Global Strategies

LeBron James and the Chinese Market

I’ve been watching the NBA playoffs in bits and pieces. I’ve enjoyed watching LeBron James of the Cleveland Cavaliers. I loved his buzzer-beating three-point shot to beat the Orlando Magics in game two of their series.

I’m also still annoyed with the current legislature and Governor for not preparing Oregon students for a rising China and a globalizing economy. Today those two interests joined. The NY Times ran an article “Cavaliers Agree to Sell Stake to Chinese Investment Group” (here).

An investment group from China has signed an agreement with the Cleveland Cavaliers to become a minority owner of the N.B.A. franchise and its arena, a partnership that could affect LeBron James’s future with the team.

The Asian conglomerate, which includes JianHua Huang, a Chinese businessman who has brokered sponsorship deals with the Yankees and other sports franchises in the United States, could acquire up to 15 percent of Cavaliers Operating Company, the entity that owns the team and operates Quicken Loans Arena.

Also note how LeBron views his financial future, and the role of Nike:

He has said that he wants to become the first billionaire athlete. His brand overseas could be enhanced by playing for a team with Chinese business partners.

There has been speculation that James will leave Cleveland when he becomes a free agent to play in a larger market, like New York or Los Angeles, because it may offer more business opportunities. But James and his corporate sponsors, which include Nike, have broader goals and may be able to attain them by tapping into China’s colossal consumer market without his ever leaving Cleveland.

LeBron and Nike understand the importance of China’s “colossal consumer market.” Oregon’s educational leaders do not.

 

Sir Martin Sorrell, Joel Klein, SB 767 & HB 2719

Sir Martin Sorrel recently appeared on the Charlie Rose show. Sorrel is the chief executive officer of the WPP Group, one of the world’s largest advertising firms. WPP Group (here) is a London based company employing 100,000 people working in more than 2,000 offices in 106 countries. In his conversation with Charlie Rose, Sorrel stressed that his company is currently pursuing two strategies: emerging markets and digitalization. Sorrel thinks pursuit of emerging markets and digitalization will bring profits to his company. As Oregon’s governor and its legislature try to lead economic development for Oregon, it is clear that neither “emerging market” nor “digitalization” is on our state leaders minds. Otherwise, why would our leaders fail to pass HB 2719 or seek to pass SB 767.

First, go here for the youtube of the Charlie Rose-Sir Martin Sorrel conversation. Note the repeated emphasis on emerging markets and the digital revolution.

Also note Sorrel’s advice to young people in the 34^th minute (34:25): “And it would be certainly to learn Chinese…or even Portuguese...”

Thinking about the impact of the digital revolution on education brings us to SB 767 and Joel Klein. SB 767 is current working its way through the Oregon legislature. It would place restrictions on the growth of online education in Oregon. As I have previously blogged (here):

This “go-it-slow approach” misses one central point: online or virtual educational programs are a growth industry. They are an economic opportunity for Oregon, nationally and internationally, not just an adaptation issue for our public educational system, both K-12 and higher ed. Just as the digital revolution is reshaping entire industries, it will reshape education. Oregon could be a leader and get some of the economic benefits. But Oregon would need to be nimble and move fast to get a competitive advantage.

Joel Klein is chancellor of the New York City schools. In a NY Times article “Big Thinking and Radical Dreaming with the Schools Chancellor” (here), Klein states how he sees the digital revolution playing out in education:

Mr. Klein, who has made no secret that he wants to improve teacher quality, came out with a doozy: Reduce the number of teachers by 30 percent, and increase their pay 30 percent. “Slowly, over time,” he qualified.

How exactly would that work, in that pie-in-the-sky distant reality? Mr. Klein referred to a book he had recently done a blurb for, “Liberating Learning: Technology, Politics and the Future of Education,” by Terry M. Moe, a Stanford political scientist, and John E. Chubb, chief development officer at EdisonLearning, which works to improve charter and other public schools.

 The book, the chancellor said, lays out the ways that “through distance learning and other individualized teaching approaches, we may be able to reduce the need in the future for teachers’ overall numbers and increase their pay.” (He called back to clarify that this would mean not hiring as many teachers in the future, as opposed to firing those we have now.)

Mr. Moe, n an interview, described his vision of a world in which real, live teachers were welcome assets but kids could “basically work it out on their own.” In 20 or 30 years, he predicted, most schools would be “a hybrid model where there is a physical school, a place where they go and have clubs and sports activities and drama, but then for their academic course work, they might take most of it online.”

