Export Promotion Rationale Continued – Part 3

If export assistance and promotion are to be rendered, budgets and efforts should
be expended in the most effective manner. Organizational key determinants of business and export success are size, human and financial resources, technology, service and quality orientation, information system, research capabilities, market insights and connections, and the firm’s ability to manage regulations. The managerial haracteristics that research has most closely linked to export success are education, international exposure, expertise, international orientation, and commitment. These two corporate dimensions, organization and management, are subject to the opportunities and constraints of the international market environment, and will determine the degree of the firm’s export involvement. This involvement in turn will result in export performance, which can be measured in three different ways. Efficiency refers to the relationship between corporate input employed and the resulting outputs achieved. Typically, efficiency is measured through the proxy of export profitability. Effectiveness refers to relative business success when compared to other competitors in the market, and is often measured in terms of market share and export sales growth. Competitive
position addresses the overall strength of a firm arising from its distinct competencies, management style, and resource deployment. Typical indicators here are the overall quality and competence of a firm’s export activities.

Export assistance can aim at the organizational characteristics and capabilities of the firm and try to improve those. It can also work with the managerial characteristics and contribute to their positive change. Export assistance providers must also be deeply involved with the international market environment, both in terms of learning from as well as shaping the environment.

Export assistance will be most effective when it either reduces the risk to the firm or increases its profitability from export operations. For example, providing information on market potential abroad is likely to decrease the risk (both real and perceived) to the firm. Offering low-cost credit is likely to increase profitability. Macro assistance in the foreign market environment can consist of international trade negotiations designed to break down foreign barriers to entry. Micro assistance consists of learning from the foreign market and its customers, and using that knowledge to adjust to that market.

Open Ivory Tower Windows Will Bring Fresh Air

Universities are among the most successful institutions that mankind has created in the last millennium. But what role do universities need to play in the knowledge society of tomorrow to continue their success story? This question grows more pressing for the Western welfare states, as their dominance in research and innovation is being challenged by globalization and the dynamics of the emerging economies.

The example of the United States, which like no other nation has been able to benefit from universities as drivers of growth, makes this abundantly clear. For a long time America has combined cutting-edge research not only with strong science and engineering but also with entrepreneurially oriented business schools. With this approach the country has promoted groundbreaking innovations.

Yet, since the bursting of the internet bubble, there are increasing doubts as to whether the previous innovation concepts still fit the new and future challenges and research priorities
The advancement of biotechnology and social sciences absorbs almost half the research funds of U.S. universities. Add the expansion of national security and military research, and universities have lost important drivers for the industrial use of new scientific insights. Instead, the ivory towers, which were believed to be abandoned, have returned. Like the hanging sword of Damocles the gigantic budget deficit will also require new structures and processes in research and teaching at universities.

Germany may currently look better with its broad mix of industrial and service-related innovations and its strong and flexible small and medium-size businesses. However, this should not obscure obvious weaknesses. What has been achieved with the excellence- and high-tech initiatives and more autonomy for universities in recent years is threatened to be lost again with ideologically motivated campaigns against an alleged commoditization of higher education.

Germany and the United States are facing similar problems. So far the American and the German university system have learned from each other in a time delayed fashion. Now, due to mounting competitive and financial pressures, universities need to learn simultaneously from each other. The transatlantic exchange of ideas at a conference in Washington a few days ago made it very clear: University success is not about tearing down the ivory towers, but to open their windows as far as possible to other disciplines and to new markets.

While the freedom of teaching and research have to be defended, at the same time strong bridges for mutual transfers have to be built.

In the 19th century, Alexander von Humboldt revamped the Western education system by insisting on the scientific approach to research. We now need a set of Humboldt kind of ideas for the 21st Century. The university of the future is only viable if best research and best teaching go hand in hand with best knowledge transfers. To achieve these goals, universities need reliable funding and high productivity. Interdisciplinary linkages, a close integration with the eco-system as well as research excellence and relevance are also necessary.

All this calls for major cultural change on both sides of the Atlantic. For a faster industrial use of new scientific knowledge both in universities and in businesses one has to rethink current approaches. We need more risk capital, new business models, and efficient intermediary organizations in order to build a sturdy bridge over the wide valley of death between basic research and innovation.

The efforts are worthwhile. Key is not just wealth and employment; it is all about the development opportunities of each individual and the defense of our freedoms. These provide the ideas and energy for the design of the next stage of our universities and our societies.

 

Michael Czinkota teaches international business and trade in the Graduate School of Business at Georgetown University (USA) as well as international marketing at the University of Birmingham (UK). Andreas Pinkwart is Senior Visiting Fellow, American Institute for Contemporary German Studies at Johns Hopkins University (USA) as well as Dean of HHL – Leipzig Graduate School of Management (Germany). He served as vice chair of the Free Democratic Party in Germany.

NEW RULES OF COMPETITION IN A SUSTAINABLE AND INTERDEPENDENT WORLD – Power Point Slides

On May 2nd, I was the opening speaker for the Governor of Virginia’s business appreciation week. My comments focused on the new rules for competition in a global environment. To view the slides of my presentation, please click below (and give it a few moments to load) .

Final new Strategies_1

Planning Your Global Success

Global strategy planning starts with a multi-functional team led by the executive with the most experience in global or regional markets. Team members should include managers from marketing, production, finance, distribution, and procurement. Their first task involves working to understand the success factors that are common to the company’s various markets. Identify the profitability and competitive drivers by analyzing the structure of the global industry. Add the common features of customer requirements and choice factors. Avoid planning global strategy on a country-by-country basis  – it can result in spotty performance. Success tends to come from a portfolio-based planning process that focuses simultaneously across a broad range of markets to help balance risks, resource requirements, competitive economies of scale, and profitability.

Every company gets a reality check when it examines its resources for global expansion. While industrial giants with deep pockets might be able to establish a presence wherever they want, others with shallow pockets will have fewer options. And money is not the only issue – a survey of multinational corporations revealed that people with certain types of knowledge or skills were particularly difficult to find. The shortage is even worse when looking for people with cross-cultural experience to run regional operations.