Ruminations on Russia

The China; A Centre of Innovation discussion is beginning to annoy me. This piece in Always On is no worse than others, it's just the piece that is at hand to be annoyed about.

I challenge the writers and commentators of these pieces to provide some hard evidence that Chinese science, R&D and business methods are going to produce disruptive technologies based on any form of past historical data. Lets start with Nobel Prize winners in any form of science - sorry could not hear you. OK; Chinese scientists who have made substantial breakthroughs in epitaxial growthing - not more silence. Show me one Chinese hi-tech company that is competing on the basis of its own disruptive technologies; Huawei? No those were Cisco inventions.

OK point over-labored. China and Taiwan has some fantastically bright researchers in US and European Universities. Their entrepreneurial spirit is not to be doubted but is has been factored on low cost high output industries. Competition is so fierce in China that most of these are operating at 2-3% gross margins. And that is not sustainable.

So lets not confuse fantastic market opportunity (as yet mostly unrealized) and cheap manufacturing with disruptive technology.

I was recently interviewed by a Japanese MIT MBA student who had spent a month working for one of the most professional money managers in Russia. He had come to Russia to see for himself where Russia fitted in to the BRIC (Brazil, Russia, India, China - A Goldman Sachs Report) scheme of things. The essence of his conclusions was that China was a huge opportunity that was incredibly difficult to access and that more people would fail than succeed. His criticisms of China read like a litany of my criticisms of Russia. Except that his conclusion that working with the Government in China is more difficult than in Russia. On a scale of really annoying that would be off the top of the scale. He saw multiple opportunities in Russia because he felt that the economy was more open to foreign intervention (viz BP/TNK). We had to agree that this is a relative and not an absolute benefit.

Interestingly he saw great opportunities in India as (nearly all?) the economy is controlled by a few firms/families which are beginning their third Harvard-educated generations.

He was an Investment Banker, and thought like one, however he had been to all three countries. Had done business in all three and was talking about in an office in Moscow not a conference room in California.

In line with my desire for greater honesty in public life I would like to see more use of facts in discussion of trends. Repeating the same crap as everyone else does not make you an expert it makes you a voice for hire.