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The happy faces of some of our World Knowledge Forum 2014 writers, editors, and staff.

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Our press writers working on the final articles of the World Knowledge Forum 2014!

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Our writers working on their articles.

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Exterior Garden at the World Knowledge Forum 2014.

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Startup: IPO and Exit

by Jeffrey Barg

October 16, 2014

Imagine you’ve sunk the entirety of your life savings into a company you’ve helped build from the ground up. Through hard work and determination, you’ve built your company into a premium service provider, identified as one of the leading companies in your industry. Then another richer, more powerful company comes along and asks to buy yours for hundreds of millions of dollars, making everyone at your company instantly rich, with plenty of leisure time. Do you say yes?

“I was inclined to say yes,” said Avishai Abrahami, co-founder and CEO of Wix.com. “Everyone would get rich, but everyone also felt it was too early.”

In the end, the answer was no. It was not an easy response to make, though.

“For me personally, I love the beach in Brazil,” he said.

At the 15th Annual World Knowledge Forum in Seoul, Mr. Abrahami gave a speech on the creation and development of Wix, and offered words of wisdom for any prospective entrepreneurs in the audience.

Mr. Abrahami shared his insights about how to find investors.

“The most important message to venture capitalists when you first want to raise money is that you have a big dream,” stated Mr. Abrahami. After all, when the investors devote their finances, they are not purchasing a product, they are buying into your dream, he explained.

“You raise money with your dream,” he said.

On the subject of how to best raise funds, Mr. Abrahami was kind enough to offer some advice.

“The best way to raise money is when you want it but you don’t need it,” he said. After Wix’s initial success, the company found it easier and easier to draw investors into its circle.

Wix is now the fastest growing website builder in the world. Their business model is unique among modern commercial websites, with no salespeople and no commissions among its staff, and it is free to use in its most basic form. Revenue is generated through website upgrades such as increases in data usage and the elimination of ads.

Mr. Abrahami believes that the success of his company is derived from its capacity to deliver customers exactly what they need.

“What we sell now is designing something, the ability to create what you want,” Mr. Abrahami explained.

Wix’s success led to several other companies attempting to purchase it, but Mr. Abrahami, along with his associates, decided to stay the course. Eventually the company went public, offering an IPO to overwhelming success.

“The best part is you still have the same chair, in the same office, at the same company, working with the same people,” said Mr. Abrahami. In the end, the company saw the IPO not as an endgame, but as another part of a successful journey.

“An IPO is just a step in the road, unlike a sale, which is the end of the road,” Mr. Abrahami said.

Speaking on what it takes to succeed, Mr. Abrahami added, “Never build a product to solve someone else’s problem. Build a product to solve your own problems, because those are the problems you understand.”

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A Tale of Two Finances: Finance 2.0 in China

by Adam George

October 16, 2014

Dr. Liu Qiao started off his discussion on the financial history of China by changing the title of his lecture at the 15th Annual World Knowledge Forum to “A Tale of Two Finances: Finance 2.0 in China.” Dr. Qiao explored the nature of China’s past economical depression, and then shifted focus to the positive future in China’s grasp. 

“Right now, there are more than 50 million companies in China, but only about 10 percent can get financial support from the current financial system,” Dr. Qiao explained. 

A lack of efficiency and a focus on fame in the form of the Forbes 500 list has propelled the Chinese companies into a downward spiral as of late.  Companies only looked at achieving a certain number in sales rather than taking into account the importance of investments and the return on invested capital (ROIC). 

“Greater China has 100 companies entering this 500 list, accounting for 20 percent of this total list…Of the 100 companies, 16 of them are losing money; they don’t have any profit, but they’re so big and so huge that they can’t fail….The financial system supports this kind of mentality, so it boosts lots of credits to their size,” Dr. Qiao said.

While this method for finance seemed to work initially, the economy currently grapples with the repercussions of poor investing and returning.  Banking systems normally provide financial loans for starting companies, but banking unfortunately accounts for a large part of China’s debt in the GDP.  Because of poor investment decisions, banks can no longer fund startups as much. 

