Notes
1. See A. Beebe and L. Cheng, “Winning in China's Mass Markets” (Armonk, N.Y.: IBM Institute for Business Value, 2007), p. 4.
1. V. Mallet, “The Rebalance of Power,” Financial Times, Apr. 5, 2008, p. 7.
2. Quoted in “The Past, Imperfect,” Time, July 15, 1996, p. 54.
3. See M. Palmer, “Motorola Trails Samsung in Global Market,” Financial Times, Nov. 27, 2007.
4. See BearingPoint, “2005 Form 10-K Annual Report,” p. 3.
5. See A. Maddison, The World Economy: Historical Statistics (Paris: Organization for Economic Cooperation and Development, 2003). Maddison is perhaps the most renowned scholar of world economic history and has published a series of books for the Organization for Economic Cooperation and Development on the changing structure of the world economy over the past two thousand years.
6. J. Llewellyn, R. Subbaraman, A. Newton, and S. Varma, “India: Everything to Play For,” Lehman Brothers, Global Economics Paper, Oct. 2007; R. de Milliano, “India 2020: Rise of the Elephant,” Rabobank Special Scenario Studies, Oct. 2020; D. Wilson and R. Purushothaman, “Dreaming with BRICs: The Path to 2050,” Goldman Sachs Global Economics Paper No. 99, Oct. 2003.
7. J. O'Neil, S. Lawson, and R. Purushothaman, “The BRICs and Global Markets: Cars, Crude, and Capital,” Goldman Sachs Global Economics Paper No. 2004–09, Oct. 2004.
8. S. Tucker, “China and India Keep Building on Success,” Financial Times, Dec. 18, 2006, p. 21.
9. “Construction Equipment Sector to Grow Five-Fold, Says McKinsey,” Economic Times, Bangalore, Nov. 15, 2007, p. 19.
10. Authors' field interviews plus an IDC India survey as reported in A. Yee, “Soaring Salaries to Hit India IT Group Margins,” Financial Times, Sept. 12, 2007, p. 18.
11. See V. Wadhwa, G. Gereffi, B. Rissing, and R. Ong, “Where the Engineers Are,” Issues in Science and Technology, Spring 2007.
12. G. T. Huang, “The World's Hottest Computer Lab,” MIT Technology Review, June 2004.
13. Quoted in R. Kirkland, “The Greatest Economic Boom Ever,” Fortune, July 12, 2007.
14. See Asian Development Bank, “Inequality in Asia,” Aug. 8, 2007.
15. “All Mouth and No Trousers,” Economist, Mar. 29, 2007.
16. See R. Meredith, The Elephant and the Dragon (New York: Norton, 2007), p. 89.
17. See A. Chozick, “Nissan Races to Make Smaller, Cheaper Cars,” Wall Street Journal, Oct. 22, 2007, p. A1.
1. Knowledge@Wharton, Interview with HCL's Shiv Nadar, Sept. 27, 2006.
2. J. Welch and S. Welch, “The Welch Way: Choosing China or India,” BusinessWeek, Mar. 19, 2007, p. 110.
3. See D. Wilson and R. Purushothaman, “Dreaming with BRICs: The Path to 2050,” Goldman Sachs Global Economics Paper No. 99, Oct. 2003.
4. In 2004, the percentage of paved roads to total was 81 percent in China versus 47 percent in India; rail lines hauled five times as much goods tonnage in China as in India; and China's port container traffic was eighteen times that of India. See World Bank, The World Development Indicators 2007 (Washington, D.C.: World Bank, 2007).
5. In 2006, China and India attracted $79 billion and $7 billion, respectively, in inbound foreign direct investment. See World Bank, The World Development Indicators 2007.
6. In March 2007, China enacted a new enterprise income tax law due to take effect on January 1, 2008. Under this law, the corporate tax rates would be equal for foreign as well as domestic enterprises. In effect, for domestic enterprises, the tax rates would come down from 33 percent to 25 percent; for foreign enterprises, they would go up from the previous average of 15 percent to 25 percent.
7. BP, BP Statistical Review of World Energy 2007 (2007).
8. Abstracted from International Energy Agency and J. Spencer, “Why China Could Blame Its CO2 on West,” Wall Street Journal, Nov. 12, 2007, p. A2.
9. B. Einhorn, “Dell Raises Its Stake in India,” BusinessWeek, June 18, 2007.
10. IDG News Service, “Lenovo Gets Ready for Big India Push,” Sept. 30, 2005.
11. G. Fairclough and J. Spencer, “Dell's New PC Marks Global Push,” Wall Street Journal Europe, Mar. 22, 2007, p. 6.
12. “The Ties That Bind,” BusinessWeek, June 8, 2007.
