International Migration Reduces Poverty, but at a Price
International Migration Reduces Poverty, but at a Price [mp3]
By Jill Moss
Broadcast: Monday, October 31, 2005
I'm Steve Emberwith the VOA Special English Development Report.
A new World Bank study says international migration helps reduce poverty in developing nations. At the same time, however, many countries that are small and poor lose highly skilled workers.
Migrants are people who move from place to place in search of work. The study shows that families with migrant workers in other countries have higher earnings than those without migrants.
Economists at the World Bank studied the effects of the money that migrant workers send to their families back home. Economist Maurice Schiff says the findings show that remittances reduce poverty and increase spending on education, health and investment.
Economist Maurice Schiff Photo: World Bank/Simone D. McCourtie
The findings are based on information from families in three countries: Guatemala, Mexico and the Philippines. Mister Schiff says further studies are being done in other countries.
The World Bank estimates that two hundred million people are migrants living outside their native country. It also estimates that about two hundred twenty-five thousand million dollars will be paid in remittances this year. In many countries, remittances supply more foreign exchange than anything else.
The study also found that migrant workers are more likely to move to a rich nation near their home country. Most migrants in Europe come from Africa and the Middle East. In the United States, migrant workers are generally from Mexico, Central America and the Caribbean.
But international migration also means the problem of "brain drain." Many of the skilled workers needed to bring their countries out of poverty move to wealthier ones instead.
The study examined research from member countries of the Organization for Economic Cooperation and Development. The economists found, for example, that eight out of ten Haitians and Jamaicans with college educations live outside their countries. In southern Africa, skilled workers are just four percent of the workforce. Yet they are forty percent of the migrants from the area.
The World Bank study says developing countries should try harder to get skilled workers to stay. It also suggests cooperation between sending and receiving nations.
The study is called "International Migration, Remittances and the Brain Drain."
This VOA Special English Development Report was written by Jill Moss. Our reports are on the Web at unsv.com. I'm Steve Ember.
THE PRESIDENT: Good morning. This week I signed into law a bill that supports our ongoing efforts to defend our homeland.
To defend this country, we have to enforce our borders. When our borders are not secure, terrorists, drug dealers, and criminals find it easier to sneak into America. My administration has a clear strategy for dealing with this problem: We want to stop people from crossing into America illegally, and to quickly return the illegal immigrants we catch back to their home countries.
For the past four years, we've been implementing this strategy. To stop illegal immigrants from coming across our borders, we've added manpower, upgraded our technology, and taken the final steps necessary to complete a 14-mile barrier running along the San Diego border with Mexico. To enforce our immigration laws within our borders, we've hired more immigration agents, gone after criminal gangs, and targeted smugglers and coyotes who traffic in human beings. We are getting results: Since 2001, we have removed more than 4.8 million illegal immigrants from the United States, including more than 300,000 with criminal records.
Our border patrol and immigration agents are doing a fine job, but we still have a problem. Too many illegal immigrants are coming in, and we're capturing many more non-Mexican illegal immigrants than we can send home. And one of the biggest reasons we cannot send them back is that we lack space in our detention facilities to hold them until they are removed. When there's no bed available, non-Mexicans who are caught entering our country illegally are given a slip that tells them to come back for a court appearance. Most never show up. And then they disappear back into the shadows of our communities. This is called "catch-and-release," and it is unacceptable.
The bill I signed includes $7.5 billion that will help us address the problem of illegal immigration in two important ways. First, it provides more than $2.3 billion for the Border Patrol so we can keep more illegal immigrants from getting into the country in the first place. These funds will help us hire a thousand new border patrol agents, improve our technology and intelligence, expand and improve Border Patrol stations, and install and improve fencing, lighting, vehicle barriers, and roads along our border areas. I appreciate the help Congress has given us for our common goal of creating more secure borders.
Second, this bill also provides $3.7 billion for Immigration and Customs Enforcement so we can find and return the illegal immigrants who are entering our country. With these funds, we can expand the holding capacity of our detention facilities by 10 percent. This will allow us to hold more non-Mexican illegal immigrants while we process them through a program we call "expedited removal." This will make the process faster and more efficient. Putting more non-Mexican illegal immigrants through expedited removal is crucial to sending back people who have come here illegally. As Secretary Chertoff told the Senate this week, our goal is to return every single illegal entrant, with no exceptions. And this bill puts us on the path to do that.
For Mexicans who cross into America illegally, we have a different plan, but the same goal. Now, most of the 900,000 illegal immigrants from Mexico who are caught each year are immediately escorted back across the border. The problem is that these illegal immigrants are able to connect with another smuggler or coyote and come right back in. So one part of the solution is a program called "interior repatriation" where we fly or bus these illegal immigrants all the way back to their hometowns in the interior of Mexico. By returning illegal Mexican immigrants to their homes, far away from desert crossings, we're saving lives and making it more difficult for them to turn right around and cross back into America.
