[Challenge:Future] BUILDING SUSTAINABLE & CREATIVE EASTERN EUROPE
TEAM: MICHAEL means INNOVATIONTEAM LEADER: MICHAEL IYANROCOUNTRY: NIGERIA
SUMMARY OF FINDINGS stretching back to theThe division between Eastern and Western Europe spans more than 1,500 years,Roman Empire. The Berlin Wall is one of the strongest physical manifestations of this political, cultural, andeconomic divide. A long series of questions fuels the debate over sustainable development and the greeneconomy. To name a few: Will the human capacity for innovation be able to offset environmentaldegradation? Can growth remain an economic priority? Or, conversely, is abandoning growth a viabledevelopment path? Amid theories and hypotheticals, the arguments must eventually shift from the abstractarena of general principles and focus on specific problems. Eastern Europe provides an interesting test case.After the breakdown of the Soviet Union, most Eastern European countries reoriented their economiestoward the European Union (EU). Many of these countries actually joined the EU, overcoming a divisionrooted in the split of the Roman Empire, 1,500 years prior to the iron curtain. It remains little short of amiracle that the re-unification of Germany and the enlargement of the EU bridged such an ancient divide.However, this eastward expansion of the EU created a regional mismatch between economic and politicalinstitutions. Economic membership requirements—in particular, the Stability and Growth Pact, which placedlimits on national debts and deficits—set unrealistic and unachievable expectations on new Easternmembers. This mismatch, manifested in todays Eurozone crisis, now threatens to separate the continentinto a strongly competitive Northern economic region and a Southern region that severely lackscompetitiveness. Regardless, both regions seem headed for a long period of slow growth and increasingsocial and environmental problems, while neither region seems capable of real cooperation on key regionalor federal decisions like smart grids or research and development priorities.For Eastern Europe, this presents a serious dilemma. Eastern European countries can, on the one hand, tryto integrate with the highly competitive group of Northern countries, which include Germany andScandinavia; but this would require very rapid development of government institutions along with culturalacceptance of these institutions, a process that could easily end in failure.
Fortunately, greening the economy presents Eastern Europe with a potential path out of thisbind. The region need not choose between Northern and Southern Europe if it can establishitself as uniquely competitive.The transition away from communism, in 1991, led to large-scale structural changes throughoutEastern Europe and a wave of deindustrialization. This shift diminished some environmentallydamaging practices, but not all. Continued environmental degradation, pervasive energyinefficiency, obsolete and wasteful production technologies, increasing water scarcity and waterlosses, as well as costs associated with these concerns are the legacy inherited by EasternEurope. Such a legacy presents monumental opportunity for mainstreaming environmental goalsinto national and sectoral policies.Transition away from communism in Eastern Europe led to large-scale deindustrialization. Oldplants and equipment fell into disrepair. While catastrophic at the time, this widespread collapsehas opened the opportunity to rebuild a regional green economy.Despite relatively low prices for energy, water, and other environmental services compared toWestern Europe, a growing proportion of Eastern European household budgets is dedicated toutilities. At the same time, utility companies are financially unstable and require subsidy, andmost Eastern European countries are highly dependent on energy imports. Hungary, forinstance, imports over 60 percent of its raw materials, 80 percent of its natural gas, and 100percent of its crude oil from Russia.These challenges, alongside several other economic and social factors—shadow economicactivity, relatively low labor productivity, brain drain, and economies skewed to low-valueactivities—make Eastern Europe particularly vulnerable to fluctuations in the global economy.Scrutiny of the current development model in Eastern Europe reveals the huge potential ofinvestment aimed at transforming national infrastructure through sustainable development. Thiswould benefit both economic competitiveness and long-term economic resilience.
