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Diversity Is Strength. Where’s China?

Posted in China Business

Last month I led a panel discussion at the Washington Council on International Trade’s annual trade conference.  Brad Smith, Microsoft’s General Counsel, gave a great speech at that event and today I just learned that the full transcript of that speech is online. Mr. Smith spoke on what it takes to compete internationally and he stressed the benefits that come from diversity:

Around the world one hears a lot of bravado. Certainly as somebody who attended both political conventions this year, one even hears a certain amount of hyperbole about what makes our country or another country great. But as I look around the world, I actually believe that there is one objective, statistically verifiable, factor that makes the United States of America unique. In a world in which we have less than 5 percent of the planet’s population, we have a population that reflects the 95 percent of the rest of the world more so than any other country.

If there is a language spoken somewhere else in the world, it is almost certainly spoken here in the United States. If there is a group of people that is talented in another part of the world, we probably have a population that has come from that place, oftentimes quite recently.

And it’s not just that they come to our country. One of the things that stands out in our region is that they come to our state.

I know, because every day I go to work at a company that employs people who come here from 157 countries. And every time I get in the elevator in my building, I have no idea what language I’m going to hear spoken.

If there’s one thing I’ve concluded, even when it comes to technology, where engineering is vital and products are the life’s blood of what you create, it’s still the case that technology is fundamentally a people business. And I believe that every business in this country has fast become a people business.

It’s all about whether we can create the products that the world wants, and whether we can offer the services that the world needs. One thing we should stop and really reflect upon is that when it comes to those challenges – as a company, as a state, as a country – diversity is our strength. It gives us the ability to understand customers around the world in a manner that is unmatched.

We really need to think about how to nurture that strength and develop that strength, to recognize, for example, that when there are 588 million people that live south of our border who speak Spanish and Portuguese, the fact that we have people who speak those languages is a national asset.

If we can focus not just on public policy but private sector and the civil society efforts on nurturing this diversity, we can turn this into a greater competitive advantage each and every year.

I am always talking about (though with less eloquence) how diversity is one of the United States’ greatest strengths and on how we have just about every country beat on this by a fairly wide margin.  Whenever someone (usually this is someone who has spent a few weeks in China) talks about how China is going to “take over the world,” I always voice my skepticism and I then usually talk about diversity, education, transparency, political stability, and innovation.

But for purposes of our discussion now, I ask just one question.  Is China diverse enough to really succeed in a globalized economy?  And by “really succeed” I mean becoming a country with a strong middle class and a country that competes in high tech and other added value industries.

  • stevelaudig

    “Diversity is strength” is as much a bumper sticker as “Unity is strength” or until the terms ‘diversity’ and ‘strength’ get defined. Unmeasured are the costs of dealing with diversity and resulting weaknesses. These costs and weaknesses are present even if unrecognized or unseen at present. I haven’t figured it out nor even a methodology for figuring it out but I sense it is there. The idea is captured in another bumper sticker “Greatest strength is greatest weakness.”

    • stevelaudig

      Diversity, and murky definitions of same, of what needs clarification. I suspect diversity of personality is what is powerfully creative.

  • Dan (another Dan)

    To be competitive, you’re gonna be diverse whether you like it or not. To gain access or be tempted to gain access to different markets, to get as many ideas you can from people who think and lived differently, to understand you’re competitors you are different from you…etc…many reasons.

    In today’s world, for one thing, working with people different from you is inevitable. However, the thing is that we are very mobile and networking has gone beyond physical borders. You don’t really have to live next to people or physically work next to someone to achieve certain goals. At least not all the time. Maybe for legal or personal reasons, you would want people working together in one specific locale but for several different purposes, it’s not necessary all the time now.

  • Colin Clauscen

    You have staff at Harris & Moure from 157 different countries. Wow.

    • http://www.chinalawblog.com/ Dan Harris

      Funny. Actually seven different countries, which itself is really quite a lot!

  • BlueApple

    in a certain way the statement is true.
    our company is based in Beijing, but only 20% of our employees are native Beijingers, the rest if from different provinces of the country.
    I feel that we have a very diversified team.
    Just as immigrants from all over the world made the USA strong, migrants from different provinces make China strong.

  • http://www.chinalawblog.com/ Dan Harris

    This comment was left on another post and I can’t figure out how to leave it on this one (the correct one) from someone other than me. But it is such a good comment that I did not want people to miss it. But please understand this is NOT my comment. it was left anonymously.