As we improve and expand our efforts to secure our borders, we must also recognize that enforcement cannot work unless it's part of a comprehensive immigration reform that includes a temporary worker program. If an employer has a job that no American is willing to take, we need to find a way to fill that demand by matching willing employers with willing workers from foreign countries on a temporary and legal basis. I'll work with members of Congress to create a program that will provide for our economy's labor needs without harming American workers, and without granting amnesty, and that will relieve pressure on our borders.
A critical part of any temporary worker program is ensuring that our immigration laws are enforced at work sites. America is a country of laws; we must not allow dishonest employers to flout those laws. So we've doubled the resources for work site enforcement since 2004.
We have much more work ahead of us. But the Homeland Security bill I signed this week provides vital support for our efforts to deal with the problem of illegal immigration, and make all Americans safer and more secure.
The well-constructed metaphors that constrain our thinking
The well-constructed metaphors that constrain our thinking
CAROLINE DANIEL. Financial Times. London (UK): Oct 29, 2005. p. 6
The Cathedral and the Bazaar, Eric Raymond's now classic study of collaborative software development, is hardly a gripping read. But the metaphor in the title is profoundly important. Gone are the days when companies could think of themselves as cathedral builders, architects of products from concept to capstone, controlling the process with unquestioned authority. Increasingly, value is created jointly, through unruly collaboration betweencustomers, suppliers, competitors and peers. Thriving in this environment requires a very different managerial mindset.
Metaphors matter because they define how we think. A lofty example is Philosophy and the Mirror of Nature (1981), in which American philosopher Richard Rorty argued that European philosophy from Descartes onwards was just an earnest attempt to solve problems inherent in a metaphor: the human mind as a "mirror" which somehow "reflects" the "real world". Reject the metaphor and the whole epistemological enterprise seems rather pointless - as to bar-room philosophers it always had.
Management is no less a hostage to the language we use to describe it. Our notion of leadership is conditioned by military metaphors such as "chain of command". We speak of "battles for market share", "pricing power" and "wars for talent". We "marshal resources" to "exploit weaknesses" in the competitive position of others.
In Designing Interactive Strategy (1994), Rafael Ramirez and the late Richard Normann argue that the whole notion of a "value chain" - one of the most pervasive management metaphors - is particularly limiting. Chains are an orderly sequence of links, like a production line. The world looks very different if you think of your suppliers, business partners and customers as part of a "value constellation". Communication is no longer restricted to the next link in the chain. Dialogue and learning take place between all participants. Value creation is a community process.
It is a matter of personal preference whether you prefer "bazaar" or "constellation" as the central metaphor for this radically collaborative style of working. Either way, the language suggests complexity, communication and lack of hierarchy.
You can see it in action most clearly in the software industry where Microsoft, a cathedral builder par excellence, finds its Windows operating system challenged by Linux, an alternative from the open source community of developers, of which Mr Raymond is a leading light. In the cathedral-like world of Windows, changes to the sacred computer code can be made only by a select few Microsoft employees working under the direction of chief software architect (yes, that is his real title) Bill Gates. In contrast, amendments to Linux can be made by anyone at any time. The only proviso is that improvements must be shared.
This bazaar-like development process is noisy, unstructured and, so far, more successful than you would imagine.
The media industry is changing, too. The Financial Times, like every other newspaper, is a cathedral. Almost every word of every edition is written by FT journalists under the ultimate authority of an editor in chief. You, our customers, are allowed on to these pink pages only in small numbers - and then confined to the letters page.
This structured way of gathering and disseminating news works well. But, like Windows, it faces new forms of competition. There are "user-generated" media such as blogs and podcasts. There are internet news groups that invite users to identify, and comment upon, the most interesting stories of the day. There are search engines that allow readers to compare the FT's version of events with that of rivals.
Now, it must be said that most blogs are more bizarre than bazaar. Very many readers will continue to prefer the cloistered hush of the FT to the cacophony of the blogosphere. But others will frequent both. Some will desert conventional media altogether.
Publishers of non-fiction books are similarly challenged. Why buy the Encyclopaedia Britannica when Wikipedia is available at the click of a browser? This online encyclopaedia is written and edited by, well, anyone who wants to contribute. The system is policed against hoaxes and vandalism by users themselves. Conflicts over matters of fact or interpretation are revealed in background notes.
Like open source software development, it shouldn't work. Why should people contribute time and expertise for free? Well, it turns out that many of us like to share our knowledge. We like to show off. We get a kick from belonging to communities and helping to build things. So much so that there is talk of extending the Wikipedia model to the publication of low-cost textbooks.
This is not to say that the old model of publishing is finished - any more than Microsoft will be put out of business by open source software or the FT annihilated by blogs. There will be times when cathedral building skills (and the hierarchies required to deploy them) will serve us well. There will be times when it pays to harness the creativity of the bazaar. For most organisations, the trick is finding a balance appropriate for the times.
Scratch the surface and you can see this in progress at most companies. Thus IBM sees competitive advantage in aligning itself with open source software, but retains the habits and hierarchy of a cathedral builder. News Corporation has recognised the significance of user-generated content but has a business model based on the economics of traditional media. Xerox is trying to recast its relationships with customers, suppliers and business partners on more collaborative terms. In the technology-enabled bazaar of global commerce, loners, control-freaks and sociopaths cannot expect to thrive.