Sorrel’s other strategic theme is emerging markets. Oregon should have a strategy to support its business selling Oregon products and services in these markets. A part of that long term strategy should be teaching our students the languages of the emerging markets and sending them to those market to study. HB 2719 (here and here) would have created a Go Global High School Study Abroad Program to do just that. But it has died in the House Education Committee.

Oregon’s current leaders do not understand the world Sir Martin Sorrel foresees. Poor Oregon!

Leaning Against the Waxman-Markey Cap-and-Trade Bill

Paul Krugman has a NY Times op-ed piece “The Perfect, the Good, the Planet” in support of the Waxman-Markey Cap-and-Trade bill (here):

If we’re going to get real action on climate change any time soon, it will be via some version of legislation proposed by Representatives Henry Waxman and Edward Markey. Their bill would limit greenhouse gases by requiring polluters to receive or buy emission permits, with the number of available permits — the “cap” in “cap and trade” — gradually falling over time.

It goes without saying that the usual suspects on the right have denounced Waxman-Markey: global warming isn’t real, emission limits will destroy the economy, yada yada. But the bill also faces opposition from some environmentalists, who are balking at the compromises the sponsors made to gain political support.

So is Waxman-Markey — whose language was released last week — good enough?

Well, Al Gore has praised the bill, and plans to organize a grass-roots campaign on its behalf. A number of environmental organizations, ranging from the League of Conservation Voters to the Environmental Defense Fund, have also come out in strong support.

But Greenpeace has declared that it “cannot support this bill in its current state.” And some influential environmental figures — most notably James Hansen, the NASA scientist who first drew the public’s attention to global warming — oppose the whole idea of cap and trade, arguing for a carbon tax instead.

I’m with Mr. Gore. The legislation now on the table isn’t the bill we’d ideally want, but it’s the bill we can get — and it’s vastly better than no bill at all.

I’m not yet sold. I’d like to think we can do better. I may be prepared to live with no bill rather than this bill.

First, the give away of the right to emit greenhouse gases to existing polluters kills the bill for me. Krugman puts it this way:

The more serious objection to Waxman-Markey is that it sets up a system under which many polluters wouldn’t have to pay for the right to emit greenhouse gases — they’d get their permits free. In particular, in the first years of the program’s operation more than a third of the allocation of emission permits would be handed over at no charge to the power industry.

Now, these handouts wouldn’t undermine the policy’s effectiveness. Even when polluters get free permits, they still have an incentive to reduce their emissions, so that they can sell their excess permits to someone else.

I’m for auctioning off all permits to pollute and refunding the revenue to the public through reductions in payroll taxes or some such equitable scheme. Giving free rights to continue polluting to some polluters means they do not have to raise their rates to the public. Which means the market would still not be giving the appropriate price signals. Increasing the costs of dirty energy to the public is, of course, what worries politicians afraid of voter reactions, but it is essential to the transition to alternatives. Why have a bill that doesn't do that?

Second, I recognize that China and India are going to determine the fate of global warming. A US bill will affect global warming to the extent that it influences actions taken in those countries. Krugman makes an assertion I’ve not heard before and think may be wrong:

Not to put too fine a point on it, think about how hard it would be to verify whether China was really implementing a promise to tax carbon emissions, as opposed to letting factory owners with the right connections off the hook. By contrast, it would be fairly easy to determine whether China was holding its total emissions below agreed-upon levels.

This is not obvious to me.

Sorry, Al!

 

 

PPS Big Ideas for Better High Schools Meeting

Portland Public Schools held another public meeting on redesigning it high schools on 5/16/09 at Jefferson High School. It was the second such meeting I have attended. About 150-200 people including students attended. I was there to advocate for strong foreign language immersions programs in the high schools and for a high school study abroad program.         

There were lots of strong feelings in the room, that being of no surprise, after all these people were giving up a beautiful Saturday morning. Lots of the discussion centered on “equity,” meaning a general concern for poor, minority and/or underperforming students. Although I was there for other reasons, I share this concern. But, rather than an analytic or reasoned conversation, this process provided lots of venting of feelings, with little opportunity to delve into the related issues in depth. Lots of anger, distrust, and unhappiness with a variety of past decisions came out. I was longing for a debate on the connection, or lack of it, between neighborhood schools with no transfers out and equity.

