Inaugural Annual Meeting of the New Champions

Dalian, People’s Republic of China 6-8 September 2007

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. (


This publication is also available in electronic form on the World Economic Forum website at the following address: Inaugural Annual Meeting of the New Champions report: (HTML) The electronic version of this report allows access to a richer level of content from the meeting, including photographs, session summaries and videos of selected sessions. The report is also available as a PDF: (PDF) Other specific information on the Inaugural Annual Meeting of the New Champions, Dalian, People’s Republic of China 6-8 September 2007 can be found at the following links: General information KnowledgeConcierge Participants Partners Programme Session summaries Videos Webcasts WorkSpace Members’ area

Page 3 Introduction Page 4 Going Global – Make It Happen Page 8

The views expressed in this publication do not necessarily reflect those of the World Economic Forum.

New Frontiers, New Models Page 12 The DNA of New Champions Page 16

World Economic Forum 91-93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744 E-mail: © 2007 World Economic Forum All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system.

The Shifting Landscape Page 20 Inside China Page 23 Acknowledgements Page 26 Founding Members of the Community of Global Growth Companies Page 27 Mentors of the Inaugural Annual Meeting of the New Champions

REF: 250907

this meeting, we were all bound together by the same spirit. The spirit of entrepreneurship and the spirit of social engagement.”

Klaus Schwab, Founder and Executive Chairman, World Economic Forum

Embodying the dynamism of the Global Growth Companies, Dalian provided the perfect setting for the Inaugural Annual Meeting of the New Champions. More than 1,700 participants from 90 countries convened for a meeting that culminated in the official formation of the Forum’s Community of Global Growth Companies. What defines a Global Growth Company? Above all, leadership and global vision. These are companies that, more than anything else, share a recognition that they are operating in a global environment and that success requires the ability to look beyond conventional wisdom to run their businesses. They face unfamiliar challenges, novel responsibilities and unprecedented opportunities. Joining the Global Growth Companies in Dalian were other New Champions. They included over 200 of the Forum’s Community of Young Global Leaders – exceptional young leaders who share a commitment to shaping a global future; Technology Pioneers – companies involved in the development of life-changing technological innovations that have the potential for a long-term impact on business and society; as well as the leaders of fast-growing regions and competitive cities from around the world. Throughout the Meeting’s many workshops and sessions, participants shared their experiences of leading in fastpaced and sometimes volatile environments. They also heard in-depth appraisals of these changing dynamics from world-renowned academics and experts. The rapidly changing global economic and political landscapes, whose fragility was underscored during the Meeting by the unfolding sub-prime mortgage crisis in the United States, are themselves yielding growth opportunities for enterprises willing to seize them. However, the hazards of going global are manifold and daunting. Going global requires a company to master the puzzle of how to cater to different markets, navigate

conflicting regulatory regimes, manage complex supply chains and build an international brand. But the payoff is inestimable. Going global gives a company better access to truly global talent – a scarce resource these days. It diversifies market risk and lends companies the power of distributed management expertise – something that can keep them nimble and innovative even as they become larger and stronger. In the process of disrupting incumbent businesses, Global Growth Companies are also recognizing that investing in improving the markets is a social and commercial imperative China’s experience offers a similar example. It is all too easy to dwell on China’s many obstacles, such as its rising labour costs, labyrinthine regulatory environment and chequered past on intellectual property. Global Growth Companies are able to look beyond these problems to harness China’s rapid transformation and invest in sectors where it is starting to excel. Breakneck urbanization and explicit targets to lower pollution provide ample opportunities for investors who can help China pursue a cleaner path to modernization. This kind of corporate candoism imbues the mindset of the Global Growth Companies and their leaders – a sense that becoming a truly global citizen is the most profitable way to move forward as a business. The Forum is proud to recognize these New Champions. The Inaugural Annual Meeting of the New Champions has provided the first platform specifically aimed at the kinds of companies taking advantage of these shifts. In many ways, then, the Meeting of the New Champions serves as a complement to the World Economic Forum Annual Meeting in Davos – a “Summer Davos”, dedicated to the kind of rapidly growing companies that like China itself are redefining the global economy. Next year, the New Champions can look forward to convening for another exciting and provocative Summer Davos in another of China’s new urban hotspots, the coastal city of Tianjin.

2 | Inaugural Annual Meeting of the New Champions

3 | Inaugural Annual Meeting of the New Champions

Going Global – Make It Happen

CEE Latin America Asia Pacific Western Europe North America

General availability, cost, quality of labour

Fluctuations in foreign-exchange rates

Commodity shortages/ price fluctuations

Intellectual property theft

Obsolescence of product inventory or technology

War, terrorism, other geopolitical concerns

Regulatory concerns

Problems with supply chain infrastructure

Plant breakdowns/ mechanical failures

Reliability of suppliers

Natural disasters

The New Champions, the new breed of high-growth enterprises that are reshaping the business landscape, are by definition global in outlook. A recent survey of these companies by the World Economic Forum and the Harvard Business Review found that two-thirds of the CEOs who responded said that they would focus more attention overseas than on their domestic market over the next 12 months. A key reason, according to the report: to build confidence. These corporations may be leading the pack at home, but the real challenge for them is to prove their mettle abroad. Yet, the urge to go global must surely be much more than an exercise in building corporate self-esteem. It is about pursuing potentially lucrative opportunities and sensible, even necessary, strategies. For an enterprise to achieve and sustain high growth in the age of globalization and the great surge in emerging markets such as China and India, a global strategy is essential. There is of course the opportunity to enter new markets. But going global also offers a company a way to increase efficiency by sourcing from low-cost suppliers that can match or possibly even exceed the quality of its local contractors. Then, there is the risk mitigation advantage. Going global allows a company to spread its exposure across markets, diversifying risk by reducing dependence on any one location for production, sourcing, supply chain management or sales. In addition, going global affords an enterprise the opportunity to widen its knowledge base by tapping the fresh talent pool and the global innovation system to gain access to the best people and ideas to fuel new growth.