By Richard McGregor and Francesco Guerrera in Beijing
Pressure is increasing on China National Offshore Oil Corporation (CNOOC) to find new sources of liquefied natural gas following last week's announcement of a long-term contract between Chevron and Japan's main gas distributor.
China's largest offshore energy company and Chevron have been at loggerheads over the price to be paid by CNOOC for LNG gas from the US group's Gorgon field.
The stalemate could force CNOOC to look elsewhere for supplies, the Beijing-based company's top executive told the Financial Times last week. "China is a very large potential market, but not immediately a high gas price market," said Fu Chengyu, the chairman and chief executive of CNOOC, which this year lost a US$18bn takeover battle with Chevron over Unocal.
"They are trying to find more potential buyers. We are also looking for potential suppliers."
Chevron announced on Thursday it would sell 1.2m tonnes of LNG a year to Tokyo Gas, starting in 2010, and also a possible equity stake.
Executives at CNOOC and Chevron said the discussions over Gorgon, a vast field off the coast of West Australia coast, had stalled over pricing but had not been abandoned.
A collapse of the protracted talks would raise concerns over CNOOC's strategy in the gas market only months after its defeat in take-over Unocal, a California-based oil group. Mr Fu remains under pressure from the Chinese government, CNOOC's majority shareholder, to find upstream reserves, which is increasingly difficult given uncertainties about both domestic and global prices.
CNOOC was envisaged as a cornerstone customer of Gorgon and agreed in 2003 to take a 12.5 per cent stake of the Gorgon project as part of a 25-year supply deal. It is pioneering the LNG business in China and signed two long-term contracts with fields in Australia and Indonesia in 2002, to be supplied through two new terminals in Guangdong and Fujian. But the spot price of LNG has increased by three to four times since then, straining negotiations over new supply deals.
Chinese buyers face an especially difficult market, because of government regulation of gas prices and the abundance of cheap coal as an alternative fuel. "At the beginning if you have a very high price, nobody will use it," said Mr Fu.
John Gass, president of Chevron Global Gas, said "price and timing" had been the biggest obstacles in the US company's failure to conclude an agreement with CNOOC. "Our hope is that we can keep the dialogue open," he said. Chevron was continuing to look for customers in the US, Mexico, Japan and South Korea. Chevron, owns 50 per cent of the Gorgon fields and is the project's operator. The remaining equity is held by Shell and Exxon Mobil, with 25 per cent each.
纽约大学(New York University)斯特恩商学院(Stern School of Business)的阿斯瓦斯•达莫达兰(Aswath Damodaran)教授致力于估价研究。他表示，运用相对价值法的分析师们发现Google的股价合理或被低估他并不感到吃惊，因为他们把"所有影响今天股价的不合理因素"都视作可推动业绩增长的长期性因素。
《新英格兰医学杂志》(New England Journal of Medicine)9月15日发表的研究报告显示，在由16万中国人组成的被调查样本中，心脏病、中风和其他心血管疾病在所有死亡病例中占到了44%。研究显示，心脏病目前已成为中国女性的第一大疾病。尽管自七十年代市场经济改革以来中国的财富迅猛增长，对传染病的治疗也有所改善，但中国人的平均寿命仅增长了5年，目前为72岁。
中华医学会心血管病学分会(Chinese Society of Cardiology)会长、北京阜外心血管病医院外科教授高润林表示，年轻人的心血管问题也越来越多。他说，他所接触的病人中就有40岁、30岁、甚至20几岁的。
为顺应中国的需求，美敦力一直采用当地促销人员向医生推销产品，其中包括上海博溢医疗用品有限公司(Shanghai Boyi Medical Devices Co.)的分销员。2002年接受《华尔街日报》采访的一位上海博溢的推销员表示，他的一位同事曾向上海14家医院的心脏病专家支付过60至1,200美元作为回扣。
Diagnostic Products则因在中国的自身子公司而遭遇麻烦，并非受外部销售人员所累。5月份，美国司法部(Department of Justice)和美国证券交易委员会(Securities and Exchange Commission)责令Diagnostic Products支付罚金480万美元，包括200万美元罚款和280万美元利润返还。监管部门表示，1991年至2002年期间，Diagnostic Products在天津的子公司为推销其研究心脏病、糖尿病和其他疾病的实验室设备向医院提供贿赂160万美元。
今年1月，中国医疗监管部门将一套新的支架、起博器和人工关节定价体系推广到了八个省市。在这一体系下，合格供应商必须向专家组提交建议价格，由专家组讨论后确定最终售价。上海医疗器械行业协会(Medical Instruments Trade Association of Shanghai)的数据显示，自此以后支架和起博器价格已下降25%。该协会与上海医疗监管部门共同监督对医院的医疗设备报价。
今年初，国会成立了两个不同的小组，它们的任务都是分析并影响由于中国经济及政治实力不断增强而产生的政策之争。包括31位成员的美国国会中国组(China Congressional Caucus)主要关注中国军队的军事现代化问题，由共和党众议员兰迪•福布斯(J. Randy Forbes)领导。当讨论中国问题时，他提到了电影《大白鲨》(Jaws)中的一个场景：警官冷漠地将鱼饵投向新英格兰海岸的水中，一条大白鲨突然跃出水面，吓坏了现场的观众。福布斯说，中国给世界带来的印象就是这样。
伊利诺伊州共和党众议员马克•科克(Mark Kirk)领导著35名成员的美中工作小组(U.S.-China Study Group)。他说，这个小组的主要目的是减少因错误信息带来的同中国不必要的冲突。尽管科克称，中国军力增长迅速的确令人担忧，但他表示，美中两国的贸易和外交联系将使中国成为威胁较低的国家。良好的经济关系也对他所在的芝加哥选区有利，美国有在华业务的三家企业巨头──波音公司(Boeing Co.)、摩托罗拉公司(Motorola Inc.)和联合航空(United Airlines)的母公司UAL Corp.──均将总部设在这里。
