Monday, June 29, 2009

Dubai: build it and they will come


It doesn’t really matter where you come from; Dubai is stunning. Of course the current crisis has taken some of the luster of the place, as of many others. Of course the place is heavily indebted, perhaps at almost 50% of its GDP, but there again; Italy’s comparable share is more than double that.

Perhaps Dubai should not be analyzed with the same parameters as anywhere else. There is something dream-like about Dubai’s self-assertion. It has chosen architecture as a statement of its presence, and much of that architecture is great.

One can rightly wonder who will pay for the grandiose
Hirshhorn-like open air sculpture garden. But I prefer to focus on the intention.
Take the Dubai National Bank for example. It was commissioned in the early-nineties, designed by Uruguayan architect Carlos Ott and built by 1997. The structure is supported on two massive granite slabs that seen from the side resemble a mast. The curvature of the roof of the bank’s hall reminds that of the hull of the dhows. The front is covered by glass but on the Creek side the glass curtain curves gracefully like the billowing sail of the dhows that used to ply the Creek. When seen from the opposite side of the Creek the lower half of the curved glass reflects the Creek’s traffic. Most modern buildings count on glass surfaces to add movement by reflecting the moving clouds in the sky, but those are absent in Dubai. At the National Bank of Dubai the glass reflects life in the Creek.

In some sense Carlos Ott set the style that
Tom Wright followed in conceiving in 1993 the mast-cum-sail-like curvature of the Burj Al Arab, Dubai’s iconic building as from 1999. At Burj Al Arab Tom Wright came as close as a modern architect possibly did, to draw in a few sweeps of a pen what became an iconic building, because all can recognize it and associate it with a place on Earth: Dubai. Very much like the pyramids or the Eiffel tower recall Cairo and Paris.

Of course these are not the only stunning buildings built in the last ten years or so, but they signal an intention: to bring a piece of desert to mind. In doing so, the Emiratis have succeeded in branding the desert. To this they added a powerful low-fare airline that has turned Dubai into a hub served by a massively modern airport. Now Dubai is where you may stop on your way somewhere else to appreciate what you can see nowhere else. Once this was accomplished it became possible to consider setting business in Dubai, as many high-tech and service initiatives have, from finance corporations to educational institutions, besides the world-class hotel chains like the Jumeira group, that cater for the well-heeled traveler.

Dubai does not have much oil and cannot host manufacturing initiatives. Location was almost all it had, but few knew about it and even less cared. Dubai began making use of its location by re-distributing goods out of the Creek but it needed to be creative in generating more revenue. Dubai does sits in the middle of highly populated countries within flights lasting an hour or two. But this is also true of many other places in the region, including more favorably endowed ones like Teheran.

Only Emiratis made more of its location by dressing it up with buildings that would attract attention, and then serving it by comfortable transportation, attracting service industries and hosting travelers in modern hotels. It is not by chance that the London Business School offers an EMBA there. Out of Dubai LBS offers and EMBA to 300 students, only 10% reside there, the rest flies in and out once a month. Its Director, Kevin Dunseath, convincingly argues that it could not be done anywhere else in the region.

If you are still asking for who pays for the buildings you are missing the point. The buildings are the magnet with which the rest would not exist. And the Emiratis badly need the rest. Brand Dubai is a magnificent example of modern marketing and so far a successful strategy to turn a desert into a service hub.
Prof. Alfredo Behrens
FIA, International MBA
June, 2009

Monday, June 22, 2009

Shanghai Surprises


Shanghai Surprises

As your airplane approaches Shanghai you realize that this huge city-province is preparing to reach more than 30 million inhabitants. From the busy, ultra-modern airport you reach the city center in 8 minutes; a 430 km/hour ride on a smooth magnetic levitation train. In the Pudong business district, a bright, modern skyline appears with broad avenues already insufficient to make traffic flow quickly. At Tonji University, a Harvard-trained senior professor, Dr. Peng, tells us that China’s growth has been led primarily through investment in infra-structure and export; with the global economic crisis reducing exports, it now must be redirected towards internal consumption.

Shanghai is the most westernized of Chinese cities; one finds street signs in English and a wide variety of international stores in ultra modern malls. But go outside the central business district and try to get a haircut in a barber just 6 steps away from a WalMart stores and no-one speaks English! Nor do they understand easily our gestures or mimicry; with language, writing and general outlook on life so distinct, communication is a real problem; you feel as if you are actually on another planet! However, for expatriates, Shanghai offers a good quality of life; the Brazilian executives we met work hard but have a pleasant lifestyle, with good housing, international schools for their children and a strong expatriate community and social life.

Visiting international companies such as Volvo, Voith Hydro and Vale (ex CVRD) you realize that building relationships is a long, time-consuming and unavoidable process; creating “guanxi” , the Chinese version of business networking is essential to developing a sustainable business. The Brazilians we met seem to adapt very well to this environment; but besides experienced Brazilian and European CEO’s we meet promising young Chinese managers. Typically with excellent technical backgrounds and training, they still seem to lack the communication and leadership skills to take over top management positions in international organizations.

A significant surprise is that labor costs are rising, but one finds that once the Chinese workers understand their tasks and are motivated, they work very hard, and are both productive and quality oriented. Another important surprise relates to environmental and safety issues. Strong legislation has been passed, and is being actually enforced by the authorities, at least in relation to major foreign firms. New companies must comply with environmental laws, and labor laws require a 40 day week, paid overtime, and respect to workers rights. Estimates on social charges on salaries vary from 40% to 50%. Competition for qualified labor is intense and unlike Japan, company loyalty is not a significant retention factor; companies must pay competitive wages and have excellent human resource policies to retain qualified workers.

After Shanghai our trip takes us to Guangdong Province, where Chinas economic opening started, to learn more about how Chinese companies are surviving the economic crisis.

Please watch out for the next blog!

James Wright

Wednesday, June 3, 2009

PRMIA GLOBAL EVENT SERIES: CREDIT RISK MANAGEMENT

Professores do MBA Executivo Internacional participarão do Evento: PRMIA, onde será proporcionado um fórum de discussão sobre os principais temas relacionados à gestão de riscos de crédito no Brasil e no mundo na atualidade.
Data: 17/06/2009
Local: FEA-USP, Auditório 5, Av. Luciano Gualberto, nº 908, Cidade Universitária, São Paulo, Brasil
O Evento é Gratuito, mas o número de vagas é limitado.
Para inscrever-se, caso já seja membro do PRMIA, por favor, click no link :
https://prmia.org/index.php?page=events&option=eventsRegister&event_id=3366
Caso ainda não seja membro do PRMIA, vá ao site
www.prmia.org e inscreva-se. Depois click no link:
https://prmia.org/index.php?page=events&option=eventsRegister&event_id=3366

Tuesday, June 2, 2009

Pergunte ao Headhunter

Novos Mercados e Oportunidades

Carlos Mello e os convidados Pedro Amaral, headhunter, e o professor James Wright falam sobre os novos mercados e oportunidades para você aproveitar