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Surviving and Thriving in a Globalized World

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Your business is radically changing: In 1990, only one-third of S&P 500 revenue came from outside the United States; today it is half. By 2025, more than two-thirds of revenue will be international. …

Your business is radically changing: In 1990, only one-third of S&P 500 revenue came from outside the United States; today it is half. By 2025, more than two-thirds of revenue will be international. During the past 40 years, developed countries’ economic dependencies on the rest of the world have shifted to sales and consumption. Ninety-five percent of the world’s consumers live outside the U.S., causing businesses to place a premium on globally savvy employees. While globalization yields significant challenges, it also offers potential for incredible reward. Leaders must position their organizations to leverage these opportunities. Expecting to hire foreign-born talent is unrealistic, especially in light of the current reverse brain drain. Are you ready?

Pete Rumpel, Vice President, Institutional Markets, Rosetta Stone Ltd.

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  • 1. Surviving (and Thriving!) in a Globalizing World
  • 2. Globalization
  • 3. In 1990, only 1/3rd of S&P 500 Revenues Came from OUTSIDE the U.S.
  • 4. Today It’s HALF
  • 5. by 2025, over 2/3rd Of Revenue will be INTERNATIONAL
  • 6. Are YOU ready?
  • 7. Is YOUR organization?
  • 8. Phase 1 Phase 3 Raw materials Innovation and from abroad R&D from Abroad 1970s 1980s 1990s 2000s and Beyond Developed Countries’ Economic Dependency on the Rest of the World Phase 2 Phase 4 Manufacturing Sales Generated Inputs from from Abroad Abroad
  • 9. Think these trends don’t affect you?
  • 10. Think again.
  • 11. Fact: American companies increasingly look to foreign talent pools to gain competitive advantage in a globalizing world.
  • 12. There is a Business-driven Shift in Recruiters’ Focus on Languages:
  • 13. As fortunes are increasingly tied to global sales… Foreign Sales’ Growing Weight Sales Abroad per $1 of Domestic Sales, S&P 500 Companies 
$1.31