两人都是在2000年进入国会的。现年53岁的福布斯进入政坛前是弗吉尼亚州东南地区的一名律师。而46岁的科克在担任国会议员前曾有过国际关系方面的工作经历，他曾当过海军预备役的情报官，也曾经在世界银行(World Bank)和美国国务院(State Department)任职，还曾在英国下议院(British House of Commons)担任过工作人员。根据无党派政治杂志National Journal的分析，福布斯在经济、社会和对外政策的立法上可能更倾向于支持最保守的一方。这份研究报告还认为，科克在保守和自由两派之间更持不偏不倚的态度。
今年6月，伯南克博士被乔治•W•布什(George W. Bush)调离美联储，让他担任总统经济顾问委员会(Council of Economic Advisors)主席。比起长期身处美联储的持异见者角色，他似乎不太适应总统经济政策公开辩护人的角色。尽管他是共和党人，但朋友们说他先前从未让政治影响工作。
Cinema Wood recently brought her grandmother, 81-year-old, Peggy Edwards, to a StoryCorps mobile booth. Wood, 32, wanted to capture her grandmother's voice on tape -- and get her advice about marriage.
It all began with Wood asking her grandmother to tell the story of meeting "Poppa" (her grandfather, G. Franklin Edwards). It was 1946, and Peggy was then working as a secretary at Howard University in Washington, D.C. Franklin was a graduate student.
Grandmother and granddaughter spoke during StoryCorps' mobile booth visit to Washington, D.C. Cinema Wood was married earlier this month. At the wedding, her grandmother gave her away.
Bush Nominates Ben Bernanke as Federal Reserve Chairman
Bush Nominates Ben Bernanke as Federal Reserve Chairman[text] [ mp3]
By Mario Ritter
Broadcast: Friday, October 28, 2005
I'm Faith Lapidus with the VOA Special English Economics Report.
George Bush with Ben Bernanke at the White House
President Bush this week nominated economist Ben Bernanke [ber-NAN-key] to become the next chairman of the Federal Reserve.
The Senate is expected to confirm Mister Bernanke to replace Alan Greenspan. Mister Greenspan has held the position at the central bank for eighteen years. He is expected to leave at the end of January.
Mister Bernanke currently serves as chairman of the president's Council of Economic Advisers. President Bush appointed him in June. Mister Bernanke served as a governor of the Atlanta Federal Reserve Bank from August of two thousand two until this year.
But, Mister Bernanke has mainly been a university professor for much of his working life. He headed the Economics Department at Princeton University in New Jersey before he was confirmed as a Federal Reserve governor.
Mister Bernanke says he does not plan big changes for the central bank. He says his first job will be to continue what he called "the policies and policy strategies established during the Greenspan years."
However, Mister Bernanke has supported the idea of the Federal Reserve announcing a target rate for inflation. Some nations, mainly in Europe, already do this. Alan Greenspan started announcing target interest rates for money controlled by the central bank. But he has not supported the idea of stated targets for inflation.
Mister Greenspan is seventy-nine years old. He has won praise for his guidance of the world's largest economy. He became Federal Reserve chairman in August of nineteen eighty-seven. Two months later, the stock market faced the worst day in its history. The Dow Jones industrial average lost almost one-fourth of its value. Since then, Mister Greenspan has led the central bank through two recessions, but also a long period of economic expansion.
Mister Bernanke was born in Augusta, Georgia, and is fifty-one years old. He studied at Harvard University and the Massachusetts Institute of Technology. If confirmed, Mister Bernanke will be the fourteenth chairman of the Federal Reserve Board. And, unlike the current one, the president noted that Mister Bernanke has been praised for giving speeches in "clear, simple language."
This VOA Special English Economics Report was written by Mario Ritter. Our reports are online at www.unsv.com. I'm Faith Lapidus.
The Three Marketeers Economist heroes? It sounds silly unless you understand how close the world came to economic meltdown last year By JOSHUA COOPER RAMO
The phone rings. You are on vacation in the Virgin Islands. You have been dreaming about the fishing for the better part of two months, and you are about to head out to chase the Christmastime bonefish running offshore and to spend a day on the water, with the sun leaching six months of Washington baloney from your brain. The phone rings, and because you are Secretary of the Treasury, you answer. "This is the Treasury operator," says the voice. "Please stand by for a conference call."
