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How Global Are the World’s Largest Contractors?
ENR
December 3, 2015



To assess how global construction companies are, we use two measures: The first is depth, or what percentage of business activity takes place across international borders. The second is breadth, or how widely that activity is spread around the world.

The ENR Top 250 International Contractors survey provides an annual snapshot of the cross-border activities of the world’s largest contractors. Here, we take a longer perspective, using data from the 2005-15 surveys to analyze the globalization of the world’s largest contractors and identify actionable strategy implications.

In 2014, the top contractors earned 36% of their revenues overseas. There was wide variation by country: The top 50 European contractors earned 65% of their annual revenue abroad versus 38% for U.S. contractors and only 13% for Chinese contractors. Compared to other services, these statistics appear to be quite high, as only about 9% of value added in the service sector is traded across borders. However, the ENR Top 250 International Contractors are not representative of all construction contractors. A better benchmark is the Fortune Global 500, whose companies earned 46% of their revenues abroad.

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ASEAN: The Business Case for Regional Integration
HQ Asia
November 26, 2015

The creation of the ASEAN Economic Community (AEC) heralds a new era of integration for the Association of Southeast Asian Nations (ASEAN), but just how closely knit is the regional bloc? Dr Pankaj Ghemawat, Global Professor of Management and Strategy and Director of the Center for the Globalization of Education and Management at the Stern School of Business at New York University, the US, and the Anselmo Rubiralta Professor of Global Strategy at the IESE Business School, Spain, questions the extent of globalisation, and argues that regional integration is good for business and ending ‘globaloney’.


In an era dominated by technological interconnectivity and the swift transfer and exchange of ideas, thoughts and information, it may seem odd to hear someone — anyone — argue for anything other than an inexorable march towards a globalised world. But Dr Pankaj Ghemawat says the world is less integrated than many presume. He argues that many, including political and business elites, overstate the extent of globalisation and form faulty views based on this assumption. Ghemawat terms this misguided belief in the scope and scale of globalisation: ‘globaloney’.

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In charts: here’s why Greece is making a mistake by turning to Russia for help
Quartz

April 27th, 2015

At the beginning of April, Greek Prime Minister Alexis Tsipras made a state visit to Moscow. Mr. Tsipras and Russian President Vladimir Putin had a lot to discuss: the two countries are working to finalize negotiations on a pipeline for Russian natural gas between Turkey and Macedonia (FYROM), and it has emerged that Greece is now in talks to buy S-300 missiles from Russia. Greece’s newfound coziness with the Kremlin has also been on display in Greek criticism of European Union sanctions in response to Russia’s annexation of Crimea.

Meanwhile, Mr. Tsipras is becoming an ever bigger frustration to Greece’s fellow EU members. The election of his Syriza party came on the promise of ending austerity measures imposed by the EU and International Monetary Fund. Since coming to power in Jan. 2015, the government has continued to push for a better deal from its European partners, but some prominent party members suggest that they might also be looking for new sources of funding.

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Thought Leader: Pankaj Ghemawat
Carnegie Council for Ethics in International Affairs
August 6, 2014

"What I have in mind with rooted cosmopolitanism and distance sensitivity is something that's much, much more practical and to my mind achievable."

DEVIN STEWART: I'm Devin Stewart, and this is Point B. We ask thought leaders about the state of the world today and how we can get to a better future.

PANKAJ GHEVAMAT: Human history would be a lot less convoluted and interesting if full rationality prevailed at all times.

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The ground reality
The Economic Times India
November 13, 2013

Unbalanced growth, pockmarked by financial distress. The threat of protectionism brought on by persistently high  unemployment, particularly in developed countries. Tensions, in wealthy nations as well as poor ones, around ethnic, religious and linguistic divides, and talk of a new age of secession or tribalism. 


These are some of the developments that contradict the story we had just gotten used to: how markets were becoming perfectly integrated across borders, technology was obliterating distance and national governments were now irrelevant. The aftermath of the financial crisis of 2008 reminds us of the many ways in which differences still matter. It also calls for a reassessment of what it means to be a global manager or corporation.



