international competitiveness

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.