The phone rings. You are at home, but getting ready to head out to your weekly tennis game in the Virginia suburbs. You are thinking perhaps about your spin serve, a wicked slice that moves left to right so fast that you have left some of Washington's biggest names tripping over their feet and cursing. Sure, you can leave the stock market wheezing with one word about higher interest rates, but ... if only they could see what you can do to anyone foolish enough to line up inside against that serve! You are 72 years old, and your tennis game is still one of your great pleasures, and surely you have been looking forward to this match all week. But the phone is ringing, and because you are chairman of the Federal Reserve Board, you answer. "This is the Treasury operator," says the voice. "Please stand by."
The phone rings. "Whoopee!" you think. "The phone is ringing!" O.K., you really should calm down about this phone-ringing stuff, but you are the Deputy Secretary of the Treasury, and this past year, for all its chaos and tumult, has been about the most exciting you could imagine. It's the holiday season, and you are eager to get to your family and all that, but boy, this holding the world economy by the hand is even better than advertised. The phone rings. Maybe it will be like this summer, when your mom picked up in your house on Cape Cod and found Fed Chairman Alan Greenspan on one line and worried Russian reformer Anatoli Chubais on the other. Oh, how she thrilled over that! The phone rings, and because you are the Deputy Secretary (and happen to be one of the few rocket-scientist economists not trying to create a black box to make deviously complex trades on Wall Street), you pick up the receiver. "This is the Treasury operator," the woman on the line says, and though she doesn't say it, what she could say now that she has you all connected is: "The committee to save the world is now in session."
多年的学术探讨之后，1980年英国雷丁大学的John Dunning关于国际化的折衷理论（the eclectic theory of internationalization）得到了较多人的认同：国际化企业的国际化从根本上来讲有三种优势：1.企业的独特竞争力。企业在某个领域做到了一流，不仅超过了母国内的竞争对手，也超过了很多国外的竞争对手。为了让这个"独门秘技"即企业拥有的独特竞争力能够在更大范围内得到使用，企业应该进行国际化，走向那些同行业无法与自己竞争的国家；2.国家的独特竞争力。这个国家拥有某种在世界上别的国家找不到的东西，可能是自然资源，可能是廉价劳动力，也可能是某个行业的独特技术、知识与人才。为得到这些东西，更好地与对手竞争，企业应该进行国际化；3.内部化的竞争力。全球市场有时候会失效，如高科技的定价、自然资源的定价等等。很多情况下，把外部交易内部化的跨国企业通过用内部市场来取代外部市场，能够更有效地进行全球范围内的资源调配。很明显，内部化的竞争力在逻辑上与前两个方面不是并列的而是互补的。没有内部化的竞争力，企业的竞争力、国际的竞争力并不必然地要求国际化。
A healthy way of thinking By Simon London Published: August 21 2005 18:13 | Last updated: August 21 2005 18:13
When Stefanos Zenios was studying for his doctorate at the Massachusetts Institute of Technology, his supervisor set him a challenge: work out whether it would be possible to cut the cost of testing for HIV, the virus that causes Aids, by pooling the blood samples taken from a community.
The young postgraduate was studying neither medicine nor biochemistry. His PhD was in operations research (OR), the discipline that uses mathematical models and statistics to study human systems.
It is a sign of the times that Prof Zenios is now one of the brightest stars at Stanford University's highbrow Graduate School of Business. Once seemingly headed for irrelevance, OR is making a comeback.
Companies have started to use OR techniques to model not only their supply chains (long the main province of OR in business) but also the behaviour of customers and competitors. Government agencies are calling on OR specialists to study the spread of diseases and strategies for prevention or cure.
A network wherever he looks
Sarah Murray talks to Toby Stuart, the professor who is preoccupied with interconnection in the business world. Go there
Prof Zenios, 35, grew up in Cyprus, where he took private English lessons to expand his educational horizons. The extra study paid off with a place at Britain's Cambridge University, where he read mathematics.
But the young student was drawn to the applied side – probability, statistics and computer science. He recalls: "I was fascinated by the idea that you could use the discipline of mathematics to say something about systems designed by humans."
This practical outlook led to MIT, academic home to Jay Forrester, one of the founding fathers of OR, and then to Stanford, in California. Last year, he was elected a full professor in the business school.
For the record, the HIV-testing project did not lead to a breakthrough. But the exercise opened Prof Zenios's eyes to the way OR techniques could be used to address issues of public health. His academic reputation is founded on studies examining alternative rules for distributing the scarce supply of human kidneys available for transplant among patients on dialysis.
Why focus on health rather than, say, poverty or business efficiency? "Obviously, health issues are very important," says Prof Zenios. "I also thought it would be easy to work with practitioners who are trained in scientific method."
His research partner for the work on kidney transplants is Lainie Ross, a University of Chicago doctor and medical ethicist who shares his fascination with statistics.
Collaboration with an ethicist underlines the fact that Prof Zenios is dealing with more than abstract numbers. The essence of OR is that it looks for solutions that are not only efficient but also practical. In medicine this can be especially complex.