“Finance 1.0 is a trouble maker, so we need a new financial reform and system in China,” Dr. Qiao said.  He then looked to ways Chinese companies have begun to put an end to this and embrace a new China 2.0.

Dr. Qiao assured the audience that a new surge of finance has been detected in China.  Peer-to-peer startups, or P2Ps, are small loaning companies that advise customers on where and how to invest their money efficiently. 

“[The] cost is very high, as high as 30 percent, but it’s efficient; [it] takes a couple of days to process an application and then receive the loan,” he explained. 

Because of this efficiency, other companies have caught on and have taken it one step further.  Alibaba, for example, advises customers on how to efficiently invest any extra money they have in their account and generate a relatively higher yield in return.  The achievement can also be viewed online, giving the customer a stronger sense of autonomy and success at their own fingertips. 

“This whole process takes 3-4 minutes; a very pleasant experience,” Dr. Qiao said of Alibaba, which sets the company apart from its competitors. 

Dr. Qiao’s appreciation of Alibaba and the P2Ps in China demonstrated his optimism for the 2.0 finance plan and encouraged more support for innovations within the country.  Multiple municipalities compose the nation of China and each can have a large influence on the economy.  By finding a way to support innovations in this area, more ventures like Alibaba can lead China to its coveted 2.0 finance. 

By focusing on the issue and efficacy of money efficiency, Dr. Qiao hopes that the Chinese economist will recognize the importance of investment and promising returns to ensure a more stable and fruitful China in the years to come. 

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Emerald Room at the World Knowledge Forum 2014.

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The Opportunities of ASEAN Economic Integration

by Thomas Kwon

October 16, 2014

Speakers:

Eric John, President, Boeing Korea, Vice President, Boeing International

Siow Yue Chia, Senior Research Fellow, Singapore Institute of International Affairs

The Association of Southeast Asian Nations has a tight deadline to fully establish its ASEAN Economic Community: December 31, 2015.  In a presentation at the 2014 World Economic Forum, Eric John, president of Boeing Korea, vice president of Boeing International, and former U.S. ambassador to Thailand, and Siow Yue Chia, senior research fellow at the Singapore Institute of International Affairs, discussed the ten-nation cooperative’s progress thus far. 

“You don’t have any conversation about regional institutions in East Asia that don’t begin with ASEAN,” said Mr. John.

Dr. Chia began by highlighting the strengths of ASEAN.  She named robust economic growth, a young growing population with 60 percent under the age of 35, and an abundance of natural resources, among other things.

“ASEAN as a region has been very dynamic in economic growth, so the growth has been on average 5.3 percent since 2009,” she said.

Another boon, Mr. John added, is the fact of outside parties negotiating solely with ASEAN.  He gave the example of open skies agreements liberalizing strict rules in the aviation industry, which have resulted in projections that over the next twenty years, of the 36,000 airplanes sold globally, 14,000 will be sold in the Asia-Pacific region, driven by ASEAN carriers.

“With ten separate countries, it becomes very complex…the freedoms of open skies agreements have led to an incredibly robust market,” Mr. John said. 

Of course, ASEAN also has its shortcomings.  Dr. Chia outlined the widening development gap amongst member countries, limited governmental harmonization, and vulnerability to external shocks.  She believes that this can lead to increased fracturing and intra-regional competition.

To support her point, Mr. John cited Indonesia’s step back in governance in removing local Parliamentary elections, Thailand’s history of military coups, and allegations of widespread corruption in many ASEAN nations.

“You’ve got a plethora of religions.  You have ten countries, but dozens of languages.  You’ve got ten countries with separate economies, but that have a lot of overlapping competitive interests,” he acknowledged.

Overall, however, the two remain optimistic.

Dr. Chia singled out the ASEAN+1 free trade agreements with China, South Korea, and Japan as indicators of progress toward the four objectives of a single market and production base, a competitive economic region, equitable economic development, and integration into the global economy.

