By Juan Pablo Murra, Dean of the Business School at Tecnológico de Monterrey
I recently attended the 12th Deans & Directors meeting of the Global Network for Advanced Management (GNAM), hosted by the Hong Kong University of Science and Technology.
Launched in 2012, with Tecnológico de Monterrey through EGADE Business School as a founding member, GNAM is a collaborative network of 31 leading business schools from diverse regions, cultures, and economies in different phases of development, connecting students, alumni, faculty, and business leaders to better understand the strategic implications of a flat and connected world.
I had an exceptional opportunity to connect and learn from influential academic and business leaders and to spend some time on the streets of Hong Kong and Shanghai. I want to share a few reflections from the trip.
CHINA ON THE RISE
Business is global and in recent decades the center of gravity of economic activity has shifted towards Asia. The scale and sophistication of the region´s economic development are breathtaking.
Along the banks of the Huangpu River in Shanghai, where just 30 years ago lay empty agricultural lands, I saw the ultramodern Bund and Lujiazul Financial Center, home to 400 global financial institutions in what is clearly the new financial hub of Asia.
I came across plenty of examples of China´s remarkable transformation and the magnitude of its accelerating economic and geopolitical impact. I´ll share a few:
The Belt & Road initiative
As a testament to China´s ambition to become the world’s most extensive commercial powerhouse, it doesn´t get any bigger than the “Belt and Road” Initiative. With an estimated US$5 trillion investment plan supporting 1,000 infrastructure projects related to, transportation, energy, trade, information, innovation, education, agriculture, and tourism, China´s “Belt and Road” initiative will impact more than 60% of the world's population across 68 countries on 3 continents, covering 20% of the world´s GDP and 35% of the world´s trade!
Despite the rise of anti-globalization sentiment and trade protectionism in the USA and other parts of the world, China has increasingly positioned itself as a champion of globalization. The "Belt and Road" policy is the economic centerpiece of the Xi Jinping administration, hailed as the “project of the century”, and presents a clear signal of China´s intention to shift to a more prominent global leadership role.
If you stand in line for a while in a Starbucks in Shanghai you´ll soon realize that China is a cashless society. No one is offering cash (or fumbling for cards) to pay, instead, they zip their mobile devices across a reader and with a “ping”- that latte is yours. Out on the streets, the clamor of food stalls serving bowls of steaming noodles is accompanied by a constant beep-beep, as vendor´s QR codes are scanned and noodles are ordered and paid for by smartphone. Street buskers can get their tips by propping up their QR code and bicycles are shared, with access locked or unlocked across the city with the same virtual system. It´s the de facto digital way of life.
Fintech in China represents a massive leap directly from cash to mobile. There are over 600 million smartphones in China and the majority of people who go online are also using them to pay for goods and services, primarily through Chinese e-commerce giant Alibaba’s Alipay or Tencent´s WeChat payment service. Through relentless innovation, these companies have developed seamless and efficient B2B, B2C and P2P payments services.
The world´s biggest online shopping event happens every 11th November on China´s “Singles Day”, closely associated with Chinese e-commerce giant Alibaba. “Singles' Day” this year was bigger than ever, with Chinese consumers breaking all-time records by spending a total of $25 billion across Alibaba's e-commerce platforms in a single day! Along with close competitor Jingdong, who sold close to USD$20 billion the same day, the combined Alibaba and Jingdong one-day sales revenue represent two-thirds of the State of Nuevo León´s annual GDP!
Alibaba processed 1.48 billion payment transactions - 256,000 transactions per second at peak - and managed over 800 million delivery orders! This example gives us a clear idea of the sheer capacity of the Chinese companies to innovate, scale and execute.
Michael Evans, former head of Goldman Sachs in Asia is now the President of Alibaba, working with lead founder Jack Ma and the Board to lead the company´s strategy and expansion beyond China. Michael visited us at the Monterrey Campus in recent days. His hugely interesting discussion on building a global business from China is here. I encourage you to watch it.
Education and Transformative Research
During a visit to Fudan University, we learned of the plans and commitments derived from the current Chinese Government five-years plan towards building world-class Chinese universities, with unprecedented investments in talent, facilities, technology, scholarships, and partnerships.
One project caught my attention: The Institute of Science and Technology for Brain-inspired Intelligence, with close on $200 million dollars in funding for research in artificial intelligence is focused on learning a great deal more about how the brain works.
A multidisciplinary approach combining large-scale genomics data, brain imaging, and behavioral science, will seek to decode how the brain works. In addition to advancing artificial intelligence, they are learning how to better treat mental illness within the Chinese population.
So, what are the implications and recommendations for our Business School community? In sum: Think Asia. Think China.
Each of us, irrespective of role or professional context, must find a way to understand and connect to what is happening across the Pacific. Encouraging our students to participate in the multiple Asia experiential learning opportunities that TEC has developed with academic partners across the region is critical. For our faculty, it means strengthening connections and networking with Asian faculty, incorporating Chinese and Asian innovation-driven company case studies and exploring greater research collaboration with academic and corporate partners in Asia.
There are an estimated 2,350 Mexicans living in China, among them many outstanding EXATEC. They provide a valuable opportunity to build competitive advantage for our community through connection and collaboration.
Whilst China presents enormous opportunities, it also faces huge economic, social, geopolitical and environmental challenges. It has however shown remarkable will and skill in overcoming them. The global economy will continue to shift towards Asia. Not only because of size but because of its capacity to innovate. As a leading business school community with an extensive network across Asia, I know that we will not be bystanders faced with this economic force, but work together to find the opportunities within it.
Get out latest news in your inbox.