yuru | inspire within » political

Do They Really Think We’re That Stupid?

kathyrobison — Thu, 26 Aug 2010 14:49:27 +0000

I don’t know about you, but I find it a little disturbing when I see politicians stand up and say that the administration’s entire economic team should be fired because they haven’t created enough jobs. First of all, governments don’t create jobs, businesses do. Secondly, governments can create environments that promote jobs, but its effectiveness is still a couple of steps removed and often comes with a long time lag. Do they really think we’re that stupid?

If we want to be honest, and I think we should, there is plenty of blame to go around for the predicament the US finds itself in today. We severely damaged our financial system through greed, ineffective regulations (notice I’m not saying a lack of), and a over zealous homeownership policy; we somehow forgot that economies and businesses work in cycles; and we all (people, businesses, and gov’t) failed to heed the wise advise of paying down debts when times were good.

Such a significant amount of economic damage requires corrective adjustments that will simply take a bit of time to work through the system. There’s nothing wrong with a slow and steady recovery. It certainly beats a continual decline or a Japanese style decade of stagnation. What’s is wrong are politicians trying to use the slow recovery to get ahead in the poles by scaring the public into thinking the sky is falling again. That may get you elected, but it will only harm the recovery because it breeds fear and continues to divide us. Fear affects confidence, and confidence can either have a positive multiplier effect or a negative one (Its our choice).

Let’s first look at what is NOT going to drive us out of this recession; and yes it’s the list of things that works in most recoveries, just not this one. It’s not going to be the housing market, since it was part of the problem. We are still in an adjustment period of getting people out of homes that really couldn’t afford them in the first place. There simply isn’t going to be much unmet demand until after the economy gets going again. Consumerism is another area where we got out over our skis and adjustments are necessary to find a sustainable level. I never really understood why the government chose to incentivized people to buy houses and new cars as a way to stimulate the economy . . . it just seems a little counter intuitive to me. The stimulus was definitely warranted, but we could have come up with some smarter programs. But since the government owned big chunks of the banks and automakers, perhaps one can see their logic . . . conflict?

Now, where’s the potential, the upside, the areas we can focus on that can produce meaningful results. Some economists are saying that we need investments in businesses (boosts productivity) and a focus on exports, which I agree with for the most part. We can use the demand that is stronger in other parts of the world to help create enough economic activity in the US, which in theory should help jump-start our own demand. That’s the beauty of globalization.

We can also look to trends, future needs, and how this new era of globalization is shaking out to find those niche areas that require capital. Anything that is working toward solving global issues, utilizing technology in innovative ways, and meeting the needs of people in lower socio-economic stances is likely a good investment. I can promise you, the companies working on the $1,500 car and mobile banking/markets for the developing world, will look like geniuses 25 years from now. We may actually be creeping up on the inflection point where it is actually more risky to bet on an investment that focuses on traditional methods of growth in developed markets than it is to explore the frontier where there are bucket loads of unmet demand . . . the bottom of the pyramid.

Success for the US in the 21^st century requires a new way of thinking, a new mindset, and paying far less attention to what the politicians are saying.

What’s All The Fuss About this New Sheriff at Downing Street?

kathyrobison — Thu, 15 Jul 2010 13:41:09 +0000

With an British mother and an American father, comparing the US and Great Britain is simply a way a life in my family . . . plus it gives me a bit of street-cred in this department. In this story, in my opinion, the Brits clearly win!

Sunday mornings with Fareed Zakaria on CNN are sacred in my house. Which basically means that my kids and husband abandon me for that hour. More often than not, I’m highly tempted to blog about one or two of the topics Fareed covers. I typically resist, because I rarely disagree with Fareed and over time I’m afraid I might come across as a “Fareed Groupie”, which could tarnish my image of a self-thinking, intelligent, strategic, modern woman. That said, this week, I am giving into temptation. I simply must blog about this new British government and the 39-year old George Osborne (Chancellor of the Exchequer – Secretary of the Treasury to Americans) whom I found to be slightly pompous (expected), highly intelligent (expected), but unexpectedly refreshing and on-point in his ideas around what people really want from their governments. I personally, think the US Republican party could take a lot of cues from the new conservative sheriffs at Downing Street. As an Independent, I actually prefer it when both the Democrats and Republicans are acting wisely as it makes for better candidate options and more solution oriented action.

