Thursday, January 24, 2008

Analyzing the long and short term costs of living in Korea

[Daniel Costello on Finance]
Analyzing the long and short term costs of living in Korea

The Korea Herald 2008.01.23

"Happiness is a positive cash flow," wrote Fred Adler. While money is not everything, expatriates generally think about living and working in Korea through comparing their income at home and abroad. This long-term view is extremely important when considering potential maximum income.

Through increasing your capital inflows, you can realize your desire to spend -- which is, after all, a happy side effect of being an expatriate. Let's face it, most of us are here because the money is good.

Improving your cash flow or income is all about adjusting and focusing time-related goals. Controlling your monthly cash flow may often appear difficult, but formulating and maintaining a budget will help you realize where it is all going.

There are several useful budget calculators, spreadsheets and freeware programs available online that you can use to give you a better understanding of where you can realize increased cash flows. Try the Consumer Credit Counseling Service's online budget calculator at www.cccsatl.org.

It would also be a tasty tidbit of self-realization to assess your comparative budgeting requirements at home and in Korea. If you were working in the same field at home, how would your costs and income in Korea compare with the same situation at home?

One source of comparative salary improvements is in the housing benefits offered in some employment contracts, or the quarter or annual performance-based bonuses in others.

In addition, some child-care benefits such as full or partial educational allotments may be available, dependent upon your employer, to further sweeten your financial standing.

Health and medical costs for insurance are often comparatively less expensive here than in other developed countries.

Extensive subsidized public transportation makes vehicle ownership much more of a luxury than a requirement, while entertainment and recreation options are often of minimal cost.

Cost of living indices such as those available at the OECD suggest Korea's consumer price index gains, at 3.99 percent, are only slightly above the overall average at 3.76 percent, which fares well for any long-term plan of retaining work here.

From a financial view, the first year of employment in Korea can often appear to be a neutral or even negative cash flow proposition, especially disheartening for new graduates. But that, of course, probably isn't the case if your stay in Korea involves working for a multinational corporation.

Too often, it seems a short-term commitment to work in Korea is made on the basis of one's first employment experience here, which is often tenuous, but which acts as a proving ground for whether or not you want to extend your stay here, move on elsewhere, or head back to your country.

It is of course important to view opportunities in Korea as an investment of time, but it is just as important to envision a long-term financial future independent of short-term impositions, challenges or difficulties. The better you are at seeing the light at the end the tunnel, the greater the potential of positive cash flows, despite serious impediments such as the daily challenges of living and working in a foreign country -- where the culture of working and doing business is entirely if not comparatively unknown to you.

Unfailing optimism will improve your chances of success in moving from a short-term to a long-term financial perspective, whatever your situation.

Tending to the maintenance of positive cash flows often leads to a desire to increase them through finding more lucrative positions, attaining more education and making a greater personal investment to your own financial future regardless of your starting point.

Moving from a short to a long-term view on your working life in Korea may be exactly what it takes to move you along your expatriate evolution from spender to cash flow manager.

AceMoney Lite 3.10 is a well-regarded and reviewed software available at www.download.com/AceMoney-Lite/3000-2057_4-10747170.html?tag=lst-5

If budgeting is challenging, you may want to try this bridge-building game at www.download.com/Bridge-Builder/3000-2111_4-5862232.html?tag=lst-2

Wednesday, January 23, 2008

Abu Dhabi unveils carbon-neutral city


Abu Dhabi unveils carbon-neutral city
CBC News


Oil-rich emirate Abu Dhabi has unveiled its plans for a car-less, zero-carbon, zero-waste city in the desert.

A model of Masdar City was formally unveiled at the World Future Energy Summit in Abu Dhabi on Monday. The city, designed by British architect Norman Foster, is designed to house 1,500 businesses and 50,000 people.

The location of the six-square-kilometre site, close to Abu Dhabi's airport, is a harsh environment, with no access to fresh water and temperatures that reach 50 C in the summer. But the project's sponsors, who include the World Wildlife Federation, said the project would incorporate a mix of current technology and ancient methods to beat the heat.

Masdar City's electricity will be generated by solar panels, with solar power driving the city's cooling systems and a desalination plant needed to produce fresh water. The city's layout will also create micro-climates, or zones of different temperatures, to encourage air circulation.