“There is some trepidation that we will not be able to achieve, or set up to achieve, but the general conclusion is we are moving in the direction,” she said.

There has also been encouragement from other sources.  Dr. Chia admitted, “We have been beating ourselves in the last few years ever since the ASEAN scorecard was published…but outsiders tell us, ‘don’t be so hard on yourselves.’”

Mr. John took a moment to recognize the value of even having such a cooperative in place, without which agreements and dialogue might not occur at all.

“I would say actually one great strength that ASEAN has is simply that it exists.  A lot of times that’s taken for granted,” he said.

In evaluating the accomplishments of ASEAN, Mr. John considered the alternative.

“Look at it in the negative.  What would it be like if there were no ASEAN?  Right now we argue about if the glass is half-full or half-empty with regard to ASEAN…but just think about if there weren’t even a glass?”

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Future of Robotics

by In-Jee Lee

October 16, 2014

During a morning session on the third day of the 15th annual World Knowledge Forum in Seoul, South Korea, leading roboticists discussed the future of robotics and potential consumer applications. The presentation included both video and live demonstrations by Ben Goertzel, chairman of OpenCog Foundation, and Mark Tilden, robotics physicist, industrialist, and design consultant.

Mr. Goertzel and Mr. Tilden are part of a design team operating out of Hong Kong, which develops robotic facial expressions, body movements, intelligence, interactions with humans, and consciousness.

“The fact is that there are methods for testing new technology and new marketplaces,” said Mr. Tilden, “and Hong Kong is the best place to make this happen.”

One of the main objectives that the team has been working to develop and improve is realism. With advances in perception, memory, and prediction in robots, the results have been astonishing.

Speaking on the uncanny resemblance of one robot to a real human, Mr. Goertzel said, “There’s one humanoid robot that David was working on, and when you walk past it, you think there’s really a guy there. And then you do a double take and realize, oh, that’s actually a robot.”

According to the panelists, robots are now able to burp, fart, sing in French, dance to Gangnam Style, and tell silly jokes. This leads to robots being viewed as a more commercially viable product.

“We found a robot that didn’t take itself seriously, and the customers loved it,” said Mr. Tilden.

However, according to Mr. Goertzel, there are still some obstacles that need to be addressed.

“It has elementary self awareness,” he said, while viewing a demonstration of Zoidstein, a miniature robot modeled after Albert Einstein. “It identifies toys as a young child would.”

Mr. Goertzel remarked on the difficulty of developing robot-human interaction.

“Will it obey the questions, will it give me nonsense, will it give me a lecture on the meaning of death,” he mused.  “We’re improving the intelligence of the dialogue.”

The evidence of this improvement was apparent during a video demonstration of Zoidstein’s capabilities. The robot was able to recognize emotions based on fluctuations in the human voice.

Despite these advances, robots are still elusive to the average consumer. Reducing costs, reducing complexities, and increasing public exposure are steps that Mr. Goertzel and Mr. Tilden are applying to their marketing campaign, making it more accessible to the average consumer.

“We knew it would be successful,” said Mr. Tilden, recalling a demonstration in front of an audience of children in Australia, “because kids were fighting over the remote controls.”

With an eye on the future, the potential commercial applications are endless. According to both panelists, possible industries which may incorporate robotics include healthcare and the service industry.

 “We will have robo-touring, robo-shopping, and robot executive assistants,” Mr. Tilden predicted.

Some applications are even available now, according to Mr. Goertzel. He discussed the work of his colleague, David Hansen.

“His Zeno robot, his little boy robot, is used to teach autistic children,” he said.

Ultimately, robots may even provide home nursing to elderly family members. Mr. Tilden looks forward to the future of robotics.

“It’s something everyone might actually appreciate. Something that comes out, cleans the house, organizes your pills, and puts itself away. You can basically stay at home, living comfortably and with dignity for the rest of your life."

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The Future of Education

by Sarah Miles

October 16, 2014

In a society where weakened labor markets can’t provide jobs for university graduates and rapidly advancing technology threatens to make traditional classrooms obsolete, questions about the future of education must be addressed. On the final day of the 15th Annual World Knowledge Forum, a politician, an economics professor, and a technology innovator came together to share their perspectives on the need to revitalize the global education system.