If you missed the show, it’s easy to watch or listen on demand. Just click here.

Just to add my own touch to the conversation, and keep up my image, here are the four primary reasons why I like what I heard from Osborne and feel strongly that this is the direction that successful politicians will have to take (regardless of party) to be successful in the future.

Not Afraid to Act

Osborne has pledged to the British people that he will not hide hard choices from them and he will make them. He has clearly lived up to this campaign promise with his austere budget that is getting a lot of press. He feels strongly that the public wants a government who can admit when there is a real problem, and work quickly to get it fixed.

Proper Leadership

The kicker here is their assumption that the public can and should act as an intelligent deputy to a sheriff who is willing to make and stand behind decisions regardless of which direction the political winds are blowing. This new conservative party clearly recognizes that the British public clearly understands there is a debt problem, and that the country has been living beyond its means for some time, and so they are willing to take it on as their first priority. They also realize that not only Great Britain, but Europe, requires proper leadership to bolster their image and regain the world’s confidence in their ability to pay their own way.

Collaboration is Not a Death Sentence

Osborne speaks of forming a proper coalition government where the other party holds seats in the cabinet and how the real benefits of diversity in Parliament are less about looking different and more about being different and thinking different. One of the best statements Osborne makes in Fareed’s interview is, “We can’t abandon whole areas of policy to the Left in British politics. There is no reason why the Conservative Party should not have a progressive policy on climate change or be interested in issues of poverty and equity in our society and have answers to those issues.”

Open, Open, Open

They are open to new ideas, new views and anyone who can come up with a better way to reach a common goal. Osborne indicated that he constantly seeks out second opinions and alternative views. He encourages large numbers of people to come into meetings and say what they want to say, and understands that listening is a large part of the job. His office recently asked the broader group of public servants for their ideas on how to reduce budgets in a way that doesn’t damage the frontline services people receive. They received over 65,000 responses in a couple of weeks, and had some of them around to Number 11 Downing Street for a chat recently. Interactive governement . . . what a concept!

I’ve been saying for years (just ask my friends) that the politicians in the US are simply making things worse and what most people really want is an entirely new breed of politician that is much more suited for the 21^st century. We need politicians who care less about party line and more about solving problems. We need politicians who can explain both sides of an issue, without bias, and why they believe their decision is the best option. We need politicians who can work with other politicians to get the job done and stop wasting the public’s time and money on petty politics.

As much as I love they way in which this new and refreshing British government is behaving, I would certainly caution them that the best solution in today’s environment is likely a combination of austerity in some areas and stimulus in others. Because western politicians failed to play the austerity card when times were good, we are all now stuck in a precarious position. The equation is really quite simple and it works for government, companies, and at home. When times are good you pay off your debts, make smart investments, and put a little under the mattress for a rainy day. When times are hard you dig out your mattress money and stretch on credit a little if necessary. If used responsibly, credit can be a very stabilizing element in an economy. When abused, as we all now know, credit can backfire as surely as a 1970’s MG.

One of the things I love the most about this new government is the fact that they aren’t letting fear run the show. They are taking a stance, creating a strategy, and they are willing to listen to other ideas. The longer we let fear run our households, our businesses, and our politics, the longer this era of uncertainty will linger. It really is that simple.

Waking Up In Jacmel

kathyrobison — Sun, 24 Jan 2010 15:55:11 +0000

Just a couple of months ago Aimer Haiti and I met with Agronome Noel (“Agronomist Noel”), one of Haiti’s leading agronomists. You cannot imagine the determination and drive that this man and his wife have for their country and the need to rebuild the agricultural industry. We dreamt of the possibilities sitting around the table of an office building that was completely destroyed in the earthquake. He showed us the book that he has written on how to rebuild agriculture in Haiti. We talked about the need for a master land plan for the island. Over time, the lower flat lands that are prime for agricultural production have been used for housing and has wrecked havoc on the natural drainage ways. We talked about how important this step is, but how difficult it would be to implement since it would require huge changes. It now represents one of the hidden opportunities in the horrors of the earthquake.