13. See open letter to suppliers dated May 22, 2006, http://www-03.ibm.com/procurement/proweb.nsf/contentdocsbytitle/United+States~IBM+Procurement+headquarters+moving+to+Shenzhen+China?OpenDocument&Parent5Global1Procurement.
14. S. Bhattacharya, “China Calling,” Business Today, Dec. 16, 2007, p. 245.
15. A. Qiu, “Dalian: China's Bangalore,” China International News, May 2007, p. 49.
16. “Mahindra to Use Weak Dollar to Buy US Factories,” Economic Times, Dec. 4, 2007.
17. R. Waters and C. Freeland, “View from the Top: William J. Amelio, Lenovo President and Chief Executive,” Financial Times, Aug. 3, 2007, p. 8.
18. Authors' interview in Bangalore with Ravi Venkatesan, chairman, Microsoft India, Nov. 2007.
19. R. Sachitanand, “GE's Innovation Hub,” Business Today, Apr. 6, 2008, p. 74.
20. AmCham Shanghai and Booz Allen Hamilton, “China Manufacturing Competitiveness 2007–2008,” Mar. 2008.
1. J. Doebele, “Standing Up to a Giant,” Forbes, Apr. 25, 2005.
2. C. Nuttall, “EBay's Ambitions in China Suffer Setback,” Financial Times, Dec. 19, 2006, p. 1.
3. Asian Development Bank, Inequality in Asia, 2007.
4. “The World's Billionaires,” Forbes, Mar. 5, 2008.
5. F. Warner, “Going for Gold,” Forbes, July 2, 2007.
6. J. Lu and Z. Tai, “EBay's Strategy in China: Alliance or Acquisition,” Case HKU701, Asia Case Research Center, University of Hong Kong, 2007.
7. E. Bellman and C. Rohwedder, “Western Grocer Modernizes Passage to India's Markets,” Wall Street Journal, Nov. 28, 2007, p. B1.
8. J. Leow, “In China, Add a Caterpillar to the Dog and Pony Show,” Wall Street Journal, Dec. 10, 2007, p. B1.
9. E. Bellman, “In India, a Retailer Finds Key to Success Is Clutter,” Wall Street Journal, Aug. 8, 2007, p. A1.
10. See Exhibit 2 in C. Holloway, “Flextronics: A Focus on Design Leads to India,” Case Study OIT-45, Stanford Graduate School of Business, 2005.
11. See F. A. Martinez-Jerez and V. G. Narayanan, “Strategic Outsourcing at Bharti Airtel Limited,” Case 9–107–003, Harvard Business School, 2006, p. 8.
12. E. Bellman, “In India, Rural Poor Are Key to Cellular Firm's Expansion,” Wall Street Journal, Sept. 24, 2007, p. A1.
13. Authors' interviews with managers at B&Q China in July 2007. See also G. Desvaux and A. J. Ramsay, “Shaping China's Home-Improvement Market: An Interview with B&Q's CEO for Asia,” McKinsey Quarterly, 2006.
14. Authors' interviews with Wim Elfrink, executive vice president, Cisco, in Bangalore, Feb. 2008, and with Jim Sherriff, chairman, Cisco China, Apr. 2008. See also Cisco, “Cisco Announces Next Stage of Corporate Strategy for China,” press release, Apr. 16, 2008. As part of the Eleventh Five-Year Plan, China's Ministry of Commerce began implementing the Thousand-Hundred-Ten Talents Project in 2006. The aim of this five-year project was to foster the creation of one thousand Chinese companies that would be internationally qualified to be services providers on an outsourced basis, attract one hundred global companies to start outsourcing their services activities to China, and build ten cities into major services outsourcing hubs.
15. See A. Beebe and L. Cheng, “Winning in China's Mass Markets” (Armonk, N.Y.: IBM Institute for Business Value, 2007), p. 4.
16. The term logical incrementalism was coined by J. B. Quinn. See his book, Strategies for Change: Logical Incrementalism (Homewood, Ill.: Irwin, 1980).