Masdar City has also been designed to be car-free, with public transportation — through a light railway and personalized rapid transport pods — never more than 200 metres away, according to architecture firm Foster + Partners.
Continue Article

Landscaping in the city and in the surrounding area will be irrigated with recycled and treated waste water.

"Masdar is an example of the paradigm shift that is needed and the strategic vision of the Abu Dhabi government is a case study in global leadership," Jean-Paul Jeanrenaud, director of WWF International’s One Planet Living initiative, said in a statement.

"We hope that Masdar City will prove that sustainable living can be affordable and attractive in all aspects of human living — from businesses and manufacturing facilities to universities and private homes," he said.

The crown prince of Abu Dhabi, capital of the seven-member United Arab Emirates federation, said Monday that ground would be broken on the project later this year. The cost of the project was not revealed.

The city plans were part of Abu Dhabi's larger strategy to embrace green technologies and change the perception of Abu Dhabi, home to most of the United Arab Emirates oil reserves.

Crown Prince General Sheikh Mohammed bin Zayed Al Nahyan said on Monday his emirate would make an initial investment of $15 billion US in projects targeting solar, wind and hydrogen power, carbon reduction and management and sustainable development.

The UAE produced 149 million tonnes of carbon dioxide emissions in 2004, or 34.1 tonnes per person, according to a 2007 UN Development Program report. The per capita rate is the third highest in the world after Qatar and Kuwait.

Entrepreneurs Need to Think Globally

Entrepreneurs Need to Think Globally
(Management Issues)


Would-be entrepreneurs are often advised to start small and crack their local market first. But if you really want to be successful you need to be thinking globally from the start.

Research by Babson College in the U.S. and the UK's London Business School has argued that encouraging more global entrepreneurship is the key to improving economic growth worldwide. It found that between a tenth and 40 per cent of entrepreneurs in high-income countries expected a quarter or more of their customers to come from outside their country.

Raising your sights and looking further afield can also be the key to freeing yourself from local red tape.

The 2007 Global Entrepreneurship Monitor (GEM) Report found that the more burdensome a country's business regulations, the lower entrepreneurs' expectations for growth.

The research also studied early-stage entrepreneurial activity within a number of cities around the globe.

It discovered differences in levels and characteristics of entrepreneurial activity were not only rooted in a country's local economy or the quality and number of institutions supporting entrepreneurship, but also in its culture and demography.

"The world economy needs entrepreneurs," said Babson professor and GEM U.S. team member Kent Jones, "and increasingly, entrepreneurs depend on an open and expanding world economy for new opportunities and growth – through trade, foreign investment, and finance.

"GEM research confirms that new entrepreneurial opportunities in all countries will expand if trade, entrepreneurship and economic growth are fostered, especially in the developing world," he added.

Early-stage entrepreneurial activity tended to be high in countries with lower per-capita GDP but declined in middle-income countries before rising again in higher income countries, the research found.

Early-stage entrepreneurial activity rates for global cities by and large showed a similar pattern as the rates at the country level. But, intriguing, some cities reported rates that diverged from this pattern. German cities, for instance, stood out as having the highest rates in comparison to the average country rate. Also, characteristics of entrepreneurship in global cities were sometimes different from characteristics at the national level, the GEM study suggested.

Both middle- and low-income countries in Latin America and Asia displayed high rates of early-stage entrepreneurial activity, with Thailand, Peru and Colombia reporting the highest rates. Countries in Eastern Europe and Central Asia, by comparison, traditionally had relatively low rates of early-stage entrepreneurial activity, yet Croatia's rate appeared to be increasing between 2002-2007.

As per-capita incomes rose in high-income countries, so did the rate of early-stage entrepreneurship, the research argued. However, cultural demographic and institutional factors also came into play.

Many European countries, perhaps surprisingly, consistently had relatively low rates of early-stage entrepreneurship. Overall, Iceland, Hong Kong and the U.S showed the highest levels. The lowest rates were found in Austria, Puerto Rico and Belgium.

Early-stage entrepreneurs from high-income countries were more likely to be opportunity-driven, as opposed to necessity-driven where entrepreneurs have no other option for work. In Norway and Sweden, most early-stage entrepreneurial activity was part-time, the study found.

There was also a strong correlation between the rate of early-stage entrepreneurial activity and the general population's positive perceptions of their entrepreneurial skills and opportunities for starting a business.

