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Why Gita Wirjawan Wants to Open Indonesia to International Investors
Indonesia's economy is on track to hit $1 trillion in GDP by 2014. The country is the world's third-largest democracy, and is in a demographic sweet spot -- half its population is under 30. But Indonesia is more widely known for natural disasters and natural resources than for its industry and infrastructure. Gita Wirjawan, a 44-year-old former investment banker with Goldman Sachs and J.P. Morgan, last year became Indonesia's chairman of Badan Koordinasi Penanaman Modal (BKPM), the country's Investment Coordinating Board, a ministerial-level post. He believes "the world needs to understand Indonesia in a different way." Wirjawan spoke with Knowledge@Wharton about his efforts to attract global investors.
'Talking the Talk': Jeff Schwartz on Building Talent During a Downturn
According to a year-long project by Deloitte initiated at the start of the global economic downturn, the firms that posted stronger performances and were optimistic about the future were those that paid more than lip service to the importance of retaining top employees. Jeff Schwartz, global leader for Deloitte Consulting's organization and change service line, shared the results of the study, which included approximately 1,800 executives, at the recent 14th annual Wharton Leadership Conference.
Mid-life Crisis? Venture Capital Acts Its Age
The venture capital community is showing signs of middle age -- moving more slowly and cautiously than before, and hitting fewer home runs than it did in younger, leaner days. As a result, experts say, the sector is having trouble producing the robust performance long associated with it. This means investors need to look at venture capital, and its impact on their portfolios, in a new way.
'Turning Social Capital into Economic Capital': Straight Talk about Word-of-mouth Marketing
If your hair stylist gave you $10 every time you sent one of your friends her way, you might be more tempted to tell everyone what a fabulous stylist she was -- or you might even try to make new friends to refer. This clever method of customer acquisition is a form of word-of-mouth marketing known as a referral program, and it is becoming increasingly popular in a wide range of industries, from financial services and automobiles to newspapers and hotels. Indeed, according to a new study co-authored by Wharton marketing professor Christophe Van den Bulte, referral programs are a financially attractive way for firms to acquire new customers.
ABC's IPO Underscores the ABCs of Banking in China
With the world record-breaking $22 billion IPO of Agricultural Bank of China (ABC) on July 15, Beijing relinquished another small part of its hold on the country's financial services sector. But the process of modernizing the country's banks is far from over, say experts in China and beyond. As ABC and its local rivals struggle to shed their legacy as state-directed "policy banks," many observers still question the central government's willingness to cede control over the balance sheets of what have become some of the world's largest lenders.
Surviving Silly Bandz: Prolonging the Shelf Life of Fads
Fads are hard to miss. Whether it's this summer's craze -- Silly Bandz, the rubber-band bracelets that have become a must-have accessory for children -- Beanie Babies or the Rubik's Cube, they take off like a rocket in popularity and then seem to fizzle out just as quickly. You might think fads are kids' stuff. But adults aren't immune to the fad machine -- remember all those grownups sporting Crocs a few years ago? And while fads present challenges to businesses riding that wave, they can also spell opportunity if managers take the cash generated by these crazes and use it to build a sustainable business.
Shooting the Messenger: Quarterly Earnings and Short-term Pressure to Perform
While most experts agree that a single-minded focus on the short term can cause negative consequences for companies, they also suggest that blaming quarterly earnings reports, and the pressure to meet analysts' targets or company guidance, is like shooting the messenger. Although the system of quarterly earnings might be broken, fixing it is no easy matter and might create even more pressure to produce immediate results.
Will the Economic Recovery Run Out of Steam?
After a year of solid gains, the economic recovery is beginning to slow. Demand is trailing off as inventory levels have been restored and emergency stimulus measures withdrawn. Continued high unemployment and a downtick in housing are weighing on consumer confidence and spending. Add unexpected shocks from Europe and a slowdown in China, and forecasters are now ratcheting down their expectations for growth over the next year. While many still expect economic expansion to continue in the longer term, "we have definitely hit a soft patch," one Wharton faculty member notes.
From Recession to Recovery: A Focus on Higher Productivity, New Partnerships, Cost Competitiveness
At the opening session of the Global Alumni Forum in Madrid, Sebastián Escarrer, vice chairman of Sol Meliá SA, Wharton dean Thomas S. Robertson and Wharton finance professor Jeremy Siegel each offered different observations about the state of the global markets, the outlook for reform, and the roles that companies, governments and business schools must play in a newly reconfigured economic environment.
