Lexington, KY - In years past, when a company wanted to establish an international presence, that business would typically start in the United States before venturing "overseas." Johnson & Johnson set up its foreign subsidiary in Montreal in 1919 some 33 years after its founding in 1886. More recently, the Gap, opening in 1969 in the United States, waited until 1987 to open its first overseas store in London.
But that was in the last century.
Advancing technology, changing demands in the world marketplace and a global workplace environment are reversing many of the old rules of success from as recently as 10 years ago. Today companies are "born global." Political and economic barriers have softened and information is a keystroke away as workers use Skype, wikis, Web sites, virtual chats, online "sharing," e-mail and more. Investment partners are found across the world. The globe has become one big employment "agency"
for recruiters and entrepreneurs.
Global business networks are and will continue to be a significant part of Kentucky's economy. In fact, during the first six months of 2009, Kentucky exported almost $8 billion in merchandise to 176 partner countries from Canada to Swaziland and across the globe. In 2008, the state's leading export category was transportation equipment, at 36 percent, followed by chemical manufactures, machinery manufactures, and computers and electronic products. In the first half of 2008, the metropolitan area of Lexington-Fayette exported 12 percent, or $1.2 billion, in merchandise, according to the Kentucky Cabinet for Economic Development.
And Kentucky's door to the world doesn't just swing out. The state is home to 406 facilities with 10 or more employees that are owned, either directly or indirectly, by interests from 26 foreign countries. Japan leads with about 200 facilities, followed by Germany, Canada, United Kingdom, France and Mexico. Total full-time employment is 76,671 across all facilities affiliated with all countries.
What will Kentucky entrepreneurs and business leaders need to continue and expand foreign collaboration in our local economy? Daniel Isenberg, a senior lecturer at Harvard Business School, says that, along with vision, leadership and passion, it will require four additional competencies: articulating a global purpose, alliance building, supply-chain creation, and multinational organization (The Global Entrepreneur, Harvard Business Review, 2008, December).
Multinational organization depends on effective communication strategies across languages and cultures. Native language proficiency is important, especially when used correctly in the context of the culture, as situation and intonation of speech are used to create meaning. Consider the complexity of product design and development across "the seas." Manufacturing plans are often designed by Japanese engineers. Engineers in Kentucky must be able to collaborate with their Japanese counterparts across both design and implementation phases of the product.
David Word of Lexmark spent two years in China. A non-native speaker, Word and coworkers relied on interpreters to communicate with their Chinese counterparts. Word learned not to use slang terms, as they do not translate. Pausing to allow for interpretation and understanding is also important. Head nodding does not always indicate understanding. Therefore, it is very important to have agreements reflected in written documents.
"The key to doing business across the globe is to maintain deep respect for everyone you work with no matter what country they are in or their position within the company," said Joel DiGirolamo, president of Turbocharged Leadership. Traveling extensively for his current position and in previous careers with IBM and Lexmark International, DiGirolamo has found that no matter the country, no matter the individual, deep down everyone wants the same thing.
"I have found that everyone really wants to have a comfortable home, safety and education for themselves and their children," he said. "If we keep this in mind and continue to respect the other parties, business can be done no matter what cultural or political obstacles exist."
Economic growth depends, in part, on intellectual capital. A 2009 summary report of the 43,511 11th-grade students who took the ACT is insightful. Benchmarks for the report represented the minimum scores needed to indicate a 50 percent chance of obtaining a B or higher, or about a 75 percent chance of obtaining a C or higher in four college courses. Percentages meeting the benchmarks were as follows: 46 percent for English, 21 percent for algebra (math), 30 percent for social science (reading), and 16 percent for biology (science). Just 11 percent of the 43,511 students met ACT benchmarks in four areas.
Student reports about career choices were also insightful. Foreign language was chosen by only 157 of those students planning to attend a four-year college.
Education and economic development are inseparable. ACT scores show us numbers, but there is something deeper - the young person's sense of self-worth, focus on education for employment, can-do attitude, curiosity about the world and comfort in being "different." Adding these elements to our children's toolbox for success in a rapidly evolving international marketplace is both our challenge and our hope.