INTERVIEWS & DISCUSSIONSThe following are the responses I got from friends and colleagues living in Nigeria & across Europe:Roberto Berna-noted that In the coming year, the Eastern European communities need to do everything possibleto remake itself so as to attract and retain talented young people. EE need to launch a multitude of programs todiversify the regions economy away from heavy industry into high technology. Most importantly, Eastern Europeanpolicy-makers need to structure the region to become a Plug-and-Play Communities. We need to ask ourselves“Why do some places become destinations for the creative while others dont? Economists speak of the importanceof industries having "low entry barriers," so that new firms can easily enter and keep the industry vital. Similarly, Ithink its important for EE to have low entry barriers for people---that is, to be a place where newcomers areaccepted quickly into all sorts of social and economic arrangements. All else being equal, they will be able toattract greater numbers of talented and creative people---the sort of people who power innovation and growth.Places that thrive in todays world tend to be plug-and-play communities where anyone can fit in quickly such asSilicon Valley, California. These are places where people can find opportunity, build support structures, bethemselves, and not get stuck in any one identity. The plug-and-play community is one that somebody can moveinto and put together a life---or at least a facsimile of a life---in a week.Joe Dicke-has this suggestion “we can use supportive policies and complementary incentive schemes toencourage emerging environmental efforts and innovations that can make Eastern European companiescompetitive. For example, the city of Czestochowa, Poland, with financing from the European Investment Bank,opened a combined coal-biomass plant that reduced CO2 emissions by 24 percent in 2003. The city also developedan energy efficiency plan for buildings and paired this with small hydro, solar, and wind plants.Abigail Alabi a student Environmental Studies & Resource Management in Nigeria-said - “How do webuild a truly creative community to spur economic growth---one that can survive and prosper in this emerging age?The key can no longer be found in the usual strategies. Recruiting more companies alone wont do it. While itcertainly remains important to have a solid business climate, having an effective people climate is even moreessential. By this I mean a general strategy aimed at attracting and retaining people---especially, but not limited to,creative people. This entails remaining open to diversity and actively working to cultivate it, and investing in thehigh-tech amenities that people really want to use often.Secondly, Openness to immigration is particularly important for smaller cities and regions, while the ability toattract so-called Creative Class is key for larger cities and regions. For cities and regions to attract these groups,they need to develop the kinds of people climates that appeal to them and meet their needs.
Yet I believe if you ask most community leaders in the EE communities what kinds of people theyd most want toattract, theyd likely say successful married couples in their 30s and 40s---people with good middle-to-upper-income jobs and stable family lives. I certainly think it is important for cities and communities to be good forchildren and families. But research show that less than a quarter of all EE households consist of traditional nuclearfamilies, and focusing solely on their needs has been a losing strategy, one that neglects a critical engine ofeconomic growth: young people.Obafemi Ireti who leaves in Poland made this suggestions for a sustainable future in the EasternEurope:a)Eastern European communities should identify opportunities for structural changes to employment. Forexample, Poland could look to offshore wind energy as a new source of demand for skilled labor, currently beingdisplaced in sectors like shipbuilding. Or Hungary could use building retrofits to both increase employment andreduce energy costs.b) Eastern European communities should use low-energy intensity residential heating to fight economic and socialinequalities and to target those populations most heavily affected by changes in energy costs—specificallyLatvia, Slovenia, and Hungary, which have the lowest energy intensity of residential heating among the EU-27. Thiswould primarily affect the elderly, single-person households, households living in dwellings supplied by districtheating, and poor rural groups.c) Eastern European communities should use formal and informal educational institutions to raise awareness ofsustainability challenges and solutions. Lack of awareness of economic consequences from depleted natural capitaland environmental degradation is often a barrier to the transformation of production and consumption. These kindsof programs are already established and underway in some countries. The Black Sea NGO Network, for example, istraining and building a network of youth leaders in Bulgaria, Georgia, Romania, Russia, Ukraine, Turkey, andMoldova. Together, these youth provide a civil sector voice in defense and promotion of environmental legislationconcerning the Black Sea.For what its worth, Ill put my money---and a lot of my effort---into EE making it. If EE, with all of its assets and itsemerging human creativity, somehow cant make it in the creative age, I fear the future does not bode well forother older industrial communities and established cities, and the lamentable new class segregation among EEcities will continue to worsen.