Penetration of Markets Seen as the Most Important Opportunity for Growth
Survey: "Which one of the following do you see as the major opportunity to grow your business in the next 12 months?

Supply Chain Risks (2)
Labour, regulatory and reliability issues are the foremost risks. Survey responses to: "Which of the following supply chain risks concerned your company during its most recent strategic/operational cycle?"

Management Tools and Trends
In a survey of 1,221 global executives, corporate blogs ranked lowest in satisfaction among 30 management tools and trends
High 3.95 Customer segmentation Strategic planning Customer relationship mgmt Core competencies Strategic Benchmarking alliances Scenario/ Total quality mgmt contingency Mission/vision Supply chain management planning statements Growth strategy tools Lean operations BPR Collaborative innovation M&A Outsourcing 3.65 Six sigma Shared service centres Consumer ethnography Loyalty management tools RFID 3.55 Balanced scorecard Knowledge management

Percentage of respondents



Averages Percentage of respondents




Average: 3.72




0 Other

3.45 Corporate blogs 3.35 Low 20 30 40 50 60

Improved supply chain mgnt Improved customer service Access to key talent Technological innovation New product development M&A Access new geographic markets Expand existing markets

Average: 62%






Source: PricewaterhouseCoopers

Source: McKinsey & Co. survey Note: Data weighted by GDP of constituent countries.

Percentage usage
* Score of 1=not satisfied, 5=Satisfied

Once taken, the decision to go global immediately throws up enormous challenges for the corporation. There are many issues to consider – where to go, when to make a move, what sort of presence to establish. The company must also be more conscious of conditions in the global economy, the status of global trade negotiations, the political situation in the countries and regions where it operates especially the growth hotspots, and other risk factors it should consider including the impact of public health threats and climate change.
Supply Chain Risks
Risks are rising, but companies are not formally assessing them
How has the amount of supply chain risk faced by your company changed in the past 5 years?
Decreased significantly Decreased slightly 2% Increased significantly 7% 15% 23% 24% With detailed models of cash flow at risk There is no formal assessment

Source: Bain & Company, Management Tools and Trends 2007

How does your organization assess the risks to its supply chain?

There are strategic matters too: What does a move overseas mean for the company’s business model? How will it manage being in multiple markets? And how will it build an effective presence or significant market share? If the corporation already manages a brand, it must figure out whether to take that brand overseas, create a new one, or perhaps acquire an established brand in the target market. “The difficulty when you’re building a brand on a global basis is to have the right touch points,” said Maurice Lévy, Chairman and Chief Executive Officer, Publicis Group, France. “If you use purely international ideas, you will obviously be characterized as an international brand, and you will not be a household name.”

The enterprise must also consider the regulatory environment, particularly the tax regime and the enforcement of intellectual property rights regulations. Other crucial factors to focus on include the availability of talent, access to financing, rule of law standards and the local business culture. Mindsets in the company will also have to change to accommodate its global ambitions. In any global company, a key challenge “is to make sure you don’t have homogenization,” warned James J. Schiro, Group Chief Executive Officer and Chairman of the Group Management Board at Zurich Financial Services in Switzerland. “When solving problems, you need diversity of thoughts and ideas. You have to have a conceptual framework for decision-making. You don’t want a formulaic approach.”

No change

26% 28%


With rough quantitative estimates


Increased slightly

Qualitatively/ intuitively

Note: Data weighted by GDP of constituent countries.

Source: McKinsey & Co. surveys

4 | Inaugural Annual Meeting of the New Champions

5 | Inaugural Annual Meeting of the New Champions

“You can be new champions not only of
commerce but of conciliation. Not only of trade but of tolerance. Not only of profit but of peace and understanding.”
H.M. Queen Rania Al Abdullah of the Hashemite Kingdom of Jordan

Top-10 Global Brands
Global companies can draw significant value from successful brands
Brand value of top-10 companies, 2007 (US$, million)




Brand value (left axis)



Brand value/market cap (right axis)












Coca Cola Microsoft


General Electric




McDonalds’s Disney


* After Chrysler spinoff

Source: Interbrand; Wall Street Journal

Going global in the globalization age also involves responsibilities. A company, for example, will have to review whether its existing governance structures and procedures are appropriate for implementing a global strategy. Once it expands overseas, it will have to take into account a wider community of stakeholders. “For any New Champion that wants to build a long-term brand, corporate social responsibility is essential,” said Sir Martin Sorrell, Group Chief Executive, WPP, United Kingdom. A responsible enterprise must consider whether suppliers and contractors adhere to sustainable practices and ethical conduct. At the consumer end, a company must ensure that its products and services meet or exceed any standards mandated in the target market. Going abroad may also raise the fiduciary responsibilities a company has to its shareholders or the reporting requirements it must attend to in its home market such as US companies do under the Sarbanes-Oxley regulations.

Another level of corporate engagement that emerged in the discussions at the meeting was a call for corporate global citizenship. H.M. Queen Rania Al Abdullah of the Hashemite Kingdom of Jordan referred to it in her address to participants when she encouraged the assembled Global Growth Companies to be “new champions not only of commerce but of conciliation, not only of trade but of tolerance, not only of profit but of peace and understanding.” The Dalian “spirit of entrepreneurship and social engagement”, as Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, put it, suggests that in going global, the New Champions could somehow bring people together in ways that governments and large flagship corporations may not be able to do. This is after all a fellowship of the ambitious and the pragmatic, the resolute and the open-minded. They are reshaping the way the world does business – why should they not also have as significant an impact on society?
Most Valuable Global Brands
US share of top brands getting smaller

Number of companies listed in Interbrand's top 100 global brands

Brand value, percentage of recent market cap











63 53


0 2001 2007

* includes Bermuda-based Bacardi in 2001. All companies must do substantial foreign business to be considered a "global" brand.

