Former President Bill Clinton, Founder of the William J Clinton Foundation attends the TIME/FORTUNE/CNN Global Forum at the Cape Town International Convention Centre on June 27, 2010 in Cape Town, South Africa.
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There are bound to be many such examples of "reverse innovation" as more Indians, Chinese, Africans and Brazilians take advantage of educational opportunities and find jobs at the growing number of R&D establishments that Western giants such as Microsoft, GE and Unilever have established outside the U.S. At the Cape Town forum, Kullman said candidly that while basic research remained concentrated at DuPont's home in Wilmington, Del., the chemicals giant had "globalized our applied research." But it's one thing to detail the exciting corporate opportunities that are now presented in areas of the world that have long been marginalized. For those who live in poor countries, the more pertinent question asks what their political and business leaders should do to maximize the chances of creating better life chances. Four factors are key:
Kill the Curse
It's long been a staple of global economics that simply having a bountiful endowment of natural resources can be as much of a curse as a blessing. Globally traded natural resources can distort relative prices in an economy, divert investment from other sectors that need capital input and, perhaps above all, provide a tempting target for political elites who want to get their hands on easily monetizable assets.
But it's too simple to think that resources are always a curse. Some nations have been able to manage natural endowments to the benefit of all. (One thinks of Norway's record of managing the development of its hydrocarbons.) The plain fact is that the insatiable demand from China and other industrializing nations for natural resources is helping many economies — rich ones like Australia and poor ones like most African nations. Africa, says Courtis, is a veritable treasure chest of resources. Martyn Davies of the University of Pretoria says there is an extraordinary correlation between Africa's modern growth and China's. "African growth," he says, "is being underpinned by demand for commodities from China." The trick is to manage resources well, as Botswana has done with its diamonds, keeping high-value-added processes in the country rather than doing little more than export raw materials and letting the rich world make the most of them.
Use Talent Wisely
For McKinsey's Barton, the key business imperative of the recession was to use the time to recruit the best talent available. More and more, said Josef Ackermann, chairman of Deutsche Bank, top managers will have global experience. It will be increasingly important to career development, he argued, for professionals to "spend a lot of time in foreign markets."
From the perspective of developing nations, the question of talent takes on a different hue. There is a growing consensus among development economists that the key driver of China's stellar success in the past 20 years has not been government policy (however effective it may have been) or the technocratic skills of its public-sector managers (though they are certainly impressive). It is that for two generations — going back to the dark, autarkic days of Maoism — China has educated its women. China would not have been able to become the workshop of the world if its factory workers, mainly girls and women, did not have the literacy and numeracy essential to perform assembly tasks. If there is one lesson from China that African nations (and ones in South Asia too) need to learn, it is that you cannot build a modern economy if you ignore the innate talents of 50% of your population.
Stay Close to the Dragon
China is an exemplar not just because of its record in women's education. Increasingly, the country is vital to the economies of the developing world because it is a major investor in poor nations. In a constant search for secure supplies of natural resources from oil to food, China and Chinese firms are "going out," not only buying up natural resources but also developing the infrastructure — roads and ports — to take them to market.
Such investment is proving vital in Africa, where infrastructure is often poor to nonexistent and many nations are landlocked. Chinese companies have enormous experience with such major infrastructure projects because much of China is itself part of the developing world — a fact often missed by those who notice only its booming eastern provinces. The skills that Chinese companies have been able to acquire in developing the nation's poor western areas are precisely those that are useful when investing in regions like Africa.