A VISION AND STRATEGY FOR THE FUTURE BY (TEAM MICHAEL means INNOVATION)Firstly, diversity and inclusion is key to growth. This should be integral to Eastern Europe’s plans, strategy and business priorities if theregion is to be competitive on the global table. Eastern Europe as a whole should recognize that leadership in today’s global marketplacerequires that we create a corporate culture and an inclusive business environment where the best and brightest diverse minds—employeeswith varied perspectives, skills, and experiences--work together to meet global consumer demands. The collaboration ofcultures, ideas, and different perspectives is an organizational asset and brings forth greater creativity and innovation.Eastern Europe is on an accelerated path of growth towards the year 2022, the future that will be driven by bio-, info-, andnanotechnology. We will be seeing new companies, and industries emerging from these sectors. But the region most followsome guidelines to get there. As a whole the region needs to recognize that in order for it to achieve aggressive leadership goals it mustleverage the intellectual power and harness the creative energy of top, highly trained individuals from all regions of the world, and thosefrom a wide range of diverse backgrounds.The region should try as much as possible to actively seek to foster greater levels of diversity in its workforce by partnering with outreachpartners which include academic institutions, professional organizations, and national advocacy groups, offering scholarships and youthprograms to encourage the study of technology and science and work with senior executive leadership team from diverse background toensure that diversity and inclusive best practices are deeply embedded throughout its work environment. These goals will provide a solidfoundation to creating a highly engaged workforce with a shared purpose of achieving Eastern Europe’s mission of creating a competitiveworkforce.All the eastern European countries should recognize that the region and global diverse markets represent tremendous sources of value inthe workplace and marketplace. The growth of diverse populations worldwide and the potential of these segments make them importanttargets as prospective employees. In order for eastern European to be competitive, by the year 2022, 85% of the entrants into the EEworkforce should be people of color and women. Moreover, developing regions, such as China, Brazil, India, and Africa, make up anincreasing share of the world population. They will account for approximately 88% of the global population by 2050, and increase inabsolute size from 1.6 billion persons in 1950 to nearly 7.5 billion persons by 2050.Economically, the diverse markets represent a growing source of market consumption and buying power. They are an important customergroup for eastern European companies. Worldwide, diverse populations account for 44% of World GDP. For instance, within theU.S., diverse populations generate over $9 Trillion dollars in buying power. So by increasing the diversity of its workforce eastern Europewill be able to create a team that effortlessly designs products with the needs of these growing customers in mind.Secondly, Eastern Europe Companies must shift from the Industrial to the Creative Age, in which creativity, "the ability to createmeaningful new forms," as The Random House Websters Dictionary puts it, must become the decisive source of competitive advantage.The Creative Age is distinguished by the rise of two great social classes. The first is the Creative Class -- workers in science andtechnology, arts, culture and entertainment, and professional knowledge workers in healthcare, law and management.The second, and larger of the two classes, is the Service Class, whose members prepare and serve food, carry out routine clerical andadministrative tasks, provide home and personal health assistance, do janitorial work, and the like.However, the key to sustainable prosperity lies in developing strategies and making investments that can speed the transition to the newCreative Age. That means removing the central props that continue to hold up the old economy -- the incentives and subsidies that keep thebadly broken housing-auto-energy economy breathing. It also means bringing more EE workers into the orbit of creativity. The way to do thisis to essentially creatify their work. My research shows that the addition of creative skills to service and manufacturing work boosts wages atan even higher rate than when its added to Creative Class work.
