New Report: We’re Not As Connected As We Think


 

HBR Blog Network

We recently released the DHL Global Connectedness Index 2012, which tracks the depth and breadth of trade, capital, information, and people flows across 140 countries that account for 99% of the world’s GDP and 95% of its population. Based on data covering the period from 2005 to 2011, it charts how globalization has evolved since the onset of the financial crisis at the global, regional, and national levels. The full report is available as a free download and, to whet your appetite, here are some of its most striking findings:

 

Global connectedness declined sharply at the onset of the financial crisis from 2007-2009, and despite modest gains has yet to recapture its 2007 peak. Capital markets are fragmenting and while merchandise trade recovered strongly since 2009, the intensity of services trade has remained stagnant. We compare trends across 10 distinct types of flows within its 4 pillars: trade (merchandise and services), capital (FDI and portfolio equity), information (internet bandwidth, telephone calls, trade in printed publications), and people (tourism, international education, migration).

The world’s most globally connected country (the Netherlands) is hundreds of times more connected than the least connected country (Burundi). Our report provides full country rankings and explains how the depth and breadth of countries’ connectedness varies with factors such as countries’ levels of economic development, population sizes, and geographic locations. It also summarizes patterns of connectedness at the regional level. Europe is the world´s most globally connected region and sub-Saharan Africa the least, but it is encouraging to note that sub-Saharan African countries averaged the largest increases in global connectedness from 2010 to 2011. Leer más “New Report: We’re Not As Connected As We Think”

Managing in a Multipolar World


First mover advantage

First mover advantage (Photo credit: rennygleeson)

Joyante’s Blog

Why global companies need to rethink their operating models.

In high-growth emerging economies, first-mover advantage is crucial, and having a coherent and flexible global enterprise management model that can adapt to (and get ahead of) rapid evolutions in the market can make all the difference. (An exerpt from an article inStrategy+Business by Paolo Pigorini, Ashok Divakaran, and Ariel Fleichman).

The last decade has seen a disruption in the nature of consumer markets on an unprecedented scale. The shifts on the demand side are well known: Emerging nations have displaced mature economies as the engines of growth, attracting Western multinationals in search of millions of new consumers. What has been less appreciated is a quieter shift on the supply side. The iconic American and European companies that have dominated the economic world order for the past several decades are ceding ground to an increasingly influential set of emerging market “champions.” Adding to the complexity, these high-growth markets are often distinct from one another in terms of the speed of the market, the drivers of demand and consumer preferences, and the regulatory and investment climate.

These developments have created a multipolar world that moves at different speeds and presents a more diverse range of requirements for success than the global marketplace of years past; one with multiple centers of power and influence that are changing the way business is done. Yet many companies are reluctant to move away from their legacy hub-and-spoke model — which evolved to support the old, more homogeneous business environment — to a global enterprise management model that allows for greater nimbleness and adaptability.

How can companies balance local autonomy with the need to achieve global scale and standardization? Does it even make sense to have a headquarters anymore? And where should the talent that runs the company come from? Such questions are critical, because they ultimately determine a company’s long-term viability. The answers, of course, are not universal, but in our work with multinationals, three key themes consistently emerge as enablers of success: a rebalanced organizational structure and operating model, more dispersed decision-rights mechanisms, and an approach to leadership and people management that emphasizes diversity and local talent.

New Balance of Power…  Leer más “Managing in a Multipolar World”

I Never Meta URL Like You Before: A Short Domain Name Trick

I love a good domain name. I sometimes look wistfully back at my youth and think about the swell URLs I would have bought if I had an inkling about what the Internet would become.

Today you’re lucky if you find a relevant, memorable domain that isn’t parked or in use — luckier still if it’s short.

With the traditional TLDs — top-level domains such as .com, .net, .org, and to some extent, locals like .ca and .co.uk — it’s getting more difficult to obtain short domain names without some creativity.

Every so often a new TLD shows up and there’s a gold-rush frenzy. When the .me extension came out, for instance, there was a bidding war on the domain name, aweso.me — a creative twist for a short and memorable URL.

I’ve long been waiting for a chance to snag a short domain name — and this is a story of how I was recently able to do so.
The Boring Technical Part

In May 2010, ICANN — the organization responsible for managing domain names and IP addresses — brought Internationalized Domain Names (IDN) to life.

This allows participating extensions to use characters and symbols from other alphabets. This is due to Unicode working with Punycode conversion.


by Arley McBlain
I Never Meta URL Like You Before: A Short Domain Name Trick

I love a good domain name. I sometimes look wistfully back at my youth and think about the swell URLs I would have bought if I had an inkling about what the Internet would become.