After several hours of invigorating discussion, which left our minds swimming with ideas and possibilities, Agronome Noel invited us to visit his farm. Fifteen years ago, he turned his frustration with politics into action and wanted us to see first hand what he had created. So, that was that, three of us were going to Jacmel for the weekend! This was huge treat for me, as I knew that agriculture would be a large part of the success equation for Haiti. For decades, Haiti had been given the well-intended advice to buy their food on the global markets and instead build factories to manufacture clothing. That strategy failed when world food prices rose dramatically and no one was interested in building factories in a logistically difficult place like Haiti when they have options like Mexico, Brazil, India and China. It was simply bad advice that millions paid the price for. A country should be able to feed itself. It cuts the risk of being subject to the large fluctuations in world food prices, it provides jobs, and for a tropical country like Haiti it can produce significant exports. But more importantly, it provides a sense of pride and accomplishment for its people.

Agronome Noel and his wife Nani purchased 15 hectares of dried up and barren land in Jacmel 15 years ago that was considered useless, for what amounted to a few hundred dollars. He told the community he was going to grow wonderful and rich fruits and vegetables. Many laughed at him and from that point on he was known as the “crazy agronomist”. He did not mind because he knew that some years down the road he would prove his point, and he did. Though at this point, I am not sure the fate of the Agronomist and his wife. They spent most of their time during the week working in Port au Prince in order to fund their farming operation in Jacmel.

Three of us from Aimer Haiti spent a weekend with the Noels on their farm in Jacmel. We stayed in the beautiful home they have been building for 3 years that was to eventually to become their retirement home and a bed and breakfast. I suspect it is no longer standing. The 3 hour drive from Port au Prince took us on a journey through the slums where all the garbage eventually collects after the rains, over broken roadways still not completely repaired from the hurricanes, and up through a gorgeous mountainous region. Despite some barren areas, there is still enough vegetation in the mountains that you can see and feel its natural beauty. The roads in the mountains were actually quite good and we past many small farmers bundling their harvests ready for the trip down the mountains that more often than not ended in spoiled produce before it reached a market.

We arrived at the farm in Jacmel after dark. The only light we had was from the cars we were driving and a small generator powering a couple of light bulbs in the house. We sat on the porch facing the ocean enamored with just how striking the stars are when you are so close to the equator and there is very little artificial light. We drank, we ate, we laughed, and we continually talked and dreamt of the possibilities for Haiti. The energy of hope and passion was strong in the air and it felt good to me. You cannot spend time in Haiti and not fall in love with the land, the people, and its spirit. It does not matter how much other heartbreak and sadness you witness, in Haiti love always wins. I am certain this is why the Clintons have remained so committed to this tiny country after all these years.

The sun arrives early near the equator; at 5:30 am in Haiti. The breeze from the sea is not as strong as I expected. Nor is the sound of the waves crashing against the 3-meter wall of rock down to the sea just 30 yards from the back porch of this large, half finished house in Jacmel. I am a lover of all sunrises, so there was no way I was going to miss this. The sun arrived on time, but shielded for some time by a large cloud. Soon, Agronome Noel was with me preparing for the day while everyone else still slept. I heard goats on the adjacent property and asked if he had any. He pointed to one goat off in the distance tied to a rock and told me that today would be the goat’s last day. Sure enough, about an hour later he and two others went out to meet the goat. And by the end of the day, well . . . we were eating goat stew.

A ball of fire finally burst from beneath the cloud and its rays reached far and wide as we quickly move from a shadowy sunrise to the full-fledge beginning of a new day. What a peaceful and gorgeous place I had awoken to, now that I could see everything. How could anyone have ever considered this land a lost cause?

When the Noels began 15 years ago with a plot of dry barren land, there was no road, no access to water, no electricity, and no soil. For the crazy agronomist, these weren’t problems, just things to be done. On weekends and holidays, with the help of a few farm hands that live on the property, they began the transformation by hand. There are no big machines and no tractors, just simple hand tools. They trucked in water and topsoil and began to build the tree canopy. You see, first you must create enough of a canopy to cool, shelter, and nourish the soil below. Once the canopy began to work it’s magic they were able to plant the tender topical plants and fruit bearing trees. They have bananas, cocoa, coconuts, mandarins, figs, papayas, and almond trees. At least those are the ones I can remember. The barren land was transformed into a tropic forest full of agricultural treasures in a few short years.

I will never forget the day I woke up in Jacmel!