Prof Zenios says: "If you are looking at a supply chain it is fairly easy to define what the objective is. But in healthcare there are many more stakeholders. You need to think about fairness as well as efficiency."
About 15,000 kidney transplants are performed each year in the US. But this is fewer than half of the 40,000 or so patients who are awaiting transplants. A shortage of suitable organs is to blame. Even if a relative is willing to donate a kidney, a mismatch of blood types often scuppers the plan.
The system would be more efficient, reasoned Prof Zenios, if the organs offered by family members were not lost to the system. He first tried to fashion an exchange programme in which pairs of donors and patients would swap kidneys to make more matches. But OR modelling revealed that such an exchange would result in only 1 per cent more transplants.
So Prof Zenios looked at another idea: if a family member donates a kidney to the pool, the transplant candidate to whom they are related moves up the waiting list and receives the first available kidney that matches.
Friends or relatives can, in effect, "buy" a priority position on the waiting list by donating an organ. The modelling in this case showed that the system could decrease waiting time by 15 per cent.
One of the lessons Prof Zenios draws from the experience is that OR researchers must collaborate closely with practitioners if they expect to be taken seriously: "Physicians want to know not only that something works but also why it works. You need to understand the clinical detail."
With a huge supply of low-cost workers, mainland China has fast become the world's manufacturing workshop, supplying everything from textiles to toys to computer chips. Given the country's millions of university graduates, is it set to become a giant in offshore IT and business process services as well?
New research from the McKinsey Global Institute (MGI) suggests that this outcome is unlikely. (The full report, The Emerging Global Labor Market, is available free of charge online.) The reason: few of China's vast number of university graduates are capable of working successfully in the services export sector, and the fast-growing domestic economy absorbs most of those who could. Indeed, far from presaging a thriving offshore services sector, our research points to a looming shortage of homegrown talent, with serious implications for the multinationals now in China and for the growing number of Chinese companies with global ambitions.
If China is to avoid this talent crunch and to sustain its economic ascent, it must produce more graduates fit for employment in world-class companies, whether local or foreign. Raising the graduates' quality will allow the economy to evolve from its present domination by manufacturing and toward a future in which services play the leading role��as they eventually must when any economy develops and matures. The conditions for a flourishing offshore services sector will then surely follow.
The supply paradox
China's pool of potential talent is enormous. In 2003 China had roughly 8.5 million young professional graduates with up to seven years' work experience and an additional 97 million people that would qualify for support-staff positions.
Despite this apparently vast supply, multinational companies are finding that few graduates have the necessary skills for service occupations. According to interviews with 83 human-resources professionals involved with hiring local graduates in low-wage countries, fewer than 10 percent of Chinese job candidates, on average, would be suitable for work in a foreign company in the nine occupations we studied: engineers, finance workers, accountants, quantitative analysts, generalists, life science researchers, doctors, nurses, and support staff.
Consider engineers. China has 1.6 million young ones, more than any other country we examined.1 Indeed, 33 percent of the university students in China study engineering, 2 compared with 20 percent in Germany and just 4 percent in India. But the main drawback of Chinese applicants for engineering jobs, our interviewees said, is the educational system's bias toward theory. Compared with engineering graduates in Europe and North America, who work in teams to achieve practical solutions, Chinese students get little practical experience in projects or teamwork. The result of these differences is that China's pool of young engineers considered suitable for work in multinationals is just 160,000��no larger than the United Kingdom's. Hence the paradox of shortages amid plenty.
For jobs in the eight other occupations we studied, poor English was the main reason our interviewees gave for rejecting Chinese applicants. Only 3 percent of them can be considered for generalist service positions (those that don't require a degree in any particular subject). Overall communication style and cultural fit are also difficult hurdles. One Chinese HR professional points out, for example, that Chinese software engineers would find it hard to draw up an information flowchart for an international five-star hotel, not because they don't understand flowcharts, but because state-run hotels in China��the only ones they know��are so very different. 3 Some people argue that a willingness to work long hours will compensate for any deficiencies in the suitability of China's talent. Although this may hold true to some extent in manufacturing, it is likely to make only a marginal difference in services because of the specific skill deficiencies that come into play.
On top of the generally low suitability of Chinese graduates, they are widely dispersed. Well over 1,500 colleges and universities produced the 1.7 million students who graduated in 2003, and likely less than one-third of them had studied in any of the top ten university cities (Exhibit 1). Just one-quarter of all Chinese graduates live in a city or region close to a major international airport��a requirement of most multinationals setting up offshore facilities. Compounding that problem is a lack of mobility: only one-third of all Chinese graduates move to other provinces for work. (By contrast, almost half of all Indian students graduate close to a major international hub, such as Bangalore, Delhi, Hyderabad, and Mumbai, and most are quite willing to move.) As a result of these two factors, world-class companies that want to hire service labor in China have difficulty reaching as much as half of the total pool of graduates.
Finally, companies that wish to set up services offshoring operations in China face more competition for talent than they would in other low-wage locations. In India and the Philippines, for example, the local economy is growing less briskly, and working for a company that provides offshore services is therefore a good option. In China, domestic and multinational companies serving the fast-growing domestic market already provide attractive opportunities for suitable graduates, and there are many more jobs in the manufacturing export sector. As a result, it's wrong to assume, as many companies do, that every suitable young professional in China is available for hire in the services offshoring sector.
