first in emerging markets and then piggy back on their success back home. Small and mid size companies should take some cues from large multi nationals.

“U.S. Micro-Multinationals Can Learn from the U.K.”

admin — Wed, 24 Aug 2011 15:13:12 +0000

Emerging markets in Asia offer an attractive destination for any company looking to scale its business. Most of the countries in Asia are growing at much faster rates than the OECD countries. These new markets offer unique possibilities for U.S. companies to enter and gain an early lead in their sectors. Consumers in these countries respect U.S. brands. However, it is important to have a local presence when doing business in large markets like China and India. U.S.-based companies can leverage the unique product development infrastructure of the U.S. to develop products suitable for global local markets and then manufacture the products in countries with large market potential.

According to an article in today’s Financial Times entitled “UK ‘micro-multinationals’ lead the way”, “The UK is emerging as a leader in “micro-multinationals” – small to midsized manufacturers that operate plants in a mix of high and low-cost locations to gain maximum benefits from different forms of production.” The article provides excellent case studies of U.K. micro-national companies that have opened operations in China, India, Thailand and elsewhere.

The FT articles notes that the successful micro-multinational manufacturers it covered share the following characteristics:

In niche sectors with only a few competitors
Use of novel technologies
Technical processes, or the products themselves, are esoteric yet vital to big industries
Have close relationships with customers who frequently play a part in product development
Business managers are “culturally adept” at adapting to the characteristics of different countries and forging links with engineering-focused customers around the world

Interesting food for thought for any U.S. company that would like to do business in the global marketplace as a micro-multinational.

Best export of the USA

admin — Mon, 09 May 2011 14:27:01 +0000

The Foreign Corrupt Practice Act of 1977 is a United States federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials.

For years, US companies had a disadvantage with foreign companies competing in countries where corruption was the norm of doing business. European companies could bribe officials from developing countries to get large orders. In order to compete, the US had two alternatives, dilute our laws or pressure the world to follow FCPA. Fortunately it was the second alternative which was followed. Recently we found major German companies guilty of bribery and huge fines were imposed on these companies. Europe is gradually following this moral benchmark. The UK is supposed to be putting into effective the Bribery Act 2010; however, the current Government is reviewing this law to look after their “economic interest”. I think FCPA is one of the best export’s of the USA. Corruption is like a drug, not only do we need to go after the people which take the bribes but the companies which provide the bribes should be equally responsible. At least the OECD countries should provide a level playing field on corruption.

Manufacturing coming back to the US

admin — Fri, 06 May 2011 15:06:26 +0000

I have been talking about this for more than a year. I discussed the fact that the property prices in Shenzhen, China are three times that of Austin, Texas. A recent report done by Boston Consulting Group confirms my theory that manufacturing will come back to the US.

I think the report misses one important development, mass customization. The advance of computing power is inline with Moore’s law. The internet has shrunk the product development process from years and months to weeks allowing product development at rapid rates. Compared to even 10 years back, we have more choices and models of any product. For example, Netbooks offered in computer retail stores have a various range of colors and configurations; usually, the one you want is not in inventory. You go to a European furniture store and the Italian sofa you selected from the range of available leather types and colors is not in inventory. For the global supply chain it has become unviable to keep these large ranges of inventory. I think this development will lead to new “modular manufacturing”. Final assembly manufacturing will come back to the US. Mass production of parts will continue wherever the resources exist, final assembly will get closer to markets. The US being the largest market, will see a lot of assembly manufacturing back home. Other factors to consider are the cost of oil and the contribution of transportation to environmental pollution. These factors will make the finished product logistics more expensive.

I think at the end of the day, we will have a more sustainable, global world which is focused locally.

West Still Rules

admin — Fri, 29 Apr 2011 14:58:28 +0000

In the last few months I have gone through 10 cities in Asia and India. Every city had an impressive skyline full of towers, cranes and shiny new airports that were buzzing with activities. I stayed at the Marina Bay Sand in Singapore with a Skypark 0n the 57th floor. I experienced an above the cloud stay at the Ritz Carlton Hong Kong inside the ICC building from the 102th floor to the 118th floor. New roads and high speed trains are being developed at record paces. Germany is riding high because of the export of luxury cars to Asia. Millions of new people enjoy smart phones and the latest computers. Neon billboards, Hollywood mixed with Bollywood, MTV China, David Letterman billboard ads in Bombay, and malls full of American and European brands all make one feel that Asia is on the rise.

However everything happening in Asia is a copy of the west. Modern transportation, communication, entertainment, clothing, processed food & drinks, architecture, fashion, and the lifestyle in Asia is of western origin. If you think about it, after the industrial revolution almost all of the innovation which supports our current lifestyle, including healthcare, has happened in the west. Asia is proud of the growth rate and ready to show off their power of economy. Asia however, has not contributed in any innovation to our current lifestyle. It is claimed that China has more patents filed than the US, yet we do not see any Chinese brands coming out of China based on game changing innovations. India has become a powerhouse in software development, but there is not a single Indian company which has become the next Microsoft or the next Google.

Sadly, Asia has years of sustainable lifestyle. Asia could be teaching the world how to live in a sustainable world at a local level. This mad rush to copy the west is creating shiny cities at the cost of a lifestyle which supported civilizations for years. They could innovate a modern, contemporary, sustainable lifestyle. They could develop a business model of stakeholder interest rather the shareholder interest. Maybe it is still not too late. The do not have to do a ” frugal innovation”. They can do a very rich innovation based on years of experience in living in a multicultural, multiple disciplinary worlds.