Rebuilding Haiti – A Unified Strategy

kathyrobison — Mon, 18 Jan 2010 14:15:16 +0000

When you see the level of response from the US and nations around the world to the tragic earthquake that rocked Haiti only a few days ago, it is hard not to feel proud of the quality of global citizenship displayed by so many. Individuals and organizations have been sent to help with security, medical care, food distribution, general aid, and journalistic coverage and they should be commended for their commitment to humanity.

However, as an economist who was working on economic development in Haiti before the tragedy, I know that the strategy and model used for rebuilding is the key to success. Despite good intentions, the developed world does not have the best track record for helping under-developed countries gain any significant traction. There has never been a lack of funds or good intention, but there has been a lack of effective and unifying strategies designed with the population’s physical and cultural needs in mind. This unfortunate and tragic earthquake has presented the world and Haiti with an opportunity to set the rebuilding of Haiti on a course that will have long term significance for its people, if we are all willing to try something new and think about building sustainable economies with a new perspective.

There are a number of areas that will obviously require simultaneous focus, however the primary force and core strategy should be helping Haiti to rebuild their own country, with their own hands, and resist the temptation to do it for them. Often our own need to help gets in the way of truly understanding what is needed. This may sound over simplified or inconsequential to many, but I assure you it is not. The rebuilding must be done in a way that unites and aligns citizens, government, businesses, investors, and aid organizations. Without unity, there will be continued factions, hoarding, corruption, and minimal progress. This monumental task requires a top-down strategy with a bottom-up implementation plan. I have faith that with the assistance and guidance from the rest of the world, Haiti can rebuild itself and become much stronger than it was before the earthquake.

We must avoid simply jumping in with quick fixes and rebuilding everything back they way it was. A master infrastructure plan that is comprehensive in its ability to connect the disparate parts of the country and support agriculture and other industries is critical. It must take into account the reverse urban migration that is likely to occur as a result of the earthquake. Many people will go back to the small towns and villages where they are from because they no longer have homes and jobs and have nowhere else to go. The people in Haiti’s countryside are generally the poorest of the poor — why so many migrated to the big cities in the first place. Supporting agriculture, tourism, and arts industries in the countryside will provide people the means to stay, to start over and to allow the country to grow in a more balanced way.

Agricultural Development Aid is a crucial component, and it will be required in a way never seen before. With the traditional strategy of sending a disproportionate amount of food aid compared to Agricultural Development Aid, we generally set a country up for failure. Sending only food aid does serve an immediate need and feeds people today, but it can also destroy what markets still exist. Building chicken farms, developing farm land and building other food production facilities puts people in business so they can build up their own markets allows the aid to continue to churn through the economy and even increase economic activity over time. Simply handing out food produced elsewhere and brought in through an outside distribution channel fills an immediate need, but if it is not balanced with other strategies eventually also feeds the equation of poverty.

Businesses must be created and financially supported so they can hire local employees and begin the re-building process. Contracts must be structured with built-in profits from the rebuilding efforts that can be used to create further self-sustaining economic activity. The banking industry must be supported such that the bankers can make enough profits to stay in business and grow while providing heavily subsidized loans for building businesses and rebuilding structures. The World Bank and the IMF need to find creative ways to support industries and businesses directly as opposed to giving the lions share of funds directly to the government. When businesses begin to grow and more money is invested in capitalistic endeavors, the government’s revenue will grow in sustainable ways and can it begin to rely less and less on foreign hand-outs. The government should be orchestrating, aligning, and ensuring coordination of all efforts. The government should be making master plans and ensuring long-term strategies are properly focused on growth. Groups like Aimer Haiti, who can help build and mentor businesses, should be working with the government, the World Bank, the IMF, the US, foreign investors and domestic investors to develop completely new strategies for growth. Aimer Haiti has already been working on such collaborative and creative economic development strategies since their launch in 2009 and for years before as concerned citizens and Haitian business owners.

Energy has been a growing issue for Haiti as its population rises, and is now even more critical. Electricity has never been reliable and is often supplemented with large battery stores powered by diesel generators. The good news is that technology has advanced enough that a country like Haiti can leap-frog many of the evolutionary steps in energy that the developed world could not. It’s a matter of getting the brightest minds together, inside and outside of Haiti, to come up with the best solutions given the unique conditions of the country. Before the earthquake Aimer Haiti was exploring the possibility of using small solar energy units in some of the poorest areas to provide light, refrigeration, and power. With refrigeration, people can store and sell perishable products such as produce and fish. With power people who cannot read or write can begin the process of building an education base through radio and television. Mobile phones can be powered and connect people to markets to sell their goods.

