Davos Newbies Home

The uncontrollable world of blogs 

Richard Edelman explains why he thinks PR consultants deserve a seat at the management table:

  We are uniquely positioned to understand the uncontrollable world of blogs, the ultimate immediate feedback mechanism. We are in touch with dissonant voices such as non-governmental organizations. We can balance the needs of global marketing and local culture. We value the input of employees as partners in building great companies. We have a different mindset, in which relationships and listening are more important than selling and marketing. In short, we are the soft power advocates (to use a phrase invented by Prof. Joseph Nye at Harvard), who believe in attraction and persuasion rather than the hard power attributes of force and compulsion.

That discussion is prelude to an excellent announcement. Richard’s firm is donating $250,000 of time to the Global Business Coalition on HIV/AIDS in the new year.

A Schumpeterian world 

Joseph Schumpeter‘s most famous phrase muscles into the holiday season twice today.

In the Financial Times, Guy de Jonquieres visits Japan (subscribers only) and finds only the destruction part of creative destruction:

  The survivors from this turmoil [the response to Japan’s long recession] are indisputably leaner and fitter. Many Japanese manufacturers have reinforced their global market leadership by enhancing their efficiency, management and technological strength in depth.
  But much of the work has consisted of pruning rotten branches – not planting new saplings. The country is like a student of Joseph Schumpeter who has mastered economic destruction but has yet to learn how to make the process creative.
  Today’s internationally successful Japanese companies were all world-beaters 20 years ago, and in the same industries – chiefly electronic, mechanical and precision engineering. The main difference is that corporate casualties have thinned their ranks.
  Few thrusting newcomers have emerged to take the place of the fallen, or to pioneer novel markets. The most talked-about entrepreneurial success stories, such as Softbank and the thriving computer games and animation industry, are all about 20 years old.
  Meanwhile, Japan remains as divided as ever into two economies. One, the high-performing export sector, is peopled by corporate global superstars; the other by agriculture and a multitude of often small services businesses operating in a domestic market largely insulated from foreign competition and riddled with restrictions. Most have, by US standards, dismal productivity.

And Tom Peters picks creative destruction as one of his business stories of 2004. His take on it makes a vivid contrast with the Japan witnessed by de Jonquieres (warning: excessive exclamation marks ahead):

  Creative Destruction. Capitalism’s primary calling card (esp the American Flavor) was/is/will be “built to flip” (churn!), not “built to last.” Big Pharma imploding! Kmart buys Sears … and nobody cares! IPOs healthy again! BioTech rising! Cheer on the mess! Churn rules!

One thought on “Davos Newbies Home

  1. Ian Jenkins

    Quotes from the FT about Japan:

    “Japan remains as divided as ever into two economies. One, the high-performing export sector, is peopled by corporate global superstars; the other by agriculture and a multitude of often small services businesses operating in a domestic market largely insulated from foreign competition and riddled with restrictions. Most have, by US standards, dismal productivity.”

    Japan seems representative: its businesses are either internationally competitive or not. And the latter category is by far the biggest. It needs exports in order to pay for essential imports. However, any comparison of relative productivity levels leads us into a debate about doing the wrong thing well.

    Before globalisation it was so much easier – there were really only national rules to worry about. Last year, the Hoover Institute touched on this problem of complying with international rules in an essay on unilateralism vs multilateralism. http://www.policyreview.org/feb03/oudenaren.html

    For example, re the environment some countries think the Kyoto process is needed to discipline the free market; and then there is the Montreal agreement on limiting CFC’s. On war, there are many restrictions – including the Geneva convention, land mine treaties and the International Criminal Court. On trade, the World Trade Organisation has many conditions.

    What will the rules be in the future? If the G8 is to be replaced by the G20, as the international panel on UN reform suggests this month, perhaps there will be new perspectives on productivity etc.

    Reply

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