The looming war for talent
More crucially, companies that are already in China and serve its fast-growing domestic market will also, our research shows, have difficulty finding enough suitable employees in key service and managerial occupations.
The demand for labor from just the large foreign-owned companies and joint ventures that now do business in China highlights the problem.4 From 1998 to 2002, employment in these two categories rose by 12 and 23 percent a year, respectively, to about 2,700,000 workers. Assuming that 30 percent of these workers must have at least a college degree 5 and that the labor demands of such companies continue to grow at the same rates, they will have to employ an additional 750,000 graduates from 2003 through 2008. China, we estimate, will produce 1,200,000 graduates suitable for employment in world-class service companies during that period. So large foreign multinationals and joint ventures alone will take up to 60 percent of China's suitable graduates before demand from smaller multinationals or Chinese companies even enters the picture (Exhibit 2).
If these numbers suggest fierce competition for China's best graduates, unemployment statistics confirm that impression. In 2003 just 1 percent of the country's university graduates were unemployed��an almost negligible rate. Unemployment among the graduates of China's colleges is a bit higher, at about 6 percent.
Effective managers are in short supply as well. We estimate that given the global aspirations of many Chinese companies, over the next 10 to 15 years they will need 75,000 leaders who can work effectively in global environments; today they have only 3,000 to 5,000. 6 Management talent generally comes from several sources��offshoring enterprises that train lower-level workers, industries that produce managers with relevant skills, and expatriates who have worked or studied in countries with developed economies. But people from all of these sources are scarce in China. Although multinational companies there do currently train and promote managers from entry-level positions, the process is time consuming and costly. Moreover, with levels of foreign direct investment so high, multinationals often resort to poaching from each other. The problem is all the worse because not many middle managers can be hired from Chinese companies; only people employed by very high-performing ones (such as the consumer electronics company TCL) have the skills and cultural attributes needed to work for the multinationals. A more plentiful source of middle-management talent is the large number of ethnic Chinese who fill management roles for companies in Hong Kong, Singapore, and Taiwan. These people can be recruited to mainland China but often require "local-plus" packages: wages and benefits above what the locals receive, though less than the full expatriate package.
Why fix the problem?
A shortage of world-class university graduates in key occupations such as finance, accounting, engineering, and business represents a major problem for multinationals in China, for Chinese companies, and for the country's policy makers. Companies need these graduates to improve their marketing and product-development efforts, to understand consumer tastes, to develop customer service and after-sales-service operations, and to raise their local financial and accounting standards. In the longer term, China's economy as a whole needs more such graduates if it is to compete in the world beyond the simpler, labor-intensive manufacturing areas in which it is now the global leader.
As economies develop, they shift from labor-intensive manufacturing to higher-value areas, notably marketing, product design, and the manufacture of sophisticated intermediate inputs. Northern Italy's textile and apparel industry, for example, has moved most garment production to lower-cost locations, but employment remains stable because companies have put more resources into tasks such as designing clothes and coordinating global production networks. Similarly, in the US automotive industry, imports of finished cars from Mexico increased rapidly after the North American Free Trade Agreement took effect, but at the same time exports of US auto parts to Mexico have quadrupled, allowing much of the more capital-intensive work��and many of the higher-paid jobs��to remain in the United States. 7
With an estimated 150 million surplus unskilled rural workers,8 who can be hired mainly by manufacturers, China is decades away from developing a consumer-oriented service economy. But policy makers must make that their ultimate aspiration. No nation will remain the world's low-cost manufacturer forever, and if it were to try to do so, its living standards would stagnate at today's levels��or even decline. Today China's economy is greatly tilted toward manufacturing, and the services sector is notably underdeveloped (Exhibit 3). But in China, as in all economies, services will be the future engine of job growth. According to Alliance Capital Management, the country's manufacturing sector shed 15 million jobs from 1995 to 2002, when large state-owned factories restructured their operations. As manufacturing productivity rises, still more jobs will be lost.
Creating the conditions that attract offshore services operations will help China move up the ladder. The country does have some strong advantages in this arena, notably low labor costs, an enormous domestic market, and a relatively high-quality infrastructure. Offshore services activities are often developed from existing operations, so China's services offshoring sector is most likely to arise as an offshoot of the activities of companies that are already there.
Pharmaceutical and software companies will probably take the lead, for in these industries some multinationals have already set up Chinese R&D operations to customize products for local needs. Several players now use incremental capacity in their Chinese R&D facilities to serve overseas markets too. Pharma companies can also run bigger, and therefore faster, clinical trials in China more cheaply, thereby cutting overall product-development costs as well as approval and release times. In addition, mainland China could emerge as a base for business process offshoring by multinationals that serve Chinese-speaking populations elsewhere��such as Hong Kong, Singapore, and Taiwan��if the country solves its looming shortage of qualified labor.