Carl Bildt, the former Prime Minister of Sweden, identified the growing importance of education for governments around the world.

“Education has always been an important topic,” he said, “but it has moved up the ranks of policy priority in the last few decades. It now probably ranks number two, right behind economy at number one.”

The panelists opened the discussion with their thoughts on problems with the current education system. According to professor of George Mason University and world-renowned economist Tyler Cowen, one of the key issues stems from the lack of available jobs for college graduates.

“The fundamental problem is that the product universities are selling is worth less than it used to be,” he said.

For Charles Leadbeater, strategic innovation consultant and former advisor to Tony Blair, the ultimate problem is content, what schools are teaching their students, because the current system doesn’t properly prepare children for an environment valuing creativity and entrepreneurship.

“The future of education is not to push people into systems that don’t deliver good results for them and which are training them for jobs that don’t exist anymore or habits that don’t work anymore. The basic problem is that the current system teaches children to put aside what fires them up and instead teaches them to learn how to comply, perform, deliver, and get through,” he said.

Mr. Bildt also pointed to challenges arising from transformations in recent society, namely globalization and the prevalence of technology.

“In recent centuries, education was a national endeavor. Now it is to some extent global, but certainly it has become a trans-border thing, so now we have to deal with the issues of education in a multicultural environment,” he said.

He continued, “We now also have the issue of the digital gaming generation. It’s not easy to get students to sit down and write an essay, it’s difficult. But we also have the question, is that good or bad?”

After detailing the issues faced by the current education system, the panelists took turns explaining how the system might be improved. Mr. Leadbeater again emphasized the importance of changing educational content.

“What students are looking for is math education and also language that gives them access to the global economy. Then they want the skills to acquire entry level jobs, primarily technology skills. So I see a new core curriculum based on math, language, IT, and skills that increase employability,” he said.

Dr. Cowen believes the ability to retrain will allow people to have greater access to jobs and give them the flexibility to react to changes in the job market.

“More and more of the people working in Starbucks have PhDs and higher levels of education. We need to re-gear the system to teach these people how to retrain themselves,” he said.

Additionally, Dr. Cowen posited a new line of thinking to focus more on what students actually get out of their education and what they need to succeed in the future. One of the important benefits of education, he said, is mentoring.

“Education brings us to mentors and exposes us to role models, and we need to reengineer the system to make this more explicit,” he said.

Along the same lines, Mr. Leadbeater was adamant on the role of education in building character and providing valuable life skills to students.

“Education, in a rather old fashioned sense, should be teaching students how to self-govern and how to work together to find better solutions with other people. We need to take seriously the idea that education is about character, not just skills, but building character to be able to persist in the face of setbacks and respond in creative ways,” he said.

In response to the rise of education technology, the panelists expressed a more subdued opinion, explaining the real impact of technology will likely not be felt for another ten years or so. For Dr. Cowen, “the problem of education technology is getting students to give a damn.”

Mr. Bildt echoed these thoughts, pointing to the job market as where the impact of technology will truly be felt.

The jobs with the most demand are not for people who can write essays, but those who can write code,” he said.

Mr. Leadbeater concluded the session with a strong appeal for change: “The point is that education is in danger of becoming a system unto itself, in which it sets its own standards and leaves both employers and students disappointed.”

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Startup Step 2: Global Investment Trends

by David Currie

October 16, 2014

Entrepreneurs from Korea have often lacked the success of their American counterparts, but that could change very quickly. The nation is filled with what Jay Eum, co-founder and managing director of TransLink Capital, called “the most tenacious people.” He argued that conditions are set for startups to quickly prosper, both domestically and abroad.

Joining Mr. Eum at the 15th  Annual World Knowledge Forum in Seoul, Korea, were Jason Portnoy, founding partner of Subtraction Capital, and Dave McClure, founding partner of 500 Startups. The group discussed how entrepreneurs can succeed globally and in the Korean market.