Source: BusinessWeek; Interbrand

6 | Inaugural Annual Meeting of the New Champions

7 | Inaugural Annual Meeting of the New Champions

New Frontiers, New Models

Necessity is no longer the mother of invention; opportunity is, and the market has been filled with opportunities of late. The rapid pace of change in advertising, finance, technology and environmental science has meant that companies must constantly disrupt their own models – or die from inertia. A confounding truth in each of those fields, noted several participants, is that success eliminates the recognized need for innovation, and thus breeds failure.
Opportunity, Not Necessity, Is the Mother of Invention
Necessity motive more prevalent in low- and middle-income countries
100% 90

Internet. Such trends demand a new conceptual model in order to reach consumers. “We have to get away from advertising as interruption,” said Marko Ahtisaari, Brand and Design, Blyk, Finland, “and towards advertising as engagement, as a conversation.”
Global Advertising Expenditure
Internet advertising to exceed radio by 2008

underperforming management. “I’d like to break with the notion that we are trying to do something to you,” said Chris Rowlands, Managing Partner, Asia, 3i Investments, Singapore. “We are trying to do something with you.” “We are being called to get better all the time,” said Max Burger-Calderon, Senior Partner and Chairman, Asia, Apax Partners Worldwide, Hong Kong SAR. “But the issues that haunt us are not even on the table at the moment.”

Even in China – a country that has suffered a great deal of criticism for its environmental record – innovators are looking for better ways to use incumbent technologies to protect the environment and preserve resources. “This isn’t actually a cost for us, but rather a business opportunity,” said Zhang Yue, Chairman and Chief Executive Officer, Broad Air Conditioning Co., People’s Republic of China. “Every day, every minute, you can cut energy consumption by half by simply changing layout.”

$326 billion 5% 3% 9% 15%

$413 billion 5% 7% 8% 13%

$470 billion 5% 9% 8% 13%

$521 billion 5% 10% 8% 12% Outdoor Internet Radio Magazines

Percentage of world advertising spend



Necessity motive

Opportunity motive






Percentage of entrepreneurs

80 70 60 50 40 30 20 10 0 Czech Republic Argentina Chile Colombia Uruguay South Africa Thailand Hungary Russia Finland Croatia Brazil China Philippines Malaysia Germany Italy UAE Peru Indonesia Mexico India Greece UK US Latvia France Spain Canada Jamaica Ireland Turkey


One thing is certain: the industry must not percolate in self-congratulation, but rather push for responsible change. “Private equity can be a catalyst to change a whole range of factors within countries,” said Rowlands. “And it isn’t just with the blunt instrument of leverage.” Some innovations, particularly technological innovations, involve taking someone else’s ingenuity and doing it better. While the iPod was not the first MP3 Player, its design made it the industry standard. Across sectors – but particularly in mobile technology, nanotechnology and biotechnology – new innovations are shaping the way businesses interact with consumers. They are also forcing lightening-fast adaptations, particularly for companies involved in health research and communications. The ultimate goal, said one participant, is not for you to learn every new technology, but “for technology to learn you.” Other innovations are more than a matter of preserving businesses – they are a matter of preserving the environment. But once again, with fossil fuel extraction still cheap, and thus the “felt need” for new energy sources, such as biofuels, not yet dire, innovation may lag behind rhetoric. “Beware of magical thinking,” warned David Hobbs, Vice-President and Managing Director, Global Research, Cambridge Energy Research Associates Inc. (CERA), USA, who described himself as “a gloomy pragmatist.”

Global Growth Company Profile





0 2001 2006F 2008F 2010F

* Newspaper website advertising counted in both Newspaper and Internet categories beginning in 2003, but not double-counted for totals.

Source: PricewaterhouseCoopers, Wilkofsky Gruen Associates, "Global Entertainment and Media Outlook: 2006-2010"

Middle-income countries

High-income countries

Source: Global Entrepreneurship Monitor, GEM 2006 Summary Results

“I am constantly looking out for ways that others would make our existing products obsolete,” said Magid Abraham, President, Chief Executive Officer and CoFounder, Comscore, USA. Abraham’s company was not the first to measure browsing patterns of Internet users, but through innovation it was faster, more accurate and more cost-effective than its competitors. One of Abraham’s primary subjects, the advertising industry, is facing upheaval at the moment, thanks to the proliferation of fast ads in mobile technology and the

Another undeniable trend, the erosion of intellectual property rights, hinders innovation. Or does it? At least one participant freely advertises his concepts and new models on an open source blog, even before he enters development. “I don’t believe in secrecy,” explained Martin Varsavsky, Chief Executive Officer, Fon, Spain, who describes his new ideas online to fertilize what he called “an ecosphere of disruption.” In so doing, he has bonded with other innovators and nurtured a selfsustaining group of forehanded investors – and, at the same time, he built his company into the world’s largest Wi-Fi network. In the world of investment, no industry has been more disruptive than private equity. And, while many praise and envy private equity firms for their stunning returns, many others have accused industry leaders of taking short-term approaches and overzealously wielding hatchets with

Qiagen is a Netherlands-based holding company which is a leading provider of innovative sample and assay technologies and products for DNA and RNA based molecular diagnostics, research for life sciences and applied testing.