Real Estate's Future: 'It Depends on What Degree of Risk You Are Looking For'
With the financial crisis wiping out trillions of dollars in property values worldwide, the challenges facing the global real estate industry are greater than they have been in decades. Within the turmoil, however, are opportunities for players in both the commercial and residential real estate markets, a point made by members of a panel at the recent Wharton Global Alumni Forum in Madrid called, "Real Estate: Exploring the Road to Recovery."
Demographic Changes: A Catalyst for New Models in the Global Tourism Industry
For years, the tourism industry grew almost effortlessly. Those days are over. Tough economic conditions have awakened companies in the industry to the fact that they must better anticipate customers' needs and reinvent their business models. That was the theme of a panel discussion at the recent Wharton Global Alumni Forum in Madrid. Panelists spoke about population shifts, the need for greater concentration in the sector and the rise of new middle class consumers with a desire to travel.
Private Equity: 'Is the Golden Age Behind Us?'
Before introducing the panelists taking part in a session during the recent Wharton Global Alumni Forum in Madrid called "Relaunching Private Equity," moderator Raffi Amit summarized the challenges that both venture capital and private equity face at a time when investors have become more conservative, returns are down, and transactions have declined in both volume and value. Panelists offered their views on the new investment climate, and suggested strategies for coping with today's tough economic environment.
Supply and Sustainability: Piecing Together the Energy Puzzle
The global energy sector is at a crossroads. Key issues such as a lack of energy independence, the security of energy supplies, and climate change have become important items on the agendas of governments everywhere. This has sparked a heated debate about the most appropriate energy mix in those countries that are considering the use of nuclear power and renewable energy, and in companies that are committed to tackling climate change. These issues were discussed during a panel session on the future of energy at the recent Wharton Global Alumni Forum in Madrid.
Ushering in a 'New Financial World' While Avoiding the Excesses of the Old
A panel at the recent Wharton Global Alumni Forum in Madrid was titled, "The New Financial World." "So, one might ask, what happened to the old financial world?" was the question posed to Forum participants by Wharton finance professor Richard Marston, who led the discussion. Marston asked his panelists to discuss the causes of the economic crisis, the ways in which increased market volatility should be managed, and how the world can address credibility issues related to global imbalances.
'Being Cautious Is to Stop Moving': How Innovation and Entrepreneurship Can Bring Societal Change
New technologies and a growing capacity for innovation are playing fundamental roles in the search for answers to the current economic downturn. At the Wharton Global Alumni Forum in Madrid, speakers from Spain, Rwanda and Nairobi took part in a panel that looked at the social and economic applications of technology and innovation, and how support for entrepreneurship can help raise the standard of living for those in developing countries.
Will Tablets Close the Book on e-Readers?
The price war is on in the e-reader market as Amazon, Barnes & Noble and others duel to increase market share for their devices. However, experts at Wharton say the larger question for these companies is whether there's much of a future for e-readers -- which are designed mostly for reading books, newspapers and magazines -- in a consumer world that is becoming more and more enamored of tablets that can do it all.
Boston Philharmonic's Benjamin Zander: Tapping into 'The Art of Possibility'
Whether they are artists or executives, every worker has the potential to be excellent. The challenge for any leader, according to Boston Philharmonic conductor Benjamin Zander, is to tap into employees' strengths and give them the tools they need to shine. In a speech at the 14th Annual Wharton Leadership Conference, Zander described how the same techniques he uses in the concert hall can be employed in creating a happier, more successful business environment.
Clear and Present Danger: Cyberattacks, Hackers and the Increasing Threat to Information Security
After cyber attacks this year on Google, AT&T and others, experts at Wharton and in the IT industry say information security within organizations is increasingly becoming a concern to top managers and directors. As a result, more and more companies will be approaching information security risks in the same way they deal with other major threats, and in a much more integrated fashion. They may not have a choice, some observers note, given that 75% of organizations recently surveyed say they suffered a security breach in the past year.
How the Public and Private Sector Could Work Together to Thaw a Future Credit Freeze
Financial institutions add to their woes during an economic downturn, experts say, by refusing to provide capital to worthy businesses because they fear other lenders will also cut back. In the end, banks create a credit shortage that does even more to extend the crisis and delay recovery. In a new paper, Wharton professor Itay Goldstein examines different approaches to halt an over-reaching credit crunch and concludes that the private and public sectors should work together to direct money toward viable businesses.
Frontiers of Collaboration: The Evolution of Social Networking
Social networking tools such as Twitter and the emerging Google Wave web application are taking businesses to the frontiers of real-time communication and collaboration. The technology has the potential to make it easier to discover and share information and interact with others. But the key word is "potential." During a panel at the last Supernova technology strategy conference, experts talked about what makes the current crop of services more promising than those that came before, and the obstacles to further progress.