The panel discussed how government regulations and culture have had a damaging effect on the entrepreneurial spirit in Korea.

“Bankruptcy laws made it harder [for entrepreneurs] to take risks,” Mr. Portnoy noted. “There needs to be more tolerance for failure.”

Mr. McClure agreed that the competitiveness of Korean culture is working against them.

“It is hard for Koreans to make mistakes knowing that others are always watching them. They are worried about taking risks and failing,” he said.

But the nature of competition within Korea is not without its benefits. The competitiveness in the education system has enabled many young Koreans to speak English fluently.

“This skill is necessary for an entrepreneur when going global,” mentioned Mr. Eum.

While the spirit of entrepreneurship may be lacking, the spirit of feeding off the success of others is alive and well.

“If they can do it, why not me?” said Mr. Portnoy, attempting to illustrate the attitude of Korean entrepreneurs. But he offered caution to this, saying that some startups fail because they cannot all achieve the same results.

“Trying to copy others and do the same is a massive waste of time,” he added.

While this theme of replicating others leaves something to be desired, Korea has quickly become a market that is tech-savvy and educated.

“If you build a company or product that can be quickly adopted by this country, you could grow very quickly,” Mr. Eum pointed out.

Mr. Eum also emphasized the necessity for understanding one’s own domestic market before moving abroad.

“If you can’t win in your home market, there is no chance you will win abroad. Once you dominate Korean domestically, you can come out to the rest of the world and win,” he explained.

The panelists made it clear that achieving this success is no easy task, but rather a long and difficult journey that few survive. Mr. McClure and Mr. Eum agreed that it is necessary for a business to understand the needs of the market, and knowing how to best fill those needs will result in a successful venture.

“The best way to do this is to make a small amount of progress, consistently,” Mr. Portnoy reasoned. Contributing to this, Mr. Eum said there is a need to focus on one’s own venture and not be distracted by competition.

“Without doing this, your venture will not be a success,” said Mr. Eum.

Speaking from experience, Mr. Eum clarified that venture capitalists focus much more on a company’s strategy than their finances and other operations.

“Venture capitalists look to fill gaps in their technology and product road maps and find companies that they can work with to get into new business areas that they are moving into,” he said.

Korean startups have been dramatically unsuccessful in the United States compared to neighboring countries in Southeast Asia. They should build off of the success of past Korean companies that have entered these Asian markets, as they will be much more successful, Mr. Eum asserted. It is after this point of expansion that entrepreneurs should look to the United States for further growth opportunities.

“You are the most tenacious people out there, if you focus on the right area, you will win,” concluded Mr. Eum, imparting some advice to the entrepreneurs present for the talk.

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The Population Shock: Aging Society

by Thomas Kwon

October 16, 2014

Speakers:

Baochang Gu, Professor of Demography, Renmin University of China Center for Population and Development Studies

Koichi Hamada, Tuntex Professor Emeritus of Economics, Yale University

HanGon Kim, Professor of Sociology, Yeungnam University

East Asia may have an image of youthful exuberance and fast-paced living, but the demographics within paint a different picture.  Baochang Gu, professor of demography at the Renmin University of China Center for Population and Development Studies, framed the issue as central to this year’s theme of invigorating the global economy: “We have to ask, ‘who are the people invigorating the economy?’”

Dr. Gu was one of three speakers at the 2014 World Knowledge Forum panel on the ramifications of aging populations in China, South Korea, and Japan.  Accompanying him were HanGon Kim, professor of sociology at Yeungnam University, and Koichi Hamada, Tuntex Professor Emeritus of Economics at Yale University.

The first two panelists relayed what they felt were the most impactful statistics.  According to Dr. Gu, China is not only the most populous country in the world, but also its oldest.  In fact, China’s elderly population alone would amount to the eleventh largest country in the whole world. 

“This is a demographic situation we’ve never seen before in the long history of Chinese society,” Dr. Gu said.