Today you’re lucky if you find a relevant, memorable domain that isn’t parked or in use — luckier still if it’s short.

With the traditional TLDs — top-level domains such as .com, .net, .org, and to some extent, locals like .ca and .co.uk — it’s getting more difficult to obtain short domain names without some creativity.

Every so often a new TLD shows up and there’s a gold-rush frenzy. When the .me extension came out, for instance, there was a bidding war on the domain name, aweso.me — a creative twist for a short and memorable URL.

I’ve long been waiting for a chance to snag a short domain name — and this is a story of how I was recently able to do so.

The Boring Technical Part

In May 2010, ICANN — the organization responsible for managing domain names and IP addresses — brought Internationalized Domain Names (IDN) to life.

This allows participating extensions to use characters and symbols from other alphabets. This is due to Unicode working with Punycode conversion. Leer más “I Never Meta URL Like You Before: A Short Domain Name Trick”

Understanding the New Breed of Reflexive Consumer

García Ruiz, P.; Rodríguez Lluesma, Carlos
Publisher: Routledge
Original document: Reflexive consumers: A relational approach to consumption as a social practice
Year: 2010

When the strength of your company’s brand is the key factor in its market position, understanding the way consumers think and behave is absolutely crucial. But such a task is easier said than done. For well over a century, economists and other social scientists have endeavored to explain, with varying degrees of success, what it is that actually makes consumers tick.

Classical economists were among the first to do so, arguing that our only real motivation as consumers is to maximize utility. Their model, however, fails to account for the meaning that we bestow on our relationship with the goods we buy. It may help explain why we buy a car, but sheds no light whatsoever on why we prefer a BMW over an Audi, or a Renault over a Peugeot.


García Ruiz, P.; Rodríguez Lluesma, Carlos
Publisher: Routledge
Original document: Reflexive consumers: A relational approach to consumption as a social practice
Year: 2010
When the strength of your company’s brand is the key factor in its market position, understanding the way consumers think and behave is absolutely crucial. But such a task is easier said than done. For well over a century, economists and other social scientists have endeavored to explain, with varying degrees of success, what it is that actually makes consumers tick.

Classical economists were among the first to do so, arguing that our only real motivation as consumers is to maximize utility. Their model, however, fails to account for the meaning that we bestow on our relationship with the goods we buy. It may help explain why we buy a car, but sheds no light whatsoever on why we prefer a BMW over an Audi, or a Renault over a Peugeot. Leer más “Understanding the New Breed of Reflexive Consumer”

The Reason Behind the Success of Reverse Innovation

The road to reverse innovation

In his article What is Reverse Innovation, Vijay Govindarajan outlines the following historical phases:

1. Globalization: companies designing and manufacturing in developed markets products that are “de-featured” for export to emerging markets that can’t afford the fully featured original product.
2. Glocalization: companies still de-featuring products from developed markets but now localizing production in emerging markets to take advantage of lower labor costs.
3. Local innovation: companies now designing in emerging markets products that are directly suited to the local needs. (Manufacturing continues to take place locally for costs reasons.)
4. Reverse innovation: companies designing and manufacturing in emerging markets for local use AND export to the developed markets (with or without some level of scaling-up).


by Yann Cramer

The Rise of SimplicityThanks to a number of spectacular successes obtained by blue-chip companies in recent years, Reverse Innovation is becoming a popular trend. Examples include GE’s portable ultra-sound equipment designed in China and sold worldwide, LG’s low cost air conditioner designed in India and sold worldwide, Renault’s Logan low-cost model designed for Eastern European markets and now selling on Western Europe, etc.

In an enlightening article, Vijay Govindarajan outlines a historical perspective from globalisation to reverse innovation, and highlights the key driver behind this evolution: the revenue gap between developed and emerging markets. But there are other drivers that may be less visible but no less powerful.

The road to reverse innovation

In his article What is Reverse Innovation, Vijay Govindarajan outlines the following historical phases:

  1. Globalization: companies designing and manufacturing in developed markets products that are “de-featured” for export to emerging markets that can’t afford the fully featured original product.
  2. Glocalization: companies still de-featuring products from developed markets but now localizing production in emerging markets to take advantage of lower labor costs.
  3. Local innovation: companies now designing in emerging markets products that are directly suited to the local needs. (Manufacturing continues to take place locally for costs reasons.)
  4. Reverse innovation: companies designing and manufacturing in emerging markets for local use AND export to the developed markets (with or without some level of scaling-up). Leer más “The Reason Behind the Success of Reverse Innovation”