    I think MS counsel is right. Up to a point. American firms have maxed out globally over the last few decades in part because the domestic market is mature, it’s pretty saturated. If the goal is growing rather than stable profits than staying at home probably isn’t an option. China of course is a developing country. For many firms the opportunities in the domestic market are still promising? If so, then they don’t face the same pressure to engage with the world and its diversity?
    In any case is not sure diversity is such a foreign concept. With 1.35(+?) billion people, several hundred dialects/languages, and dozens of ethnic cultures and identities (okay 90 percent nominally Han, yet they themselves are pretty diverse and divided) a product developer and marketer in China has a lot to think about, especially as consumers become more discerning.

    Bit of a facetious point perhaps. But for the time being China’s firms may not need to go global in the way American firms have over the last few decades given that China is still a developing country and its future, either developed or middle-income trap (or worse), is unclear (my money is on middle-income trap with the caveat that it may have better prospects than many of its peers that have achieved less in more time)?

    Chinese firms seem to learn pretty quick on the job. When they find foreign markets aren’t working maybe they’ll do what most do when they need something – turn to the market.

    A few anecdotal points. Bank of China’s advertising at airports and a few other places aspires to present a global positioning – as I recall a white face, an Indian face, an African face, and two Oriental faces. In Laos I’ve come across phones from China with Lao user interface and texting (plus Chinese Thai and English).

    A final question. Does diversity guarantee a competitive edge? Maybe. Or maybe not. I don’t think it’s a given that someone necessarily always understands their culture society or country better than someone who isn’t, especially someone with extensive and varied time on the ground in a range of societies and cultures. If nothing else it’s helpful to have that curiosity and comparative to raise questions, to challenge insiders to think anew, to guard against groupthink and under-weighting of issues and risks that are important to a foreign firm but may in the local context be habitually ignored or overlooked.

    • Natalyia

      Like this comment. It really makes sense to me. Chinese people from different places are diversified. I felt it for the first time when I left my hometown and went to a university in Beijing, where seven girls from seven provinces shared a dormitory.

      An interesting thing is: Chinese value uniformity much more than diversity. Diversity has not been clearly raised as an important concept in China, let alone the strength of it. Now Chinese enterprises are going global, will this change Chinese people’s thinking and give more value to diversity? Let’s wait and see.

    • Cynical Observer

      If diversity is so great and being relatively homogenous isn’t …. then why has it become common wisdom that the US is on the way down and China is on the way up?

      I’m from the US, also lived in China for 5 years. There’s a lot of stuff wrong with China, but they know “who they are” and they aren’t ashamed of it.

      The diversity/multiculturalism thing is a racket that only ends in ethnic conflict. It’s a cancer destroying the West.

  • DukeofQin

    Complete and utter Bolshevik bullshit. Diversity, or rather ethnic fragmentation and demographic invasion, to more accurately describe it, is a complete and unmitigated disaster in the making. Akin to jumping off a cliff and enjoying the falling sensation yet not paying attention to the onrushing ground. I see that you are a true believer Dan, carrying high the banner of Horkheimer thought forward. “Diversity” is hollowing out the United States into a latter day Byzantium or more accurately the Estados Unidos.

    You speak of diversity and other liberal platitudes in the same breath without realizing that the former is anaethma to all of the latter. Diversity destroys the educational achievements of the United States by filling its schools with lumpen proletariant mestizos and stone age Somalies. It debases the education for all as standards are lowered to pass ever more marginal students. It creates a protected caste whose entry into the upper echelons of society are shepharded by the vengeful fist of the state.

    Diversity destroys transparency because as society fragments, unwritten rules and behavior become the norm even while American Pravda continues inculcating the populace with an ever more obsolescent public rulebook. Some people are more equal than others comrades and while this is not written in stone, it exists in practice.

    Diversity destroys political stability as politics inevitiably degenerates into an ethnic spoils system where horse trading between combatitive ethnic communities clash for an ever decreasing share of state resources.

    Diversity destroys innovation because the fundamental nature of society becomes ever more atomized and the goal of society becomes less focused on progress and more on the eternal question of kto, kgo? Who rules over whom.

    China needs more diversity like a dog needs more fleas. What China needs and has always needed to succeed is for the Chinese race, the Han race, is to arise free from the yoke of tatar tyranny and Judeobolshevism. It has not, and has never needed the presence of more foreign parasites.

  • theoriginaljedi

    I am going to begin by addressing the statement “whenever someone (usually this is someone who has spent a few weeks in China) talks about how China is going to “take over the world,” and then proceed to diversity.

    Here is a list of bilingual individuals who have spent the better part of their lives in China, and believe that China has a great and influential future that will challenge America’s role as the world’s sole superpower.