“Traditional drugs were like rusty hammers where you hit a patient on the head to see if the drug works or not. Now we are leading the way towards personalized medicine.”
Peer M. Schatz, Chairman and Chief Executive Officer, Qiagen, Netherlands

8 | Inaugural Annual Meeting of the New Champions

9 | Inaugural Annual Meeting of the New Champions

Public Financing for Renewable Energy
Alternative energy commitments follow the real price of oil
Crude oil prices (US$ per barrel, 2005 dollars)

Global Growth Company Profile


Real worldwide government renewable energy R&D budgets (US$, million)





Crude oil prices (right axis)
1,000 40



0 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005


Renewable energy R&D by type (left axis) Solar Ocean Biomass Wind




Source: OECD/IEA, BP Statistical Review of World Energy 2006

JASDAQ Securities Exchange Inc.
JASDAQ is a Japanese securities exchange providing a stock market specializing in new ventures and SMEs.
“Things are becoming more globalized and investors would like to invest ‘borderlessly’. So stock exchanges should be more globalized too. The key should be collaboration. We need better cooperation among exchanges.”
Takashi Tsutsui, President and Chief Executive Officer, JASDAQ Securities Exchange, Japan

Yet, while new environmental innovators look to disrupt old models, they are often met by the inertia of old orders. Zhang, who is also the Vice-Chairman of the Sustainable Building and Construction Initiative of the UN Environment Programme, shared his perspective stating: “I think that government products are not really linked with the economic results. If they were, [the government] would be more focused on energy conservation.” Ultimately, government and international regulation will only succeed in protecting the environment if it is combined with a shift in consumer behaviour. The popularity of Toyota’s Prius shows that such a shift is already underway; but a deeper sense of buyer responsibility for everyday purchases could lead to new models of production. “It may be that what causes the greening of China is not the Chinese government, but American consumers,” said Hobbs.

10 | Inaugural Annual Meeting of the New Champions

11 | Inaugural Annual Meeting of the New Champions

The DNA of New Champions
“Whereas in the past, the advantage may have come
from the partitioning of information, in the future, marketplaces will come from innovation and new ideas.”
Craig R. Barrett, Chairman of the Board, Intel Corporation, USA

“Being good in business is the most fascinating kind of art,” said Andy Warhol. Today, the most understudied new “artists” come from rising power countries like Brazil, China and India. But their canvas is the global marketplace. What are the dominant traits of these new Global Growth Companies? The New Champions are a varied lot, but certain themes recur. Those that survive and thrive keep and retain talent; lead with vision and foster an attractive corporate culture; and look globally and adapt quickly to competitors’ innovations. Unsurprisingly, most CEOs of Global Growth Companies find that, while financial resources are often available internally, human resources are a scarce commodity. “New Champions, Global Challenges,” a survey of some 50 such CEOs by the Harvard Business Review and the World Economic Forum, found that a plurality felt that “finding seasoned executives” was their toughest challenge. The challenge is not limited to recruitment. Today’s college graduates can expect to change jobs a dozen times. Many will also change careers, even countries, more than once. “I believe the war for talent is over,” said Kevin L. Kelly, Chief Executive Officer, Heidrick & Struggles International, USA. “Talent won.” But for Global Growth Companies, the wide-open labour market can also be an opportunity. Three-quarters of the CEOs surveyed in the HBR-Forum survey revealed that they employed foreign nationals. “Talent has no passport,” explained Ben J. Verwaayen, Chief Executive Officer, BT, United Kingdom. Even more than money, what often wins over talent is effective leadership. “Only 30% of individuals move for compensation,” said Kelly, who fronts a leading executive search firm. To woo the remaining 70%, “create an environment in which the best can work with the best,” advised Verwaayen. By enhancing core competencies, by fostering a sense of urgency and by creating an attractive corporate culture, chief executives can build a corporation that employees do not want to leave.
12 | Inaugural Annual Meeting of the New Champions

Features of Companies Built to Last
Enduring companies built on continuity and culture, not big ideas and charismatic leadership
Core ideology
12 11 10

Mechanisms for self improvement

9 8 6 5 4

Use of “Big Hairy Audacious Goals”


Comparator companies Built-to-Last companies*

Finally, one of the most complex challenges facing the New Champions is how to go global. Conventional wisdom holds that companies will first attempt to capture their domestic market, then expand slowly by entering markets of geographic neighbours. The idea is best represented by the Singaporean government’s encouragement to national companies to look first to its “seven-hour radius,” which includes 2.8 billion people. By contrast, in a surprising finding, the HBR-Forum survey revealed that a plurality of Global Growth Companies look first to enter the US markets, despite the common worry that foreign consumers would shy away from unknown brands. The corollary challenge is fostering corporate management that can traverse different cultural contexts – and think globally. “We need people who can understand the local culture of a country,” said Maurice Lévy, Chairman and Chief Executive Officer, Publicis Group, France, and Member of the Foundation Board of the World Economic Forum. The challenge of creating a globally-oriented management is made more difficult by the split between younger executives – who are much more in tune with the needs of foreign marketplaces – and the management board, who tend to be over 60 and more provincial in their outlook. “The board and the management are the last to get the idea that going global is an imperative,” said Anand P. Raman, Senior Editor, Harvard Business Review, USA, the author of the HBRForum study. Ultimately, the business of being a Global Growth Company is not for the faint of heart. The risks are high but so are the rewards. “Be brave, be innovative and never cease in this endeavour,” Wen Jiabao, Premier of the People’s Republic of China, told the leadership of the New Champions.

Global Growth Company Profile

Management continuity

Evidence of “cultism”

Purposeful evolution

Dalian Wanda Group
Wanda Group is one of the earliest joint stock enterprises in China's northwest, involved in commercial real estate, residential real estate, the cultural industry and grand hotels.

* 18 operating US-based firms founded in 1945 or earlier, identified in a survey of CEOs as a "highly visionary" company.