Solving the energy issue is also the key to stopping deforestation. Until there is a reliable source of energy to replace charcoal, and until there are jobs and small businesses to give people a means to survive, deforestation will continue. Deforestation causes rapid erosion, which leads to road and bridge destruction, and leaves the land unsuitable for farming ensuring the cycle of poverty continues. The cutting down of trees does not happen because Haitians do not care about their land, it happens because it has become a means of survival for so many people.

The interconnectedness of all of these major issues in Haiti is another reason why getting the overall re-building strategy right is so key to its long-term future success. Every solution and every single effort of aid and rebuilding should be viewed as an opportunity to put Haitians in businesses that will create jobs. For example, the distribution of food and creation of helicopter landing sites, which is happening right now in Haiti, is a huge opportunity to employ people and allow them to feel a part of the solution and not a part of the problem. There shouldn’t be such a stark line between those giving aid and those receiving aid. This is an example of the change in thinking and the change in mindset that is needed to change the trajectory of how under-developed countries are assisted, particularly in times of need.

This type of re-building is not done from an office or over the phone, it is done by creating relationships on the ground, building businesses, one at a time, and helping families, one at a time. It’s about doing, creating, uniting, and elating in each small success that both dedication and determination will bring.

History has proven time and again that capitalism and the building of a significant middle class are still the best ways to bring people out of poverty. Before the earthquake, one of the first billboards you saw when you were leaving the Port au Prince airport, was the large unity triangle of Aimer Haiti, which of course translates to “Love Haiti” in English. I hope it is still standing!

Aimer Haiti & Their Dreams

kathyrobison — Wed, 13 Jan 2010 04:02:33 +0000

This photo was taken just before Christmas of me and my friends at Aimer Haiti. It was the end of a busy week of planning, dreaming, and believing in what Haiti can be one day when we all work together. I have not been able to reach any of them and pray that they and all of their loved ones survived.

I can see the shanty towns on the hillside of Port-au-Prince in my mind as if I were standing there right now and know the outcome for many will not be good after the earthquake shook a city already in pain to its knees today.

I have spent the last 4 months working with a group of business men and women in Haiti who have seen enough disappointment and suffering and are willing to do whatever it takes to show the rest of the world that it is not to late for Haiti. They have a dream for their country and they are determined more than any other people I have ever met to see that dream come true. Their country is beautiful, its people are kind, and its potential is off the charts.

We are working on economic and agricultural development and devising new models that would let us use this one country and the momentum their government, the UN, President Clinton, and my friends at Aimer-Haiti have recently created to let it mark a new beginning for global economic development. Despite this tragedy, it can still be done.

What everyone needs to know is that just because they have now experienced what appears to be massive devastation, we cannot give up on the dreams that both local Haitians and those living abroad still have for their country. In fact we must use this tragedy to awaken the rest of the world to the story of Haiti. Haitians have more spirit and more strength than you can imagine and they will not let this beat them. What Haiti needs, and what Aimer Haiti is organized around, is economic development and the building of a true middle class. Haiti will need immediate aid for sure, but they also need long term development aid so they can eventually find their own way and loose the title of the poorest country in the western hemisphere.

If you want to help please do two things: One you can give to Yéle Haiti donations that will be used for immediate relief. Yéle Haiti is a non-profit that did amazing work after the devastating hurricanes in 2008. Grammy-Award winning musician, humanitarian and Goodwill Ambassador to Haiti Wyclef Jean founded Yéle Haiti in 2005.

Two, you can provide donations to AimerHaiti that will be used to ensure that focus remains on economic development after the period of immediate aid is past. Long-term development is the real lifeline that will ensure everyone in Haiti has an opportunity to earn a decent wage and take care of his or her loved ones. If you are interested in helping this organization, please contact me directly.

There is much we are planning as far as creating new and innovative ways of using international aid and government support to promote private investment. Alignment and partnerships can be created between local governments, private domestic investors, private foreign investors and foreign aid such that all are moving in the same direction. Aid can be used to incentivize and guarantee investment that will create sustainable progress instead of being primarily used to shore up faltering national balance sheets and lining the pockets of a few.