    1. Joseph Needham
    2. Henry Kissinger
    3. James R. Lilley

    All three of the above men’s contributions to Sino-Western relations in the last century are greater than the sum of the contributions of you, me, and anyone else who reads this blogs contributions taken across our entire lifespans.

    All three above men had unchallengable knowledge of China. All three identified that China has hurdles to overcome, but their faith in China’s ability to overcome such hurdles was nearly unshakeable.

    By stating that people who believe China’s rise could completely upend the last one thousand years of Western power, and pose one of the greatest threats to Anglo-Saxon dominance in the future, are people with mere weeks of experience in China is a flippant, offensive, straw-man argument.

    It has become extremely trendy to speak ill of China. One could never really say that the expatriate community spoke well of China to begin with, but never before in recent memory has belittling the world’s oldest and only civilization state been more in-vogue.

    And belittling those that argue that success in spite of China’s challenges could have a detrimental and negative effect on the United States and its global role, only belays the ignorance and insecurity of a large group of Americans who have become slaves to a groupthink mentality that China is doomed. Usually solely because of the completely incorrect assumption that our version of democracy is the only viable form of government, or because of more offensive and bigoted undertones.

    It would not concern me that such a mentality exists, if it were not for its prevalence and for the danger it poses. For anyone that underestimates China’s rise not only lacks the first hand experience of witnessing the marginal and dramatic generational changes underway in China, but they underestimate the threat that China’s desire to become a developed nation poses towards the largely service based sectors of the Western economies.

    Diversity will not save the West. As demographically heterogenous as the United States has become, rarely do those ethnic varieties translate into business opportunities. Most immigrants to America assimilate or remain detached from the U.S. business community, operating in black market sectors tertiary to the U.S. economy (Chinatown – Asian men have the highest long term unemployment rate in the United States).

    Prime example of this, our current and much mocked ambassador Gary Locke, whose only qualifications for his position were his facial features. It is so blatantly evident to anyone who is aware of the U.S.-Sino relations over the last four years that the white, Mormon Chinese speaker that preceded Locke was 1000 times more capable of managing the complex relationship between the two nations, and keeping economic integration and international cooperation in line with the previous work so many other hardened China experts from Kissinger to Lilley had done before.

    American’s may look diverse, but culturally we have become assimilated.

    I would pose the question is it the power of diversity, or of culture that drives a nation forward?

    • r_s_g

      “All three of the above men’s contributions to Sino-Western relations in the last century are greater than the sum of the contributions of you, me, and anyone else who reads this blogs…All three identified that China has hurdles to overcome, but their faith in China’s ability to overcome such hurdles was nearly unshakeable.”

      See argumentum ad verecundiam.

  • James Guzzo

    I do agree with other comments about China’s internal diversity. I’ll admit that I had absolutely no idea how much cultural variety there is within China before I lived here.

    However I do think global diversity is an important factor for success as a company or nation on the global stage. The fact that diversity is so rooted in the history of America means that other countries start at a comparative disadvantage.

    The problem I see is that in China there seems to be an inherent distrust and even sometimes hostility towards diversity. I don’t feel that I will ever be considered anything but a foreigner or “laowai” as long as I stay in China.

    Not to say that conflict does not exist in the US – its a melting pot, not a utopia – but there is the concept of the “American Dream” which is not limited only to natural born Americans. People from anywhere in the world can come to America and eventually become Americans, and not just in a legal sense, but in a social sense.

  • Jameslast

    diversity is not a pre-requisite for success. examples: south korea, germany.

  • spmiller

    I agree that diversity is not a prerequiste for success as some others below have pointed out. Look where I am now, Japan. Japan has been a very “successful” nation since soon after the Meiji restoration. It is one of the most densly populated places in the world but poverty does not exist and the high tech is world class. But has there ever been diversity here ? No. And now look at what China has done over the last 30 years without diversity. The did not need diversity to build the second largest economy in the world out of nothing. And they just won the Noble prize for literature without diversity.
    Diversity sounds good and it is one of the very nice things about living in the US. It is something we are all proud of. But many countries do just fine without it.

  • gregorian10

    “Diversity” is a mantra that is pushed on all white and ONLY white nations. India for the Indians, China for the Chinese, Africa for the Africans, Israel for the Jews, but WHITE NATIONS FOR EVERYONE is the theme today. As a nation becomes less and less white, the standards of living decrease, the levels of poverty and illiteracy increase, and crime rates and conflct increase. Diversity is nothing but a code for essentially white genocide, plain and simple.