Other factors associated with early-stage entrepreneurial activity were whether entrepreneurship was widely believed to be a good career choice and the degree to which it was reported in the media.

Among high-income countries, the U.S., Israel, Iceland, and Canada showed the highest rates of high-growth expectation entrepreneurship, where entrepreneurs expected to employ at least 20 employees five years from now.

Among middle and low-income countries, China had the highest rate followed by Argentina.

Early-stage entrepreneurs were more likely than established business owners to claim that they offered innovative products. They were also more likely to claim to be using use technologies that had not been available to them a year earlier.

Populations that embraced innovation also tended to have higher levels of early-stage entrepreneurial activity.

Early-stagers were by and large young (aged 25-34) and were more likely to be men. This gender gap was present among all age groups but was relatively small for countries in Latin America and the Caribbean, said the GEM survey.

Finally, in an increasingly globalised economy, international economic institutions such as the World Bank or World Trade Organization were now exerting a growing influence on entrepreneurs and their opportunities. This influence was either directly through international trade agreements or indirectly the fact they were cultivating an environment of economic flexibility and adjustment and an open world economy, it said.

Click here to download the GEM 2007 Global Report.

Monday, January 14, 2008

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The Canada-U.S. FTA: 20 Years After

The Canada-U.S. FTA: 20 Years After
(Stephen Poloz, Export Development Canada)


Twenty years have passed since the signing of the Canada-U.S. Free Trade Agreement, which went into effect 19 years ago. It’s a good time to check the report card, to see how we are doing.

The architects of the deal told us that north-south trade would blossom, and they were right. Our exports of goods and services to the U.S. have more than tripled since 1988, from $117 billion per year to $398 billion, an increase of 240%. Our imports of goods and services from the U.S. have not risen by as much – from $108 billion to $322 billion, and increase of just under 200%.

A good part of Canada’s relative success is due to higher resource prices. Adjusting exports and imports for inflation shows that export and import volumes have both risen by about 150% since 1988. Still, that means that Canadian exporters have earned more through the arrangement.

Superficial analyses might leap on this and claim victory, but this would be wrong. Every transaction that would not have happened without the FTA should be seen as a victory, regardless of direction. When an American and a Canadian agree to a sale, they both get what they want, so they both win.

What makes the analysis of free trade so difficult is that we do not know what the world might have looked like today had there been no FTA. Some analysts look at employment, and they are often disappointed. After all, if everyone should win from free trade, shouldn’t employment go up everywhere? The answer is “no”. Adjusting to free trade means that both countries produce more of what they are good at, and produce less of the other things, which then are obtained through trade, instead. At the production level, then, there are both winners and losers, by definition.

And so it is that the manufacturing sector has seen a decline in employment over the life of the FTA, of about 50,000 jobs, while mining and oil and gas have seen an increase of 50,000 jobs. Within manufacturing, the durables sector is up 80,000, while employment is down 130,000 for non-durables. In the context of a workforce of 17 million, these figures are small, but they belie a big increase in specialisation beneath the surface, which has boosted productivity. Indeed, there has been a 43% increase in manufacturing productivity since 1988, or around 2.4% per year. Not bad, except that U.S. manufacturing has done better, at 68%, or more than 3.8% per year.

It is at the consumer level that everyone wins, because the lower cost of imports boosts total purchasing power, and the extra spending creates jobs across the board, since it is mostly spent domestically. Accordingly, construction sector jobs are up by 360,000 since 1988, and service sector jobs by nearly 4 million. The latter include such occupations as health care (650,000), retail and wholesale trade (630,000), professional and technical (600,000), business support (410,000), hospitality (340,000), the financial sector (270,000) and so on.

The bottom line? It is very difficult to pin down all the effects of the FTA, especially since the effects of increased purchasing power are, well, everywhere. But if one accepts the basic premise that trade in both directions is good, then the FTA has surely made a positive difference.

Canadian Club - Community Race Night

Invitation from the Canadian Club - Community Race Night - January 20

Under the auspices of the UAE Equestrian & Racing Federation, the Canadian Club in Abu Dhabi invites you to attend its Community Race Night, on Sunday, 20 January, 2008.

We will gather on the track side patio of the Abu Dhabi Golf and Equestrian Centre where we can enjoy the races both on the track and on the Club?s new large outdoor screens. The Club will provide a delicious BBQ buffet dinner.