1. E. K. Sharma, “Chipping In,” Business Today, Feb. 10, 2008, p. 58.
2. Based on interviews with senior managers at the John F. Welch Technology Centre, Bangalore, Nov. 2007.
3. A. Jack, “GSK to Spend $100m on R&D in China,” Financial Times, Dec. 13, 2007, p. 20.
4. J. L. Lunsford, “Cessna's New Plane to Be Built in China,” Wall Street Journal, Nov. 28, 2007, p. A14.
5. See V. Wadhwa, G. Gereffi, B. Rissing, and R. Ong, “Where the Engineers Are,” Issues in Science and Technology, Spring 2007. The data in this article also indicate that China has a rapidly growing lead over both the United States and India in the production of Ph.D.s in engineering and technology. In 1995, China produced about two thousand Ph.D.s in engineering and technology versus about five hundred for India and seven thousand for the United States. In 2005, the numbers were over nine thousand for China, about eight thousand for the United States, and about one thousand for India.
6. Quoted in “Something New Under the Sun: A Special Report on Innovation,” Economist, Oct. 13, 2007, p. 8.
7. D. Wilson, R. Purushothaman, and T. Fiotakis, “The BRICS and Global Market,” Goldman Sachs, Global Economics Paper No. 118, Oct. 14, 2004.
8. “Something New Under the Sun,” p. 8.
9. See also A. K. Gupta, V. Govindarajan, and H. Wang, The Quest for Global Dominance, 2nd ed. (San Francisco: Jossey-Bass, 2008), Chap. 4.
10. Abstracted from Boston Consulting Group, “Harnessing the Power of India,” May 2006.
11. F. W. McFarlan, W. C. Kirby, and T. Y. Manty, “Li & Fung 2006,” Case 9–301–077, Harvard Business School Publishing, May 2007.
12. J. Spencer, “Lilly, China Firm to Develop Drugs,” Wall Street Journal, Aug. 21, 2007, p. A11.
13. See O. E. Williamson, The Economic Institutions of Capitalism (New York: Free Press, 1985).
14. J. Range, “Rethinking the India Back Office,” Wall Street Journal, Feb. 11, 2008, p. A6.
15. Interview with Karl-Heinz Floether in The India Story (Accenture, Oct. 2007).
16. Authors' interview with Keith Haviland, Dec. 7, 2007.
17. Authors' interview with Mei Xu, president, Pacific Trade International, May 15, 2008.
18. Authors' interviews with senior managers at the John F. Welch Technology Centre, Bangalore, Nov. 2007.
19. Quoted by R. A. Mashelkar, former director-general of India's Council for Scientific and Industrial Research in R. A. Mashelkar, “Technology: Opportunity and Challenge,” Tribune, Jan. 3–7, 2004.
20. G. T. Huang, “The World's Hottest Computer Lab,” Technology Review, June 2004.
21. Quoted in R. Buderi and G. T. Huang, Guanxi: Microsoft, China, and Bill Gates Plan to Win the Road Ahead (New York: Simon & Schuster, 2006), p. 36.
22. S. J. Palmisano, “Leadership, Trust and the Globally Integrated Enterprise,” remarks at INSEAD Business School, Fontainebleau, France, Oct. 3, 2006.
1. Quoted in “A Special Report on Innovation,” Economist, Oct. 13, 2007, p. 19.
2. For a detailed analysis of country-specific advantages, see M. E. Porter, “The Competitive Advantage of Nations,” Harvard Business Review, May 1990.
