Economic Insight Behind the Global Knowledge Market
 The Strategic Management Association, the Harvard Business School and the CDMA sponsored the 2007 Economic Forecast featuring David Hale, Chairman of Prince Street Capital Management and Lyric Hughes-Hale, Founder China Online. David has international renown as an international economist, and he presented his encyclopedic knowledge and perspective on global economic trends in Chicago on 9 January 2007. Afterward, Lyric shared her insights on China in Part II of the evening. The Global Human Capital Journal also covered the 2006 Economic Forecast.
David’s forecast was global in scope but adapted to his U.S. audience. It reflected many of the numbers behind the global shift to the Knowledge Economy, and how this is driving global prosperity:
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 Chinese Prescription for Healthcare Providers predicts that China is showing itself to be very innovative in health care by implementing market-based offerings. The TEDA International Cardiovascular Hospital, just outside Beijing, offers six levels of service, ranging from $6.70 to $3,200 per night, as reported in “Hospital Caters to China’s Wealthy and Poor” in The Wall Street Journal or the hospital website. The lowest class of service has patients sharing a small room with other patients while “first class” includes a suite with a private gym, a garden, massage chair and other amenities.
China has an aging population of 1.3 billion to whom the government is struggling to provide health care. It regulates the prices of medicine and subsidizes basic services at public hospitals, but most people do not have western-type insurance and end up paying a major portion of their health care. The stakes are high today to solve the health care problem, and they are getting higher as the population ages.
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High Potential for Business Innovation
 Plus ça change* was the theme of The Executives’ Club of Chicago High Technology Conference December eighth, where an esteemed panel gave varying perspectives on Chicago’s importance as a technology center. William Avery of Brunswick Corporation, James O’Connor, Jr. of Motorola, Inc. and Ira H. Cohen of Goldman, Sachs & Co. spoke about technology from enterprise IT, mobile technology and investment points of view respectively. Prior to their prepared remarks, John Gentry of CSC Consulting outlined key results of the forthcoming Chicago Technology Outlook Survey, in which corporate technology leaders commented on IT trends for 2007 as well as Chicago’s role as a technology center. He moderated the panel during a Q&A session.
The net-net: Chicago has a way to go before it becomes a preeminent technology center; however, its best chance for creating breakaway value through innovation will lie in not focusing on technology, as explained in Analysis and Conclusions.
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The Knowledge Economy, Ultimate Context for Understanding the Future welcomes you to the Post-Industrial World, which turns past assumptions on their heads.
 The Knowledge Economy is a post-industrial economy characterized by a highly developed information technology industry along with overproduction and commoditization in industrial and agricultural sectors. Widespread information technology (IT) adoption among producers and consumers enables all market participants to create and share information about all aspects of economic transactions. The creation, packaging and sharing of information is termed “knowledge.” In the Knowledge Economy, information about an underlying good creates most of the good’s differentiated value.
Consumer mobilization and engagement in the Knowledge Economy renders many of the Industrial Economy’s rules invalid. In the Industrial Economy, consumers had little information relative to producers, they were isolated from each other, and they had no collective voice. They were at a disadvantage as market participants. The “second stage” of the Internet, “Web 2.0,” facilitates P2P (peer to peer) information sharing, and its tools are free to use and accessible to anyone with an Internet connection. Producers […]
The TransAtlantic Partnership’s Implications for U.S., E.U. Economies summarizes coverage of the EEC International Conference—Talking with the Ambassadors of the World’s Largest Trading Relationship and the CEOs of Four Global Enterprises.
 Three eminent diplomatic leaders and CEOs from Baxter, Financial Dynamics, ITW and Philips briefed Midwest executives on the current status and future directions of the world’s largest trading relationship at the Executives’ Club of Chicago’s International Conference November 15. The half-day program featured several presentations, a CEO panel and a media round table. All speakers sought to impress upon the audience the pivotal importance of the transatlantic alliance for the United States and Europe, and most warned chief executives neither to take it for granted nor to be passive in the face of rising protectionism.
The fact that the importance of the E.U.—U.S. alliance had to be emphasized brought into sharp relief the relatively sudden rise of Asia as well as the shift from the Industrial Economy to the Knowledge Economy. Both megatrends pose opportunities and threats for the world’s largest economies and enterprises, and […]
Last night I attended TiE Chicago’s “The Great Chicago Tech Debate,” which turned out to be a rousing panel discussion (no, that’s not necessarily an oxymoron 😉 replete with insights. As it was my first TiE (The Indus Entrepreneur) event, I enjoyed taking an informal survey of members afterwards, and everyone I spoke with found it extremely valuable (not awfully surprising, but still..). TiE, which was founded in The Valley and has chapters globally, is a network to support entrepreneurs. As its name suggests, many of its leaders originally hail from India, and many have founded, led or helped to launch successful start-ups that have leveraged offshore partners in India.
Although the setting of this tale is Chicago, its lessons will apply to many other cities, provinces or countries that find themselves in a global knowledge economy, with the need to form a vision to galvanize their citizens to make changes in order to succeed in the new environment. Two of the main challenges are: making the shift from the industrial economy to the knowledge economy and the need to differentiate to compete. “Technology” plays a supporting role, which we’ll discuss more in a minute. After some observations on the […]
Sidebar: Industrial Economy DNA
Chicago, in being one of the foremost industrial regions, has industrial economy DNA. This DNA isn’t well suited to the first phase of the knowledge economy, which turns many industrial economy assumptions on their heads. For example, even more remarkable than tech companies’ ability to create wealth quickly is their lack of constraints from raw material inputs: these companies can be located anywhere, irrespective of natural resources. Their main physical requirements are power and fiber, which can be built or brought almost anywhere. In contrast, putting together an industrial enterprise involves accommodating materials with physical constraints at every turn: the sources of raw material inputs are often limited and scarce. Moving the material or parts from one area of the enterprise to another often requires special machines and specialized equipment. Dangerous chemicals are often involved in transforming raw materials. Disposing of waste is not trivial. Often, machinery to transform the raw materials must be custom built, and the machinery imposes its own constraints. Consequently, Chicagoans are accustomed to changes being incremental; we are accustomed to things taking time. This economy is bits, not bytes.
Chicago is renowned as a distribution hub, which began with its proximity […]
At the MIT Enterprise Forum’s Innovation and Technology Forecast in Chicago Tuesday, there was significant discussion about China’s growth and what that would mean for innovation in Illinois. Many speakers also made references to the importance of catering to knowledge workers. Chunka Mui, Dan Ratner, Geoffrey Kasselman and Jerry Mitchell were panelists, and Jerry spends significant time in China. His admiration for what is happening in China was contagious and triggered the train of thought here.
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Rare Legal and Business Insight into Offshore Countries and Regions describes Baker & McKenzie’s excellent webcasts focused on offshore business.
Depending on your business strategy, it may make sense to explore offshoring to several regions of the world to mitigate the risk that your partner might be affected by natural disasters or political upheaval. In fact, many offshore experts recommend a portfolio strategy for risk mitigation or operational effectiveness (follow the sun operations can reduce time to market) while meeting cost objectives.
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China: The New Economy summarizes that, by any measure, China is a juggernaut in the early stages of flowering on the global stage: As a consumer market, it has the potential to be the largest in the world as the country is the most populous. As a hub of human capital in a knowledge economy, it will become an epicenter of service-based knowledge workers. As an ambassador of Southeast Asia, it will influence what will arguably be the deepest talent pool in the world. This will cause a reconfiguration of the world’s knowledge network.
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