Peter Truesdale says that multinationals from Europe and North America have much to learn from their new counterparts in the developing world.
What can the West learn from the rest? Jim O’Neill started me thinking. Not an entire surprise since he was for many years Chief Economist of Goldman Sachs.
As part of his BBC radio programmes on the MINT economies (Mexico, Indonesia, Nigeria, Turkey), he asserted that developed economies might have something to learn from how the MINT economies were organised. Just fancy that.
In fact Mr O’Neill’s throw-away remark poses a potent challenge to multinational companies (MNCs).
A colonial model
The debate about MNCs in Europe (and to a lesser extent in North America) is built on what is best characterised as a nineteenth century colonial model. Supporters and critics of MNCs draw different conclusions from the model, but they share a common narrative. The traffic is conceived of as being all one way.
From capital-rich Europe and North America the companies set out to invest in/ravish the resources of less economically developed parts of the world. The result is modernisation and economic prosperity/destruction of indigenous cultures and environmental loss.
Like a ritual family disagreement, it is all very comforting. Like most family disagreements, it isn’t based on the facts. It is not adding value. In fact, it is stopping an important question from being asked.
Modern reality
While proponents and critics of MNCs have been locked in shadow-boxing ‘debate’ the world has changed: capital flows are not one way. Today I did some work for the Singaporean MNC that supplies water to Bournemouth, the genteel resort on England’s south coast. This morning I was transfixed by an article entitled London skyline gets a £1.2bn Chinese fortune.
The trouble is, few people recognise this. Here’s a suggestion to challenge these perceptions.
An MNC two-way day
Every issue now has its own ‘day’. So let’s have a Two-way Trade Day.
Here’s what should happen.
All developed-economy based MNCs should communicate solely about what they have learnt from their operations in developing markets. How have these been applied and used in the developed markets?
No articles about agricultural investment Vietnam. No press releases about the improvement in working conditions in the Dhaka factory.
What insight has been obtained, what lessons learned from operating in developing economies? How (if at all) have they been deployed in the long-industrialised West?
Developing economy-based MNCs must contribute too.
What (apart from an injection of capital) are these developing economies MNCs bringing to developed economies? What is the advantage brought by having a Singaporean company supplying your water? Does Chinese property investment bring with it insight, skill, discipline or good practice that can’t be got from Land Securities or the Grosvenor Estates?
Who knows what the answers to these questions will be?
I doubt anybody knows, so rarely has the question been asked.
So roll on Two-way Trade Day. It probably won’t be as colourful (or as embarrassing) as Save the Children’s Christmas Jumper Day. It certainly ought to be more informative.
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