Source: Jim Collins and Jerry I. Portas, Built to Last (Harper Business, 1994)

Elemental to building a sustainable business is including space for potentially innovative – if temporarily disruptive – ideas. “If you’re one of the New Champions,” said Sir Martin Sorrell, Group Chief Executive, WPP, United Kingdom, “you have to ask if the vision and energy of the individual is leading the business.” A business structure that fosters communication between employees and employers – yet puts the customer first – will be the most sustainable model over the long term. “Traditional leadership was about leading primarily vertically; but leading a network is much more challenging because it requires horizontal leadership skills,” said Julie Louise Gerberding, Director, Centers for Disease Control and Prevention, USA. “Communication is absolutely critical; listening and learning is essential.” Beyond staffing issues, Global Growth Companies face significant competitive pressures. “The strongest model is a uni-branded model that grows organically,” said Sorrell. “But that takes time to grow.” Another traditional model is one that relies on innovation. But the HBR-Forum study found that the most frequent concern of the New Champions was how to be a “fast follower”, and take advantage of competitors’ innovations by making them better or more cheaply.

“For our company, it is not simply about keeping costs down and relying on connections to do business. Companies like us must focus on conducting fair transactions. We also implement energy-saving and environmentally friendly practices. We try to be in areas where there is a good environment. We give to charity.”
Wang Jianlin, President, Dalian Wanda Group, People's Republic of China

13 | Inaugural Annual Meeting of the New Champions

14 | Inaugural Annual Meeting of the New Champions

15 | Inaugural Annual Meeting of the New Champions

The Shifting Landscape

While companies struggle to respond to a rapidly shifting global landscape, Global Growth Companies have become a powerful force of their own on the global scene. “The global growth enterprises,” said China’s Premier Wen Jiabao, “are playing a key role in world economic development.” For the Global Growth Company CEO, running the business increasingly requires anticipating the potential impact of events half a world away. “Business leaders need to have a truly global perspective,” said Wen. “They should not only know what is happening in the world now, but also in the future.” Simply reacting to these trends is not enough. In a fastmoving world, risk is opportunity. Global Growth Companies, therefore, must recognize and exploit their long-term ability to affect and improve the landscape and so gain new markets, scale and productivity. “We don’t need a CEO that manages only the business,” said Mohammed Al Gergaw, Minister of State for Cabinet Affairs of the United Arab Emirates, and Executive Chairman, Dubai Holding. “We also need him to understand the social aspects of working in a lot of countries – and the political aspect. So he is a CEO and politician, or a policy-maker at the same time.” Despite predictions for 4.9% global economic growth in 2007, the global backdrop appears decidedly uncertain, particularly in a country long associated with stability – the United States. Distracted by a deeply unpopular policy in the Middle East, the US appears to be relinquishing diplomatic leadership in other regions, such as Asia. The unfolding crisis in the mortgage lending industry threatens US consumer spending and economic growth. Many question whether the global economy can withstand a downturn in both the US economy and the US dollar. Some believe that robust economies and massive foreign currency reserves will insulate Asia, but others warn that the region is still too dependent on exports not to be affected. Much of Asia’s reserves are also invested in the US and stand to suffer from falling asset prices there.
16 | Inaugural Annual Meeting of the New Champions

But China and India have emerged as economic locomotives in their own right, helping to support a recovery throughout the developing world and in other mature economies such as Europe and Japan. While the pressures of China’s growth are well publicized, those pressures are also yielding business opportunities. The mass migration into China’s eastern cities, for example, underpins strong demand for fixed assets. China’s efforts to reduce consumption of raw materials and lower pollution are a bonanza for providers of clean energy. India, too, faces problems of pollution and urban congestion. But its government has called for a neardoubling of investment to 8% of GDP to improve urban services and broaden development. The devolution of power from Delhi to the states, while creating regulatory headaches for investors, is fostering competition for investment. And an influx of overseas Indians is injecting expertise and connections that could boost India’s allure to foreign investors in the wake of the latest market turmoil. The tsunami of wealth being created in China and India is reverberating far abroad. South-East Asia has recovered from the financial crisis a decade ago and is promoting economic integration to position itself as a hub for goods and services between the two giants. Investment by China in Africa’s raw materials and infrastructure is fuelling economic growth where Western aid failed, turning the continent into an important energy player. Resource-rich Latin America is also experiencing newfound optimism, with Colombia staging a remarkable turnaround and Brazil enjoying a retail and services-led boom. Despite its own political turmoil, the Middle East is showing signs of a revival, spurred by high oil prices, and fuelling a real estate and infrastructure boom that is swelling the ranks of an Arab middle class.

Even Europe has been revitalized, thanks to low-cost manufacturing and rising consumer spending in eastern Europe. Germany has bounced back from its costly reunification to become a centre for investment in biotechnology and IT. Now Japan is also re-emerging after a “lost decade” of moribund growth. Despite continued political stagnation, the reforms of the past few years set in motion the privatization of the country’s massive public savings bank. That event promises to unleash a torrent of capital that can combine with rising spending by the country’s retirees to finance new growth. And despite the uncertainty surrounding its economy, opportunities in the US still abound. Manufacturing jobs may be going to China and services to India, but the spread of e-commerce has positioned the US as the storefront of the world. US companies also stand to benefit from the push by China and other nations into cleaner energy. As in Europe, Americans over 45 are taking advantage of improving health to extend their productivity, start businesses and add more value to the economy. Companies hoping to seize these global opportunities need to do their homework. “When you invest money abroad it’s very important to realize that there are certain rules and regulations one has to recognize. Some of these rules are written and some are not written,” said Soud Ba’alawy, Executive Chairman, Dubai Group, United Arab Emirates. Perhaps the biggest risk facing companies going overseas is the backlash against globalization, particularly in the US. Weakening economic signals during a presidential election year raise the likelihood that legislation imposing trade sanctions on China will be passed.

Whether lobbying against protectionism in the US or advocating more transparent regulations in Africa, companies need to take a proactive role. Partnering with regulators helps educate them on the industry’s needs, formulate smarter policies and maintain a constructive dialogue. Many companies mistake light regulation with good regulation, but the unfolding product safety scandal in China underscores how problems in one country can hurt a company’s reputation worldwide.