Dr. Kim compared South Korea with other OECD nations.  South Korea ranked dead last in the OECD in multiple areas, including fertility rate, expected newborn babies, and poverty percentage of the elderly.  In his eyes, this makes for a potentially toxic mixture.  At current rates, Dr. Kim explained, “The National Pension Fund will be drained by 2060.”

Dr. Kim continued, focusing on the near future. 

“In the shorter term, there are three scenarios that are solutions…an increase in women’s workforce participation, an increase in elderly labor participation, plus open doors to the foreign workers,” he said.  

Dr. Hamada added some insight on Dr. Kim’s first point. 

“In China, Korea, and Japan, women’s participation rate needs to grow…advanced countries have 80 percent or 75 percent,” he said.  He contended that if Japanese women worked like their Western counterparts, it would be akin to having 10 percent population growth, a huge jump.

To illustrate his view, Dr. Hamada drew on a time he was invited to a Japanese corporate meeting to give a speech. 

“Of 60 people or so, no women were there.  Instead, there was a shadow meeting of housewives of the executives…in the next room,” he said.  If deployed, he explained, those highly educated women would be an invaluable part of the workforce.

In the long-term, the panelists agreed on increased fertility as a potential lifeline. However, reversing declining rates has never been accomplished in advanced nations to date.   Nevertheless, Dr. Kim was hopeful.  

“The more important thing is to make a first move,” he said.

Dr. Gu also pushed for action, saying that there is an immediate need to combat the growing global problem of getting old before getting rich, suggesting that what we need is to be ready before it’s too late.

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Girl's Day performance at the end of day two of the World Knowledge Forum 2014.

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Brain Engineering

by Adam George

October 15, 2014

At the 2014 World Knowledge Forum, new developments in brain engineering were discussed by Dr. Ben Goertzel, the Chairman of the OpenCog Foundation, and Dr. Jaeseung Jeong, associate professor of KAIST. The two doctors have conducted research on brain engineering, and their findings provided an inside look into how much the brain is already capable of doing, as well as what we will be able to achieve through brain engineering in the near future.

Dr. Goertzel commenced the session by focusing on the neural regions of the brain, explaining that each region carries out numerous cognitive functions. In his research, Dr. Goertzel must examine specific neural regions that, when examined apart from its cerebral connections, have specific functions.  This, however, poses an issue for Mr. Goertzel and his peers.

“How to divide the brain up into regions is a problem within itself that we don’t totally agree on,” Dr. Goertzel said.  Due to the fact that each region’s function changes when looking at the connections it has with neighboring regions, segregating one region and assigning its functions proves challenging.

Dr. Goertzel also described the roles of neurons, the brain cells that transmit ideas from one  to the other.  He explained the convolution of the brain, noting that each neuron has its own function.  In one example that examined an epileptic patient, researchers would “measure specific neurons that only fire when they see a specific actress,” according to Dr. Goertzel.  Ultimately dubbed the Jennifer Anniston Effect, the patient had specific neurons that only fired when he viewed a picture of the actress.

Dr. Goertzel’s work on artificial intelligence, or AI, must delve into these intricacies of the brain, yet disregard the complex nature of the brain.  His goal is to “simulate biological neurons…intending to build a thinking machine, the same way people can.” His research falls under the Brain-Computer Interface aspect of brain engineering.  This realm explores the ways to connect brain and computer functions into one.

The idea of Cognitive Synergy helps Dr. Geortzel to understand his research findings.

“[Cognitive Synergy] refers to the way the whole is a lot more than the sum of its parts in a brain system… when you put [the parts of the brain] altogether, it would not be easy to predict by looking at each part separately,” he said.

Dr. Goertzel also expressed hope that brain engineering development will one day witness more elaborate products derived from brain-computer interfacing.  These ranged from the ability to broadcast feelings to others, to implanting USB ports and memory sticks into one’s head. 

Shifting focus to Dr. Jeong’s research, he explained more aspects off the commercialization of brain engineering.  For example, Dr. Jeong started his portion of the session with a new means for advertising.