 
$1.06

 
$0.87

 
$0.75

 
$0.64

 2000
 2002
 2004
 2006
 2008
 2010
 2012
 2014
 2016
 2018
 2020

  • 14. Globalizations’ Impact on Profitability % of Executives Expecting Positive Impact, 2010 Growth of Consumers in 64% Emerging Economies Shift of Economic Activity 51% Between and Within Regions Increasingly Global Markets for 50% Labor and Talent
  • 15. …American companies naturally emphasize multilingualism in their recruiting efforts. U.S. Recruiters’ Hiring Preferences Q2 2010 50% 33% Will be hiring bilinguals Will prefer a bilingual over a non- bilingual, all else equal
  • 16. Coupled with a Widening Skills Gap:
  • 17. While American children face diminishing and limited access to foreign languages at school… U.S. Public Schools with Foreign Language Programs 1997 vs. 2008 75% 58% 1997 24% 2008 15% Elementary Schools Middle Schools
  • 18. Languages Most Frequently Offered at U.S. Secondary Schools 2008 93% A “dead” language is offered more often than languages spoken in markets that are major 46% U.S. trading partners. 14% 13% 4% 4% 3% 0.6% 0.3% Spanis French Germa Latin Chines Italian Japane Arabic Russia se n h n e
  • 19. …their European counterparts graduate from school speaking at least one foreign language. Language Learning Among Upper Secondary European Students EU Average, 2007 No languages 6% 1 Language 33% 2+ Languages 60%
  • 20. Forces Increased Talent from Abroad:
  • 21. Recognizing the wide gaps in language proficiency between American workers and their foreign counterparts… Proficiency in Foreign Languages Beyond Beginner Level % of Active Language Learners, 2007 54% 57% 47% 45% 40% 42% 33% 33% 23% vs. vs.
  • 22. ...many companies look to poach talent from abroad… Growth in Number of Foreign Workers H1B Visa Petitions by Top 1000 Employers of Foreign Workers 143,769 13% 99,426 r CA GR = 3-Yea 2005 2008
  • 23. ….even at the CEO level. Foreign-born CEOs Fortune 100 Companies, 2000 vs. 2010 14 4 2000 2010
  • 24. Fact: Fulfilling multicultural and multilingual business needs exclusively through hiring foreign-born talent is not sustainable.
  • 25. The Lure of Fast-growth Developing Countries:
  • 26. The staggering pace of business activity in parts of the developing world… Real GDP Growth USA vs.BRIC Countries, 2000 through 2009 9.91% 7.01% 5.30% 3.31% 1.88% vs. USA Brazil Russia India China
  • 27. Change in M&A Activity Q1 2010 over Q1 2009 Asia-Pacific (excl. Japan) 126% Asia-Pacific (incl. Japan) 79% Europe -3% USA -11%
  • 28. …coupled with the arbitraging effect of lower cost of living in these countries… The Illusory Wage Gap Average Salary for 5-9 Years of Experience, 2010 Duty
  • 29. …presents lucrative opportunities for professional development and career advancement. Returnees’ Careers on Steroids % of Returnees Holding Senior Management Jobs, 2008 Data
  • 30. Reverse Brain Drain Further Exacerbates the challenge:
  • 31. The promise of a brighter future abroad... Positive Outlook on Future Economy % of Immigrants Studying in the U.S.,2008 Data
  • 32. …and governments’ efforts to lure talent back home... Concerted Global Recruitment Efforts Case in Point: China  Special chapter on Human Resource Development in 5-year Plan  “One Thousand Talents Scheme” to recruit global academic and managerial talent.  $150,000 one-time subsidy for high-potential employees moving to work in China.  Special service to help foreign professionals handle immigration paperwork and get settled.
  • 33. ...are starting to crowd American recruiters out of the labor market for international, high-potential talent. MBAs Taking Jobs in Asia % of Graduates from Top 10 U.S. Business Schools
  • 34. Serious Competition from Foreign Recruiters Case in Point: Samsung in 2009  50 non-Korean MBAs from top 10 U.S. business schools signed for Samsung’s Global Strategy Group (100% year-over-year increase).  16 graduates hired from Kellogg alone – more than the combined number of graduates hired by U.S. giants Proctor & Gamble and General Mills.  Jobs offer early opportunity to advise top Samsung executives on internal consulting projects.
  • 35. Cumbersome and Uncertain Processes add to the Challenge:
  • 36. Current U.S. Immigration quotas that accommodate only a portion of yearly work authorization cases… Supply-Demand Imbalances 2008 Work Authorization Applications Situation 163,000 1 Day Random Lottery H1-B applicants Available visas ran Lucky applicants BUT out on the day after the + selected through a random computer application lottery. 85,000 process started. Annual cap on new H1-B visas 78,000 Foreign-born, highly skilled workers that could not be hired by American companies due to lack of available visas.
  • 37. Fact: American companies seek to develop linguistic awareness amongst their employees through offering language training support.
  • 38. Multilingualism is now a Critical Component of Employees’ Skill Set:
  • 39. Companies increasingly consider foreign language proficiency a critical part of their employees’ skill set… Importance of Speaking a Foreign Language 2009 Data
  • 40. …and many have already started offering subsidized or free training opportunities to their personnel. Provision of Language Training 2009 Data
  • 41. Look into the Near Future:
  • 42. Companies that consider foreign language proficiency important but do not currently offer language training often compensate for the skills gap by hiring already multilingual staff… Top 3 Reasons for Not Offering Language Training Support 2009 Data 36%
  • 43. …however, as they face increasing difficulties recruiting international talent, language training increases. Anticipated Near-term Changes in Corporate Language Training % of Companies Expecting Increases, 2009 Data
  • 44. Fact: Innovative technology can be leveraged to deliver effective, scalable language training across an organization.
  • 45. A platform approach that is engaging, effective, and easy- to-implement is the answer:
  • 46. Technology-based platforms offer scale... Foundational Language Learning Platform Linguist Expert Fluency Operational Proficiency Foundational Learning REACH
  • 47. ...measurability, and value. Foundational Language Learning Platform INVESTMENT Linguist Expert Fluency •  The ideal platform offers: –  Language breadth –  Management platform/ Operational LMS integration Proficiency –  Scalability/accessibility –  Motivation and learner engagement Foundational –  Effectiveness Learning REACH
  • 48. Rosetta Stone Enterprise TOTALe™ a Robust E3 Language-Learning Platform:
  • 49. The Ideal Platform Delivers the Right Content in the Right Way… Intelligent Sequencing   No translation   Adaptive RecallTM   Adjusts to user needs   Audio CompanionTM Natural Discovery Speech Activation Native Socialization   Patterned input   Proprietary technology   Most natural method   Helps discover meaning   Emphasizes interaction   Simulated dialogues   Thought and play   Helps develops skills   Native-speaking coaches   Keeps users motivated   Builds confidence   Connect with other users Actionable Feedback   Response to user action   Speech, text, click   Models correct way   Real-time applicable
  • 50. Rosetta Stone Enterprise TOTALe
  • 51. RosettaCOURSE™
  • 52. RosettaSTUDIO™
  • 53. RosettaWORLD™
  • 54. Fact: Rosetta Stone delivers award-winning enterprise language- learning platforms that develop the language advantage for thousands of organizations all over the world.
  • 55. Recognized Effectiveness:
  • 56. Outstanding Reviews, Trade Recognitions, and Academic Validation… Outstanding Reviews Trade Recognitions “Gold standard.” “Next best thing to living in a country.” “A thousand times more engaging than “Unrivaled.” audio tapes.” Academic Validation Independent 2009 study: 95% confidence that average user will meet requirements of full semester in college after 55 hours of using Rosetta Stone.
  • 57. Embraced by Organizations Worldwide: