Tuesday, December 21, 2004

Article: Cultural Awareness is Key to Securing Global Business

The following article that I wrote was recently published by Mass High Tech:


http://www.masshightech.com/displayarticledetail.asp?art_id=67411&sec_id=130


Cultural Awareness Carried the Day for Companies Seeking Global Reach
Dec. 20, 2004

How you answer this question could be an indicator of the future of the Massachusetts’technology sector in a globalized economy. Ready?

What country is achieving economic growth of 8 percent a year, graduates close to 1 million engineers and programmers annually, saw its stock market rise 80 percent last year, and has free trade agreements with Japan, Australia and the United States?

If you answered "China,"you were off by a couple of thousand miles. Read on for the answer, below.

Since 2000, Massachusetts has lost more than 94,000 Innovation Economy jobs. And it’s not over; layoffs and restructurings continue. The Massachusetts Technology Collaborative recently observed that Massachusetts businesses are failing to capitalize on globalization and that the regional economy could be significantly expanded by "serving a wide variety of international markets."

A recent piece in BusinessWeek pointed the way to those markets for the high tech industry. According to the report, with affluent markets maturing, tech's next one billion customers will be Chinese, Indian, Brazilian, and Thai. In reaching them, the report predicts, the industry will be deeply transformed. Unless something changes, this transformation is likely to leave many Massachusetts technology companies behind.

Massachusetts has a lot going for it: large immigrant/expatriate communities; proximity to Europe; an established venture capital community; a multilingual, diverse workforce; and world-class services that can aid corporate globalization efforts. The state’s innovation economy accounts for 25 percent of its workforce. For Massachusetts to continue to thrive, new businesses and industries must blossom, creating new jobs. To make that happen, we need new markets.

Agility, flexibility and timeliness are crucial to reach global markets. Opportunities can appear or disappear virtually anywhere, anytime. Exploring the following seven parameters can give any company an edge as it ventures into the global arena:Gauge your company’s collective global experience. Make sure your organization has team members with work experience in key markets - these may include China, India, Japan and Korea. It could be anywhere. Ask your marketing department what international expertise is in-house and what outside resources exist. If no one in corporate marketing has a valid passport, take that as a sign of trouble.

China. No matter what your business is, your company is likely to be affected by China. From Lenovo’s acquisition of IBM’s PC business to supply chains to the 2008 Olympics, the business momentum in China is having an effect on corporate America. The opportunity in China is as impressive as China is vast. The risks of doing business in China are no secret: constant innovation and cultural savvy are key to staying ahead of reverse-engineering, counterfeiting and counter-innovation (it’s coming).

Don’t let the allure of China overshadow India for attention. India is a democracy with a thriving free press. Indians speak English, and are more culturally transparent to Westerners. These are important distinctions from China. In addition, India’s information economy is booming. Although the media spotlight is focused heavily on the issue of offshore outsourcing and the resulting loss of U.S. jobs, Indian job growth carries an upside: household consumption is expected to double by 2008. That’s opportunity.

E-mail is a terrible form of communication. Particularly for non-native English speakers. Do not rely solely on e-mail to communicate with global partners, customers and suppliers. Relationship building is crucial to doing business in international markets, just as it is at home. Get on a plane, and break bread with your business partners. The results are worth it.

The world is not the United States. Even though English has become the lingua franca of global business you cannot expect contacts and customers abroad to be proficient in English, particularly in technical subjects. Translate and localize your product literature, web site and business cards. Language should be clear and free of idioms. In markets like Japan and Korea, hire professional translators for every important meeting. In these face-saving cultures, it may be difficult for someone to admit that he or she doesn’t understand English well. Decrease the risk of miscommunication and embarrassment by having dialogue translated for everyone. It’s a matter of respect, which is often important currency abroad - particularly for Americans who often have to dispel a reputation for arrogance.

Be prepared. Have crisis plans in place, as well as opportunity strategies. Just as crises erupt without notice, business opportunities can quickly appear. Identify new markets or categories of interest. Advance work on requirements, translation and who the players are could give you first-mover advantage if circumstances unexpectedly allow.

Globalize your perspective. Become a consumer of global media. Read online business news and analysis from a range of global economic centers, including London, Hong Kong, Sao Paolo, Singapore and Frankfurt. Know that the CNN we watch here at home is not the version the rest of the world sees. Understand the differences and what they mean.

Expanding IT business into global markets is a key to growing the entire industry and expanding the Massachusetts economy. Each international market is unique, with its own risks, challenges and rewards.

The answer to the question posed above, by the way, is India.

As more Massachusetts companies reach out to international markets, and more of us learn the intricacies and nuances of those markets, the answer to that question, and so many others, will become clear. The result can be a thriving Innovation Economy and a workforce that leads rather than follows in global business.

Josef Blumenfeld is a consultant on global public relations management and founder of Natick-based Tradewind Strategies. He can be reached at jblumenfeld@tradewindstrategies.com.

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