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Why China's middle class will solve its air pollution problems
Fortune
November 7, 2013


A cloud will hang over the upcoming plenum of the Chinese Communist party in Beijing -- literally. It is late fall, and so pollution levels in China's capital as well as in other of its cities, always high, are going to go through their usual seasonal surge. The NASA Earth Observatory just announced that the northern city of Harbin saw concentrations of fine particulate matter (PM2.5) as high as 1,000 micrograms per cubic meter. For comparison, the NASA report said, the U.S. Environmental Protection Agency's air quality standards say PM2.5 should remain below 35 micrograms per cubic meter.

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We are not as cosmopolitan as we assume
MBA Channel
May 13, 2013

Being one of the biggest “gurus” of globalisation doesn’t mean that Pankaj Ghemawat isn’t also someone who cautions against exaggerations and shortcomings. The strategy professor from the Spanish IESE Business School is what you could call quite globalised himself.

He was born in India and lived in the U.S. for 30 years before moving to Spain. In the States he left an imprint as he started Harvard College at the age of 16, began his Ph.D. programme at the age of 19 and started teaching at the renowned business school there at the age of 23 – being considerably younger than most of his students at the time. In 1991, he was appointed the youngest full professor in the history of the business school. MBA Channel spoke to Pankaj Ghemawat about his latest book “World 3.0”, the bible on globalisation for his fans, and about common assumptions and errors that surround the topic that drives the 21st century.


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New Blood for Global Boards

Global Leadership Portal

February 3, 2013
 

It’s now essential for the top management team and board to have international experience. Pankaj Ghemawat, Anselmo Rubiralta Professor of Global Strategy at IESE Business School in Spain and a Criticaleye Thought Leader, reveals why directors need to broaden their horizons.

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Going beyond greed: 4 I’s for India
The Times of India
December 28, 2012

Corporate greed & corruption as witnessed in the 1.76 lakh crore 2G scam, which involved many large businesses last year, only got bigger this year with a host of other cases grabbing the limelight. Be it the much bigger 1.86 lakh crore coal scam, charges of bending rules by DLF, Reebok or allegations of spending money in lobbying first by Walmart and then by another dozen MNCs in India... the list kept getting bigger. TOI spoke to several CEOs, and those who teach them, on the issue of corporate greed and asked them for ways to address the issue at hand. Here's the take of four of the brightest minds in the world of business and academia on the subject of corporate greed...

It is easy to rail against greed, especially because, as Milton Friedman once deadpanned, "None of us are greedy, it's only the other fellow who's greedy." He went on to observe that "The world runs on individuals pursuing their separate interests." The implications are that, as a descriptive matter, the pursuit of profit drives most businesses' behavior most of the time — and that the primary challenge is to harness this drive for constructive purposes whenever possible rather than simply decrying it.

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West India Company
Outlook India
December 17, 2012


Few could have predicted the boldness with which the Tata Group, once given the opportunity to do so, would stride on to the global scene. By 2003, the year TCS crossed the $1 billion revenue mark and three years after Tata Tea acquired Tetley, international revenues amounted to 24 per cent of the group’s earnings. By 2012, international revenues had increased to 58 per cent. With the United States and United Kingdom as its largest foreign markets, the group bridged the divide between the world’s advanced economies and emerging markets.
 In 2011, six Tata Group companies (among 20 Indian companies) were listed on the Boston Consulting Group (BCG)’s list of the top 100 ‘Global Challengers’ from emerging markets. And it’s noteworthy that BCG’s methodology screens out companies “that could only pursue low-end, export-driven models”. The Tata Group includes a substantial proportion of India’s globally competitive, outward looking enterprises. Looking at the group on a per-employee basis, the international focus of the group is also exemplified by the fact that roughly half of the group’s total employment is in TCS, a company that derives over 90 per cent of its revenues from the Indian market.

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Q&A with Pankaj Ghemawat
360 Steelcase
October 24, 2012


Pankaj Ghemawat was born in Jodhpur, India, educated at Harvard, teaches global strategy at IESE Business School in Barcelona, and consults with businesses around the world. In his new book, “World 3.0: Global Prosperity and How to Achieve It”, he argues that contrary to  nother bestselling book the world is not flat, that local culture, geography, and borders still drive individual and corporate behavior

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Strategies for Global Connectedness
Strategy + Business
October 22, 2012


National efforts to expand international flows — of trade, capital, information, and people — can be a major leverage point for raising prosperity

Not that long ago, the world was supposed to be flat. Hardly a day passed without references to globalization and “borderless markets.” This led many policymakers and business leaders to jump on the bandwagon of open globalization, treating all interconnection among countries as equally beneficial.

