GE has its share of challenges, some of which are laid out in this recent posting by my colleague, Jena McGregor. But I was encouraged a couple of days ago when I interviewed Michael Idelchick, the vice president of advanced technology for GE Global Research. That's the central research and development organization that for decades has pushed the envelope in technology for aviation, medical equipment, and energy generation. I asked if GE is cutting back on R&D; as a result of its financial troubles. His answer: "We innovate in all cycles, and we run the company for the long haul. There's no slowing down." That's the answer I wanted to hear. I've seen Intel, Cisco, and IBM invest aggressively during downturns in the past and get rewarded for it when economic growth and demand picked up again.
Back in June, before I took off on my crazy reporting swing through Asia and Africa, I wrote about how Steve Leonard, EMC's president of Asia Pacific and Japan, is trying to get the right mix of local and corporate management and culture in his region. Recently I spoke to Charles Fan, vice president and GM of EMC's China Development Center, to get the view from the field. It was a relatively quick conversation, but I came out of it feeling that Fan is on his way to mastering the art of setting up an off-shore research operation that's tightly connected to the corporate mothership.
While the US is bogged down in Iraq and on the hook, apparently, to spend $700 billion to save the financial system, another major problem is barely being noticed. And it will have a lot to do with the nation's economic health over the coming decades. It's the innovation gap. The US isn't investing enough in basic scientific research, on new technology development, and on preparing the science and technology workforce of the future. The latest warning comes from Judy Estrin, the former chief technology officer of Cisco, in her new book, Closing the Innovation Gap. "We have become short-term focused both in Silicon Valley and in Corporate America because of all of the other pressures. The result is that things have fundamentally changed in the world of innovation," she told me when we met a few days ago.
It has been a remarkable couple of weeks in New York. First, the financial system meltdown. Now, Meltdown Part II. Meanwhile, many of the world’s political, business, academic, and civil society leaders are in the city this week attending the UN General Assembly meeting, the Clinton Global Initiative conference and a smattering of smaller big-think events. It seems to be the end of the world as we knew it. And being on the edge of big and painful changes has put people on edge. There’s a sense of urgency. Also, anger.
I talked to Craig Barrett of Intel and Pramod Bhasin of India’s Genpact on Monday and Tuesday, and it was remarkable how frustrated they are--and how willing to express it. Barrett lamented that the US government has not responded to industry’s calls for long term planning and investing in national competitiveness. Instead our leaders stumble from crisis to crisis and play to the popularity polls. “The government is thumbing their noses at us!” he says. Bhasin bemoaned India’s corruption and lawlessness: “Private industry is trying to pull us into the 21st Century, but government is trying to keep us in the 18th Century!”
What’s going on here is we’re in the middle of a global leadership crisis. The US was once the undisputed world leader, economically, politically, and, after 9/11, morally. But the Bush administration blew that big time. In the past eight years, we have been diminished tremendously. When Bush gave his lifeless speech at the UN yesterday, he seemed to have shrunk to half of his former size. There was barely a ripple of reaction from the audience. He is not only despised; he’s now irrelevant. Meanwhile, the overheated and untruthful rhetoric of the US presidential election has diminished the stature not just of the liars but those they are lying about.
But the world needs leaders--individuals and countries with the authority, recognized wisdom, and clout to bring stability to global affairs and economics. And, right now, it doesn’t have any. Putin’s a powerful despot who commands no respect beyond his borders; China’s leadership is a faceless, self-absorbed bureaucracy; Britain’s Brown is a faded star; and Merkel is merely a competent technocrat. The only global political leaders who inspire respect and excitement (at least, from me) are India’s Singh, Columbia’s Uribe, and Rwanda’s Kagame. Unfortunately, Columbia and Rwanda are too small to matter except symbolically, and Singh governs a nearly ungovernable India.
Survey the business horizon, and you come to a similar conclusion. Only Warren Buffett commands almost god-like respect. What he thinks and says matters. Leaders such as IBM’s Palmisano and Intel’s Barrett are competently leading their large companies through the storm, but their influence is fairly limited beyond the borders of their supply chains.
In civil society, people expect a lot from Bill Gates now that he’s spending most of his time on his foundation. He has a ton of money, between his fortune and Buffett’s, and a bold strategy for attacking poverty and disease. I have a lot of hope for what he can do, too. In fact, I suggested to a couple of Gates Foundation people earlier this week that he should use his UN speech to try to calm the world. Their answer: It’s impossible to do that in the six minutes that have been allotted for him.
I have hope, though, for the state of leadership in the world and for America’s role in it. Think of the US in the early 1930s. We were in disarray, yet a great leader came in with a vision, a plan, and a commanding confidence that turned the tide and set us on the course that made America a positive role model and shaper of the course of world history for more than half a century. That sort of thing could happen again.
Peter Kellner has been a venture capitalist and a private equity guy, and, soon, he'll launch a fund of hedge funds, but while his brain is in finance his heart is somewhere else: Changing the world. As co-founder of Endeavor, a non-profit that helps small and medium-sized companies in emerging nations perform better, he helped build an organization that has aided 330 entrepreneurs who now employ 86,000 people. I sat down with him a couple of days ago after he spoke to Pamela Hartigan's class on social entrepreneurship at Columbia University to find out about Endeavor's latest expansions. Here's why the organization is setting up an office in Jordan:
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Innovation is happening everywhere these days. Companies operate without borders to find the best talent and the best ideas wherever they may be. Meanwhile, new business models are arising that just might make it possible to turn large swaths of this contentious world into something approximating a true global village. Tune in for Senior Writer Steve Hamm's dispatches from the intersection of globalization, innovation, and leadership.