Thirdly, The key to understanding the new economic geography of creativity and its effects on economic outcomes lies in whatis called the "3Ts" of economic development — technology, talent and tolerance.Technology: The ability to support research and innovation and transfer that into marketable products and great companies are criticalcomponents of economic growth.Talent: The driving force behind any effective economic strategy is talented people. And people these days, especially talentedpeople, move around a lot.Tolerance: When I discuss tolerance, I mean a place that is open to all kinds of talent. For example, approximately half of the newstartups in Silicon Valley include at least one immigrant among its founders, so its absolutely critical to be welcoming to peoplewho are from different places because the key to economic growth lies not just in the ability to attract the creative class, but to translatethat underlying advantage into creative economic outcomes in the form of new ideas, new high-tech businesses and regional growth &that can only be possible if a favorable and welcoming environment is provided.Creativity and members of the creative class take root in places that posses all three of these critical factors. Each is a necessary but byitself insufficient condition. To attract creative people, generate innovation, and stimulate economic development, a place most have allthree. The 3Ts explain why countries in the Eastern Europe fail to grow despite their deep reservoirs of technology and worldclass universities: they are unwilling to be sufficiently tolerant and open to attract and retain top creative talent. The most successfulplaces such as San Francisco, and Boston in the US, Bangalore in India, etc-puts all the 3Ts together. They are truly creative places.I conducted a great deal of statistical research to test the creative capital theory by looking at the way these 3Ts work together to powereconomic growth. I found out that talent or creative capital is attracted to places that score high on basic indicator of diversity.A large number of studies point to the role of immigrants in economic development. In the Global Me, the Wall Street Journal reporterPascal Zachary ―argues that openness to immigrants is the cornerstone of innovation and economic growth‖. He contends that America’ssuccessful economic performance today is directly linked to its openness to innovative and energetic people from around the world, andattributes the decline of once prospering countries such as Japan, and Germany, to the homogeneity of their population (Zachary, 2000).This fact can also be attributed to the countries in Eastern Europe.Turning now to larger macro-societal questions. The past several decades have seen a dramatic shift in the underlying nature ofadvanced capitalist economies, from a traditional industrial-organization system based on large factories and large corporate officetowers, and premised on economies of scale and the extraction of physical labor, to newer, emergent systems based on knowledgeintellectual and human creativity. Understanding the underlying dynamics of the system, the social structures on which it rests, the kindsof workplace transformations it is setting in motion, and its effects on community as well as city form, structure, and function is atremendous opportunity for EE to learn from.Bottom line:1)The Eastern European community need a decisive ―political‖ investment in a single energy market and a single digital market. Thesewould probably be the two most important contributions Eastern European policy-makers could do to enhance its competitiveness and forit escape the bind between it and the more productive West. In addition, having a single Eastern European digital market would mean alot to create a more competitive business climate & to bring to life the creative age company needed in 2022.2) Eastern Europe need to embrace diversity. The region need to attract and utilize the potentials of local & immigrant creative class(asexplained above) in order to move from the industrial age into the creative age where high-tech become the cornerstone; in that way, theEE region can create its own ―Super-Sillicon -Valley‖ hence the needed company that will be competitive & spur economic growth would
THE FUTURE COMPANIES OF EASTERN EUROPEAlmost all companies organize people in a hierarchy, and then run well known managerial processes(planning, budgeting, staffing, measuring, etc) with it. We have all seen so many hierarchical org charts — sprawling boxes of letters andarrows arranged in inverted pyramids — and have been through so many budget, planning, and problem solving meetings, that we take allof this as a given, as if it had existed forever. In fact, it hasn’t.The hierarchical organization that we see today was invented in the last century, and it is an incredible invention. It can direct andcoordinate the actions of thousands of people making and selling thousands of products or services across thousands of miles, and do soeffectively, efficiently, and profitably, week after week after week. If you had told an average citizen in the year 1900 what this structureand those sets of processes were accomplishing everywhere today, they would have thought you daft.But 20th-century, capital “H” Hierarchy (a sort of hardware) and the managerial processes that run on it (a sort of software) do not handletransformation well. And in a world with an ever-increasing rate of change, it is impossible to thrive without timely transformations. Thedata, case studies, and personal anecdotes to this effect abound.The challenge is that, at both a philosophical and a practical level, the Hierarchy (with its management processes) opposes change. Itstrives to eliminate anomaly, standardize processes, solve short-term problems, and achieve stopwatch efficiency within its current mode ofoperating.In a sense, the crowning accomplishment of the Hierarchy and its management processes is the enterprise onautopilot, everyone ideally situated as a cog whirring on a steady, unthinking and predictable machine. Thus, the Hierarchyignores new opportunities that require transformation because these don’t align with its core purpose of maintenance and optimization. Amarket opportunity for tablet computers, for example, is more of a distraction than an opportunity to the hierarchy of a giant PCmanufacturer focusing on this quarter’s earnings targets.That is not to say that small- and medium-sized change is impossible in the Hierarchy. In fact, many critics point to change managementprocesses, kaizen initiatives, and the like as evidence