From left, Daniel Harris, regional director for East Asia/Pacific of the U.S. and Foreign Commercial Service; Dinesh Keskar, president of Boeing India; and Richard Drobnick, director of the Center for International Business at the USC Marshall School of Business
Only 1 percent of U.S. companies export to customers overseas, despite the fact that 95 percent of consumers live outside America’s borders. Translation?
Vast untapped opportunities remain for economic growth for U.S. companies that engage in foreign markets, particularly in the Asia-Pacific region, where developing economies are expected to grow by 7.5 percent in 2012-13, according to the International Monetary Fund. In contrast, the U.S. economy is expected to grow by 2 percent during the same period.
For the 300 people attending the 25th annual Asia/Pacific Business Outlook (APBO) conference at USC on March 26-27, the message was clear: U.S. companies must engage in foreign markets if they want to grow robustly in the 21st century.
As explained in opening remarks by Richard Drobnick, director of the Center for Business Education and Research (CIBER) at the USC Marshall School of Business, which organizes the conference in partnership with the U.S. Department of Commerce: “Twenty-five years ago when we started this conference, the world was a different place. The Soviet Union still existed, the Berlin Wall was going to come down a year later. China was an impoverished, poor country and the U.S. was the locomotive for the world economy. Today, it’s the economies of Asia that are pulling the world economy.”
But how do U.S. companies successfully engage in these economies, particularly those in areas with vastly different cultures or political and business climates? The APBO gave attendees a crash course on entering or expanding in 15 Asia/Pacific markets, as well as Brazil and Russia, thanks to 60 business experts from the U.S. Commercial Service, the private sector and academia.
Following remarks from USC Marshall dean James G. Ellis, Los Angeles Mayor Antonio Villaraigosa, Drobnick and a keynote presentation from Francisco Sanchez, under secretary for international trade at the U.S. Department of Commerce, seminars included updates on the earthquake recovery and opportunities in Japan, the impact of the global recession on the Chinese economy and briefings of 17 countries at the two-day gathering held at the Davidson Continuing Education Center at USC.
A multimember panel discussed recovery efforts in Japan and where the country and its businesses stood. Jun Niimi, consul general of Japan in Los Angeles, described how the Japanese government’s first stage of recovery efforts, which included clearing debris and reconstructing lost villages and towns, was nearing completion.
He outlined the government’s plan to fully address the fallout from damage and radiation leaks from the Fukushima Dai-ichi Nuclear Power Plant. Executives from Toyota Motor Sales, USA Inc., and Mitsubishi Electric and Electronics USA Inc., described the impact of the earthquake on their operations and remaining challenges, which included working around power shortages in the country as it grapples with the loss of the Fukushima plant, ramped-up maintenance of remaining reactors and public concern over nuclear power in the wake of the disaster.
This was the first year the conference offered a presentation on Burma – a country undergoing a major political transformation.
James Rooney, president of J. P. Rooney and Associates Limited in Nabgkok, spoke about opportunities in Thailand and Burma, also known as Myanmar, days before landmark elections that resulted in opposition icon Aung San Suu Kyi and her party gaining parliamentary seats. In response to her historic election, the Obama administration announced that it soon would nominate an ambassador to Myanmar and ease some travel and financial restrictions on the formerly military-run Southeast Asian nation.
Rooney described Burma as a country with an abundance of natural resources, but one in which “time literally stood still.”
“If you want to experience a time warp, go to Bangkok and take a plane to Naypyidaw, Burma, and you arrive in a land where time has stood still for 30 years,” he said. “They have no infrastructure. They have no road system. They have no telecommunications. It’s really starting from a tabula rasa.”
For companies looking to do business in Burma, Rooney said the opportunities are overwhelming, but they should proceed with caution.
“We advise our clients to very carefully assess what it is they want to do and to work on how they want to position themselves to take advantage of other opportunities as they develop,” Rooney said, describing the tendency for outsiders to come in and do business with existing prominent business people.
China, meanwhile, continues to be an economic powerhouse, despite the impact of the global recession. Christopher Goode, president and managing director of White Drive Products, spoke about broad-based improvements in living standards and attitude changes in China that he classified as similar to the “American Dream.”
“The expectations of the typical Chinese worker have changed,” he explained. “Today they wish to own their own home, car and an investment property. They desire and give their child a university education, aspire to be managers and earn more money and have the freedom to do what they want,” which, he said, increasingly means buying more, eating out and traveling overseas.
Yes, Goode said, China is in a recession – its growth rate in 2011 fell to single digits – but that will not derail the Chinese dream.
“The forecasted future growth rate in the next few years is 8 percent,” Goode said. “The Chinese dream can prevail, driven by the power of the people and power of consumption in China. Consumer spending will increase from 37 percent of the gross domestic product to 50 percent in 2017.”