We are going to insist that when it comes to the developing world:

We must change the focus from problems to opportunities
We must take more action and do less analysis
We must build-up and exploit what each country has to offer
We must reinvigorate the dreams of people all around the world
We must let the world participate in it’s own rebuilding

Please don’t give up on Haiti, there is still a chance to rebuild; and rebuild something far better than what exists today. Haiti is a beautiful country that has much to offer the world. We have an opportunity to show that the world together can develop a small country into a productive nation that can in turn help others. We simply must be smart about how things are rebuilt, create partnerships that last, and align all parties in the same direction.

What Does the Debate on Climate Change Have to do with 21st Century Business Models and Global Economic Development?

kathyrobison — Fri, 18 Dec 2009 13:31:37 +0000

The short answer is EVERYTHING. The long answer is what this post is all about. These are three of today’s most pressing issues that are all too often discussed in a vacuum. The best progress will be made at the margins where each of these pressing issues overlap. When we begin to see them each as an integral component of global economic progress and prosperity and not discrete issues, much will be gained.

Perhaps the inclusion of 21^st century business models is a surprise to many lumped in with the other two that get a lot more focus and media airtime, but please notice that I use the predication “21^st century”. If we want to do something about the ramped greed and selfish strategies that exist in many of today’s firms, then it must be added to the mix. If created correctly, new and improved business models can be a large part of the solutions to climate change, global economic development, and their own perils of decreased employee morale and disgraced public opinion.

They all require new, passionate, and innovative solutions. In fact, we must assume that the very best solutions are not yet known. Thus, the solution frameworks that are being bantered around today need to accommodate the unknown solutions of tomorrow. It’s beyond out of the box thinking and into a world without the constraints of boxes of any sort. It’s about unleashing the mass of untapped potential and productivity that lies dormant inside people and organizations around the world.

They are each integral to the success of the others. Slowing population growth in the developing world is one of the keys to avoiding a climate catastrophe down the road. Economic development and the creation of a middle class is the most effective way to slow population growth in the developing world. Private sector ingenuity is key to new technologies that will reverse the current trajectory of climate change as well as promote economic development in the developing world.

Alignment is key to effective solutions in each case. Businesses are learning how to align their shareholders, employees, customers, and the public in ways that will dramatically increase productivity. When transparent alignment and partnerships are created between foreign aid, domestic and foreign private investment, and public money, global economic development will become significantly more efficient and effective. Unless we properly align the big players in the world on climate change soon, it will likely suffer the same fate as the Green Revolution in Africa.

The most successful businesses models in the 21^st century will be those that realize contributing to the creation of new markets is a winning long-term strategy, that focusing on something besides growth and profits is the key to engaging employees and winning the hearts of customers (yours as well as your competitors), and that how you decide to be in the world can be just as important, if not more important, than what you sell.

Too often when these topics are discussed in the media, there is too much focus (in my opinion) on the facts known today which narrows the conversation and too little focus on what we want to create. In other words, discussions and potential solutions are being filtered based on what we know how to do today and not on whether or not they fit what it is we are trying to create. All great movements start with an unadulterated view of what should be created, if anything is possible. There isn’t much humans can’t do once they set their minds to it. Some things take a few months and others a few generations. The problem is that we sometimes lack the belief that it can be done, which ends up being the biggest thing that holds us back from succeeding.

Looking for Profits in All the Wrong Places

kathyrobison — Wed, 02 Dec 2009 18:19:50 +0000

Investment comfort in the world of high finance all too often comes from fast profits in known and proven markets. The never-ending game of offering higher profits at lower [apparent] risk to attract capital was certainly alive and well before the global economic crisis. The question is, why does it appear to be coming back? Didn’t we learn anything?

A global economic recession of epic proportions should have taught us a few lessons, but the days when CNN is glued to the US consumer expenditure figures as if it were the only barometer in existence, it seems it isn’t so. Too much investment comfort will lead to not enough investment in the future and much greater economic turmoil down the road. For economies to flourish they need to grow, and we seem to continue to look for growth in places where the potential is quite low.

One of my mentors used to always say that if you aren’t feeling nervous and agitated about a deal, then it’s probably not a good one. We were investing Goldman Sachs money, so the deals we worked on weren’t small and were often the first of their kind in that country. A healthy amount of discomfort means we’re forging new territory. Forging new territory in a world that primarily relies on capitalism to make the wheels go around is a good thing. Running in the same old markets over and over and over again may move the wheel around, but it does little to make the wheel bigger. In a world where we are slated to break 9 billion inhabitants in the next 40 years, we will definitely need a bigger wheel.

