America should respond to China with a ‘second Sputnik moment – Yasheng Huang

MIT Sloan Professor Yasheng Huang

MIT Sloan Professor Yasheng Huang

From MarketWatch

The burgeoning trade war between the United States and China has as much to do with technology as with the balance of trade. Reports have surfaced that the Treasury Department is drafting rules to block Chinese firms from investing in American companies doing business in so-called industrially significant technology, while the Commerce Department is planning new export controls to keep such technologies out of Chinese hands.

These moves follow President Donald Trump’s proposal to impose tariffs on $50 billion worth of Chinese products, many of which are on the priority list for “Made in China 2025,” President Xi Jinping’s blueprint to transform China into a global leader in high-tech industries like aerospace, robotics, pharmaceuticals, and machinery. Although the Chinese government has refused to modify its initiative, the U.S. is demanding that China end all government subsidies and grants under the program. Trade talks have stumbled on this point.

America’s concern with Made in China 2025 is understandable; China’s approach to technology development has been controversial, to say the least.But there are better ways to respond to China’s policies. Two ways, to be precise. Read More »

China, the innovation dragon – Simon Johnson and Jonathan Ruane

MIT Sloan Professor Simon Johnson

From Project Syndicate

China has achieved much since 1978, when Deng Xiaoping initiated the transition to a market economy. In terms of headline economic progress, the pace of China’s transformation over the past 40 years is unprecedented. The country’s GDP grew by nearly 10% per year on average, while reshaping global trade patterns and becoming the second-largest economy in the world. This success lifted 800 million people out of poverty, and the mortality rate of children under five years old was halved between 2006 and 2015.

The question now is whether China, well positioned to become the world’s innovation leader, will realize that opportunity in 2018 or soon after.

China’s transformation has been underpinned by an unprecedented manufacturing boom. In 2016, China shipped more than $2 trillion worth of goods around the world, 13% of total global exports. It has also pursued economic modernization through massive infrastructure investment, including bridges, airports, roads, energy, and telecoms. In less than a decade, China built the world’s largest bullet train system, surpassing 22,000 kilometers (13,670 miles) in July 2017. Annual consumption is expected to rise by nearly $2 trillion by 2021, equivalent to adding another consumer market the size of Germany to the global economy.

Earlier this month, Apple CEO Tim Cook declared that, “China stopped being a low-labor-cost country many years ago, and that is not the reason to come to China.” The country’s manufacturing strengths now lie in its advanced production know-how and strong supply-chain networks. Understandably, China’s leadership wants to increase productivity and continue to move further up the value chain.

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The philanthropy data gap: measuring what matters – Tavneet Suri

MIT Sloan Associate Prof. Tavneet Suri

MIT Sloan Associate Prof. Tavneet Suri

From Financial Times

As philanthropy becomes a common source of finance for poverty-fighting programmes, it is natural for donors to want data about their impact on the people they want to help.

Yet measuring the benefits of philanthropy is surprisingly hard. How can we define and measure “income” in a village of subsistence farmers? Can we ask a street kid enrolled in a violence-prevention programme about his illegal activities? How do we know if a change in nutritional outcomes was the result of a social programme and not some other variable, like a change in food prices? How can we measure non-quantitative or non-monetary outcomes, like women’s empowerment or entrepreneurial motivation?

For many years, aid impact studies were based on anecdotal evidence or fragments of data. Over the past decade, searching for a more rigorous approach, development researchers have applied the “gold standard” of medical research: randomised controlled trials. In an RCT, researchers allocate an intervention, such as a microfinance loan, to a randomly selected test group of people and compare their outcomes with a control group. Read More »

What do job swapping and an MIT Sloan elective have in common? — Roberta Pittore

MIT Sloan Senior Lecturer Roberta Pittore

MIT Sloan Senior Lecturer Roberta Pittore

From Forbes México

In today’s economy, the need for global experience and cultural awareness is greater than ever. As a result, global talent swaps are becoming more common. These short-term assignments — where two employees from the same international firm trade positions for less than a year – are predicted to increase by 49 percent in the next two years, according to a PricewaterhouseCoopers report cited in The New York Times.

MIT Sloan has long supported students in gaining this type of global experience, offering a very popular elective course called Global Entrepreneurship Lab (G-Lab) for the last 15 years. It’s similar to a job swap in that it matches teams of MBA students for short-term assignments with startup companies in emerging markets. However, these are full-time second-year MBA students; they are not sent to MIT Sloan by the host company. Students’ incentive for choosing a specific host startup is often to gain hands-on experience in a new function or industry — and in a new country. The function/industry is often different from what they plan to focus on after graduation. The student groups work on an issue for the startup throughout the semester, meshing together as a team while living and working on-site for three weeks at the end of the term.

Mentoring adds another dimension to the job swap concept. Each G-Lab team is assigned a mentor from MIT. The mentors’ role is to help students see how to translate what they have learned from their previous employment and first-year coursework at MIT Sloan into something that will bring lasting value to the host company. The mentor tries to gauge the strengths and vulnerabilities of the team and guide them into becoming a cohesive unit. The mentor also steers the team toward resources and research to get them up to speed to make an impact at the company starting on day one. The companies play an additional mentoring role by matching C-level executives with the student team to provide guidance during their time onsite.

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To remain a superpower, the US must become inclusive and generous — Gita Rao

MIT Sloan Senior Lecturer  Gita Rao

MIT Sloan Senior Lecturer Gita Rao

From Quartz 

In his new book, Superpower, Eurasia Group’s Ian Bremmer suggests three strategic options for America to remain a global superpower. But while many lawmakers appear to be taking his preferred option of an “Independent America” to heart, we believe it’s the wrong choice. In fact, Bremmer leaves out a fourth approach that we feel is the best strategy for America to win not only on the current global chessboard, but on the next one as well.

With the US reluctantly being drawn back into putting out fires in the Middle East, warily watching Russian aggression, facing a stop-and-start “Asia pivot,” and on the sidelines the Greek crisis unfolds or Chinese stock markets go through turmoil, reviewing these options is timely for President Obama; they may be even more important for his successor.

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