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The globally integrated economy requires fresh thinking and innovative approaches to managing change.
In today's globally integrated economy, CEOs are bombarded by change -- can they handle it? According to IBM's 2008 Global CEO Study of 1,130 CEOs, which was conducted face-to-face in 40 countries, CEOs are battling to keep up with the pace of change.
CEOs reported a surprising level of optimism about change as an opportunity to build new competitive advantage. In fact, 83 percent of surveyed CEOs expect substantial change in the future, an increase of 28 percent in just two years.
Yet, while CEOs see change ahead, their ability to effectively manage change is increasing at a far slower pace. CEOs rate their ability to manage change 22 percentage points lower than their expected need for it, a ‘change gap' that has nearly tripled since 2006. The study reveals that CEOs were specific about where the most important change will occur - within their own customer base as two classes of customers emerged: the ‘information omnivore' and the ‘socially-minded' customer.
Would an 'Asia Daily' news bulletin help Australia to better understand its closest neighbours?
Despite Australia becoming increasingly enmeshed with the Asian world - whether economically, politically or culturally - we are experiencing a serious decline in the numbers of young Australians studying the region's languages, as well as its history and thought patterns.
This leaves us with a growing information gap, and one that has little to do with major events. If an aircraft crashes in Indonesia, a bridge collapses in Vietnam, or floods devastate much of China, it's more than likely you'll see it on the nightly TV news. You'll also find coverage in the following day's newspapers. But the things that regularly impact on the lives of our Asian neighbours - in the way that interest rates, mortgage payments and skyrocketing rents do with us - receive scant, if any, attention here. You might see some analysis in a specialist journal, but that's about all. Most Australians, for example, would have no idea how a shortage of onions and potatoes in northern India can impact on the life of a citizen there.
Australians, whether locally born or from overseas, who are fluent in regional languages, can already access much of this information via the excellent news services provided by say, SBS TV and radio. But that's a relatively small part of our population.
Why does this whole credit crunch look so damn familiar?
Greg Mumford wrote a fabulous analysis this morning in the AFR pointing to the similarities between the current US market maladies and those sparked by the Savings and Loans crisis in 1990.
According to Mumford the 1990 domino-like collapse of over 1000 financial institutions, cost the US economy $125 billion, or about 3 percent of GDP, and precipitated a 20 percent decline in the value of the stock market.
Similarly the mass foreclosure on poorly drawn loans in the US, will come at an estimated cost $400 billion, or a shade under 3 percent of US GDP, and has precipitates a 20 percent decline in the value of the stock market.
(it's being called the credit crunch, but that sounds to me like something you eat, while this is a market shift which is eating houses, or at the very least turfing people out of houses)
Predictably all the other elements also fall into place, oil prices are at record highs, consumer confidence is swan diving, the US dollar is tanking and a range of financial institutions are looking wobbly.
Rather than pulling up stakes and heading for the hills, Mumford suggests the 1990 crisis lead to a ten-year bull market, and that investors facing the current market should in fact be looking to get in and buy into companies with a good long-term outlook which are currently undervalued.
We've trained our sights so far out we can't see what's in front of our noses.
There's something funny about the way we do business.
Take a look at our trading partners for example. Last year Japan bought more of the stuff that we produce than any other country. All in all they spent $32 627 million goods we produce here in Australia. The Chinese follow at a reasonable distance paying us $22 845 million, then came South Korea spending $13 071 million, India at $10 099 million, and then the US and New Zealand each of whom spent a little under $10 000 million.
But if you look over to our services sector a very different picture emerges. For starters, the value of our services exports is much smaller than our merchandise exports - our entire services exports only brought in $46 233 million in 2007, compared to $215 850 million for merchandise exports.
And our principal services customer is the US at $5286 million, followed but the UK, $4356 million, Japan, $3284 million, China; $3169, and New Zealand at $3006 million. So while our commodities, agriculture and manufacturing sectors are largely focussed on Asia, our services sector remains trained on our Anglo allies the US and the UK.
Can Australia withstand the shocks and blows of the global economy?
Sorry, the heading might have been slightly misleading, I'm not talking about the kind of person to person love that leads to coupling, weddings, mortgages, and occasionally even children. I'm talking about the coupling that leads countries to plunge, lemming like, into and out of economic crises, forming a macroeconomic conga line behind that pinnacle of consumer power the US of A.There's a debate currently raging as to whether the USA's economic woes will suck the rest of the world into a global recession, or whether Asian and European consumers have become sufficiently powerful to pick up where US demand is about to fall off.
If the global economy remains tightly coupled, and we're all on the verge of plummeting headlong into a global recession, I hate to break it to you, but it's our own stupid fault.
For the last few decades open market evangelists have gone forth and multiplied, chanting the mantra that small open economies should focus on exports, constrain wages, and limit government spending on human capital development.
Responsible business practices can in many ways build trust and social capital, contributing to broad-based development and sustainable markets.
As many of you know, I have been a strong and passionate advocate of the work of the United Nations, as it has applied to matters relating to governance, intellectual property and the protection of rights, particularly for small business. More recently I have taken the decision to align my business interests with those of the United Nations through the signing of the United Nations Global Compact. I am pleased to inform SansGov partners and clients that this morning I signed the final remaining letter of intent from the UN Secretary General in order for SansGov to become a full member of the Compact. You may wonder what the Compact is all about and perhaps, more importantly, what it means to you as a client or as a partner.
The Global Compact is a framework for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, the environment and anti-corruption. As the world's largest, global corporate citizenship initiative, the Global Compact is first and foremost concerned with exhibiting and building the social legitimacy of business and markets.
Business, trade and investment are essential pillars for prosperity and peace. But in many areas, business is too often linked with serious dilemmas - for example, exploitative practices, corruption, income equality, and barriers that discourage innovation and entrepreneurship. Responsible business practices can in many ways build trust and social capital, contributing to broad-based development and sustainable markets.
