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A Talk I gave at Boston University Alumni Breakfast Series in NY on April 1, 2008.
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PROFESSOR N. VENKATRAMAN
David J. McGrath Jr. Professor in ManagementBoston University School of Management
April 1,2008
Globalization 3.0:Opportunities & Challenges
Headlines.. Of Many Kinds
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And there are cartoons..
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Look Back in History: May 12, 1896
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40.94
Fast Forward to 2050: ‘BRIC’
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We are in an era of global networks…
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Live
ConsumePlay
Work Create
Connect
Or to put it differently…..
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And according to Dilbert…
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Process offshoring.. Just getting started
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Globalization: Stylized Shifts
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Globalization 1.0
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One of the First Global Corporations…
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Globalization 2.0
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Globalization 2.0 Infrastructure
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Globalization 2.0 Infrastructure
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Globalization 3.0
Three Technology Laws….
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What’s the impact today? What’s the likely impact in 2010? 2015?
Globalization 3.0 is about IT-enabled work
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Engineering
Legal
Medical
Software
BPOCall Centers
Tech Support
??
R&D
Analytics
??
??
Services
Design??
Where’s it designed? Where is it manufactured?
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Globalization through digital networks..
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Remote, Connected Work
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Globalization 3.0:Early observations…. But not prescriptions
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Healthcare in Global Business Networks
AN ILLUSTRATIVE COMPARISON OF
COSTS
(SOURCE: BUSINESSWEEK)
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Heart Bypass
U.S.: $130,000Singapore: $18,500Thailand: $11,000India: $10,000
Photo: EastShore Hospital, SingaporeData: Business Week, The EastShore Hospital is an International
Member of Blue Cross, Blue Shield ofSouth Carolina..
Heart Valve Replacement
U.S.: $160,000Singapore: $12,500Thailand: $10,000India: $9,000
Photo: Apollo Hospital, Chennai. IndiaData: Business Week, The Apollo Hospital is an International
Member of Blue Cross, Blue Shield ofSouth Carolina..
Angioplasty
U.S.: $57,000Singapore: $13,000Thailand: $13,000India: $11,000
Photo: Bumrungard International Hospital , BangkokData: Business Week, 35,000 Americans traveled to Bangkok in 2007
for this treatment
Hip Replacement
U.S.: $43,000Singapore: $12,000Thailand: $12,000India: $9,000
Photo: Gleneagles, SingaporeData: Business Week,
US Private equity firm, TPG has taken a controllinginterest in the Parkway Group that owns the hospital.
Hysterectomy
U.S.: $20,000Singapore: $6,000Thailand: $4,500India: $3,000
Photo: a subsidiary of Wockhardt in Mumbai, IndiaData: Business Week,
Active discussions with US insurers
Knee Replacement
U.S.: $40,000Singapore: $13,000Thailand: $10,000India: $8,500
Photo: St. Luke’s Hospital in ManilaData: Business Week,
Early stage infrastructure; not yet world-class..
Spinal Fusion
U.S.: $62,000Singapore: $9,000Thailand: $7,000India: $5,500
Photo: Tiantan Puhua Hospital, Beijing, ChinaData: Business Week,
Experimental stem cell treatments, not availablein the USA..
Medical Tourism in Thailand
Medical Tourism %USA: 33%China: 29%Japan: 18%UK: 14%Middle East: 6%Australia: 6%Others: 17%
Photo: Phuket Hospital, BangkokData: Business Week,
Thailand had 1.5 million medical tourists in 2007
Remember Lessons from the Global Motorcycle Sector?
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It’s not all about accent neutralization!
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Globalization 3.0: Early Experimenters
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Globalization 3.0: Positioning it in the Strategic Agenda
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1. What’s our business scope?
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StrategicImportance ofCapabilities Core
Necessity
Support
“Best”“Good”“Weak”Relative Position
Sourcing Logic
2. Where’s our global footprint?
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Shoringdecisions
3. How’s the governance distributed?
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[Sourcing]
“In”
“Out”
“On” “Off”
[Shoring]
4. How to architect global work?
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What’s the design logic for work? Transactional
Transformational
Tacit
Source: McKinsey
4. How to architect global work?
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How to design different types of work? Sequential work
Reciprocal work
Pooled work
(A) (B)
(A) (B)
(C)
Value creation and capture in Globalization 3.0
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Strategically thinking about Globalization
for value creation and capture
Embarking and Embracing Globalization 3.0
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CoreProcesses
KeyCases
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Thank You Very Much!