Global Growth Company Profile

Monex Inc.
Monex is the sole online investment bank in Japan offering online brokerage, mutual funds and alternative investment funds as well as IPO underwriting services. It seeks to create a new nationwide infrastructure capable of replacing the post office.
“The last thing Japan should do is worry too much about Japan.”
Oki Matsumoto, President and Chief Executive Officer, Monex, Japan

17 | Inaugural Annual Meeting of the New Champions

Companies need to conduct strict audits of their supply chains and make sure they do not apply varying standards from one country to another. They should encourage regulators to adopt the highest international standards for their industry, thereby encouraging scale and innovation across borders. Those venturing into new markets should even consider teaming up with local competitors, combining their strengths to help open regulatory doors. Above all, Global Growth Companies have to recognize that with their influence comes responsibility. Making profits for shareholders is no longer enough, said E. Neville Isdell, Chairman and Chief Executive Officer, Coca-Cola Company, USA. “If we’re not seen both in perception and in reality as being an integral and functioning part of every community and society we operate in, I think that the model that we have is in danger.”
Global Growth
Developing world sets the pace for global economic growth

Global Growth Company Profile

Neusoft is a leading software and service provider and the largest offshore software and service outsourcer in China.

8% Emerging market and developing countries

6 GDP growth



Advanced economies


“The IT services sector will keep up 2030% growth over the next 10 years for both local and international businesses doing business in China. More outsourcing of services will come to China. But we still face challenges - how to change our image with regard to the protection of intellectual property, for example. Also, can we provide the talent we need?”
Liu Jiren, Chairman and Chief Executive Officer, Neusoft, People's Republic of China


2001 2002 2003 2004 2005 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2006 2007F 2008F

Source: IMF

18 | Inaugural Annual Meeting of the New Champions

19 | Inaugural Annual Meeting of the New Champions

Inside China
is in the process of accelerating industrialization and urbanization. It’s quite true that energy demand will increase in the future but, in the meantime, we will also pay greater attention to energy saving and environmental protection.”

Zhang Xiaoqiang, Vice-Chairman, National Development and Reform Commission, People's Republic of China

As a venue for the Inaugural Annual Meeting of the New Champions, Dalian embodied the dynamism inherent in the New Champions and highlighted the ongoing transformation taking place across Chinese society. The city is one of China’s fast-growing, “second-tier” municipalities, quickly turning into a globally connected hub for manufacturing and services. Dalian is one of China’s new champion cities. And China is an economy that is facing many of the same challenges that the New Champion enterprises must address such as managing rampant growth, dealing with the pressures of globalization and addressing the responsibilities of global citizenship. Like many of the Global Growth Companies that met in Dalian, China is at an inflection point in its transition to a global leader. To borrow the motto of the Olympic movement, China is running faster, rising higher and becoming stronger. Next year’s Olympics are likely to be as significant a validating milestone for China as previous Games were for South Korea in 1988 and Japan in 1964. It will be an opportunity for China to showcase its achievements. “We in the West don’t understand the magnitude of what this represents for China and the Chinese people,” said Maurice Lévy, Chairman and Chief Executive Officer, Publicis Group, France. “People’s mindsets will change. It is also about national pride. This country has been locked for 50 years. It is absolutely huge.”

More Chinese Entering the Middle Class

Income Distribution in China Has Broadened Over 30 Years



Global affluent (Incomes* >200,000 RMB) Share of total urban disposable income


Number of people

Mass affluent (100,001-200,000 RMB)



Upper middle class (40,001-100,000 RMB)


World 1970

World 2000


Lower middle class (25,001-40,000 RMB)
0 1985 1995 2005 2015 2025

China 1970
20,000 $100 $1,000

China 2000
$10,000 $100,000

While it is true that the tight labour market in some sectors has made job-hopping a problem, many companies are able to cope and retain staff by making the right first hires and offering employees a career development path. And, while hobnobbing with government officials on the golf course or in karaoke clubs may have been a good way to secure approvals in the old days, today a more effective strategy may be to recognize the professionalism and quality of government officials at every level and keep relationships proper and at a high level.
Forecast Consumption Growth in China
Overall spending expected to increase almost 9% per year

Poor (<25,000 RMB)

Income per year

* Base year 2000, 1RMB=$0.12

Source: Xavier Sala-i-Martin; Source: National Bureau of Statistics of China; McKinsey Global Institute analysis

Of course, China has been opening up to the world for more than three decades. While the Olympics will serve as a catalyst for further economic progress and social change, many of the fundamental transformations the country is undergoing have been playing out for years. Consider, for example, the drop in the incidence of poverty. According to the World Bank, between 1981 and 2001, the proportion of Chinese living in poverty fell from 53% to 8%. Today, the biggest concern is rising inequality, the widening gap between rich and poor, particularly in urban areas. A key focus of policy-makers: how China can shift from its dependence on manufacturing for export to a more consumer-driven, knowledge-based economy.

“Policy-making is much more complicated than before,” explained Fan Gang, Director of the National Economic Research Institute at the China Reform Foundation. Achieving economic growth is no longer the paramount objective. Addressing environmental and social pressures are now major priorities for the central government. Chinese policy-makers “have more diversified goals than even five years ago,” added Fan Gang. “They have to think about many other issues. Even economic policy itself is more difficult to make. It is more difficult to make quick changes because of the constraints.” Companies new to China and veterans alike will have to grasp the ways in which China has changed, and continues to change, if they are to adopt the strategies they need to succeed in this Olympic-sized market. For any China player, perhaps the biggest mistake would be to make outdated assumptions about the market. For example, in some sectors, China has become a highly competitive playing field, with local enterprises competing not just among themselves but also with foreign entities.


Recreation, Education

Housing, Utilities

Transportation, Communication





R: G

7% 6.


