Executive Forum 2001
Montreux, Switzerland
26-29 September 2001

Interviews

It’s very a difficult enterprise to put together something which is supposed to be a public service with something that is essentially non-democratic, that is business development.

I asked, which kind of networks in the world are international and functioning? Can we learn anything from them? We have worked a lot with trade development organizations to try to benchmark one against another, to find out what they are doing right, what they are doing wrong. But here I was asking: can we learn anything about efficient international networks that had perhaps nothing to do with our particular mission of trade development?

The ones that I felt were working very well were: the diaspora – the Chinese, the Lebanese, the Jewish ones – these work extremely well. Another efficient network is, of course, family – where your family is where you spend your holidays, where your wife has her roots, where you went to school. Another working network whose objectives you might not approve of is the mafia but the mafia works extremely well internationally. The Catholic church is the same – we study that in business schools. The Nigerias, the Ghanaians – they are very, very efficient internationally.

What is it in these organizations that makes them work efficiently? Why is it difficult to get this networking operating efficiently in a TPO? One common denominator is that they are exclusive. They are certainly non-democratic, all of them.

We are trying to do something else. We are trying to unlimit our membership – anybody can be part of this –and there will be no sanctions if you don’t do your job right and the reward systems aren’t clear. It is difficult to have a public service which has unlimited membership and business development whose objective is to make money for the members of the company.

Believe or not I think it is. For small and medium companies, how do you choose the ones you want to support, should that be a democratic process? Do you accept all comers or do you limit your attention and your resources to the ones that you think are going to survive, that is the fleetest, the fastest and the ones with the best ideas? How do you choose these guys?

If Bill Gates were to come to a TPO, 20 years ago, would he be accepted? No business, no backing, not even any family, he just had an idea. How do we choose these guys? What mechanism do we have, and should we do that? Is it our role really to be a public service or is it, actually, to pick the winners?

This is a debate that is going on in the developed world. Since we are all developing countries here, what are the lessons for the trade promotion organizations? Should they go the same road as the developed countries?

I would say that the general trend for the developed world in trade promotion is to reduce it, is in fact to pick the winners. If you look at the size of the trade promotion organizations of the developed world – the Scandinavians, the Canadians, the Brits – they are all going down.

The key point is that everyone in trade promotion organizations is working in the service business. It is very difficult to measure efficiency in the service business. In the private sector the way one measures efficiency in services is use of time. How many people fill out time sheets? This is the way that consultants like me do it, this is the way that lawyers do it, and this is one of the few outputs that we can actually measure.

All service organizations – be they public or private –should actually account for their time. The way you do that is filling out a time-sheet. It’s terrible to do. Everybody hates doing it. But at the end of the year you can learn a lot of very interesting things about what is happening and what you can do with the time better next year.

The interesting thing is to try to get smaller companies to invest in your country. The bigger ones you cannot influence. They are ‘supertankers’. You can maybe go to the boardroom and shift them a little bit. But once they invested in one place they have their own programmes of investment and you cannot do really very much about it.

The second-tier companies are the ones that are medium-sized. We look at the trade patterns. We say [to them]: ‘OK, you have been exporting a lot to our country, let’s do some import substitution. Why don’t you set up in our country?’

The third category I think is the most interesting: How do you attract entrepreneurs that have small or medium-sized companies to your country and how do you get them to be interested in foreign direct investment and in being international? We have been working on this for a long time, looking at what makes companies successful internationally and trying to develop some normative ideas about how you could choose these companies.

One of the normative ideas I came up with – that the FDI people treat with tweezers and don’t really accept, but I believe firmly in – and that is cherchez la femme (look for the woman).

This means using your family and ethnic connections to decide where you are going to invest. Where do you spend your time? Where does your wife want you spend your holidays? Where do you send your kids to school?

Most of these [SME] entrepreneurs are somewhat monodimensional – they just speak about business, even when they are on holiday. Take an Italian immigrant to the States who goes back to Italy. He talks about business: ‘What are you guys doing here? You know you can do it this way, that way?’ ‘Why don’t you help us to do that?’

I can take my own example, where I set up my company. We have offices in eight different countries, and in all of these I have either lived or my wife has relatives.