For example, many in attendance seemed very supportive of “neighborhood schools” and of more restrictive transfer policies. Not so most of the students in attendance, who supported having transfer policies letting them attend schools out of their neighborhoods.

But, clearly, there are parents and others in Portland that believe a student should be required to attend their neighborhood school. Many believe this is the best solution to the equity issue; others have other reasons. For some, it is loyalty and affection for a school they attended. For others still, it is about preserving an important component, symbol, or landmark of their neighbor.

I think restricting students from transferring out will just create more segregated (by income, class and race) neighborhoods not more diverse, equitable schools.

I was surprised, and worried, by the sentiment against change in the room. This is not good. If we are to have a competitive economy in this 21^st century, we must substantially change our educational system. We must embrace change. If that means some experimentation, so be it! “Experiment” was a bad word for this group.

For more info from PPS, see here.

 

Joint Committee on the Fujian Sister State Meets

The Oregon Joint Legislative Committee on the Fujian Sister State met in the Oregon State Capitol on 5/15/09. Pictured alone and with various members of the committee is the Honorable Gao Zhansheng, Consul General of the People's Republic of China, San Francisco.

     

The Fujian Province of China is located across the Taiwan Straits from Taiwan.

Mercy Corps’ Hanson speaks at Joint Warfare Conference.

One of the lessons of US involvement in Iraq is that we do not do nation building very well. The US is just not yet good at reconstruction and economic development. The US military has no peer when it comes to taking down powerful bad guys, and is learning to create political space for development in counter insurgency conflicts, but if US the does not get better at assisting the processes of reconstruction, economic development and nation-building, many failed states will stay just that. This has been obvious for some time. We need to do much more and we need to put much more thought into what we do do.  Part of the rational for more foreign language programs is to develop a skilled workforce for these efforts.

Tom Barnett has been calling for a “Department of Everything Else” (here):

This department would fill the gap between the current Departments of Defense and State, engaging in unconventional pursuits such as nation-building, disaster relief, and counterinsurgency. In many ways, it could be a virtual department, bringing together various resources from the government, nongovernmental organization, and business sectors, along with foreign governments and the linchpin SysAdmin force.

I support Barnett’s efforts and other efforts like it.  He was the keynote speaker at the current Joint Warfare Conference held in Virginia Beach. Also there was Mercy Corps’ Director of Public Affairs Dr. Heather Hanson. Mercy Corps is a Portland, Oregon, based international humanitarian aid and development organization (here). Dr. Hanson spoke on a panel on day 2.

More on the conference is here. Let the conversation continue. There needs to be more dialogue between the US military and aid organizations.

The need for foreign language proficiency did come up at the conference (here):

In a luncheon address, Navy Adm. Eric T. Olson, commander of the U.S. Special Operations Command, highlighted his perspective on the joint fight by offering the following line: "Presence without value is perceived as occupation." He went on to detail ways in which the special forces community is working alongside other entities, while trying to promote foreign language skills to deepen relationships they form with locals in and around the battlefield. "In this we must invest," he said, adding that countries like Afghanistan have a long history of rejecting outsiders.

With regard to language training, Olson said his command is slightly ahead of the larger force. For example, every Green Beret has to speak a non-English language. "We are victims of a culture that does not recognize those types of skills as essential to fighting," he said, referring to the military's failure to value foreign languages. Olson said he's convinced that on his 12-man special forces teams, he'd rather have one excellent speaker of the native language than 12 with basic language competency. "That level of language skill develops that level of relationship with someone from another country. It is not 70 percent accuracy; it's exchanging family photos because of a relationship that is face-to-face over several years."

What if Nike ran our high schools!!!

Portland Public Schools is in the midst of a high school system redesign process (here). I’ve attended several meetings discussing alternative design models. More meetings are to come. But this past week I was on the Nike campus for a luncheon featuring Kris Aman (here) who guided Nike’s Beijing Olympic efforts. The contrast in organizational cultures is significant. It got me thinking “What if Nike ran our high schools.”

First, there are the ads. What if attending high schools, and the accompanying intellectual and personal growth accomplishments, were promoted with the same creative force that Nike does for its products. What would be the equivalent of “Just Do It” for high school education? Could a motivational media campaign create as much interest in learning as Nike creates for its products? Is our organizational model for learning wrong? Do we need learning organizations that have large advertising budgets?