that the Hierarchy can do change. But I am referring to something far bigger: large-scale organizational change, such as a company redesigning its entire business model, or accomplishing its most important strategicobjectives of the decade, or changing its portfolio of product offerings. And there is no evidence to suggest that the Hierarchy allows forsuch changes, let alone that it effectively facilitates them.All of this has led me to believe that the successful organization of the future will have two organizational structures: a Hierarchy, and amore teaming, egalitarian, and adaptive Network. Both are designed and purposive. While the Hierarchy is as important as it has alwaysbeen for optimizing work, the Network is where big change happens. It allows companies to more easily spots big opportunities and thenchanges itself to grab them.My idea for the future Eastern European companies is a system of teams with representatives from all divisions and all levels, wholeave formal titles at the door to participate in a decidedly anti-hierarchical forum. As the environment changes in various ways, this systemsenses and responds to it, and in turn creates more and more teams with volunteers to address the discrete parts of a larger change. Withthis Network, potential opportunities and changes are identified, urgency around tomorrow’s possibilities is fostered andmaintained, strategies for organization-wide changes are formed, barriers are identified and addressed, and change is achieved.To clarify, I am not talking about a cross-unit “task force” or a new “initiative” built into this year’s plans. I am talking about a whole newsystem that is much bigger, more powerful and involves far more people. Over the past few years, I’ve started to see many high-performing organizations use a network-like structure outside their traditional hierarchy to lead change, and with great results.However, Just like students learn from their teachers to become “super teachers". In order to move Eastern Europe into the creativeage, we must have a role model-”role model here means the region we can learn from and build on to move into prosperous future.Here I am using "Silicon Valley” as a model to build on. Learning from its “Global diversity and inclusion (GD&I) strategy”.But before I proceed, certain point needs to be noted:The EE region should recognize that success for global diversity and inclusion is best achieved when it is integrated into the daily operationsof business. The region should not isolate diversity as a separate initiative; rather, it should seek to continuously incorporate diversity andinclusion into all business efforts to drive enterprise-wide impact.
Global diversity and inclusion (GD&I) is a long-term business principle that should be linked to the current and future success of the region. ―Byproviding access to technology, the EE region should strive to help all people realize their potential. This means that diversity and inclusionshould not just be words on paper; they should be core values and business imperatives. EE region should promote diversity at every level withinits organizations and should strive for inclusiveness in everything.The Silicon Valley for instance is fertile ground for developing partnership with venture firms and international technology leaders. The diffusionof high technology has been global.The introduction of new information technologies has however followed different patterns in different countries. Thus, the societies havepreserved their unique features in production processes even though the adaption of high technology has included also the borrowing of diffusedand common organizational forms.The success of Silicon Valley has been investigated and absorbed by many countries.They either built their own models to do competition or they went to a model that leverages the Valley. India, Israel, Ireland are the good modelsfor the latter.KEY GROWTH STRATEGIES FOR THE DEVELOPMENT OF Eastern Europe FUTURE COMPANIES-(lesson from the Silicon Valley)If Eastern European countries could embrace Global Diversity & Inclusion (GD&I) strategy, it will serve them as a fundamental link in making theirbusiness environment competitive. Eastern European companies should work with senior executives from various business groups andcorporate functions across the world to drive their goal of market leadership through diversity excellence. This is the key to the effectivecompetitiveness of the silicon valley model.The pillars of the global diversity and inclusion strategy are:1. Representation: Building a Pipeline of Future LeadersThe region should focus on building its employee pipeline, while actively recruiting and hiring the world’s top talent from all groups within society.The region can achieve diversity recruiting by leveraging relationships with schools and professional organizations. These organizations mustinclude groups like the international Society of Hispanic MBAs, Society of Women Engineers, international Black MBAs, the American IndianScience and Engineer Society, the Association of People with Disabilities, the Gay, Lesbian and Straight Education Network – and more. Inaddition, the region should also offer several programs that provide students in grades K–12 with opportunities to interact with today’s technologyand learn about careers in this industry.2. Inclusion: Creating Engagement in the Work EnvironmentThe region should recognize that diversity gains will not be sustained if the work environment does not promote behaviors that encourage newways of problem-solving and reward diversity of thought. The region should provide its companies or organizational leaders with culturalcompetency training and GD&I best practice management strategies and should offer employees ample opportunities to network and build keystakeholder relationships, thereby fostering a culture of inclusive behaviors.The region should also supports Employee Resource Groups and Employee Networks which can provide cultural awareness and socialnetworking, and can link to the overall business goals of the region. Members should voluntarily work together and serve as internal resources toensure that diverse perspectives are included in business operations, marketing and product development activities. The region should providecareer development, support, networking opportunities, mentoring, community participation, product input, and assistance in activities thatpromote cultural awareness. Programs such as speaker series, scholarship programs, community service, development conferences, andheritage celebrations should be embraced.