: GR




R: 1


Household products Personal products







Real consumer spending (RMB, billion)

Source: National Bureau of Statistics of China; McKinsey Global Institute analysis

Companies still hesitant about introducing their technology to China for fear that their intellectual property rights will be violated may lose out to rivals who appreciate that the IPR situation has clearly improved. While enforcement remains inadequate and the punishment for violators not harsh enough, by most accounts, the commitment of the Chinese leadership to IPR protection is strong and consistent. Knock-offs are harder to find in the big cities, and Chinese consumers are becoming more conscious of IPR. As the number of Chinese-held patents continues to increase sharply, more local enterprises are joining the fight to enforce IPR.

20 | Inaugural Annual Meeting of the New Champions

21 | Inaugural Annual Meeting of the New Champions


The World Economic Forum wishes to recognize the support of the following companies as Partners or Supporters of the Inaugural Annual Meeting of the New Champions.

Strategic Partners
ABN AMRO Bank Accel Partners Accenture Alcan American International Group (AIG) Apax Partners Audi Avaya Bain & Company Booz Allen Hamilton BT The Coca-Cola Company Deloitte Deutsche Bank Dubai Holding Ernst & Young Goldman Sachs Heidrick & Struggles International HP Infosys Technologies Intel Corporation KPMG Kudelski Group Manpower Marsh & McLennan Companies (MMC) McKinsey & Company Merrill Lynch Morgan Stanley Nike NYSE Euronext PepsiCo PricewaterhouseCoopers Reliance Industries Reuters Siemens SK Group Standard Chartered Unilever UPS Xenel Group WPP Zurich Financial Services

Dalian Partners
ARTOC Group for Investment & Development Atos Origin Cambridge Energy Research Associates (CERA) Dalian Wanda Group

Dalian Supporters
Agility CH2M HILL Companies Financial Technologies (India) HCL Technologies International Bank of Azerbaijan International Finance Corporation (IFC) Neusoft Ogilvy Public Relations Worldwide Phoenix Satellite Television Co. Shamil Bank of Bahrain TCL Corporation Troika Dialog Group Underwriters Laboratories

Patent Activity Picking Up In China...
... driven by Chinese companies
300,000 4,500

Chinese Equity Markets
Trading volumes have increased 30-fold within 7 years

Bars – Patents granted by China patent office


Foreign companies

Chinese applications for international patents under the Patent Cooperation Treaty

4,000 3,500



Line — Chinese applications for international patents*

3,000 2,500 2,000



China-DS Market, Total return (100=31 Dec 1999)

Chinese companies

China-DS Market, Volume (millions of shares traded)

45,000 600

Total return index
30,000 400

1,500 1,000 500 50,000 2001 2002 2003 2004 2005 2006 0




0 31 Dec 1999 31 Dec 2003 31 Jul 2007


* under the Patent Cooperation Treaty

Source: State Intellectual Property Office of the PRC; World Intellectual Property Organisation

Source: Thomson Financial

China is changing faster than even veterans of the market can fathom. Fail to appreciate how quickly the Chinese markets are expanding and a company could find itself running behind its rivals. The swift rise in prominence of the Chinese capital markets – the biggest IPO last year was in Shanghai – is an example of just how fast China can move when conditions are right. There is now serious talk about combining the Shanghai, Shenzhen and Hong Kong markets into one platform to compete more effectively against New York and London. Such an idea would have been unthinkable just five years ago.

Indeed, any China player should resist thinking of this unique market as being x number of years behind the US, Europe or Japan. Even if it may lag now, the likelihood is that China will leapfrog ahead and not simply follow from behind or catch up and converge with the pacesetters. Like the New Champion enterprises that gathered in Dalian, China is setting its own path to global competitiveness.

Dalian Service Provider
China Mobile Communications Corporation

22 | Inaugural Annual Meeting of the New Champions

23 | Inaugural Annual Meeting of the New Champions

Founding Members of the Community of Global Growth Companies*

Mentors of the Inaugural Annual Meeting of the New Champions

Abbasi Group, United Arab Emirates Aditi Technologies Pvt Ltd, USA Advanced Chemical Industries Ltd, Bangladesh Advantage Partners LLP, Japan Aecon Group Inc., Canada Air Arabia, United Arab Emirates AK BARS Bank, Russian Federation Alvarion Ltd, Israel Amalgamated Bean Coffee Trading Company Ltd, India Ameria CJSC, Armenia APCO Worldwide Inc., USA Apollo International Ltd, India Asset Management Company Ukrainian Realty Group, Ukraine AVentures Group, Ukraine Axiom Telecom LLC, United Arab Emirates Azersun Holding, Azerbaijan Basis Management Company, Russian Federation Bematech, Brazil Cayan International Ltd, Saudi Arabia CBC Capital, People’s Republic of China Cephalon Inc., USA China Bohai Bank, People’s Republic of China CJSC Industrial Association Konti, Ukraine CMS Computers Ltd, India Colite International Ltd, USA Compass Group, USA Cox Industries, USA Crompton Greaves Limited, India CYBIRD Holdings Co. Ltd, Japan Dalian Dayang Trands Co. Ltd (Dayang Trands), People’s Republic of China Dalian Hi -Think Computer Technology Co. Ltd (DHC), People’s Republic of China Dalian Wanda Group Co. Ltd, People’s Republic of China Dashang Group Co. Ltd, People’s Republic of China East African Cables Ltd, Kenya Egyptian Traders Co., Egypt EPS Co. Ltd, Japan Etihad Airways, United Arab Emirates Far East Holding Group Co. Ltd, People’s Republic of China Fawaz Alhokair Group, Saudi Arabia Financial Technologies (India) Ltd (FTIL), India Fujia Group Company Ltd, People’s Republic of China Future Technologies Inc., USA Globis Group, Japan Golden Gate Business, Ukraine Gradient Company Ltd, Russian Federation

GROUPE Socota, Madagascar Gruma SAB de CV, Mexico Gulliver International Co. Ltd, Japan Health Integrated, USA Hill International Inc., USA Hunter Dickinson Inc., Canada IDEO Inc., USA iGATE Global Solutions Ltd, India IHS Inc., USA Industrial Construction & Engineering Company (SIAC), Egypt Inner Mongolia Mengniu Dairy Industry (Group) Co. Ltd, People’s Republic of China Inner Mongolia Yili Industrial Group Co. Ltd, People’s Republic of China Inter Car Group, Ukraine International Bank of Azerbaijan, Azerbaijan International Investment Bank, Russian Federation Intralot SA, Greece JASDAQ Securities Exchange Inc., Japan JSC Holding Company “AK BARS“Russian Federation JSC Shipbuilding Plant «Severnaya Verf», Russian Federation Kio Networks, Mexico Kolibri Capital, USA LANIT Group of Companies, Russian Federation M.P. Technologies Inc., Japan MARITIME BANK, Russian Federation MB Holding Company LLC, Oman MDS Holdings BVI, Lebanon MENA Financial Group Ltd, United Arab Emirates Metro International SA, United Kingdom Mineks International, Turkey MKS Consulting Limited, Japan Monex Inc., Japan Moser Baer India Ltd, India Muvis Srl, Italy National Oilwell Varco Inc., USA Ltd, Japan Neusoft Group Ltd, People’s Republic of China NeuStar Inc., USA Odontoprev, Brazil OJSC KINTO, Ukraine OJSC Ukrgasbank, Ukraine OJSC Ursa Bank, Russian Federation Option NV, Belgium Organização Jaime Câmara, Brazil OTKRITIE Financial Corporation Ltd, Russian Federation Politec, Brazil Praj Industries Ltd, India Qiagen NV, Germany Rajshree Sugars & Chemicals Ltd, India Ransat Group, United Kingdom

Regus Group Plc, United Kingdom Rupa & Co. Ltd., India SAG Gest, Solucoes Automovel Globais SGPS SA, Portugal SamCorp, Peru Schoeller Industries GmbH, Germany Sekunjalo Investments Ltd, Saudi Arabia Shanfari Group of Companies, Oman Shoreline Energy International, Nigeria Shuaa Capital PSC, UAE SoftBank Investment (SBI Holdings) Inc., Japan Solid Technologies Inc., Republic of Korea Suntone Business (Group) Co. Ltd, People’s Republic of China Synergy Healthcare Plc, United Kingdom Tag-it Pacific Inc., USA Tantash Investments, Japan THine Electronics Inc., Japan Tianjin Bohai Chemical Industry Group, People’s Republic of China Tianjin Jinbin Development Co. Ltd, People’s Republic of China Tianjin Materials Group Corp., People’s Republic of China Tianjin Pipe (Group) Corporation, People’s Republic of China Tianjin Port (Group) Company Limited, People’s Republic of China Tianjin Tasly Pharmaceutical Co. Ltd, People’s Republic of China Tianjin Teda Group Co. Ltd, People’s Republic of China Tianjin Zhonghuan Electronics and Information Group Co. Ltd, People’s Republic of China Tianjin Zhongxin Pharmaceutical Group Corporation Limited, People’s Republic of China TIBCO Software Inc., USA Unison Capital Inc., Japan Univera, Republic of Korea UTV Software Communications Ltd, India Vozrozhdenie Bank, Russian Federation WiseKey, Switzerland Wockhardt Ltd, India Xi’an Dagang Highway Machinery & Electricity Co. Ltd, People’s Republic of China YES BANK Limited, India Yida Group Co. Ltd, People’s Republic of China

* As of 20 September 2007

Peter Bakker, Chief Executive Officer, TNT, Netherlands Craig Barrett, Chairman of the Board, Intel Corporation, USA Samuel A. DiPiazza Jr, Global Chief Executive Officer, PricewaterhouseCoopers, USA Mohammad Al Gergawi, Minister of State for Cabinet Affairs of the United Arab Emirates; Executive Chairman, Dubai Holding Jiang Jianqing, Chairman of the Board, Industrial and Commercial Bank of China Limited, People’s Republic of China Maurice Lévy, Chairman and Chief Executive Officer, Publicis Groupe, France William R. Rhodes, Chairman, President and Chief Executive Officer, Citibank NA, USA

James J. Schiro, Group Chief Executive Officer and Chairman of the Group Management Board, Zurich Financial Services, Switzerland Sir Martin Sorrell, Group Chief Executive, WPP, United Kingdom Ben Verwaayen, Chief Executive Officer, BT, United Kingdom Wang Jianzhou, Chairman and Chief Executive, China Mobile Communications Corporation, People’s Republic of China Wei Jiafu, Group President and Chief Executive Officer, China Ocean Shipping Group Co. (COSCO) , People’s Republic of China Yang Yuanqing, Chairman of the Board, Lenovo Group Limited, People’s Republic of China

26 | Inaugural Annual Meeting of the New Champions

27 | Inaugural Annual Meeting of the New Champions


Peter Torreele is Managing Director of the World Economic Forum. Jeremy Jurgens is Director, Chief Representative and Head of Global Growth Companies, World Economic Forum Beijing. The Inaugural Annual Meeting of the New Champions was under their direct responsibility, with Denise Burnet, Director, Head of Events, Stéphanie Janet, Director, Head of Annual Meeting Operations, and Laura de Wolf, Senior Specialist, Events.

Report Writers: Wayne Arnold, E. Benjamin Skinner and Alejandro Reyes The World Economic Forum would also like to express its appreciation to the summary writers for their work at the meeting. Associate Director, Editing: Nancy Tranchet Design and Layout: Kamal Kimaoui, Associate Director, Production and Design Photographs: Doug Kanter

28 | Inaugural Annual Meeting of the New Champions

Sign up to vote on this title
UsefulNot useful