Second, Nike relentlessly pursues innovation. When I recently walked into a high schools building, it seemed like the one I attended in the 1950’s. Not much had changed. For the past two years plus I have advocated for more Mandarin programs in the public schools, and for the past year for a high school study abroad programs. Not one educational leader and not one business leader has come to my aide. Strategically, for our future, this should be a big deal. Yet, at an Oregon House Education Committee hearing in March, again, not one educational or business leader testified. Nike thrives on change, our educational system is stuck. No wonder our schools are so deadly dull.

Third, Nike understands the youth culture in all its local variations around the globe. Nike taps into these youth cultures through all the new media to promote its products. High schools use some of the new media only in bits and pieces. There is no systematic effort to reach and teach students through new media (cellphones, computers, youtube, etc).

Fourth, Nike understands the global economy. Nike understands where the growing markets are and is there, having thought out its strategy. Our educational system has yet to recognize how much the global economy is changing and that we need to do some things differently. Our schools are just hopeless out of date.  

And fifth, Nike cultivates athletes. Much of its innovative is focused on the need of athletes to perform better. At its core, a profound understanding of competitive athletes drives Nike’s business. High schools, I think, are caught between cultivating the two significant group of actors, students and teachers, and does neither one really well.  High schools do not really support superior teaching, nor superior learning by students. This can be argued, but lacking a culture of innovation to adapt to the changing youth culture, neither teachers nor students get what they deserve.

Just for serious fun, Portland Public Schools might turn its high schools over to Nike for say ten years. Let’s really create a new high school model!

“Our Future as a Financial Colony” of Beijing, Dubai, Brazilia and others

Email sent to all 90 Oregon legislators on 5/11/09.

As state budgeting for the next biennium moves into its final stages, let me again urge you to allocate funds for an educational system that will carry Oregon through the 21^st century. The global economy is changing rapidly. Even the best of our today’s educational system is not sufficient to serve us well in 2010 and beyond. To survive and thrive in the global economy of the future Oregon’s public education needs to invigorate its foreign language programs and create a high school study abroad programs. Please do not make us wait another two years just to get started.

Please consider this excerpt from Berkeley Economic Professor Brad DeLong’s article “Our Future as a Financial Colony” (here):

Let's look beyond the current financial crisis for a moment. Let's think not about the long run, but the foreseeable medium run in which we are, for the most part, still alive.

For the foreseeable future, China alone will, on net, be buying more than $300 billion a year in dollar-denominated assets. But that is just the tip of the foreign-exchange iceberg….

… If foreign governments leave their enormous reserves in U.S. Treasurys and similarly safe assets, they will be presenting the U.S. taxpayer with an enormous financial gift: extremely cheap financing for the U.S. government as it borrows, while the high-return investments in U.S. corporate securities are left to fatten the portfolios of American investors. Because governments, like people, do not like leaving a fortune on the table, they are unlikely to follow this course.

The next generation, therefore, will see a very interesting dance. Call it reverse finance colonialism? Call it something. Foreign governments will be seeking high-return assets for their enormous portfolios without selling dollar-denominated wealth. Consequently, they will have to focus on U.S. corporate securities. With such large-scale investment comes ownership and with ownership comes control. No government will want to play the role of passive investor, with the attendant risk that its partners will tunnel the wealth out from under its grasp, leaving an empty corporate shell.

So what is likely to come to pass is not the socialism feared by the Right—at least not ownership of the means of production by the U.S. government. Instead, it will be ownership of U.S. companies by foreign governments—and on a scale we’ve never before seen.

Can anything stop this progression? Yes. A collapse of world economic growth—which would create a very dangerous and angry world. Or a sudden return to thrift on the part of American consumers—so that we can finance the industrialization of the rest of the world rather than having them finance our consumption. But neither is likely.

That will leave Americans confronting a new and unprecedented phase of globalization. Government agencies in Beijing, Dubai, and Brazilia will have a large financial interest in everything from the health-care policies of American factories to the compensation packages of corporate executives and the apportionment of seats on corporate boards. And their interest will matter: They will, after all, be the people who have the money—just as Americans were the people who had the money in the years after World War II.

It's not that proxy contests will be initiated in Mandarin (although youngsters in Britain and America may well find themselves being sent to finishing schools in Maharashtra to purge themselves of their hillbilly Oxford or Boston accents and acquire the high-class English tones of Mumbai). But corporate bankruptcy will become a branch—probably the major branch—of international intrigue as governments find themselves dealt in whether they like it or not. And for the rest of us, "working for the man" will take on a brand-new—and foreign—dimension.