There is an inherent flaw in this mindset of investment comfort. It stays in the world of what is known and it over-exploits markets such as US housing, US consumer, and luxury hotel. While billions of dollars were being invested by countries all of the world in relatively finite (but comfortable) markets, much of the world’s potential new markets were being ignored. I would argue that it is actually riskier to invest in false markets (backed by too much debt) that are unsustainable and maxed out on growth than it is to invest in creating completely new markets in the emerging and developing world that are backed by sustainable commerce. It doesn’t feel riskier because it is known territory and feels comfortable, but from a purely economic system point of view it is, definitely riskier in the long run.

I believe this will be the biggest lesson of the 21^st century for both the private and public sectors around the world. During the 20^th century, there was adequate growth potential in the population and quality of life in developed countries to support investments shrouded in the comfort of known markets. This will not be the case for the 21^st century. The 21^st century requires new investment models, new leaders, and new perspectives on globalization.

I predict that the very best Wall Street firms will turn from security selection and asset management in known markets to designing unique investment solutions that build entirely new markets around the globe. They will bring public and private money together in ways that have never before been attempted. The old model of trying to build nations through foreign aid and local (sometimes corrupt) governments alone clearly doesn’t work. We need new models that forge new territory and challenge conventional thinking. The potential and the opportunity are there. The question is are we going to seize the moment and begin to look at the world differently? Are we going to set future generations around the world up for success or for failure?

An uber-macro-global economic view of the world indicates that with stagnant population growth and an already high quality of life in much of the developed world, the economic progress and growth necessary to continue building global wealth must come in large part from under-developed countries. In other words, the developed world is becoming over-saturated with capital. The excess capital is creating false markets in many cases because new markets are unobtainable. Companies are either stealing customers away from the competition or simply swallowing the competition because the markets are not big enough to support them all. We also saw this play out over the five years prior to the recession where cheap debt allowed for an ever-increasing portion of returns to come from debt arbitrage as opposed to real investment fundamentals, which basically masked the issue.

Though, without the comforts of known markets, the developing world represents a significant potential for entirely new markets. These new markets won’t get created overnight; however, they will require long term commitments and a lot of hard work. The ones we are seeing pop up in China and India have been in progress for decades. Creating entirely new markets requires both time and investment in infrastructure to create an environment where a middle class can flourish and grow. Investors are starting to consider places like China and India, which is good, but they must realize that though the business mechanics are similar, the subtleties, relationships, and manner in which business is conducted is quite different. There is still much work to be done in these markets and well as smaller ones that get far less attention but hold an equal amount of promise.

Success in creating new markets and building a middle class in nations void of one will require new and innovative ways of combining public global aid with both foreign and domestic private investment. Creating partnerships that promote food security, business investment, and job creation to jump-start capitalistic activity seems far more beneficial than the old ways of shoring up the local government and banks. When businesses are sustained, tax collections will shore up the governments in much more sustainable ways, and citizens will gain more political power to avert corruption. It’s about starting an economic cycle, not circumventing it. Governments generally do not produce economic activity, but they do benefit greatly from it. It starts with building business, not building governments. We need an entirely new perspective on how we can work together to build markets and bring people out of poverty and increasing the quality of life of those who currently reside at the bottom of the pyramid. This ultimately requires a broadened view of capitalism. Creation of the haves and have-nots does not have to be a side effect of capitalism. We can choose a different path for the future of our world. This is what it means to start thinking like a global citizen.

Can the US be the Kind of Leader the World Needs?

kathyrobison — Tue, 17 Nov 2009 17:40:06 +0000

It depends really on the US’ ability to recognize that the type of world leader required in the last century is quite different than the world leader that is needed in the 21^st century. Just as in business, what qualifies as effective leadership changes over time as the constituents being led change not only demographically, but also in what they value the most. Successful leaders of the 21^st century will be the ones that are more inclusive than exclusive; the ones put their egos aside; the ones that lead more by relationships than through control; the ones that recognize that every person and every country has their own story and though on a different scale they may in fact be doing the best they can. Leaders of the future are not afraid to give credit where it is due, and in some cases they must step aside and let others lead.

