Speaking to international business educators, Dean Doug Guthrie made a case for China as an innovative country where local governments compete with one another for business development.
Guthrie spoke at the GW Center for International Business Education and Research (GW-CIBER) fourth Faculty Development in International Business (FDIB) workshop, “Succeeding in Emerging and Developing Markets: Understanding How Institutions Impact Firms and Managers.”
The June 11-14 workshop, led by Associate Dean for Graduate Programs Liesl Riddle and Yohannes Assefa, director at Stalwart Management Consulting PL, a Dubai-based management consulting firm, attracted 31 faculty and doctoral students from U.S. and overseas institutions. The event was aimed at giving the participants an in-depth understanding of how institutions shape firms’ strategies and managers’ actions in developing and emerging markets.
The workshop’s keynote dinner address was given by Jianhai Lin, DBA, `86, secretary of the IMF and its International Monetary and Financial Committee.
Guthrie, in his luncheon speech on the workshop’s last day, said there were half a dozen keys to understanding economic reform in China, which is on pace to overtake the United States as the world’s largest economy.
Among them: gradualism, which in China has meant adopting new, far-reaching laws and regulations only after they are tried and tested locally and receive years of feedback. This “bottom up” method allows for greater stability during periods of change, versus the “shock therapy” economic reform approach used in the former Soviet Union, Guthrie said.
Gradualism “is a lot messier, but it actually gets you the right institutions,” he said.
Another key to reform has been decentralization, which has allowed local governments to compete with one another for business development. Sometimes, competition is so intense that it’s impossible to get a flight from one city to another, as Guthrie discovered on one trip to China, because “entrepreneurial governments” want to make it as difficult as possible for business executives to visit their competitors.
“In the U.S. we still largely have a `doom and gloom’ view of China,” he said, adding that instead of accusing China of stealing jobs, for instance, the United States could adopt a competitive mindset by subsidizing industries such as renewable energy that require a long incubation period and that China has been able to attract. “I actually think China is a place of radical institutional innovation.”
For more on the CIBER program, go here.
Posted by gwsb on June 18, 2013 | Filed under: GWSB News.