So, put together a group of Canadians and Friends of Canada and come and join us for a night of racing and fun at the track!

Tickets only 90 AED! Tickets will be available for purchase at the club House from January 9 ? 18.

Time: 17:00 - 22:00
17:00 Pre Race Meet & Greet
18:00 First Race
19:00 Buffet Dinner

Questions? Call Ian McNabb 050 612 2079

ALLARABIA Recruitment Agency

It is our pleasure to keep you updated with the Job opportunities news in the Middle East.

Arabian Centers and ALLARABIA as the largest recruitment group in the Middle East with branch office in many cities in the region, is pleased to inform you that we have more than 7000 job vacancies available for you to apply free with just a click of a mouse just CLICK HERE to visit ALLARABIA.

Also you are welcome to contact our nearest branch office for assistance

Best Regards,

Chris G.
Online Recruitment Manager
Arabian Centers Employment Services
Head office: Dubai , P.O. Box: 99447
Tel: 00971-4-2833350

مجموعة المراكز العربية هي شركة التوظيف الأكبر في العالم العربي بفروع منتشرة بمعظم الدول العربية تقدم خدماتها مجاناً تماماً للباحثين عن عمل و تسعى لتشجيع التوظيف العربي.

Saturday, January 12, 2008

Sorting out globetrotters' tax dilemma

Sorting out
globetrotters’
tax dilemma

Daniel Costello
on Finance

Since the days of Roman tax collectors,
people have been willing to
hoe pits in olive gardens, sew precious
stones into lined outer garments,
skirt the fraying edges of
empires, and trick the trade of
treaty nations in an effort to outwit
or outrun their government’s outstretched
hand.

Individual tax audits appear a
quiet affair. No one really wants to
wear that scarlet letter or hire
enough fingers to pin it. U.S. IRS
Commissioner Charles Rossotti estimated
in 2002 that the tax collecting
organization is incapable of collecting
about $30 billion in known
due taxes annually. That’s about the
cost of a national health care
scheme.


How is your country doing? The
only writer I have read so far who
extrapolates a global tax evader’s
role in extralegal economic growth
would be the Peruvian economist
Hernando De Soto. He apologizes
for extralegal non-taxable income in
developing nations as legislative
failures to adapt quickly enough to
integrate the working poor into the
system of shared global growth.
Paradoxically according to
Leonard E. Burman of the Urban
Institute, the working poor are the
only people the IRS continues to
monitor for compliance. These days
intra-national labor mobility could
be said to be freer and faster than at
any time in history for similar reasons,
so a similar De Soto-ian apology
might be made in terms of global
individual income taxation where a
complex set of bilateral tax treaties
govern over smaller individual expatriate
incomes.

So expatriates who complain
about taxes may be divided into two
classes: those who pay them locally
through reciprocal tax treaties and
those who have deferred until a later
date. In many nations one may
delay tax filings indefinitely on the
assumption of a non-residency status
waiver. Such a determination
requires that minimal residential
ties be maintained.

Know who and what you are in
terms of your tax status.

Often it appears as a case by case determination.
For example, take the case of an
expat, let’s call him Frank, stirring
his green tea on the streets of Seoul
and saving his earnings here in the
ROK for five years. At the same
time he collects rent by direct deposits
on Madame Hortense’s hotel
back home. He fears his entire international
income is at risk for levee
at his home nation’s deemed resident
taxation rates. Accountants
have even told him this is the case.
The opportunity to declare non-residency
for tax purposes is not an option
where the continued maintenance
of significant residential ties
such as home rental and mortgage
payments may have coincidentally
been a major factor in his decision to
leave the country.

When Frank returns to his country,
the taxman will be waiting.
That smacks of catch-22 for a lot
of people. Some start singing Steve
Miller’s “Take the money and run.”
International income to a certain
maximum is exempted from most
OECD resident tax requirements,
which many appear unaware of.
Also there is often no criminal
penalty for late filing of overdue taxes
if you do the cometh-ing. There
could be, however, significant interest
payments owed. Burman of the Urban Institute
also reveals, as of 1998, that the IRS
estimated an entire tax gap of $232
billion overdue. That would amount
to at least $532 billion in total overdue
in the United States alone in
the coming Year of the Rat.
Only through voluntary compliance
policies are taxes often, if ever,
effectively collected. If in doubt, file
today?