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Reinventing Spain's economy
Fortune
July 23, 2012


As Europe's leaders attend one emergency meeting after another, the political high drama shouldn't make us lose sight of the fact that if the debt crisis is to be solved, Southern European companies need to change how they compete. Nowhere is that more evident than in Spain, whose elites fret over interest rates while protesters in the streets call for closing the borders and a return to barter.

Almost no one there is talking about how to make the real economy more productive. According to our research with IESE Business School colleague Bruno Cassiman, Spanish labor productivity (real output per worker) went up by only 15% between 1990 and 2010, vs. 25% in Northern Europe. Meanwhile Spanish costs per worker went up by 120%, vs. 60% in Northern Europe. That means labor costs per unit produced in Spain rose three times faster than in Northern Europe -- the region that includes its two largest trading partners, France and Germany. Italy and Greece have fallen behind the productivity curve as well.

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To Secede or Not to Secede: The Case of Europe
The Globalist
July 2, 2012


According to one source, as many as ten new countries will be created in Europe over the course of the 21st century. This prediction suggests that the argument linking globalization and secession — that borders no longer impede trade and so secession imposes little or no economic costs — has a special appeal. But does this proposition really hold up to scrutiny?

In Europe, the argument usually articulated by separatists goes beyond globalization. The argument is bolstered by claims that integration at the level of the European Union, paired with the devolution of power from national to regional governments, has further eroded the power of national borders. In other words, the established nation-states in Europe are squeezed both from above and below.

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  Pankaj Ghemawat
"Most Trusted Brands 2011: What Coke learnt about
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  The Economic Times
  September 28, 2011

Perhaps the simplest way of understanding the current status of global branding is to look at Milward Brown's database covering 10,000 top brands in 31 countries. Only 16% are recognized in more than one country, and only 3% are recognized in more than seven!

Note that this is the situation more than a quarter century since the late Ted Levitt, once my colleague at Harvard, published his manifesto, "The Globalization of Markets," proclaiming that customers everywhere increasingly want the same thing. Simply because it is fashionable to make such proclamations doesn't mean that it is profitable to take them seriously. Rather, the reverse is true.

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  Pankaj Ghemawat
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The Economics of Secession"
  Financial Times
  June 28, 2011

Sir, Xavier Cuadras-Morató and Modest Guinjoan assert (Letters, June 23) that secession from Spain would have a smaller negative effect on Catalan trade than I suggested in my article "The ties that bind Catalonia" (June 17). Their principal argument seems to be that my guesstimate of a two-thirds haircut on Catalonia's trade with the rest of Spain is too high because it is based on the dissolution of empires. To my original points, I would add that estimates such as Jeffrey Frankel's of a two-thirds "pure" border effect do not depend on the historical origin of a particular border. And I would draw further attention to the example of the "Velvet Divorce" between the Czech and Slovak republics, where trading intensity quickly dropped off to a greater extent despite considerable efforts on both sides to preserve trading relationships. Catalonia's separation from Spain would probably not be quite as amicable.

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  Pankaj Ghemawat
"Markets and globalization: Chicago, Harvard and the way
  forward"

  Roland Berger Strategy Consultants News
  December 22, 2009

The financial meltdown and other recent upheavals in global markets have raised questions not only about the efficiency of markets, but about globalization as well. Anti-globalizers have sounded the death knell for what they view as exaggerated faith in financial integration, while pro-globalizers have sometimes responded by denying that significant market failures have occurred at all and by blaming governments for the crisis. Thus, in an interview in early 2009, Rupert Murdoch remarked:

"It's very easy to blame the free market but how did we get the housing bubble? We got it because of Congress pushing Fannie Mae and Freddie Mac into lending money to people who couldn't afford it and blowing up the price of housing; a Fed which was too loose with the money. It just led to this very naturally. When you get a bubble, it has to be lanced and it's painful."

Murdoch's perspective may resonate with those who are already in thrall to the magic of the markets, but it probably won't help convince anybody at the margin.

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