“Called train windows, or talking windows, [audio is transmitted] by vibrating without any sound.  If the passenger leans against the window [on a train], the window is vibrating.  The technology is called ‘bone conduction technology’ which transmits vibration to the hair cells in the cochlea which transfers the vibrations to sound,” he said.

Dr. Jeong’s research also looks at artificial limbs that, when connected to a patient, accurately follow the patient’s neural commands.  In a video, Dr. Jeong showed a monkey with a robotic arm. 

“The monkey has the intention to control the robot like his real arm,” he noted, showing the success of his research. 

The goal of replacement rings true for Dr. Jeong’s work, in that artificial organs and neural prosthesis help humans retain elements that the body suddenly lost. 

Dr. Jeong also mentioned a more recreational aspect to the commercialization of his research, particularly in the video game, World of Warcraft.

“In the future,” he said, “you play World of Warcraft without using the keyboard, just thinking!”

Even though researchers have only explored the area of brain engineering for a small amount of time, both Dr. Goertzel and Dr. Jeong’s works have demonstrated its opportunities prove promising. In the near future, more developed innovations into brain engineering will open the door for a new way of life. 

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The Blueprint for Success in Asia

by David Currie

October 15, 2014

Success is not always easy to achieve, and defining it can be a challenge. Mr. Pindar Wong,  Chairman of Consultancy at VeriFi Limited, attempted to do so during a roundtable discussion at the 2014 World Knowledge Forum in Seoul, Korea.

“It is one’s determination to succeed no matter what,” Mr. Wong said, that is the key. But the question, he said, is where to focus such determination, as the world is now in a transformational state that is creating new jobs and industries at an accelerating rate. 

Mr. Wong was joined by Mrs. Noni Sri Ayati Purnomo, President Director and CEO of Blue Bird Group Holding, Dr. Tetsuo Ochi, managing partner & CEO of MCP Asset Management Co. Ltd. and Mr. Xiaozhong Yang, Vice President of Trina Solar, to discuss a blueprint for success in Asia.

Currently, larger companies are earning most of the profits in Asia. But Mr. Wong said that such companies act as “big ships,” which are difficult to turn in the seas of constant change. Mrs. Purnomo added that smaller ships, or startups, are necessary for Asia to prosper in the future, yet they must have a strong corporate culture to continue to succeed as they grow.

Unfortunately, the panelists noted, Asia is struggling with innovation, most notably in the technology sector, while nations like the United States are currently thriving.

Addressing a group of students from the Hong Kong University of Science and Technology, Mr. Wong said, “The jobs you think you want to go into might not even exist now.”

“Asia is building the wrong kind of ecosystem,” he continued, adding that no one is willing to finance the risk of startups that can potentially offer substantial returns.

Mrs. Purnomo offered that Asia benefits from having a very tolerant and communal culture, but lacks the ambition of Western cultures.

“Women are most limited by themselves,” she said, explaining a common struggle to achieve signifiant prosperity due to a lack of confidence and the ability to be assertive.

To overcome this, Dr. Ochi reasoned that one must not be afraid to fail.

“It’s a shame when one fails, but it does not kill character, desire or hope. One needs to appraise himself,” he said.

This appraisal will help to determine strengths and weaknesses, which is necessary to achieve success, Mr. Yang validated.

“Failure is the mother of success,” Mr. Yang added. In the investing world, he explained that venture capitalists often seek entrepreneurs who have already failed twice. This individual was referred to as “a third time person,” which Mr. Yang said is a positive characteristic in an entrepreneur, as they have a better perspective on how to achieve success and how to measure risk, two qualities necessary for a good investment.

Touching on different ideas of success in Asia, Mr. Wong stated that parents in Hong Kong

typically do not want their children to become entrepreneurs. They would prefer them to have a safe and reliable occupation, such as a doctor or engineer, rather than taking risks on starting a business. Mr. Wong, on the other hand, has a much different parenting style.

“I want [my children] to fail early and often, as it is not failure if one learns from it and innovates from it,” he said.