Please, consider what skills and knowledge Oregon’s work force will need to prosper in such a global economy. Please, pass bills to expand Mandarin programs and to create a high school study abroad program. We have no time to lose.

Firing a gay, Arabic speaking officer: two wrongs do not make a right

Aaron Belkin  in his The Huffington Post article “Obama To Fire His First Gay Arabic Linguist” (here) writes:

is First

Dan Choi, a West Point graduate and officer in the Army National Guard who is fluent in Arabic and who returned recently from Iraq, received notice today that the military is about to fire him. Why? Because he came out of the closet as a gay man on national television.

This is crazy and wrong!

First, the whole "don't ask, don't tell" law is wrong. Gays should be able to serve openly in the US military. Same as anyone else. Period.

Second, the Obama administration does not have a strategic foreign language development program producing enough personnel fluent in strategic foreign languages, such as Arabic, Mandarin, Urdu and Pashto (and a longer list). Nor do Governor Kulongoski and the Oregon legislature. Bills died recently in the Oregon legislature that would have expanded Mandarin programs in Oregon and would have create a Go Global High School Study Abroad Program, including the death of a bill giving extra funding for study abroad in languages like Arabic.

Two wrongs do not make a right.

Lunch at Nike: Driving the Global Youth, Athletic Culture

 

 

Nike’s Kris Aman spoke to the NW China Council luncheon held at Nike’s Tiger Wood Center on Nike’s Beaverton campus on 5/6/09. Aman gave an informative and engaging luncheon talk to about 30. He used lots of powerpoint type slides and videos. I was impressed by the relentless effort Nike puts in to be innovative, to understand and drive the youth culture, and to understand the global market in all its local variations. I came away wondering what our educational system might look like if it were run by Nike. I may blog more on that theme in the future.

About the program and Aman, the NW China Council published the following:

Kris Aman, Global Vice President and General Manager of Men’s Athletic Training at Nike Inc., was responsible for leading the global business vision for Nike’s Beijing Olympics effort  – one of the most ambitious and successful brand project in Nike’s history.  Kris will discuss his experience with the Nike brand and the Beijing Olympics - connecting the consumer to sport and innovation through the Beijing Olympics.  He will also discuss the current consumer and market trends in relations to the athletic industry and the economic situation in China.

A college athlete and University of Washington graduate, Kris is off the court and into the business side of sports.  With a degree in Advertising/Communications, Kris joined Sun Sportswear where he honed his skills in product merchandising, trends, development, design direction and licensing with major corporate properties.
 
He started his Nike career 12 years ago as a product line manager for Nike Basketball, then went on to footwear product marketing and global category footwear leadership roles.  At his current position as Global Vice President and GM of Men’s Athletic Training, he is leading an integrated consumer-oriented focus across footwear, apparel and equipment for the category.  He is also responsible for American football and baseball, two important sports for Nike that are closely aligned with training.

Nike’s Olympics ’08 was a “compelling effort” over four and one-half years and involved 1000 Nike people. Nike used the opportunity not only to markets its products in China but all over the world. This was a global stage. It was an opportunity to connect with young athletes and to realign its categories worldwide.

Nike works hard on meeting the needs of athletes. A core marketing theme is that it is the brand for athletes and that it seeks to inspire athletic achievement. The voice of athletes is prominent in many of its promotional efforts. Some used local athletes to tell “Just Do It” moments.

China is a mega market for Nike, along with the US, Tokyo (Japan), London (Europe).

Doing business in China is different. China has much more “mono-retailing,” meaning one brand stores, and unlike US stores with multiple brands and multiple products. Nike does sell shoes in China that are less expensive than in the US, but it does not sell at the lowest priced levels. Nike sees itself as providing “premium” shoes and apparel, and wants to keep that image. Asian feet tend to be a bit wider than US feet.

Leading up to the Olympics, Nike used life size manikins of sports stars as part of its promotional campaign. One China mall featured a three story high, figure-eight track with life-size sport star manikins on it.

I asked Aman how Nike organized its China expertise. He replied that Nike has three levels on management: global, regional and local (as in China). Some China expertise would be at all three levels, and people did move between levels, but the most China expertise would, of course, be at the local level.

Nike used several funny youtube to create a “preheat” to the Olympics. Aman showed two. Here is one:

Aman talked about the crisis of Liu Xiang, China’s track star, being unable to compete. Nike did not pull away from Liu Xiang but stuck with him in a campaign about “Love Sports, Even When It Hurts – That is part of competition.”