Australia
The Australian Taxation Office:
www.ato.gov.au

Canada
Canada Revenue Agency:
www.cra-arc.gc.ca/international

The U.K.
HM Revenue and Customs:
www.hmrc.gov.uk/cnr/faqs_general.htm

The United States
The IRS: http://www.irs.gov/

Pakistan
Paktax: www.paktax.com.pk/main.htm

Egypt
Egyptian Income Tax Rules:
www.incometax.gov.eg

To contact Daniel, visit his website at
http://crossculturalreviews.blogspot.com — Ed.
(The Korea Herald)

Wednesday, January 09, 2008

X-Perience & Midge Ure - "Personal Heaven"

X-Perience & Midge Ure - "Personal Heaven"

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China Coastal Ports Capacity Reaches 4b Tonnes

China Coastal Ports Capacity Reaches 4b Tonnes
(CargoNews Asia)


The comprehensive traffic capacity of China's coastal ports is estimated to have reached four billion tonnes by the end of 2007, according to Xiao Daxuan, deputy director of the Water Transport Department of Chinese Ministry of Communications.

Xiao said China's water transportation has achieved big progress in recent years, which has fully played the advantages of large volume transport, low cost and small pollution. A batch of crude oil, iron ore, coal, container wharves and deep-water channels have been constructed and put into use.

Xiao predicted that by the end of this year, China's coastal ports will boast 5,340 productive berths, including 1,391 deep-water berths witch capacity able to accommodate above 10,000 dwt vessels. The coastal ports' comprehensive traffic capacity will amount to four billion tonnes and their container throughput is to reach 88.49 million TEUs.

According to Xiao, China has built up five port groups respectively in the Yangtze River Delta, the Pearl River Delta, Bohai Rim, the southeastern coast and the southwestern coast.

Halifax Faces Uphill Battle for More Container Cargo

Halifax Faces Uphill Battle for More Container Cargo, Dal’s Brooks Warns
(Halifax Chronicle Herald)


There is no quick fix, says Mary Brooks.

Attracting more cargo and shipping lines to the Port of Halifax won’t happen overnight.

Container cargo through the port is expected to be down six to eight per cent in 2007 compared with 2006, and Ms. Brooks, the William A. Black chair of commerce at Dalhousie University, says building more container cargo through the port is a complex matter.

"Part of it is the fact we are a discretionary port. We need to hope going forward that we can change a lot of people’s minds about us being more than second choice."

Maersk Line’s decision last year to leave Halifax is something "the port is not going to be able to do anything about," Ms. Brooks said in a recent interview. "Maersk made a global decision about how it was going to offer its services to the global market place, so we were a casualty along with a lot of other parties. We are not like a New York where people feel they have to call because there is a huge population base and it is going to be difficult to serve otherwise."

A noted transportation expert, Ms. Brooks says Halifax has many features but points out that sometimes "Maritimers are their own worst enemy."

"We don’t always see the brighter side of everything. But we have got a number of things actually working in our favour that have long-term prospects."

She pointed to the warehouse opened in 2007 in Dartmouth by Consolidated Fastfrate, a similar facility to be built by the Armour Group and a transloading facility likely to be built by CN next to the Fairview Cove container terminal.

"These things if they hit that tipping point where they make the decision to make the investment, then you have even more that is saleable, but it is going to be a very tough marketing slog," she said. "It is not just marketing by the port; it is everybody sharpening their pencils and figuring out how to extract the cost out of the system to make us look a lot better."

But cost is only part of the equation, she said.

Ms. Brooks, who has written extensively on marine transportation issues, said she would like to see the province "focus on making the Halifax gateway work better." But she acknowledged that other ports like Sydney and Canso are also looking for something, which "just dilutes the effort."

"It looks like we in Atlantic Canada have not gotten our act together."

In October, Atlantic premiers and the federal government signed a memorandum of understanding to work together to develop the Atlantic Gateway as an entry and exit region for international trade.

Ms. Brooks sees that process as the premiers looking for money and "it is more than about money."

"I get disturbed when I see that people think if you throw money at it, it is going to solve everything."

Putting money into a new container port in Prince Rupert, B.C., was a good move for both the federal and provincial governments, she said, because there were also private investors wanting to deal with the cargo/ship congestion problem in Vancouver.

"Vancouver was getting difficult and the opportunity was really strong," she said. "But it isn’t always about pouring money into things. It is sometimes about the softer things you need to take care of."