Innovation in Asia also has much to do with the cultures each new business grows within. Mr. Yang expressed that companies must have respect for other companies and other regions they want to do business with. Without this understanding and mutual respect, a company’s culture can be misaligned with the local culture and business will suffer.

“Adaption is necessary for survival,” Mrs. Purnomo said, agreeing with her co-panelist.

She stressed that as new prosperous companies in Asia begin to accelerate their growth, a choice must be made to maintain success: losing corporate culture or slowing down growth. This adds to Mrs. Purnomo’s advice that companies need to know its own capabilities to be successful. Without this knowledge, she said, it can become lost and business will deteriorate.

The panel concluded on a positive note, with all speakers confirming that there is always a chance for success, no matter how unpredictable the future may be.

As Dr. Ochi said, “There is always a path to innovate.”

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Korean Unification: Bonanza or Risk

by In-Jee Lee

October 15, 2014

Panelists:

Chenggang Xu, Quoin Professor in Economic Development, University of Hong Kong

Stefan Schaible, Deputy CEO, Roland Berger Strategy Consultants, member of the GEC

Josef Brada, Professor of Economics Emeritus, Arizona State University

On the second day of the 15th annual World Knowledge Forum held in Seoul, South Korea, the potential for reunification of the Korean peninsula was discussed by a panel of experts from around the globe. The panelists, including Josef Brada, Professor of Economics Emeritus at Arizona State University, Stefan Schaible, Deputy CEO of Roland Berger Strategy Consultants and member of the Global Executive Committee, and Chenggang Xu, Quoin Professor in Economic Development from the University of Hong Kong, offered different perspectives on reunification.

Mr. Schaible spoke from personal experience as a German citizen.

“Twenty-five years ago brought end to a regime of oppression and deprivation. For Korea, it is longer,” he said, adding that the political circumstances aren’t comparable. “The North,” he said, “is more complex.”

It was generally accepted, however, that a smooth transition would require the South Korea to take the reins. Another critical aspect the panelists addressed is the method of transitioning North Korea into a free market economy.

According to Mr. Brada, East Germany, like Southern Italy and the Southern United States, fell into the same trap of one side prospering while the other lagged behind after unification.

“East Germany got an early bump. The east is still heavily dependent on government  expenditures. Unemployment rates are high. Germans were willing to pay for this. Are Koreans willing to pay for it?” he asked.

Mr. Schaible suggested that North and South Korea might avoid these pitfalls.

“You in Korea are in a much better position than we were at that time. You are drawing from previous collapses of socialist countries,” he said.

Professor Xu, however, focused primarily on the economic transition necessary for North Korea. Using the contributions of Hong Kong to the development of the Chinese economy, he also highlighted differences in the situations.

Mr. Xu argued that South Korea, like Hong Kong, is quickly becoming a major financial center. This, he suggested, could play an important role in North Korea’s economic development following unification.

“South Korea has a GDP 110 times higher than the North,” said Mr. Xu. Reunification would also require the active participation of legal and financial institutions, with private enterprises doing much more than the government.

Mr. Brada discussed other potential difficulties in unifying Korea.

“North Korea is different from these other unifications in the sense that its a pretty militarized place, and not only do they have a military that’s big, you have a party and government apparatus that has a lot of people, too. What are you going to do with those people? Send them on vacation? Send them to an island?”

Mr. Brada continued in a somewhat negative tone by questioning whether there are any historical success stories of reunification.

“I didn’t mean to cool down anyone’s zeal for unification,” he said. “I meant to go in with eyes open. Don’t think we can’t make it.”

Despite the overall theme of the discussion centering around managing expectations, preparedness, and a slow economic transition for the North’s economy to join the South Korean economy, Mr. Schaible reminded everyone that unification is about more than just integrating economies - it’s integrating people.

When I was young,” Mr. Schaible recalled, “I could not really imagine a unified Germany. When I was sitting next to my daughter, she said she couldn’t imagine that Germany was ever divided. What a wonderful change in just one generation. I am convinced that this experience is not too far away from you in Korea, and that my grandchildren will not remember a divided Korea.”