Addressing the shortage
Raising the quality of China's graduates will be a long-term effort, but even modest improvements would make a huge difference. If the proportion of Chinese engineering graduates who could work at global companies increased to 25 percent (as it is in India), from today's 10 percent, China's pool of qualified young engineers would be among the world's largest by 2008.
How can the country raise the quality of its graduates? First, it must change the way it finances its universities. Expenditures for tertiary education are growing quite rapidly��from 2000 to 2002, by more than 50 percent. The number of students increased even more, however, so expenditures per student fell by 5 percent. Funding is also spread unevenly throughout the country: in Beijing average spending per student is more than 30 percent higher than it is in second-place Shanghai and more than twice the level in 25 of the 31 provinces. More money should be focused on raising quality than quantity, and funds for institutions in places other than Beijing and Shanghai should rise dramatically.
In addition, China must continue to improve its English-language instruction. Since 2001, the Ministry of Education has required all students to start learning English in third grade. This is a step in the right direction and will pay dividends in the long run, but English classes are still very large, even at universities, because teachers are in short supply. 9 Furthermore, conversational skills receive too little attention. To resolve both of these issues, China must train many more English teachers and do more to recruit them from abroad.
For the foreseeable future, companies themselves will have to invest more in training and developing the talent they need. When Microsoft, for instance, outsourced part of its Web-based technical support to Shanghai Wicresoft, a 400-employee joint venture with the Shanghai municipal government, it hired ten native US English speakers to teach their Chinese coworkers about US e-mail protocol and writing style. These instructors hold language classes and meet one-on-one with Chinese employees to assess their progress, an effort that raises the joint venture's personnel costs by about 15 percent 10 but brings the language skills of Chinese workers up to speed. Other foreign companies are developing management-training courses, sometimes in collaboration with local business schools, to upgrade the skills of existing middle and top managers. 11
Companies can also work with policy makers and university leaders to bring curriculums��not only at the top universities but also throughout the university system��more in line with the needs of industry. Software projects are team efforts that require less theoretical knowledge than application skills, which Chinese graduates lack, according to managers at multinational companies. In response, Microsoft has formed partnerships with four universities in China to establish software labs where student interns learn practical software-development skills. Other companies should adopt similar policies. Such public-private education programs make students more suitable for good jobs with world-class companies and ease the transition to middle-management roles later on.
Finally, China's policy makers must ensure that its many students who study abroad return home, since a relatively high proportion of them have the skills needed to work for multinationals. In 2003, some 120,000 Chinese students were studying abroad��the highest number of any of the 28 countries whose supply of graduates MGI has investigated. Moreover, half of these Chinese students were living in the United States, the largest overseas market linked to China. India's diaspora, including people who have returned to their homeland, has played an important role in the growth of the Indian IT and business process services sector while helping to alleviate the country's management shortage. China too needs its expats.
China faces a looming labor shortage that could stall not only its economic growth but also its migration up the value chain. Reforms in the educational system��including a greater emphasis on practical and language skills��will help the country fill its skilled-labor gap.
About the Authors
Diana Farrell is director of the McKinsey Global Institute, and Andrew Grant is a director in McKinsey's Shanghai office.
The authors would like to acknowledge the contributions of Martha Laboissi��re, Jaeson Rosenfeld, Sascha St��rze, and Fusayo Umezawa.
Notes
1The low-wage countries we studied were Argentina, Brazil, Bulgaria, Chile, China, Colombia, Croatia, the Czech Republic, Estonia, Hungary, India, Indonesia, Latvia, Lithuania, Malaysia, Mexico, the Philippines, Poland, Romania, Russia, Slovakia, Slovenia, South Africa, Thailand, Turkey, Ukraine, Venezuela, and Vietnam. The mid- to high-wage countries we studied in depth were Canada, Germany, Ireland, Japan, the United Kingdom, and the United States; Australia and South Korea were studied by way of extrapolation.
2All branches except civil and agricultural engineering.
3Juhi Bhambal, interview with Alan Choi, Korn/Ferry's regional managing director for Greater China, Global Outsourcing, January 11, 2005.
4We considered only companies with more than 1,000 employees. Foreign-owned companies in Hong Kong, Macao, and Taiwan were excluded.
5This estimate is based on MGI's study of the global automotive industry, where 48 percent of all jobs require a college education. Since the estimate includes headquarters functions, we reduced it to 30 percent.
6Andrew Grant and Georges Desvaux, "Narrowing China's corporate-leadership gap," China Daily, May 18, 2005.
沃尔顿在他位于曼哈顿上西区的公寓里经营著一家只有他一名员工的独立研究公司。这家公司是在监管机构2003年与华尔街公司达成和解协议后成立的，该协议要求一些华尔街知名的经纪公司除了提供自己的报告外，还须向客户提供独立的第三方研究。
华为是建立在供方优势国际化的一个很好的例子。
道德自律失灵之后，严刑峻法是唯一能够增加食品安全程度的途径。
管理思想何以流行，营销手段如此重要。
政治家的底线是安全，毕生追求及最高目标其实更是安全。任正非不是政治家，但是作为有着深刻政治定位的企业家，他也一直把企业的安全作为追求的最高目标。他有一条坚信不移的法则，即"木秀于林风必摧之"。