Ms. Brooks has recently received an academic study on global cargo that she feels plays toward Halifax’s strengths.

The study, she said, shows that reliability is a major issue for companies with cargo interests because of port congestion, "and there we are part of the solution as opposed to part of the problem."

Monday, January 07, 2008

Koreans Advised to Be More Foreign-Friendly

Koreans Advised to Be More Foreign-Friendly



By Kim Sue-young
Staff Reporter


Veteran financier David Eldon, the only foreign national on President-elect Lee Myung-bak's transition committee, said Sunday that South Korea should take a more friendly attitude toward foreign investors to attract investment.

The Scottish-born financier who, in an unprecedented move, was appointed to a top advisory position, stressed that openness and transparency are key to helping the nation achieve its economic goals.

``What investors need is a place where they can do business openly and transparently. Evenly applied law and a level playing field are also important,'' Eldon, 62, told a press conference in Seoul.

``If Koreans want investment to come in, it has to come from within Korea. They have to improve the level of competition,'' said Eldon, co-chairman of the national competitiveness subcommittee of the transition team.

South Koreans showed a willingness to do so as they voted for Lee Myung-bak whose platform aims at revitalizing the economy, said the concurrent chairman of the Dubai International Financial Center Authority.

He cast a positive outlook for the Korean economy, saying ``I believe we can make some serious achievements.''

However, he said many investors are not certain about the factors required, including openness and transparency.


Asked about Lee's plan to make the reclaimed Saemangum land into an international financial hub, Eldon said the country can learn lessons from Dubai in the United Arab Emirates (UAE).

``The attraction for financial institutions has been related to issues of low taxation like zero taxation. It's also related to stable government and independent regulators in Dubai,'' he said. ``It (Dubai) has been successful because it's open, transparent and very committed to cover a number of sectors.''

Yet, he took a cautious approach to apply the same rules here, saying there are significant differences between Korea and the Middle East country.

``There are many countries with best practices in the world, which may be suitable for Korea. But we have to recognize Korea is unique. Therefore, it would be naive to believe some things will work for Korea if those worked for other countries,'' he said.

The financier also stressed that Dubai's success in building an international financial hub is attributable to independent regulators.

``I've always been puzzled over why Korea, which has the 13th largest economy and is an OECD country, doesn't reach the same level of other similar economies. Advanced countries with successful financial centers have single and independent regulator in common,'' he said.

Saying Korea has tremendous potential Eldon urged Korean organizations to be more international and attractive to the outside world.

He added that it is important to ensure investors that reasonable returns would be guaranteed to encourage them to invest more.

Eldon, with a 37-year working career at banking giant HSBC in the Middle East and Asia, became acquainted with President-elect Lee in 2002 when he served as chairman of the Seoul International Business Advisory Council and Lee became Seoul mayor, according to Lee's aides.

As part of efforts to revive the economy, Lee has promised to woo foreign investment through deregulation and more incentives.

ksy@koreatimes.co.kr

Globalization: The World's Not So Flat

Globalization: The World's Not So Flat
(CSCB)


This article is extracted from the January 2, 2008 edition of “globeandmail.com”.

Much of the discussion around the issue of globalization has focused on the "flatness" it brings. Buoyed by the release of Thomas Friedman's book The World is Flat in 2005 (and new editions in 2006 and 2007), the notion of a level, borderless world seems to have been accepted as fact by many leading economists and academics.

The basic premise is that globalization has levelled the competitive playing fields between industrial and emerging market countries. But although some aspects hold merit, Mr. Friedman's argument is exaggerated. The real state of the world is neither globalized nor local, but semi-globalized – and it will remain so indefinitely.

In the recent book Redefining Global Strategy, Harvard business professor Pankaj Ghemawat writes that 90 per cent of the world's telephone calls, web traffic and investments are local, suggesting that the proponents of the "flat-world" theory have neglected this empirical data. Instead, the world appears to be divided into a "triad" with strong barriers for entry into the key regional markets of the European Union, North America and Asia-Pacific.

Today's business activity is organized mainly within each of these regions, not beyond. The total amount of the world's capital formation that is generated from foreign direct investment has been less than 10 per cent in recent years. In a truly globalized environment, one would expect this number to be much higher.

There are a number of well-documented examples of large U.S. corporations attempting to tap into markets beyond their own triad, only to quickly see the many linguistic, cultural and political barriers that inevitably lead to failure overseas….