3. Innovation: Driving Market ExcellenceThe region should understand that building the best company will mean incorporating the talents of varied workforce into its products, and recognizingthe needs and priorities of diverse customer, supplier and partner base. The region should be committed to supplier diversity, which should includeworking with certified and highly trained minority, women, veteran-owned businesses, and businesses owned by persons with disabilities, as well as withsmall businesses seeking to purchase competitively priced quality goods and services from the region.Future Direction of the Eastern Europe CompaniesIf all the above suggestions has been digested, the next line of action will be to create the “ Valley of Eastern Europe” that will be open to significantopportunities driven by bio-, info-, and nanotechnology. These will create new industries and transform the existing industries making the region morecompetitive globally.The convergence of these three technologies will drive a revolution in how people live and work in the region. The explanation is as follows;“Bio” is the utilization of chemistry in life to not only understand living organisms but to manufacture all types of things that we have in our environment.“Info” is the harvesting, storage, and transmission of information about our environment in all sorts of ways. And “nano” is the control of matter at thescale where basic material properties are determined.The world experienced several waves before but the waves are speeding up since the world becomes even more interconnected. That is why now threewaves are ridden simultaneously and sometimes competing with one another, but very often interacting and reinforcing one another. These new waveswill create new opportunities for Eastern European countries to connect to the world. The advantageous of Eastern Europe and how ready their models tonew wave will determine the direction of the possible strong bonds.The “Valley of Eastern Europe” should possess assets that are critical to economic success, entrepreneurial culture, capital and people. Benchmarking theSilicon Valley is a way to understand the high-tech successors of the Valley. The Valley has been successful because it is a habitat filled withcreativity, entrepreneurship, education, and trust:CreativityCreativity requires close interaction between companies and institutions in order to keep the competition at the highest level. Close interaction makeavailable flow of information and the sharing of knowledge which together boast the competition and innovation. Environment is crucial for creativitysince creativity is composed of productivity success, product development, technology transfer, intellectual property, marketsuccess, R&D, standardization, networking and analyzing the competitors. The right environment for creativity should preserve these characteristics; firstthe environment should foster this creativity. Second management should create the right working conditions to make the company competitive andinnovative. Last, acquiring information is kind of feeding the creativity since it is necessary for creative minds.EntrepreneurshipThe EE Valley should harbor a special habitat for innovation and entrepreneur-ship. The components of an entrepreneur are taking challenges, havingpassion, and bringing innovation. An entrepreneur in high tech industry develops for an idea and goes after it to turn it into a product. The Valley shouldprovide conducive conditions for entrepreneurs by providing entrepreneurs dense and flexible networks, universityresearchers, lawyers, consultants, highly skilled employees and others. Having appropriate institutions is an easy way to acquire information and workforce. Recent university graduates are the best possible employees for the startups since they can take challenges compared to other employees in thecompanies who have jobs already. These complex networks can continually connect people to good ideas.EducationThe Valley should be able to create the education and training programs to meet the technology. The Valley should be able to prepare residents from thecurrent wave to the next wave and then the next wave will be an inclusive wave of shared prosperity and lifting the standards for everyone.TrustThe Valley should be able to create a fluid work arrangements and lasting bond of trust to sustain a high level of innovation in the years ahead. We seethat these components are somehow available in India, Israel, and Ireland. What makes them successful is their initiative to form their workforce in amanner complementing towards the high technology in the Silicon Valley.