Last week I attended the US-China Business Forum Green Texas 2009 in Austin Texas, organized by the US Department of Commerce, US Chamber of Commerce, and the Austin Chamber of Commerce, among others. The overwhelming take-away for organizations wanting to take advantage of the tremendous business opportunities in China was that you must be willing to make a long term commitment that is centered on relationships, alliances, trust, and respect. If you think you are going in as the big, intelligent, egotistical American, you will likely be in for a big disappointment. We heard from folks that have done business in China for decades and newcomers that are still on their journey, and the most successful are open, respectful, and go in knowing that they will learn a lot from the Chinese. It can be a wonderful win-win for both countries.

We may not always agree with the ways of the Chinese government, but the reality is that they are doing a lot more than the US in getting the world’s economy back on its feet. They may not have an open political system, but they are very far along in an open economy and that is a massive step forward and certainly one in the right direction. They may have substantial environmental issues to contend with, but considering where they started, they are definitely moving forward. We cannot support immoral activity, but we can and should, in my opinion, support what they are doing well and their commitment to an open economy. Political change will eventually come from within when the growing middle class become large enough and courageous enough to speak up for what they want. Listening to a talk on China by James Mills of the Economist, this growing middle class and the political implications it may bring is a big concern for the Chinese government.

It would not surprise me if China eventually leads the world in the rate of environmental change. They are starting at a much lower position than the rest of the developed world, and they will be able to leapfrog the stage we are in and go directly to the latest technologies with the best results. Despite the large size of their country, their ability to make large sweeping changes is greater than any democracy because they simply lay out the new rules and begin demanding change. I am certainly no advocating communism, but it is hard to ignore that in the case of environmental clean up in China it will likely be very effective. My personal opinion is that slowly over many decades China will continue to take on more and more democratic practices in an effort to maintain peace and stability within their own country.

If we do not keep our eyes open, acknowledge and embrace the changes that our own country needs, and are not willing to support other countries in their struggles to become leaders themselves, we will miss the proverbial boat. We will wake up one day and realize that the US is behind the times and has lost an important and powerful opportunity to continue to lead the world to success, out of poverty, and to a peaceful existence.

We must be proud of countries like Brazil, and be proud that they have one the recent bid for the 2016 Olympics. Though we all wanted Chicago to be chosen, if we dig deep down in our hearts, we know that Brazil needed it much more than we did. They now have a goal to work toward to clean up some of the violence, and prop up some of the infrastructure. I only wish we could have see that before and perhaps graciously asked that Brazil be the winner. Instead, we have confirmed what much of the world thinks of America; that we are selfish and sometimes a bit of a bully. What a lost opportunity!

According to last week’s Economist (special report on Brazil), “Brazil has long been known as a place of vast potential. It has the largest freshwater supplies, the largest tropical forests, land so fertile that in some places farmers manage three harvests a year, and huge mineral and hydrocarbon wealth. Brazil could easily be one of the 5 largest economies sometime this century. Shouldn’t we be asking them what they would like to create and how can we help? Instead we always seem to be saying, “Here’s what you need to do.” Shouldn’t we be helping our own entrepreneurs do more business with Brazil? A strong and successful Brazil means wealth and stability for a large chunk of South America . . . and that has to be good for the spread of democracy and the globally interdependent economy.

It’s clear that later on in the century the US may loose it’s first place standing in some measures, or at least loose it’s massive lead. We can either sit around worrying about how we can keep our edge in whatever measurement the media is focused on at the moment, or we can become true global leaders and help our comrades become leaders themselves and in their own right.

This is the exact same struggle that large corporations are facing today. They can continue their hard-line ways of controlling their employees and making sure that all the decisions are kept close to the chest at the top of the pyramid, or they can realize that tomorrow’s greatest companies will come about through a new kind of leadership. Leaders that genuinely deflect the limelight, constantly support their customers and employees, and believe in people enough that their full potential shines through. These are the companies that will attract the best and brightest employees that design and develop the best products and services. People will gravitate to companies where they can become themselves at the office and aren’t forced to go down a certain path or abide by a certain set of rules.

As the US learns how to help countries without dictating, and listens to what they really need, and has the compassion to put others first on occasion, then, and only then, will we deserves to be the leader the world can truly look up to.

It’s simple really. When you gain their trust and have compassion, then you have a chance to really create a positive influence. Without trust, you will, at best, maintain the status quo.