3. Zheng Caixiong, “Vice-Minister Urges Domestic Firms to Go Global,” China Daily, Aug. 8, 2006, p. 10.
4. S. Tucker, “China and India Begin to Deliver on M&A Promise,” Financial Times, Dec. 20, 2007, p. 16.
5. S. Oster, “China: New Dam Builder for the World,” Wall Street Journal, Dec. 28, 2007, p. B1.
6. R. McGregor, “China Power Group Offers Skills to Manila,” Financial Times, Dec. 17, 2007, p. 6.
7. R. G. Matthews, “Essar Steel of India Set to Acquire Esmark,” Wall Street Journal, May 1, 2008, p. B5.
8. W. Lixin, “TCL's Overseas Struggle,” China International Business, Dec. 2006, p. 44.
9. Quoted in S. Robinson, “Is India Bad for Jaguar?” Time.com, Dec. 14, 2007.
10. Quoted in S. Sengupta, “IBM's Tryst with India,” BusinessWorld, May 22, 2006.
11. Interview with Karl-Heinz Floether, in The India Story (Accenture, Oct. 2007).
12. G. Edmondson, “Renault's Race to Replace the Rickshaw,” BusinessWeek, Nov. 2, 2007.
13. Edmondson, “Renault's Race to Replace the Rickshaw.”
14. D. Kiley, “Ghosn Hits the Accelerator,” BusinessWeek, May 12, 2008, p. 48.
15. J. H. Dyer, P. Kale, and H. Singh, “When to Ally and When to Acquire,” Harvard Business Review, July-Aug. 2004.
1. Wang Zhenghuang, “Hotel Chief Exec Sees More Room for Growth,” China Daily, Mar. 4, 2008, p. 15.
2. World Bank, Global Economic Prospects 2007 (Washington, D.C.: World Bank, 2007).
3. See “2008 White Paper: American Business in China” (Shanghai: American Chamber of Commerce, 2008).
4. See A. Batson, “Help Wanted: Top Managers in China,” Wall Street Journal, Apr. 29, 2008, p. B4.
5. See J. Johnson, “More Westerners Take Top Posts in India as Locals' Pay Demands Soar,” Financial Times, May 30, 2007, p. 1.
6. “2007 Global R&D Report,” R&D Magazine, Battelle, Sept. 2006.
7. Li Weitao, “Local Executives Take Helm at Big Corporations,” China Daily, Sept. 4, 2007.
8. D. Farrell and A. J. Grant, “China's Looming Talent Shortage,” McKinsey Quarterly, no. 4, 2005.
9. Weitao, “Local Executives Take Helm at Big Corporations.”
10. See R. Ball, A. Robin, and J. Shuang Wu, “Accounting in China” (Washington, D.C.: World Bank, 2001).
11. See B. Jopson, “Number-Crunchers Line Up for Boot Camp,” Financial Times, Dec. 8, 2006, p. 8.
12. “2007 Global R&D Report,” R&D Magazine, Battelle, Sept. 2006.
13. We first came across the brilliantly coined term last-mile unemployability in an April 2007 India Knowledge@Wharton interview with Manish Sabharwal, chairman of TeamLease, the biggest player in India's temporary staffing industry.
14. “India's College Graduates,” International Herald Tribune, Nov. 7, 2006, http://www.iht.com/slideshows/2006/11/07/business/web.1107college.php.
15. E. Ramstad and Qin Juying, “Intel Uses China as Blueprint to Grow,” Wall Street Journal, May 23, 2006.
16. D. Chatterjee, “School for Retailers,” Business Today, Dec. 30, 2007, p. 60.
17. Zhenghuang, “Hotel Chief Exec Sees More Room for Growth,” p. 15.
18. B. Einhorn, “The Shanghai Scramble,” BusinessWeek, Aug. 20, 2007, p. 53.
19. J. Schlosser, “Harder Than Harvard,” Fortune, Mar. 17, 2006.
20. S. Roy, “Infosys Builds a Realistic Dream,” Rediff.com, July 16, 2005.
1. Quoted by W. Holstein in an interview with J. E. Garten, former dean of the Yale School of Management. See W. Holstein, “Only a Passing Grade,” Chief Executive Magazine, June 2005.
2. J. Mero, “Global Innovation: John Deere's Farm Team,” Fortune, Apr. 14, 2008, p. 119.
3. T. Leavitt, “The Globalization of Markets,” Harvard Business Review, May 1983.
4. For an extensive discussion of globalization, see A. K. Gupta, V. Govindarajan, and H. Wang, The Quest for Global Dominance, 2nd ed. (San Francisco: Jossey-Bass, 2008), Chap. 1.
5. See A. K. Gupta, P. Tesluk, and M. S.Taylor, “Innovation at and Across Levels of Analysis,” Organization Science, 2007, 18, 885–897.
6. See W. Elfrink, “Executive Perspective: Virtualizing the Corporation,” ThoughtLeaders, Cisco Systems, 2008; also our personal discussions with Wim Elfrink in January and February 2008.
7. “IBM Shifts Global Procurement Headquarters to China,” press release, IBM Corporation, Oct. 12, 2006.
8. See F. Cairncross, The Death of Distance (Boston: Harvard Business School Press, 1999), and “A Survey of Business and the Internet,” Economist, June 26, 1999.
9. This assessment is based on our own experience at using TelePresence.
10. S. Spear and H. K. Bowen, “Decoding the DNA of the Toyota Production System,” Harvard Business Review, Sept.-Oct. 1999.
11. All three quotes from “The Past, Imperfect,” Time, July 15, 1996, p. 54.
12. Quoted in T. Eisenmann, S. Bakshi, S. Briens, and S. Singh, “Google Inc.,” Case 9–804–141, Harvard Business School, 2004.
13. Authors' personal discussions with Wim Elfrink during January and February 2008.