Despite the claims of a borderless world, many large capital-laden companies have suffered when they have treated the world as one and the same. Case in point is Google, the $215-billion search-engine giant. Despite being rated the most globalized website for the third year in a row, by Byte Level Research, the company has had great difficulties trying to enter a number of foreign markets, with culture and loyalty appearing to be the predominant stumbling blocks….

This is not to say that Google should not have entered the Russian market – but rather that it was forced to think differently about how to compete in it. The company has to consider national differences while retaining and exploiting its competitive advantages and unique core competencies.

It appears as though some foreign companies understand this better than their North American counterparts. Japan's Toyota Motor Corp. has recently overtaken General Motors Corp. to become the world's largest auto-maker.

The company has excelled in anticipating expanded free-trade agreements within the Americas, Europe and East Asia, but not across them. They understand this concept of the "triad." Consider Canadian-U.S. trade, the largest bilateral relationship of its kind in the world. In 1988, before the North American free-trade agreement was implemented, merchandise trade levels among the Canadian provinces were estimated to be 20 times as large as their trade with similarly sized and similarly proximate U.S. states. In other words, the domestic-preference bias. Although NAFTA helped reduce this ratio of domestic to international trade to 10 to 1 by the mid-1990s, it is still greater than 5 to 1 today. Clearly, in our seemingly "borderless world," borders still matter to most people.

If there were one realm in which borders should be rendered meaningless and the globalization proponents should be correct in their overly optimistic models, it should be the Internet. Yet Web traffic within countries and regions has increased far faster than traffic among them. Just as in the real world, Internet ties decay with distance….

What this implies for Canadian firms looking to go global is that they need to significantly tailor their strategies to specific foreign environments. What works in North America may not work in Japan. Brand image in North America does not freely hold in these foreign markets – look at Coca-Cola's troubles with international expansion in the 1980s and Wal-Mart's recent expansion difficulties in China.

Companies must adopt different regional strategies and spend considerable time understanding the differing role of governments in the world's three major economic regions. Canadian subsidiary managers must understand regional differences to effectively maintain their place in the firm's evolving global network.

It's not a flat world, but one with hills and valleys – so get out your climbing gear.

Wednesday, January 02, 2008

Online university courses big hit

Online university courses big hit
Monday, December 31, 2007
CBC News

The free online courses offered by the Massachusetts Institute of Technology (MIT) are getting more than a million hits a month, an example of the burgeoning interest in internet education.

Including translations on MIT's OpenCourseWare (OCW) site, the total rises to about 1.5 million hits.

MIT math professor Gilbert Strang says having a world audience 'is just wonderful.'
(Steven Senne/Associated Press) Math professor Gilbert Strang's 18.06 linear algebra course (using and understanding matrices) is the most often downloaded, MIT's website said; users view his lectures about 200,000 times a month.

More than half of OCW users come from outside the United States, the university said.

In Istanbul, Bogazici University undergraduate Kemal Burcak Kaplan uses Strang's material to raise his marks. In Dar es Salaam, teacher Noorali Jiwaji at the Open University of Tanzania said Strang's lectures are a tool and guide for students. "They feel lost and they don't have good books."

Strang welcomes the international students. "My life is in teaching," he said. "To have a chance do that with a world audience is just wonderful."

MIT's online offerings, published under an open licence that encourages reuse, redistribution and modification for noncommercial purposes, include lecture notes, exams and lecture videos from more than 1,800 courses, virtually all of its curriculum.

"The site includes voluntary contributions from 90 per cent of faculty and more than 2,600 members of the MIT community," the university said.

"The site embodies the generosity and dedication of our faculty," president Susan Hockfield said in November.

Online students, however, cannot get a degree.

Beyond MIT, the university's 2001 online initiative has spurred the OpenCourseWare Consortium, a group of more than 160 universities worldwide that have published an estimated 5,000 courses.

North Vancouver's Capilano College is the only Canadian institution listed on the consortium's website.

MIT launched a site for secondary students this fall called Highlights for High School.

Michael, from rural Hagerstown, Md., sent MIT an e-mail praising the material. "Your website has contributed hundreds of hours to my education in physics as well as biology. Discovering and utilizing MIT's OpenCourseWare site was like finding $40,000 sitting on a park bench."

With files from the Associated Press