Who’s Winning the Game?
I confess that throughout my many years in various forms of international business journalism, I have tried to analyze economic [...]
July 1 2004 by Chief Executive
I confess that throughout my many years in various forms of international business journalism, I have tried to analyze economic activity in national terms. I have tried to analyze what a particular company or industry is achieving or not achieving for a specific country€¦quot;in my case, the United States. I still believe that’s a legitimate intellectual exercise, but acknowledge that it’s getting harder and harder to do.
Three stories in this issue illustrate why I’m so challenged: Our cover story is about the Chrysler Group of DaimlerChrysler, which was an essential part of Detroit’s Big Three. I say “was” because after DaimlerBenz swept in and bought Chrysler, I started writing that the Big Three were now the Big Two. But Dieter Zetsche has pulled off an interesting twist. The Detroit newspapers, no shrinking violets when it comes to strident nationalism and curvaceous metal, still write about the “Big Three.” It seems that Detroiters have accepted Herr Zetsche as part of the fabric of their industry and as a key ally in fighting Japanese and Korean competitors. From the invader springs a potential savior.
Then take Novartis. This is a Swiss-based company run by a Swiss. But it turns out that CEO Daniel Vasella has borrowed heavily from his American experience to change the way the pharmaceutical company is managed. Perhaps even more intriguingly, Novartis has created a $4 billion research facility in Boston to tap the best American R&D brainpower. In effect, the company has migrated away from Europe as a research base. Too many rules, not enough talent. It’s the way of the world. Economic activity picks up and moves to where conditions are best.
Lastly, go figure out the Flextronics phenomenon. Here is a chief executive, Michael Marks, running a company domiciled in Singapore but managed mostly from California. It manufactures U.S. electronic products relying, in this particular case, on Muslim women in southern Malaysia on the outskirts of Singapore. Once upon a time, I drove from Singapore up through Malaysia. There wasn’t much there, except jungle and sea turtles. Now it’s one of the epicenters of making things that Americans want.
In such an economically seamless world, what are the indicators that matter? How do we keep score of who’s winning? Trade figures have long ago lost any meaning. Standards of living are hard to measure. Rate of GNP growth isn’t a solid measuring stick because Japan can be happy with a 1 percent rate of growth, but that number would be disastrous for China. Capital formation and investment flows are important, but don’t pack much emotional punch.
I’d be interested in hearing what you have to say about these issues. If CEOs want Americans to believe that globalization is good for the U.S. economy, we ought to find a way to articulate that case. I may not be the only Neanderthal clinging to the notion that nation-states have a stake in trying to shape the quality and quantity of economic activity that takes place on their soil. Write to me at email@example.com.